Scotland, Wales and NI unite to condemn Osborne’s “disastrous” plans for civil service pay


By a Newsnet reporter

Speaking on the BBC’s Sunday Politics show, Scottish Finance Secretary John Swinney has said that the Scottish government will “vociferously oppose” plans by the Chancellor of the Exchequer George Osborne to abolish national pay rates for civil servants.  According to reports, the Chancellor will use his budget speech on Wednesday to announce plans for lower pay for public sector workers in “poorer areas”.

It is thought that civil servants in Scotland, Northern England, Wales and Northern Ireland will be most affected by the measure.  The Scottish government has given a commitment that it will have no truck with the plan to lower wages for staff working for departments under the control of the Scottish Parliament, however staff working at the Scottish offices of UK departments such as the Dept of Work and Pensions and HM Revenue and Customs will see their wages frozen.

Staff earning more than £20,000 annually have already had their wages frozen due to Westminster austerity measures.  The new pay freeze is expected to affect all staff, including those on the lowest pay grades.

The Coalition government claims that the measure is necessary because public sector pay is higher than equivalent work in the private sector in poorer parts of the UK.  The Conservative led Coalition believes that this is discouraging recruitment and investment in the private sector.  The government proposes to freeze public sector salaries in “poorer areas” until private sector pay catches up.

Critics have claimed that the plan will only increase the disparity between rich and poor in the UK, already one of the most unequal countries in Europe, and further disunite a United Kingdom where Scotland already plans to hold a referendum on independence.  The result of the pay freeze will see civil servants in London and the south east of England enjoy the highest rates of renumeration, and may encourage staff to seek relocation to these privileged areas.  

Mr Swinney said that he had already made his “complete opposition” clear to the Treasury, saying that the pay freeze risked having a “potentially disastrous impact” on employment and remuneration, as well as on public expenditure in Scotland, Wales and Northern Ireland.

Mr Swinney said: “What the chancellor’s proposal is rumoured to be is a reduction in pay for people in areas outwith the south of England, and what one might consider to be areas of congestion in the jobs market.

“That will be a disastrous approach if it’s taken by the chancellor because it will undermine economic confidence in areas far removed from the south east of England and it will do absolutely nothing to solve the regional inequities that exist within the United Kingdom.

“My counterparts in Wales and Northern Ireland are as vociferously opposed to this as I am.”

He added:  “The Scottish government will go absolutely nowhere near this proposal for the areas of pay policy that are under our control.”

The governments of Scotland, Wales and Northern Ireland have united in their opposition to the Coalition pay plans.  Northern Ireland Finance Minister Sammy Wilson said:  

“This proposal addresses a problem that doesn’t even exist.  There is no evidence that national agreed public-sector wages create problems for the private sector in recruiting workers.

“Where there are labour shortages it is very often in an area where the private sector is not competing with the public sector.”

He added:  “This policy is another excuse to grab cash from devolved administrations and from poorer regions of the UK in an attempt to balance the Treasury books.”

Welsh first minister, Carwyn Jones, said that the UK government ought to be trying to close the gap between the richer and poorer areas of the UK instead of making it worse.

Mr Jones said:  “People work hard. Nurses work hard, police officers work hard, teachers work hard.  Why should they be penalised because of where they live?  Surely we should be looking at a situation where we look to close the gap in income between different parts of the UK rather than make it worse, which is exactly what this will do.”