Liz Truss has taken the lead in the Tory leadership race with an agenda that seems radical and ambitious, whereas Rishi Sunak appears to offer only elegantly managed decline. Truss promises instant relief from the rising cost of government; Sunak offers to reverse barely half of his own tax rises – and over the course of the rest of the decade. To promise more, he says, is to sell ‘fairytales’. Truss says a better future is possible with enough vision, ideas and, perhaps most importantly, resolve.
Ms Truss came up with a promising idea this week: regional pay boards, so that civil service salaries could be set relative to the local cost of living. For example, the Institute for Fiscal Studies found that public sector workers in the South East are paid 5 per cent less than private sector workers, as might be expected, given the greater job security and pensions. But in Wales and Northern Ireland, public sector workers are paid close to 10 per cent more. The Truss campaign said almost £9 billion could be saved by varying pay nationally, as happens in the rest of the economy – not by cutting anyone’s pay but by reforming future starting salaries.
Over-generous public sector pay, her team argued, is not just bad for the taxpayers, it also undermines recruitment by private sector businesses, starving them of talent and negating what should be one of the advantages of setting up shop in an economically disadvantaged area: lower employment costs. Devolution of pay can empower local areas to attract staff, especially during skills shortages. This is why Barclays, for example, is cutting back in London and hiring in Glasgow: it makes business sense.
Truss’s plan, however, lasted less than a day.