Peter Hoskin

To freeze or not to freeze?

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The question of whether or not to freeze public sector pay has had a fair bit of airtime over the past few days.  In his interview at the weekend, Alistair Darling seemed to take a hard-line on the issue - and most outlets wrote it up as him not ruling out a freeze.  But, via today's Times, "sources close to [Darling]" say that he won't re-open wage deals to introduce a freeze.  While, for his part, David Cameron is also claiming that a Tory government wouldn't order a freeze of public sector pay.  The politics of the situation is plain: neither side wants to seem especially tough on public sector pay ahead of the "nice cuts vs nasty cuts" battle which lies ahead.

But, as today's FT points out, the scale of the wage bill - and the scale of the debt crisis - makes it very unlikely that the next government won't take action over public sector pay.  The Audit Commission's Steve Bundred - who has done more than most to push spending cuts over the few weeks - argues that a freeze is a "pain-free" way to cut public spending, given how the public sector has thrived over the past decade.  I'm sure he'll have something like the following tables in his head, which show how the public sector has outstipped the private sector on measures of both pay and personnel:

  Full-time public sector employee median weekly wage, £ Full-time private sector employee median weekly wage, £
1997 349.3 309.2
1998 358.1 322.5
1999 375.1 335.8
2000 384.8 345.5
2001 402.6 365.4
2002 418.9 381.3
2003 431.3 392.5
2004 452.9 410.4
2005 475.7 411.2
2006 486.8 429.5
2007 501.2 439.6
2008 522.6 460.0
Percentage change, 1997-2008 +50%

+49%

  Full-time public sector employee mean weekly wage, £ Full-time private sector employee mean weekly wage, £
1997 373.0 372.8
1998 385.1 391.8
1999 402.9 410.2
2000 415.2 425.5
2001 438.1 455.1
2002 457.8 479.1
2003 478.1 492.2
2004 499.7 510.8
2005 530.8 512.6
2006 545.2 536.4
2007 556.7 549.5
2008 581.9 573.8
Percentage change, 1997-2008 +56% +54%

  Number of full-time public sector jobs, thousands Number of full-time private sector jobs, thousands
1997 3,907 11,233
1998 3,861 11,561
1999 3,988 11,594
2000 3,942 11,760
2001 3,909 11,892
2002 3,927 11,661
2003 4,123 11,589
2004 4,161 11,282
2005 4,425 11,760
2006 4,373 11,940
2007 4,492 12,351
2008 4,558 12,372
Percentage change, 1997-2008

+17% +10%

(Source: Annual Survey of Hours and Earnings, Office for National Statistics)

These tables don't tell the whole story - for instance, an incoming government may find it politically easier to cut top-end public sector salaries (well chronicled by Ross Clark in the Spectator, here) - but they make a compelling enough, Budred-style case to my eyes.  The question remains, though, whether the public sector will see things quite the same way...

P.S. Alex has more on the spending debate here.