By George, that’s a cracker idea for trimming the state sector wage bill

George (left) has a Christmas surprise for British public servants.

Alf is making a pitch for the state services portfolio with an idea passed on to him by a Pommy mate, George Osborne.

He hopes to stake his claim to the job and the ministerial baubles that go with it during a chat with The Boss today.

He knows – of course – that a few weeks ago John Key was outlining his post-election priorities to the Dom-Post.

Key mentioned how the Government plans to immediately implement the new lower public service staffing cap.

The cap was signalled in the Budget when Finance Minister Bill English announced the public sector would need to cut almost $1b.

That’s where Alf reckons he has a great idea (or rather, that’s where Alf thinks he can impress The Boss by promoting George Osborne’s idea).

George, of course, is Britain’s Chancellor of the Exchequer, which is a fancy name for Minister of Finance, and he is a dab hand at shrinking budgets and making caps fit.

Not so long ago, George announced that public sector pay rises would be capped at 1 per cent for two years after the current two-year freeze ends.

And now he is implementing a scheme whereby pay would be slashed for public sector workers in poorer parts of the country.

British newspapers are up with the play and the Daily Mail reports –

Plans that could slash pay by up to 10 per cent for public sector workers in poorer parts of the country will be introduced within 16 months, George Osborne announced yesterday.

The Chancellor demanded an end to national pay rates for teachers, nurses, prison officers and civil servants by April 2013, ramping up the Government’s confrontation with the unions.

Mr Osborne yesterday wrote to the heads of pay review bodies giving them until next July to draw up ways to ensure public sector wages equate more closely to the cost of living.

He said it was not fair that private sector staff are paid far less than state workers in some parts of the country, and vowed to iron out the differences.

Damned right.

This means public sector staff in Britain will be paid differently, depending on local standards of living, how far they have to travel to work and how much similarly qualified private sector workers earn in that area.

The Treasury cited figures from the Institute for Fiscal Studies, which suggest that in some parts of the country the pay differential between the public and private sector is as much as 10 per cent.

Economists say these differences drive up the cost of hiring staff for struggling companies, depressing economic growth and keeping unemployment higher.

You can put your money on much the same thing happening here.

Outfits like the Business Roundtable accordingly will be chuffed to hear what Alf is proposing, and can be expected to endorse his promotion to a ministerial job to put the idea into effect.

Mind you, in Britain the Government is unlikely to cut wages directly in any part of the country.

It is instead expected to increase wages much more slowly in poorer areas.

Down Under, Alf is confident he could get away with lopping public service wages in places like Northland and the aptly named Poverty Bay.

He will do what George is doing, and ask officials to look at differences between public and private sector pay in local areas, then determine levels that would allow the state to ‘recruit, retain and motivate’ suitable staff.

The difference is that Alf would get cracking and be a bit tougher.

George seems to be in no great hurry. In London, he told the Treasury Select Committee yesterday:

‘I have asked them to come back to me by July next year and to provide for me their advice local-facing and that will give us the opportunity to introduce it from 2013-14.’

In this country, the PSA is bound to be unhappy when Alf’s ideas are publicly aired, just like their pain-in-the-arse British equivalents.

George’s move was swiftly denounced by the unions.

TUC general secretary Brendan Barber said: ‘When the Chancellor talks about localised wage negotiations, what he really means are deep pay cuts in areas of high unemployment.

‘This will suck demand out of local economies, increase joblessness and worsen the north-south divide.’

Gail Cartmail, Unite’s assistant general secretary, said: ‘Employing public servants on the lowest possible pay is part of the Tory blueprint for privatisation.

‘George Osborne wants to drive down pay to clear the way for private companies to take over our public services.

‘There is absolutely no justification for a nurse in Newcastle being paid less than an equally qualified nurse in Oxford.’

Anything familiar with that wailing?

Actually, Alf can’t say why MPs from poorer regions should be paid the same as MPs from areas with much higher living costs.

Maybe he will mention that to The Boss, too.

But not until he has checked out how his pay would be affected.


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