Right to remove public sector pay cap

I am not renowned for my sympathy with raising public sector pay, but there are now clear reasons to do so at a rate above (even well above) 1%.

As a consequence of Brexit, Sterling has devalued and in turn the cost of living (not least given the decline of over 10% against the dollar and, thus, against oil) has risen. This particularly hits those who are in an inflexible position – most obviously those on fixed incomes.

With real inflation at 3.9%, wages in all sectors need to rise at well over 1% to keep the standard of living even close to where it was before the referendum.

Furthermore, there is a penalty for not doing this. It is already the case that Agency staff can be paid up to half as much again (in practical terms) as those in full-time public service work. If pay does not even come close to keeping up with inflation, the temptation to take the risk of Agency work just becomes higher. This in turn makes the cost of delivering public services higher than it would be if you simply paid those in permanent direct employment higher wages.

The same applies to business of course, but by and large business has reacted to some extent. The public-private pay gap in Northern Ireland is still too high, but having once been over 40% it is now set to fall below 20% by end decade – still the highest gap in the UK, but not anywhere near as ludicrous as it once was.

It is essential that any government is in position to respond to changing circumstances, and on public sector pay that is what it needs to do. Not least since it is its own idiocy which is causing the cost of living to rise…


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