IT took a long while coming but David Cameron has at last swung his axe. His ministerial reshuffle, which began last night, will only be fully completed this morning, when all of the details of the personnel changes become clear. There will be some substantial moves though crucially George Osborne remains Chancellor and Vince Cable business secretary.
But long-term the reshuffle won’t be the most important political moment of 2012. Yesterday’s confirmation by Nick Clegg that the Liberal Democrats will be voting against proposals to reduce the number of MPs and to change constituency boundaries to make the system fairer will cost the Tories twenty seats at the next election. At present, constituencies range from 109,902 electors to just 21,780. This is bizarre. Because the large constituencies tend to be in rural areas, where the Tories are strongest, and the smallest in urban ones, where Labour tends to do better, the system means each Tory vote translates into fewer seats than each Labour vote. Making the seats closer in size would partly eliminate this anomaly and is generally accepted by independent, non-party analysts to be fairer.
Under the current boundaries, the Conservatives would need an astonishingly large 10.5 percentage point lead over Labour to win an outright majority at the next election; they would have needed to be “just” 7.6 percentage points ahead under the proposed new boundaries. Labour just needs a three point lead to guarantee a majority.
As ConservativeHome, which represents Tory grassroot members, recently reminded us, this undemocratic bias in the voting system isn’t new. John Major got a majority of 21 seats in 1992 with a large 8 per cent lead and a 42 per cent share of the vote while, in 2005, Tony Blair got a 66 majority with just 36 per cent of the vote and a 3 point lead. That said, the Tories only managed to grab 36.1 per cent of the vote at the last election, a 7.1 percentage point lead over Labour’s 29 per cent; both parties deserved to lose and the Tories certainly failed to win, hence the need for a coalition. But regardless of today’s reshuffle, Cameron looks unlikely to grab the substantially higher vote needed to overcome the electoral bias and win an outright majority in 2015, and is therefore on course to lose the general election.
Instead of relying on the reshuffle, which is unlikely to change much, he should be thinking the unthinkable to create jobs. He should certainly consider Policy Exchange’s proposal today to rebalance the pay and pensions of public sector workers to align them with equivalent private sector employees. This would save £6.3bn a year and create 288,000 private jobs.
The average public sector premium – the additional pay a typical public sector worker receives over a private sector worker – now stands at 7 per cent, increasing to 14 per cent with pensions. In parts of the country, some public sector workers enjoy premiums of as much as 25 per cent. The reason for this is public sector national pay bargaining: workers are paid the same regardless of where they live, despite varying living costs and irrespective of local labour markets.
The government must start to allow local public sector employers to choose pay that reflect local living conditions and vary awards according to individual performance. It is that sort of reform that would save money, create jobs by making private sector jobs competitive again, and eventually help Cameron fight back. We will find out more about his reshuffle this morning, but in of itself it won’t be enough to rescue his ailing government.