The unions are holding back better pay deals

 
Anthony Browne
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IT MIGHT have been the worst general strike for a generation, but it clearly failed to take off. Apart from the closure of my children’s school, and the vast army of police protecting parliament, I honestly didn’t notice much impact from it. As the Prime Minister said, in the end it felt a bit of a damp squib.

Perhaps public sector workers looked into their hearts and felt it was wrong to punish private sector workers, who on average earn less than them, for not paying more in tax to fund the sort of pensions that the private sector workers could not even dream of for themselves. As the Institute for Fiscal Studies pointed out, even after all of the chancellor’s cuts, public sector workers will still on average earn more than private sector ones, and enjoy far better pensions. Never has a strike been more morally repugnant: this was the better off trying to bully the worse off into paying for their privileges.

Perhaps it was particularly muted in London because it was a public sector strike, and the public sector is smaller in London than any other part of the country. Or perhaps public sector workers twigged that the government’s proposals to scrap national pay bargaining would actually be in their interest. Yes, you read that right.

Having a one-size-fits-all pay scale across the public sector (with only a small London allowance on top) means that in many parts of the country workers earn far more than their private sector equivalents. This can quite literally price private sector companies out of the market, because they just can’t compete with the sort of wages that the public sector offers. This is why some parts of the country have become so over-reliant on the public sector, with a barely a private employer to be found.

But that effect works in reverse in London, which is the most expensive part of the country. For skilled workers, the salary premium for being in London can be over 40 per cent, far higher than the London weighting given to public sector workers. The result is that many in the public sector, from firemen to policemen to nurses to teachers, simply cannot afford to live in London. They often commute long distances, or just give up and get a job elsewhere. The vacancy rate in the public sector is far higher in London than other parts of the UK as schools and hospitals struggle to recruit, and the turnover of staff is higher. Scrapping national pay bargaining, so that wages reflect local labour market conditions, could actually massively work in the interests of public sector workers in London.

Not that the unions will care about that. Unions can perform a very useful role, and do indeed help protect workers. But too often – and especially when run by militant leaders – they care more about themselves than they do about their members. The six figure salaries of the union barons and their generous pensions, all paid for by lower-paid workers, should bring shame on honest unionism. Unions bitterly oppose scrapping national pay bargaining – just as they opposed academy schools – not because of the effect on their members, but because it erodes their role in wage-setting. Let’s hope the unions learn the lessons from this damp-squib strike. But I doubt they will.

Anthony Browne is former director of Policy Exchange: anthony@anthonybrowne.org