Chan­cel­lor urges re­straint on pub­lic sec­tor pay

Pen­sions mean work­ers in pri­vate sec­tor ‘still be­hind’ Cab­i­net leaks blamed on dif­fer­ences over Brexit

The Guardian - - NATIONAL - Pe­ter Walker Po­lit­i­cal cor­re­spon­dent

Philip Hammond has urged cau­tion over any moves to lift the cap on pub­lic sec­tor pay, ar­gu­ing that pen­sion pro­vi­sions meant pub­lic sec­tor em­ploy­ees were still bet­ter com­pen­sated on av­er­age than their pri­vate sec­tor coun­ter­parts.

While the chan­cel­lor re­fused to com­ment on a re­port that he had told cab­i­net col­leagues pub­lic sec­tor staff were over­paid, he point­edly did not deny it, ar­gu­ing it was wrong to say pub­lic sec­tor staff had ex­ces­sively lost out dur­ing aus­ter­ity.

Asked about the “over­paid” com­ment, re­layed to the Sun­day Times by an un­named min­is­te­rial col­league, Hammond told BBC1’s An­drew Marr show: “I’m not go­ing to talk about what was or wasn’t said in a cab­i­net meet­ing, and it’s easy to quote a phrase out of con­text. But I’m very happy to talk about the sub­stan­tive is­sue.”

Hammond de­nied a re­port in the Sun that he sup­pos­edly told the cab­i­net that driv­ing a mod­ern train was so easy “even a woman can do it”, al­legedly bring­ing a re­buke from Theresa May. “I wouldn’t say any­thing like that,” he said. “I’ve got two daugh­ters in their early 20s, both high achiev­ers,” he said. “I don’t think like that. I wouldn’t make a re­mark like that.”

Hammond said that while pub­lic sec­tor pay had for­merly “raced ahead” of pri­vate salaries, the gap had closed. But, he added, pub­lic sec­tor pen­sions skewed the pic­ture. “When you take into ac­count the very gen­er­ous con­tri­bu­tions that pub­lic sec­tor em­ploy­ers have to pay in for their work­ers’ very gen­er­ous pen­sions, they are still about 10% ahead,” he said.

“And I don’t for a mo­ment deny that there are ar­eas in the pub­lic ser­vice where re­cruit­ment and re­ten­tion is be­com­ing an is­sue, that there are ar­eas of the coun­try where pub­lic sec­tor wages and pri­vate sec­tor wages are get­ting out of kil­ter in the other di­rec­tion. We have to look at th­ese things and we have to dis­cuss them.”

Asked whether this meant he did be­lieve the pub­lic sec­tor was over­paid, Hammond said it was a rel­a­tive ques­tion.

“In­de­pen­dent fig­ures show that pub­lic sec­tor work­ers, on av­er­age, are paid about 10% more than pri­vate sec­tor work­ers,” he said. “You can’t eat your pen­sion, you can’t feed your kids with your pen­sion con­tri­bu­tion, I un­der­stand that. I un­der­stand all the is­sues that pub­lic sec­tor work­ers are fac­ing.”

Ques­tioned about whether this meant pub­lic work­ers should ex­pect salary in­creases to re­main within the 1% an­nual cap, Hammond said the pol­icy had not changed. “We’ve sought to be fair to pub­lic sec­tor work­ers but also fair to tax­pay­ers.” But he did not com­pletely shut the door on eas­ing the pay cap: “We do keep this un­der con­stant re­view, and I think the fact, as is well known, the cab­i­net has been dis­cussing this is­sue sends a clear sig­nal that we do un­der­stand the con­cern both of pub­lic sec­tor work­ers and of the wider pub­lic.”

Hammond has in re­cent weeks been seen as an iso­lated voice in the cab­i­net, urg­ing con­sis­tency on pub­lic sec­tor pay. Min­is­ters in­clud­ing Boris John­son, Michael Gove, Jeremy Hunt and Jus­tine Green­ing have all sug­gested the 1% an­nual ceil­ing should be lifted, prompt­ing the for­mer Tory chan­cel­lor Lord La­mont to urge more cab­i­net dis­ci­pline.

Hammond sug­gested the leaks over his sup­posed com­ments were more mo­ti­vated by dif­fer­ences over Brexit, say­ing “some of the noise is gen­er­ated” by min­is­ters who dis­agreed with his aim of prioritising the econ­omy in leav­ing the EU.

Damian Green, the first sec­re­tary and May’s deputy, said the brief­ings from cab­i­net needed to stop. “Now is ab­so­lutely not the time for this type of ac­tiv­ity,” he told Pien­aar’s Pol­i­tics on BBC Ra­dio 5 Live.

The in­ter­na­tional trade sec­re­tary, Liam Fox, told BBC1’s Sun­day Pol­i­tics that the leaks were a re­sult of too much self-in­dul­gence. “I think my col­leagues should be very quiet, stick to their own de­part­men­tal du­ties,” he said. “Talk of lead­er­ship chal­lenges is com­pletely overblown … The last thing any­one wants is for the Con­ser­va­tive party to turn in on it­self.”

The Labour leader, Jeremy Cor­byn, said the brief­ings were sow­ing con­fu­sion. “We’re hav­ing vary­ing ac­counts com­ing out of ev­ery cab­i­net meet­ing about who said what to who and at what point in the meet­ing they said it, and ev­ery­body say­ing noth­ing ac­tu­ally hap­pened … It’s a very strange meet­ing where noth­ing ac­tu­ally hap­pens.”

‘I’ve got two daugh­ters, both high achiev­ers. I wouldn’t make a re­mark like that’

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