Ross Clark Ross Clark

How to solve the public sector pay cap dilemma

Of all the mistakes in the Conservative election campaign, possibly most grievous of all was the promise to maintain a public sector pay cap of 1 per cent until 2020. It was one thing to maintain such a policy in the 2015 election campaign – when the Consumer Prices Index (CPI) stood at 0.4 per cent. It is quite another to do it now, with the CPI at 2.9 per cent. In May 2015, the Cameron government had a policy of capping public sector pay at 0.6 per cent. Now, the May government has a policy of cutting public sector pay by 1.9 per cent. Small wonder that nurses, teacher firefighters and many others aren’t very happy about it.

This is a problem that should have been foreseen, and which could have been avoided by capping public sector pay at the level of CPI.

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