Peter Brown
PAYdata Blog, January 31 2011


There is increasing evidence that pay freezes are considerably less prevalent in the private sector.  Early results from the January running of the PAYdata UK Reward Survey endorse this view.  Meanwhile, in the public sector pay restraint is likely to be one of the defining domestic issues of 2011.  Last summer the coalition government announced a two-year pay freeze for workers earning more than £21,000.  This is set to affect some 1.7 million workers when it comes into force in April.
 
In the circumstances, it is more than a little unfortunate that this month saw a recommendation to increase MPs’ pay by 1%.  As can be seen in the graph, the proposed rise, whilst modest by the standards of going rate in the private sector, continues a steady growth in base pay for MPs.

Meanwhile, the Government is left with something of a dilemma.  In addition to the public sector pay freeze, David Cameron is conspicuously not drawing the full Prime Ministerial salary to which he is entitled and, back in June 2010, Ministers in the newly elected Government accepted a £5,000 cut in their own pay.  The emphasis has been firmly on the notion that “we are all in this together”.  Consequently, the leader of the Commons, Sir George Young has said that MPs will be asked to reject the 1% rise by putting forward a resolution in the House of Commons in the next few weeks.

There again, look at the Council employees of Blackpool.  They have just agreed to take a voluntary pay cut in order to reduce the number of compulsory redundancies.  Maybe MPs will take a leaf out of their book …

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