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Public Sector Pay Figures 'Hammond Tried To Hide'

Monday, October 23, 2017

 

This is nothing short of an attempted cover up, but it’s no wonder that Ministers fought tooth and nail to cover up these damning figures.

GMB, the union for public sector workers, has exposed a shock Treasury report which Chancellor Philip Hammond tried to hide showing public sector wages are now below those in the private sector.

The union has accused the Treasury of ‘covering up’ the study – which reveals that in 2016 public sector workers were paid 0.6 per cent less than their private sector counterparts in similar roles. [1]

Every year the Government conducts analysis on public and private sector pay – and has published them routinely in previous years when they appeared to show there was a public sector pay ‘premium.’

This year’s figures were not published and Chief Secretary to the Treasury Liz Truss recently refused to release the updated analysis when challenged in Parliament. [2]

The Treasury then also failed to publish the study in response to a Freedom of Information request by GMB.

The figures were only released when GMB officially complained and threatened to refer the Treasury to the Information Commissioners' Office (ICO).

GMB said that the previously unpublished Treasury estimates ‘kicked away the last prop’ behind the Government’s policy of enforcing real-terms public sector pay cuts.

The news will come as an embarrassment to Chancellor Philip Hammond who had previously quoted the study in media interviews after he was accused of saying that public sector workers are ‘overpaid.’ [3]

Although Hammond claimed that public sector workers benefit from higher employer pension contributions, GMB analysis shows that they also pay in significantly more through employee contributions.

Three in five public sector workers pay in at least six per cent of earnings on average, compared to one in seven private sector workers.

A separate estimate by the Office for National Statistics shows that public sector pay is 5.5 per cent lower on average for jobs in similarly sized organisations.

Research suggests that when private sector wages outstrip those in the public sector, hospital fatality rates rise and schools’ GCSE results decline. [4]

Hundreds of public sector workers, including an uprising of ‘Maybots’, protested against pay cuts in Westminster on Tuesday. [See note 5 for 'Maybot' pictures]

An announcement on whether pay rises above one per cent will be funded by the Treasury is expected in the Budget.

Inflation hit three per cent this week while most public sector wages remain capped at one per cent.

Rehana Azam, GMB National Secretary for Public Services, said:

“This is nothing short of an attempted cover up, but it’s no wonder that Ministers fought tooth and nail to cover up these damning figures.

“The Tories can never again claim that public sector workers are ‘overpaid’ when the Treasury’s own assessment proves otherwise.

“The average local government worker earns about £20,000 while teaching assistant are paid just £12,000, and all public sector workers have lost thousands due to a planned decade of real-terms pay cuts.

“It’s shameful that in one of the world’s richest nations some of our public sector heroes are forced to take on debt or use food banks to make ends meet.

“GMB’s members are performing miracles every day, but the goodwill is at breaking point and if public services can’t retain their staff then patients’ lives will be put at risk.

“Enough is enough. In the Budget the Chancellor must announce the fully funded above-inflation pay rises that public sector workers need and so desperately deserve.”

ENDS

Contact: GMB press office on 07958 156846 or at press.office@gmb.org.uk

Notes for editors

[1] Headline comparisons of public and private sector pay can be misleading due to differing role responsibilities, qualifications, and the outsourcing of lower paid public sector roles.

The Treasury and the ONS therefore weights average pay levels to account ‘for differences in age, gender, job type (full or part-time, permanent or temporary), occupation category, region, and tenure’ (this wording is from the Treasury FOI response).

The ONS also adjusts its estimates to compare public and private sector wage levels in employers of a similar size. The Treasury claims that public sector workers are made approximately 9 per cent more when employer pension contributions are taken into account.

However GMB analysis of official figures shows that public sector workers also pay significantly more in on average, with 60 per cent of public sector workers paying in 6 per cent of earnings or more compared to 14 per cent of private sector workers.

 

Treasury estimates

ONS estimates

Per cent of workers paying employee pension contributions of 6% or more

 

 Pay

With employer pension contributions

Pay - not adjusted for organisation size

Adjusted for organisation size

Public sector

Private Sector

2005

3.1

8.4

2.6

-1.4

44.5

21.3

2006

1.2

8.0

1.7

-1.6

43.6

21

2007

0.4

7.5

0.9

-3.0

51.2

21.3

2008

0.6

8.8

0.1

-4.0

57

22.2

2009

3.5

11.8

2.4

-2.0

56

23.7

2010

5.8

14.7

4.3

-0.4

59.7

24.8

2011

3.9

12.8

3.8

-0.7

58

24.4

2012

3.2

11.9

3.1

-1.0

58.2

24.2

2013

2.7

11.7

2.3

-2.1

60

23.9

2014

0.5

9.3

0.4

-3.8

61.5

16.9

2015

0.9

10.4

1.0

-3.4

59.7

14.6

2016

-0.6

9.1

-1.0

-5.5

59.8

13.6

 

Treasury Freedom of Information Act response to GMB complaint, 18 October 2017 ONS, Analysis of factors affecting earnings using Annual Survey of Hours and Earnings: 2016 (Figure 7), 26 October 2016,

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/analysisoffactorsaffectingearningsusingannualsurveyofhoursandearnings/2016

ONS, Employee Contribution Bands by Industry and by Pension Type (P6) tables, 02 March 2017,

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/workplacepensions/datasets/annualsurveyofhoursandearningspensiontablesemployeecontributionbandsbyindustryandbypensiontypep6

[2] For an example of the Treasury’s analysis being published in previous years, see Figure 2.3, Department of Health, Evidence for the NHS Pay Review Body : pay round 2017 to 2018, 25 October 2016, page 19:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/562430/NHSPRB_review.pdf Liz Truss response to a Parliamentary Question asked by Alex Norris, Labour MP for Nottingham North, 09 October 2017: http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-09-13/10430/

[3] Philip Hammond on The Andrew Marr Show, 16 July 2017: “Public and private sector pay on average are around about the same level. But when you take into account the very generous contributions that public sector employers have to pay in for their workers’ pensions, their very generous pensions, they are still about 10% ahead.”

http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/16071702.pdf

[4] “… Propper and Van Reenen (2010) find that as private sector wage opportunities for nurses increase, hospital death rates also tend to rise. “Similarly, Britton and Propper (2014) find that GCSE results decline as private sector wage opportunities for teachers improve. In both cases, the authors find that the negative effect of paying below the market rate on the quality of public service is larger than the positive effect of paying above the market rate.”

IFS, Public Sector Pay in the UK, October 2014, page 29: https://www.ifs.org.uk/uploads/publications/comms/r97.pdf

[5] See attached photos:

https://www.dropbox.com/sh/yfcn7x8uhy3wg51/AADwwwyquh9W1qVhiVxSCWDga?dl=0&preview=IMG_6056.CR2
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