Belfast Telegraph

Monday 1 September 2014

Editor's Viewpopint: Osborne pay plan fans union flames

Chancellor George Osborne has done his best to ensure that today's public sector unions' strike gets widespread support by delivering a double whammy of a virtual pay cut and suggestions that wages should be set at regional level rather than having an across the board national agreement.

If the unions were angry before over changes in pensions provision, then their ire will be increased greatly by Mr Osborne's latest proposals.

Certainly public sector workers in Northern Ireland will feel that they have most to lose. Local wage levels outside of the public sector are among the lowest in the UK and a move to negotiate pay for public sector workers at regional level will lead to fears that they will fall behind counterparts in other areas. They will view the proposal - with some justification - as a stealth attack on public spending here.

A reduction on public sector pay levels will have a disproportionate affect on our already ailing economy. If those workers - some 230,000 of them - have less spending power in the years to come, where will the stimulus for economic recovery come from?

The government argues that high wages in the public sector in areas like Northern Ireland stifle private enterprise because it cannot compete on salaries. But strangling the public sector is no recipe for rebalancing the economy either.

There was some good news for Northern Ireland in the Chancellor's autumn statement - an additional £142m, most of it for capital spending, although experience has taught us to see the fine print of such largesse before becoming too excited. The cancelling of fuel duty increases and some increases in benefits will also be of help to hard pressed households but it is the threats to public sector wages which will today draw most attention.

Mr Osborne will hardly be surprised if he does not receive an overwhelming vote of confidence at today's union rallies.

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