Public sector pay freeze “appropriate” at this time, says IEA expert
Professor Len Shackleton, Editorial and Research Fellow at the free-market think tank the Institute of Economic Affairs, responded to reports that the Treasury will announce a public sector pay freeze in this week’s Spending Review
“Every 1% increase in pay costs the taxpayer around £2 billion, and even with a freeze on pay there will be an upward drift in spending as a result of new hires, pay increments and promotions. So it is understandable that in any financial crisis a freeze in pay is the first recourse of Chancellors.
“This is particularly appropriate today, at a time when many people in the private sector have suffered major pay cuts and hundreds of thousands have lost their jobs. The unions may object, but any attempt to take industrial action at the moment will be exceptionally unpopular with the bulk of the population.
“Nevertheless a freeze is a blunt instrument and will suppress pay in areas of shortage where it probably needs to increase. In the medium term the government needs to have a much more selective approach to public sector employment and cut out jobs which add little of value to the taxpayer. A fresh look at foreign aid is long overdue, and many middle-manager roles in the civil service, education and the health service are likely to be surplus to any real requirement.
“More generally, public expenditure should be concentrated in those key areas where private enterprise cannot function: defence, law and order and the relief of serious poverty. A genuine reforming government would consider whether our massively overstretched state should retire from many areas where it has spread its tentacles in recent years.”
Notes to editors
For media enquiries, please contact Emily Carver, Head of Media, on 07715942731 or firstname.lastname@example.org.
Professor Len Shackleton is available for interview and further comment.
For further IEA reading on public sector pay, click here.
fdThe mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
Latest News from
Hiking corporation tax would be ‘illogical and counterproductive”, says IEA expert19/01/2021 11:35:00
Mark Littlewood, Director General at free market think tank the Institute of Economic Affairs, responded to reports that the Chancellor Rishi Sunak is considering raising corporation tax
IPPR - UK risks EU retaliation if workers’ rights are rolled back19/01/2021 10:35:00
IPPR trade and EU relations expert says leaked proposal to cut working time protections would also be damaging and deeply unpopular
Any extension of the Universal Credit uplift should not be made permanent, says IEA expert19/01/2021 09:35:00
Professor Len Shackleton, Editorial and Research Fellow at free market think tank the Institute of Economic Affairs, responded to calls to extend the £20 a week Universal Credit uplift
King's Fund - Boost for local health partnerships as six areas secure place on £3 million grant-funding programme14/01/2021 12:35:00
Six areas in England have been chosen to join the first phase of a major grant-funding and development programme designed to improve the health and wellbeing of communities and tackle health inequalities.
IEA - JRF proposals constitute a “costly and unrealistic wish list”14/01/2021 11:35:00
Professor Len Shackleton, Editorial and Research Fellow at free market think tank the Institute of Economic Affairs, responded to the Joseph Rowntree Foundation’s report on poverty
The King’s Fund responds to Office for National Statistics deaths data for 202014/01/2021 10:35:00
Richard Murray, Chief Executive of The King’s Fund responded to the latest Office for National Statistics data on deaths in England and Wales in 2020
JRF - After a decade of deprivation, we need policies that prioritise recovery for families in poverty14/01/2021 09:35:00
In yesterday’s state of the nation report, the Joseph Rowntree Foundation warns that ministers must make tackling poverty an economic priority in 2021 or they risk being defined by a record of worsening hardship.
IEA responds to Chancellor’s economic update12/01/2021 11:35:00
Mark Littlewood, Director General at the free market think tank the Institute of Economic Affairs, responded to the Chancellor Rishi Sunak’s economic statement