A year of high stakes for pay packets

As the general election hurtles towards us, this year’s Fair Pay Fortnight provides a timely reminder of what a complete term of a Conservative/Liberal Democrat coalition government has meant for the pay packets of working people.

Over the time that this government has been in office, prices have risen by just under 20%, while pay rises for the majority of public sector staff have been in the region of 3%. The result has been that the average full-time public sector worker has seen around £3,400 stripped from the value of their wages. For staff at the top of their pay band – who haven’t benefited from moving up their pay scale – the figure is closer to £4,800.

The government hasn’t been able to hide the blatant injustice of its policies – latest figures show company profits across the UK growing at 4%, the pay of chief executives running Britain’s biggest companies escalating by 21%, and dividends flowing to shareholders jumping by 21%.

The new year began with two stories that perfectly illustrate the scale of this divide. Just two days into the working year we arrived at Fat Cat Tuesday, when the pay of Britain’s top bosses passed the average UK full-time salary for the whole year. A week later, a report emerged showing that landlords have made £177bn in profit from the spiralling cost of housing since 2010.

This toxic landscape has been further fed by the government’s relentless privatisation programme and weakening of employment rights, creating an explosion of zero-hours, temporary and part-time contracts that plunge the lowest paid deeper into debt and insecurity.

However, while the moral case is plain to see, where the government has unfortunately sometimes been more successful is in presenting its pay policies as painful but necessary and beneficial for the economy in the longer term.

Yet this carefully constructed illusion masks the real effect that draining the economy of demand though a clampdown on pay has had on the economy.

Despite making reducing government debt its centrepiece policy, the government’s period in office has seen a £500bn growth in debt to £1.46 trillion.

Despite endless claims of skilful economic management, its policies extended the recession to almost six years – more than two years longer than any other recession since the Second World War.

Despite continuous promises that employees would soon feel better off, the wealth produced per person in the UK is still lower than when the recession began seven years ago.

UNISON members continue to fight the gross injustices of government pay policies, but we also need a new vision from Labour that it recognises the link between fair pay and boosting the economy.

Our point was illustrated by Landman Economics last year when it published research which found that, for every 1% increase in public sector pay, round £675m of extra value is injected into the economy and around 14,000 full-time jobs are created.

Without such a new vision, we face an intensified attack  – £55bn of cuts to come out of a £90bn cuts programme, the cost of living rising three per cent a year until 2018 and plans for new industrial action ballot threshold rules to restrict the ability of public sector workers to strike against the onslaught

The stakes for workers’ pay are high in 2015 and UNISON will continue to defend our members’ standards of living every step of the way.

Dave Prentis is the General Secretary of UNISON