A new report from the Centre Forum think tank (which although non-party has particularly good links with the Liberal Democrats), written by Professor Alison Wolf, has called for an end to national pay bargaining:
"Professor Wolf attacks national pay systems that ignore local differences, handicap struggling regional economies, and make it impossible for public sector managers and institutions to cope sensibly with our fiscal crisis."
Key arguments from the report:
- Five million people employed in England’s public services should receive individual contracts from their employers, instead of pay and conditions set at national level.
- Where local private sector wages are high, recruitment is much more difficult and large numbers of expensive agency staff are needed to fill the gaps.
- For poorer regions, inflexible public sector salary scales do damage in another way: they handicap the private sector. England’s regions are as unequal today as when Labour took power, in part because employers cannot compete through lower costs. If they want good employees, they must match high, nationally set and funded public sector rates.
- England is, in this respect, like Germany, where the imposition of national pay-scales after unification had catastrophic consequences for the East German economy.
Michael Fallon MP has also argued for the end of national pay bargaining.