The government has always claimed that the main reason it is holding down pay in Whitehall, schools and the NHS is because the taxpayer can’t afford it and we need to cut the deficit. Francis Maude, the Cabinet Office minister responsible for Whitehall’s industrial relations, claims to have safeguarded the very lowest paid and attacked perks given to richer civil servants. The ex banker is on record as saying ” It is absurd to expect that people can be paid the same amount in the public sector as they are paid in the private sector.” This reference is to the higher paid where he is pledged to end perks. It was made in 2011 just at the time when Ed Lester, head of the Student Loans Company, had secured a very lucrative deal where he avoided paying tax or national insurance at source on a £223,000 a year package.
Now in the very same organisation a new drama is being played out which also proves the government is lying about its intentions to protect the lowest paid and curb bonuses for the rich. I have written about it in Tribune.
The Public and Commercial Services Union, which represents Whitehall’s lowest paid, put forward a rather interesting negotiating ploy for 2014. They suggested that his successor, Mike Laverty, forgo a £25,000 a year bonus on top of his £160,000 salary and taxable expenses of £30,000 a year. Instead it suggested that the bonus be redistributed to the staff,benefiting the lowest paid.
The union had calculated that, if all the money available, including a below inflation rise and one off £265 payment (worth £595) for those earning less than £21,000 a year and a one-off £560 payment to those over £21,000, all 2400 staff could get an increase of more than £600 incorporated into their salaries. The few very lowest paid would get a £960 pay rise to take them up to the nationally-recognised living wage. It would benefit people working in Glasgow, Darlington and Colwyn Bay.
But it is understood that the Cabinet Office blocked this move and are insisting the bonus is paid to one person instead.
Now it is not known whether Mike Laverty, the present chief executive of the SLC, would have agreed. But he is unusual in that he returned some £80,000 to the Treasury last year from a previous redundancy deal when he got his new job. This is almost unknown among senior mandarins.
Unfortunately he is so media shy, he seems worried, like his predecessor,to talk to me. I can’t think why.
However what this sorry saga exposes is that the lower paid are not having to take a pay freeze to save taxpayers’ money to help bring down the deficit because such a deal would hardly have cost the taxpayer another penny.
What it does show is that the government WANT to keep the lower paid poor and reward the rich – probably because those at the top in the private sector are seeing their salaries soar during the recession.
The results can already be seen in the prosperous parts of the country with the rich looking for things to spend all their money while the poor economise or go into debt.
I was behind a well paid young couple in Berkhamsted Waitrose at the butchery counter who were ordering fillet steak – not for their own dinner- but to feed their dog. The complacent man boasted that he wouldn’t normally be at Waitrose because he regularly got the fillet steak for the dog at Harrods food hall.
I have no doubt Francis Maude – if it is he who approved this – is happy for the rich to buy fillet steak for their pampered pets this Christmas, while the poor juggle the cost of the fuel bills to cook their Christmas turkey. He has created a system where this happens every day.