The equal pay anti-climax
Has Will Hutton overestimated the caution of the Coalition? It certainly seems so. Back in May the Government commissioned him to bring his considerable, albeit lefty, skills to bear on the question of pay equality. His starting point was a promise from the new Prime Minister – a promise informed by the Progressive Conservatism Project’s Everyday Equality report – that pay ratios would be explored as a solution to runaway pay at the top of public services. The Government had recognised the profound unfairness, negative effects and expense of the salaries arms race that had hiked management pay in the public sector ever upwards whilst leaving staff lower down the ladder on incomes that were often shrinking in real terms. Their commitment to resolving these knotty problems appeared steely – thus Will Hutton, left-wing intellectual and bastion of social democracy.
Except that what he has today produced is a disappointingly timid set of recommendations that appear to have been watered down to an extent usually only seen in homeopathy. Instead of pay-ratios to keep public service chiefs in the same universe as their staff, we have ‘transparency league tables’. Instead of an acknowledgement that the public/private race to the top on salaries is unaffordable and undesirable, we have public sector ‘bonuses’ which will be paid for by salary reductions for those who are underperforming. Leaving aside the political difficulties of introducing bonus schemes for some public servants at a time when Theresa May is battling to wrestle them from the police, don’t these recommendations seem a little uninspired?
Instead of looking to the private sector for new ways of incentivising top public servants, Hutton could have looked to the best performing public services. He would have observed that money is not always the driving force behind highly motivated leaders in the taxpayers’ employ. The pay gap in the army, for example, stands at 6-1, meaning that senior military figures earn around 6 times that paid to their most lowly soldier, sailor or pilot. In the NHS this pay ratio is 15 to 1. It is these discrepancies that the Prime Minister asked Hutton to look into – they will be solved neither by greater transparency nor by hiding salaries in bonus pots. Fixed pay ratios, to keep public services cohesive, fair and equitable workplaces, were what the Prime Minister asked for – they are not what Hutton has delivered.