THE Prime Minister is expected to "buy off" 1.3 million public- sector workers this week by offering most of them pay rises substantially above the inflation rate. John Major will be engaging in the practice, employed by both Conservative and Labour governments, of keeping their own employees "sweet" ahead of an election.
On Thursday the Cabinet is expected to agree increases of between 3.5 and 4.2 per cent on the recommendation of the pay review bodies which cover doctors, dentists, nurses, teachers and senior personnel in the armed forces, the judiciary and civil service. The Treasury is known to be unhappy with the recommendations, but ministers are keen to promote a "feelgood factor" among potential supporters.
It will be a matter of debate how such increases are compatible with the Government's insistence that pay bills must remain static and rises be financed through increases in efficiency and productivity. Mass job losses to pay for salary increases will not be popular with electors.
Historically, the level of pay in the state sector may depend to a greater or lesser extent on a range of factors, including ministerial policies, economic cycles, inflation and the going rate in the private sector. …