Cbi Calls For Two-Year Wage Freeze

Workers marching in London last month to defend the welfare state
Workers marching in London last month to defend the welfare state

Public sector trade union Unison, yesterday condemned the bosses’ organisation, the CBI, for calling for a two year public sector pay freeze.

Unison warned that hitting public sector wages now would pull down demand for private sector goods, risking a double dip recession.

Unison General Secretary Dave Prentis said: ‘Let’s not forget, the public sector didn’t cause this crisis, and it is wrong for the CBI to expect them to pick up the bill with pay cuts.

‘It also makes no sense to depress wages now. Hitting the spending power of public sector workers would drag down demand in our economy, just as it needs a boost to avoid a double dip recession.

‘As a union, Unison wants the best possible use of public money. But the CBI is wrong to hold up privatisation as the way to achieve bang for the taxpayer’s buck.

‘There are huge transactions costs associated with selling off services, which the public purse has to pay for. The shareholder premium leaches off more money that could be pumped back into giving the public better services.

‘Privatisation also means public bodies get locked into long-term contracts.

‘When unexpected events, such as the credit crunch happen, where the cost of borrowing shot up, it’s impossible for councils and health authorities, that have outsourced contracts, to respond.

‘What they have ended up with, are far more expensive contracts.’

Spelling out its priorities for the new government in a Time for action: Reforming public services and balancing the budget, the CBI highlighted the areas where it claimed ‘immediate cost-savings could be made, while maintaining frontline services’.

It added: ‘For example, freezing the total public sector pay bill from 2010-11 for two years through selected pay and recruitment freezes could save £18bn.’

The CBI emphasised that ‘far bigger savings could be achieved through a fundamental re-shaping of public service provision, including using the private and third-sector to deliver better outcomes more efficiently.

‘For example, by re-engineering health and social care to treat patients in their homes and in the community more than £8bn could be saved by 2015-16.’

TUC General Secretary Brendan Barber responded: ‘This is special pleading from the CBI which is calling for the full brunt of spending cuts to fall on public sector staff rather than the billions spent by government on private sector goods and services, such as consultants.

‘The economy is still very fragile and any cuts could send us back into a double-dip recession.’

Meanwhile, social workers and managers in social care have raised serious concerns about the roll out of personal budgets, in a survey commissioned by Unison and Community Care.

Helga Pile, Unison National Officer for Social Services, said: ‘Worrying numbers of people are reporting vital local services, such as day centres, are being shut down.

‘Councils are making these decisions purely on the assumption that less people will be using them on personal budgets.’