How pay goes up before elections

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The Independent Online
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.

Yet there does appear to be a very definite electoral influence. Before the 1979 election both Labour (then in power) and the Tory opposition fell over themselves to endorse the Clegg report on Whitehall pay which recommended ways in which the earnings of public servants could be responsive to pay elsewhere. That meant that public-service pay rose 4 per cent faster than private-sector earnings in 1980.

Subsequently, the victorious Margaret Thatcher lost little time in going back on the Clegg recommendations. In 1981 she set a limit of 4 per cent on public pay increases, but a 9 per cent ceiling on other costs.

But before the 1983 general election, she again took off the brakes to ensure a maximum number of votes among public servants, a situation that was again reversed the following year when private-sector pay rose 4 per cent faster than public-service pay. (Graphic omitted)