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The Public Sector Pay Cap and the Economy: What should be UKIP’s response?

Two things are certain: by the end of September UKIP will have a new leader and Britain will be on the verge of a ‘Winter of Discontent’ unmatched since 1978-1979. A golden opportunity to set the stall for how UKIP might run the economy! An opportunity to set new ambitions for Britain!

Disregarding right now the rights and wrongs of the sheer scale of the public sector – which expanded by nearly two million under Labour! – there are about 5.4 million people who have seen their spending power drop by ca 15% since 2010. The average police officer, for example, has lost £6000 of spending power during that time.

The arithmetic means that for every 1% extra these workers are paid, approximately £1.5 bn has to be found or borrowed. An inflation busting pay rise will cost c £9bn as a one-off, with rolling additional expenditure of – at current inflation rates – £5.5 bn a year.

The government has already granted a paltry pay rise of approximately 2% to the police and prison officers but all other groups are still currently capped. The effects of this are easy to see. Nurses are leaving the NHS in droves. New nurses, now that the government has stopped training bursaries, are very hard to come by, providing just the excuse for never-ending migration.  The local economy is blighted as millions of people struggle to make do, let alone spend a few pounds in pubs or cafes enjoying themselves.

However, at the top of the pile, senior managers in councils, the NHS and in colleges and universities continue to earn massive salaries, sometimes hundreds of times higher than the lowest paid in their sectors. It is manifestly unfair. Everyone, apart from a minority, is thoroughly fed up with it all.

Over the following few weeks and months, this witches’ brew is exactly what Corbyn will exploit – quite rightly – along with strong union support: Britain is about to go on strike. It’s not a matter of if, but when.  

So, what should UKIP’s response be?

Quite simply, UKIP needs a distinct economic policy of its own, but right now UKIP must back the workers. If, come November, the rubbish is not being collected and UNITE, the country’s largest union, strikes, we will see a chain-reaction of wage demands across the public and private sector and this government will inevitably fall, projecting Corbyn/Momentum and its anti-Brexit government into power.

It will be the end of the Brexit debate. We will be going back into Europe. Permanently.

UKIP must develop its economic policies as a matter of urgency. It must prepare for a snap election as an alternative to Labour. I believe that government spending is not too high, but badly distributed. Slashing the pay of public sector workers to pay for foreign aid, HS2, Trident and aircraft carriers with no aircraft not only makes no sense but also alienates a quarter of the workforce, whose productivity declines as resentment over wages overrides pride in their jobs.  

This is why the police can’t be bothered to turn up for a simple break-in, why you can’t get hold of the local council after two o’clock on Fridays and why you wait ten hours in a casualty department. Poverty wages do no one any good. They create misery and a stagnant and inefficient economy.

Britain needs picking up! UKIP must be the party of the Public Sector, of blue-collar workers, of white van man and industry. For far too long the prevailing attitudes of the Right has been to support the non-productive financial and service sectors. The Left monotonously supports the unproductive and feckless.

UKIP can stand apart: Yes, we do support the public sector, and will pay a decent wage immediately to those in it. Yes, we do support the infrastructure spending that creates jobs for blue-collar workers and tradespeople – but: No, we don’t support crazy non-jobs in local authorities, vanity projects like HS2 and nor will we ever support a system that pays people to breed and not work!

UKIP must halve the foreign aid budget to provide the immediate cash injection (£7bn) and immediately scrap HS2 and new Trident development. In the medium term it must gradually cut public sector employment as investment in housing, local railways, roads and energy creates alternative, better paid jobs. Productive jobs.

We must cut migration and pay living-wage bursaries to British doctors, nurses, engineers and tradespeople as they train for their permanent careers. We must inject cash into rebuilding the shipyards and steel works, inject cash into an unprecedented house building plan that creates hundreds of thousands of jobs within five years. As the standard of living rises, we’ll see crime rates fall as they always do when economies boom. Sufficient money to pay for community police support and a large increase in police numbers will keep a lid on it, permanently. It must be done.

You may ask, will this be inflationary? Will it require borrowing?  Yes, and yes. Will we need union support? Absolutely – it works in Germany! But don’t let it worry you too much. Modernise. I urge you not to shut your eyes to economic alternatives and alliances you may not have countenanced in 2010.

Keynes said, ‘in the long term we are all dead’. If we look back in time we can see that the motor for economic booms of the past has always been war. Take the United States, four times richer after WWII than at the time of Pearl Harbor. The reason: huge government spending on the infrastructure for war production. Germany 1945-1960: completely regenerated by investment in modern industry after destruction. Japan, South Korea… I can go on. However, we don’t need the catalyst of destruction to act and act now.

The country needs to be picked up and shaken out of its doldrums with imaginative and workable policies that put Britain back on its feet. But we can only do it if we are elected.

So, I say, support the public-sector workers right now and develop policies for industrial and economic growth. In five years, the country can be transformed.

If you want that, we need enough MP’s to sway the government. That means getting elected when the next time comes. It will be very soon. So, policies now. Ready to go. Electable policies. And let’s get those 5.4m public sector votes for a start!

 

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30 Comments on The Public Sector Pay Cap and the Economy: What should be UKIP’s response?

  1. Ukip should have some sort of policy on union/worker/management affairs, ready for another winter of discontent.

    It’s not difficult, accountancy training for various workers representatives, on boards.

    Acas and federation of small businesses to name a couple can be asked for possible solutions. I bet they’ve been ignored for years. ( but don’t ask the echelons that talk to politicians )

    Policies ( not for blabbing ), but ready.

    Powlesland might be able to help for starters.

  2. You’re certainly on the right lines, Mr Bav.
    LibLabCon have been building the wrong sort of economy – low wage, low skill, low productivity,at the whim of big business and the globalists.

    We are now 19th in terms of GDP pc, yet Anthony and the UKIP establishment still try and liken the economy to a household budget. It’s Neanderthal Economics!

    The economy should be UKIP’s USP. We could be doing so much if only we could think a bit more laterally.

  3. I agree with Hugo. The Public Sector worker are overpaid and have all the benefits as well as pensions that the rest of the workforce can only dream about.

    Alistair Darling ramped up public expenditure from 105% to 125% of revenue before Labour lost the 2010 election leaving the Tories with an impossible task of trying to bring it back to ‘within our means’.

    The annual spending on the public sector plus the interest on the huge accumulated loan is now running at 110% of revenue and the Tories are beginning to give in the the relentless public and private sector and union pressure to allow up to inflation level increases.

    This only ultimately leads to a Greek scenario where eventually the creditors won’t lend any more bailout money unless they remove the democratically elected government and replace it with an unelected financial technocracy.

    The only logical policy is to work out the division of revenue to the different departments as a percentage, totalling 100% or less. Then whenever one part demands a higher percentage they must be asked which other department should give up some of its budget.

    HS2 and aircraft carriers probably don’t come from revenue but from a different source of capital borrowing. Overseas aid is pretty much universally hated by the British people.

    Remember Socialism is intent on driving the economy to destruction as one route to revolution and the end of capitalism. Your article Mr Bav seems to support this!

    • ‘ Remember Socialism is intent on driving the economy to destruction as one route to revolution and the end of capitalism. Your article Mr Bav seems to support this! ‘
      As absurd a comment as declaring that all Kippers are swivel -eyed-loons.
      It is very apparent that the monetary and economic policies of the 2010-2017 governments have failed.
      Keynesian economics when applied at the right time- and it is the right time- are proven by history to work.
      However, I have yet to see any UKIP policy at all in the last year regarding how the party might get Britain back to its feet. Its all been negative.
      As I have repeatedly stated- The public hate pessimists.
      No ideas= NO MP”S

      • What I think is absurd Mr Bav, is that a socialist party has been in power in this country three times since 1951.

        Each time it has driven the country into the ground and caused economical and financial carnage.
        1967 – Devaluation of the pound.
        1976 – Enforced Borrowing from the IMF; followed by the misery of the ‘winter of discontent’ in 1979.
        2010 – Need I say any more?

        The policies of 2010-2017 have been just the essential first aid to start to reverse the injuries of Labour vandalism.

        And of course, socialist parties tend to pursue the economic theories of a certain John Maynard Keynes…

  4. I’m all for backing the workers, so long as we recognise that’s not the same as backing the unions.

  5. A question for you “Mr Bav”:

    As public sector workers are paid more than private sector workers, why should they be singled out for more special treatment?

    http://uk.businessinsider.com/hammond-is-actually-right-public-sector-employees-do-get-paid-more-than-the-rest-of-us-2017-7

    http://www.bbc.co.uk/news/uk-politics-40480766

    Many in the private sector over the last few years would have been liked the chance to get 1% increases instead of the lengthy pay freezes and actual pay cuts they had to take to keep their companies going.

    • Many public sector workers cannot or will not strike. They depend on persuading the government to grant reasonable pay awards. Its illegal for the police, for example, to strike. Nurses are loathe to. However if , in the private sector, work for Tesco’s and Sainsbury’s offer a higher wage, then off you can go. . Frankly the patience of public sector workers has been abused.
      The choice is clear. Its better to negotiate and compromise now before what will be inevitable industrial action. Action supported by a lot of the population. UKIP should take a position. I see no leadership at all.
      UKIP needs its potential leaders to keep commenting and make their policy known or the party is irrelevant.

      • Mr. Bav,

        Sorry, I disagree.

        “Many public sector workers cannot or will not strike.”
        The firemen, doctors, teachers have all been on strike in recent times. Did they give a hoots about the people whose homes were on fire, the sick or the school kids and their parents. The police can’t strike, along with the military for obvious reasons….

        ” in the private sector, work for Tesco’s and Sainsbury’s offer a higher wage, then off you can go.”
        That’s how a market works, and indeed should work. A public sector employee could join a private sector company if they wish or become self employed. Nothing is stopping them, but they don’t, do they, because life is much tougher in the private sector.

        Lets look at the public sector in general:

        Employee absence levels are on average are 8.5 days per annum, per employee, in the public sector (5.2 in private sector) (according to the CIPD in 2016). Productivity in the public sector is lower compared to the private sector. Public sector employees earn on average £506 per week (£464 in the private sector). Pensions are better compared to the private sector, with 92% enrolment (compared to 73% in the private sector) never mind the pensions themselves. I could keep going but, I won’t, I think I have made my point.

        “Action supported by a lot of the population.”

        Whom specifically? Apart from the Unions, Corbyn and Labour and the public sector employees themselves? What has the private, voluntary and self employed said.

  6. Slightly at a tangent however I believe that the interest rate on student loans should at least be halved with a further cut an agreed amount of Capital is replayed after a given time, maybe 10 years. A UKIP policy of sense and for the young?

  7. While it is true that the fall in unemployment rates is encouraging, we don’t know the full story unless we see the figures for those claiming benefits.
    Unemployment levels are falling, yet our welfare bill continues to increase year-on-year. So something doesn’t appear to be adding up, as one would expect the welfare bill to fall as unemployment falls.
    Perhaps this is something to do with the vast numbers of unemployable ‘migrants’ we have been welcoming into this country since Labour opened the floodgates?
    Controlling EU migration is a good thing, but at least most EU migrants do come here to work. We’ve always had the power to control other rest-of-the-world migration, yet the Tories have failed to reverse what Labour put in place.
    It’s all detailed in David Vincent’s excellent book “2030: Your Childrens Future In Islamic Britain”.

  8. The Government should make voting fraud a priority now.
    voter id at polling stations
    students only vote from one address,
    postal voting only for house bound disabled, to be confirmed by doctor or other health professional,
    overseas voting to be carried out at Embassies or other government Buildings,
    all crosses to be put in ink not pencil

  9. We mustn’t make promises we can’t keep but we can make government smaller. Just because we have signed up to just about every organisation going (and pay into them)and made a department to deal with it doesn’t mean we need to continue. All these International organisations impose as much regulation as did the EU.
    There are many things we can change which neither of the two main parties will contemplate such as the foreign aid budget ruled by the OECD and today we saw an example of that. Neither have they mentioned a cap on top public service bosses pay nor a clampdown on future payments to the EU. These are policies which will free up funds, allow decent wages for the low paid and help energise the economy. We must have a simple message that Joe Public can understand, warm to and vote for.

  10. “Britain will be on the verge of a ‘Winter of Discontent’ unmatched since 1978-1979.”

    No it won’t, unemployment is low, employment is at a record high. The public won’t support a general strike and will see it as a self serving selfish act (which it would be) orchestrated by Corbyn, the Unions and the hard left to seize power.

    “we will see a chain-reaction of wage demands across the public and private sector and this government will inevitably fall, projecting Corbyn/Momentum and its anti-Brexit government into power.”

    Are you suggesting a revolution? Never going to happen. Too many people have their savings invested in property in the UK…..whatever sector you work in.
    Remember the fireman’s strike in 2002? That should have brought Blair’s government down but didn’t, and that lasted a long time. The military bailed Blair out, then got cut for their troubles later.
    They are trying to call the governments bluff…let them strike…the UK will never touch Labour in a million years again….maybe we need a taste of the 70’s as a reminder to generation Y….about socialists..

    “Britain needs picking up! UKIP must be the party of the Public Sector, of blue-collar workers, of white van man and industry. For far too long the prevailing attitudes of the Right has been to support the non-productive financial and service sectors. The Left monotonously supports the unproductive and feckless.”

    Why just the public sector, the private sector actually boost our GDP? UKIP needs to be the supporter of the strivers, job creators and entrepreneurs. NO-ONE else backs these people and these people dominate in the private sector, who fights for them? You increase public sector wages across the board and there WILL be massive redundancies to pay for it. The UK is flat broke, no-one talks about it. Yes we could use the aid budget, but what if they ask for 5% next year, then next year and so on….

    “You may ask, will this be inflationary? Will it require borrowing? Yes, and yes. Will we need union support? Absolutely – it works in Germany!”

    The UK is bust, national debt close to £1.8 trillion. The UK is very different to Germany. Germany is in big trouble, the second oldest population in the world after Japan, falling levels of tax payers and and with a massive welfare bill (growing daily thanks to Merkel, just wait until family reunification’s begin). There are three realistic ways out of this mire we are in. :
    1. Borrow – not an option, especially now interest rates look likely to rise and by extension public borrowing cost will rise. Kicking our debt into the long grass at the detriment of our children and grand children is economic illiteracy.
    2. Increase taxes – Not an option, especially as the UK population is already overtaxed and inflation biting disposable income. We need to look at cutting tax, especially VAT as it is a regressive tax. Cutting tax creates growth.
    3. Reduce the state size – We need to cut the size of the state. Too many non-jobs, managers and NGO’s. We need to add proper accountability and reward the good public employees, but also hold the bad ones to account. Too many bad employees hide behind the good ones and the Unions protect them. We also need to get to grip with migration (especially the financial costs thereof) and our exploited welfare system.

    “And let’s get those 5.4m public sector votes for a start! ”

    The public sector is controlled by the Unions and therefore the Labour Party. The Unions run the Labour Party and fund the Labour Party. Until that cycle is broken they will not vote UKIP. You can court their vote but they will still vote Labour. Look at the voting expectations of teachers for example and you will see they have no interest in the Tories let alone UKIP. What about the other 60 million odd people in the UK? Do their votes not matter?

  11. Why only halve the Foreign Aid budget? It couldn’t even be used to help people affected by the hurricanes in our own British Overseas Territories! Abolish the whole damn thing and the stupid ring-fence law that bloats it, and no one speak of it again until every British homeless person is housed and there is no further need for food banks.
    But the FA budget is probably peanuts compared to what is wasted on unnecessary layers of government, the HofL, NGOs, Quangoes and the rest of the committee-sitting parasites. They’re all still there despite empty promises to get shot of them. Sling the lot!
    Then there is the money we could save from leaving the EU asap instead of mucking around with fake negotiations, provided caffy-hearted politicians such as May don’t give in to the bullies’ demands for a ‘divorce bill’ to be paid. This is tantamount to demands for ‘reparations’, the money that is demanded by the winning side after a war, for all the expenses of waging it. Britain is going to win the war over Brexit, but seeing as the EU has been screwing us over for years, as gangsters do, the only money to be repaid should be from them to us. Offer them a deal: shut the hell up about a fictional ‘divorce bill’ and we won’t tally up what you owe us. If our politicos haven’t got the wit to do it, call in a seasoned divorce lawyer who knows what he’s about.
    Finally, think of all the money we won’t have to pay out once that glorious day of freedom comes when we are OUT for good and all. If that won’t kick the economy into motion and pay off some of the deficit, what will?

    Borrowing money with high interest rates should be a very last resort. Cut out all the wastage first, including all the money spent on housing, feeding and clothing workless immigrants that we don’t need or want here, especially the muslim ones whose only productivity is large families of children to add to the muslim army of occupation of the future.

    • I am interested to note that Michael Howard is reported today as saying exactly as I did in the above post yesterday about the EU treating us like a defeated country and demanding reparations for the expense of waging war. Pity Howard didn’t get to be PM; he would have been better than Cameron and May rolled together, and got us out sooner.

  12. This is a call for the opposite of what I believe UKIP should be doing. There are already a range of socialist parties aiming to indebt us to the point of bankruptcy. UKIP has traditionally and needs to stand for controlled government spending and free markets. We should maintain control of public spending only increasing where it makes sense because of recruitment and retention issues. Government shouldn’t be aiming to create jobs or pouring money into industry it should unburden industry and step back to allow the innate entrepreneurial spirit of the nation to flourish. If UKIP were to adopt policies such as these, what would be the incentive for the candidates to stand and campaign? They could simply work for any other party, campaign for the same failed policies and get a lot less grief.

    • The inate entrepreneurial spirit of a poor but smart kid from Hackney or Newcastle might well turn him to becoming a drug dealer unless we pay for him to go to technical college and become a highly paid bricklayer or electrician. But at the moment he would get paid nothing to do that. I would pay him £10 an hour whilst training and guarantee him a job at £20 an hour once trained in a 200,000 affordable houses a year building initiative. THAT’S sensible intervention.

  13. The problem with borrowing is that it has to be repaid. The national debt is a charge on future generations and some would say an immoral charge outside times of war. A policy of jam today paid for by the generations of tomorrow is not one I support.

    • I don’t know anything about economics, Stout – but isn’t repayment of the debt now almost impossible with so many, and more coming in all the time, dependent on welfare? Surely the problem goes back much further to when we sold off all our shares, as it were, our assets to other countries – so Britain was technically left without an income?

      • “so many, and more coming in all the time, dependent on welfare” is certainly one aspect of the problem.

      • America owes nearly 20,000,000,000,000 Dollars. In $100 bills laid end to end enough to go to the Sun and back.
        But not enough wood pulp available to print them even if we fell all the trees in Brazil’s rain forests.
        So yes, repayment is impossible

      • The US national debt , in Dollar bills, weighs the same as 250 Nimitz class aircraft carriers. Britain only owes a tenth of that.
        Chicken feed….. ; )

        • It’s not the size of the debt but the size of the interest payments that have to service it that matters. That does contribute to budget deficits and take away money from public spending.

          • Yes, but it is part of the Treasury convention to have, for example, ‘perpetual bonds’ and bonds that last over a hundred years such as the ones that were only repaid under Osborne – dating back to the First World War.

            Also, the ‘independence’ of the Bank of England can always be taken away by an Act of Parliament – if the Treasury or rather the Chancellor wishes to pre-empt or avoid a situation – highly unlikely it has to be said – where the Governor of the Bank might resist an instruction – to monetise government debt by buying up public bonds from the private sector in the secondary market.

            In other words, the creation of electronic money – a form of quantitative easing (QE), actually ….. ‘money’ created out of thin air by as keystroke. This doesn’t involve the printing presses in anyway at all. The assets (electronic money and bonds) are shuffled between accounts within the central bank system (horizontal operation) via the reserve accounts of the commercial banks.

          • Of course, you have a valid point Stout, however The Government can, if it chooses raise enough money to pay for a complete reconstruction and regeneration plan via a bond issue. Like a War Loan. Britain has an extremely good credit rating and even with a 25 year bond paying a tiny interest rate it would attract domestic, international and institutional investment.
            Putting, as I suggest, money into training our own new generation of skilled workers and essential professionals and using these skills to solve chronic housing and infrastructure problems is a wise and profitable investment.
            Its exactly the same as running a business. You have the credentials, credit and skills to borrow to build a factory making widgets that everybody needs, you borrow the money and employ 100 people making widgets and pay the bank back over 10 years. The country benefits from the widgets, 100 people are employed and the banks are happy. The trouble is that the governments of the past have NOT borrowed to build useful widgets. They borrowed money to create non – jobs on a colossal scale that are utterly non productive and added nothing to the country or its productivity. THAT is what we need to reverse.

  14. I have lost patience with members of the public who still think all civil servants are overpaid and over-rated. The greater percentage of them are just ordinary folk on ordinary incomes. It is disgusting that British people who want to work for the NHS can’t get in. I would pray that voters wouldn’t be so stupid as to vote for Corbyn, but sixty years of life has shown me that they DO do dumb things and the scenario described here could well happen if UKIP gets it wrong.

  15. Just trying to think of someone who might just fit the bill, Mr. Bav……

  16. Absolutely agree with you. Let’s hope the new leader is able and willing to put those wheels in motion.

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