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The government was criticised from all parts of the lords for its handling of public sector pay during a debate las...
The government was criticised from all parts of the lords for its handling of public sector pay during a debate last night initiated by industrial relations authority and Labour peer Lord McCarthy, who pressed for a long-term strategy.

He said: 'The key to any long-term strategy for public sector pay will consist of getting rid of the endless series of short-term fixes which have applied to it ever since 1983. I refer, for example, to the differential availability of pay reviews, where some workers are completely excluded; the anomalies, the inconsistencies and the fragmented forms of performance-related pay; the lunacies in local bargaining; the vagaries of competitive tendering; and the wholesale importation of people from outside the organisation who know nothing about the fancy rates of pay.

'Until the government grasp and deal with the previous government's short-term attempts to deal with the problem they will not have a long-term strategy'.

Lord McIntosh of Haringey, government treasury spokesman, said the stragey was already in place. He added:'The comprehensive spending review published in July set spending limits for departments for three years and proposed new terms of reference for the pay review bodies to ask them specifically to consider recruitment, retention and motivation, the department's output targets for the delivery of services, the department's three-year expenditure limits, and the government's inflation target. These considerations will also be relevant to the other pay settlements in the public sector'.

In reply to Liberal Democrat Lord Razzall, who said the decision to stick to Conservative expenditure plans made serious pressures inevitable in the poublic sector, he said: 'As regards the build-up of pressure in the public services, of course it is the case and of course it is an inevitable consequence. That is why we are looking at a three-year horizon for pay awards in the future'.

Pressed by former Conservative employment secretary Lord Tebbit for an undertaking that there will be no phasing of public sector pay awards, Lord McIntosh said: 'If the pay review bodies propose affordable solutions we will move away from staging as soon as possible'.

Lord Newby said the differential in public and private sector pay had moved consistently against the public sector during the past 20 years. The public sector would only meet the levels of service demanded by government if people like teachers and nurses were adequately reward.

Lord McIntosh replied said the Office for National Statistics has been required to look again at the figures it produced showing pay disparity between private and public sectors. 'Our interim conclusions appear to be that the difference between the public and private sectors was not as great as originally concluded. We have set up an independent inquiry under Sir Andrew Turnbull and Professor Mervyn King to look into how it was that estimates had to be corrected. That will be conducted by an expert outsider, Mr Martin Weale'.

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