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Hammond: pensions make public sector pay better than private sector Philip Hammond urges caution over moves to lift public sector pay cap
(about 4 hours later)
Philip Hammond has argued that public sector workers remain on average better compensated than their private counterparts, refusing to deny telling cabinet colleagues that public sector staff were “overpaid”. Philip Hammond has urged caution over any moves to lift the cap on public sector pay, arguing that workers in the sector remain on average better compensated than their private counterparts due to better pensions.
The chancellor has been the subject of two leaks from this week’s cabinet meeting: one about his comments on pay, the other that he reportedly said driving a modern train was so easy “even a woman can do it”. While the chancellor refused to comment on a report in which he had told cabinet colleagues public sector staff were “overpaid”, he also pointedly did not deny it, arguing it was wrong to say that public sector staff had excessively lost out during austerity.
Hammond told BBC1’s Andrew Marr Show he was being briefed against by some cabinet colleagues, with the leaks coming from people who were “not happy with the agenda” he has in pushing for a Brexit focused on the economy. Asked about the “overpaid” comment, relayed to the Sunday Times by an unnamed ministerial colleague, Hammond did not reject the report.
He vehemently denied making the comment about women as train drivers, saying: “No, I didn’t. And I wouldn’t say anything like that.” “I’m not going to talk about what was or wasn’t said in a cabinet meeting,” he told BBC1’s Andrew Marr Show. “It’s easy to quote a phrase out of context. But I’m very happy to talk about the substantive issue.”
But asked about the comments on pay, reported by the Sunday Times, Hammond did not reject it, arguing there was a wider general issue with public sector pay. “I’m not going to talk about what was or wasn’t said in a cabinet meeting,” he said. “It’s easy to quote a phrase out of context. But I’m very happy to talk about the substantive issue.” In contrast, Hammond was adamant when questioned about a report in the Sun that he supposedly told cabinet that driving a modern train was so easy “even a woman can do it”, bringing a rebuke from Theresa May.
“No, I didn’t. And I wouldn’t say anything like that,” he said. “I’ve got two daughters in their early 20s, both high achievers,” he said. “I don’t think like that. I wouldn’t make a remark like that.”
Hammond said that while public sector pay had formerly “raced ahead” of private salaries, the gap had now closed. But, he added, public sector pensions skewed the picture. “When you take into account the very generous contributions that public sector employers have to pay in for their workers’ very generous pensions, they are still about 10% ahead,” he said.Hammond said that while public sector pay had formerly “raced ahead” of private salaries, the gap had now closed. But, he added, public sector pensions skewed the picture. “When you take into account the very generous contributions that public sector employers have to pay in for their workers’ very generous pensions, they are still about 10% ahead,” he said.
“And I don’t for a moment deny that there are areas in the public service where recruitment and retention is becoming an issue, that there are areas of the country where public sector wages and private sector wages are getting out of kilter in the other direction. We have to look at these things and we have to discuss them.”“And I don’t for a moment deny that there are areas in the public service where recruitment and retention is becoming an issue, that there are areas of the country where public sector wages and private sector wages are getting out of kilter in the other direction. We have to look at these things and we have to discuss them.”
Asked whether he thus did believe the public sector was overpaid, Hammond said it was “a relative question”.Asked whether he thus did believe the public sector was overpaid, Hammond said it was “a relative question”.
He said: “This is about the relationship between public and private sector pay. And it is a simple fact – independent figures show that public sector workers, on average, are paid about 10% more than private sector workers.He said: “This is about the relationship between public and private sector pay. And it is a simple fact – independent figures show that public sector workers, on average, are paid about 10% more than private sector workers.
“You can’t eat your pension, you can’t feed your kids with your pension contribution, I understand that. I understand all the issues that public sector workers are facing.”“You can’t eat your pension, you can’t feed your kids with your pension contribution, I understand that. I understand all the issues that public sector workers are facing.”
Asked whether public workers would expect salary increases to remain within the 1% annual cap, Hammond said the policy had not changed. He said: “We’ve sought to be fair to public sector workers but also fair to taxpayers.” Quizzed on if this meant public workers should expect salary increases to remain within the 1% annual cap, Hammond said the policy had not changed. He said: “We’ve sought to be fair to public sector workers but also fair to taxpayers.”
But he added: “We do keep this under constant review, and I think the fact, as is well known, the cabinet has been discussing this issue sends a clear signal that we do understand the concern both of public sector workers and of the wider public.” But he did not completely shut the door on easing the pay cap in the future: “We do keep this under constant review, and I think the fact, as is well known, the cabinet has been discussing this issue sends a clear signal that we do understand the concern both of public sector workers and of the wider public.”
Hammond was, however, adamant in rejecting a report in the Sun on Saturday that Theresa May had admonished him for making the sexist comment about women driving trains. Hammond has in recent weeks been seen as something of an isolated voice in cabinet urging consistency on the policy of limiting annual pay rises for public sector workers to 1%.
“I’ve got two daughters in their early 20s, both high achievers,” he said. “I don’t think like that. I wouldn’t make a remark like that.” Ministers including Boris Johnson, Michael Gove, Jeremy Hunt and Justine Greening have all suggested the ceiling should be lifted, prompting the former Tory chancellor, Lord Lamont, to urge more cabinet discipline.
Commenting on the series of leaks against him, Hammond said: “If you want my opinion, some of the noise is generated by people who are not happy with the agenda that I have. Over the last few weeks, I’ve tried to advance ensuring that we achieve a Brexit that is focused on protecting our economy, protecting our jobs and making sure that we can have continued rising standards in the future.” Hammond suggested the leaks over his supposed comments in cabinet were more motivated by differences over Brexit, saying “some of the noise is generated” by ministers who disagree with his aim of prioritising the economy in leaving the EU.
But he insisted ministers were was not overly divided on Brexit: “I think the cabinet is coming much closer together on issues like transition, for example,” he said. Damian Green, the first secretary and thus May’s deputy, said the briefings from cabinet needed to stop.
“Five weeks ago the idea of a transition period was quite a new concept. I think now you’d find that pretty much everybody round the cabinet table accepts that there will be some kind of transition.” “There are a lot of very serious things going on the world and now is absolutely not the time for this type of activity,” he told BBC Radio 5 Live’s Pienaar’s Politics.
The international trade secretary, Liam Fox, told BBC1’s Sunday Politics that the leaks were a result of “too much self-indulgence” and should stop immediately. The international trade secretary, Liam Fox, told BBC1’s Sunday Politics that the leaks were a result of “too much self-indulgence”.
“I absolutely deplore leaks from the cabinet. I think my colleagues should be very quiet, stick to their own departmental duties,” he said.“I absolutely deplore leaks from the cabinet. I think my colleagues should be very quiet, stick to their own departmental duties,” he said.
Fox played down the idea of divisions between him and Hammond over the length of any post-Brexit transitional deal with the EU, which he has talked of in terms of months, while the chancellor has said it could be in place for years. “Talk of leadership challenges is completely overblown and completely the wrong thing for the country. The last thing anyone wants is for the Conservative party to turn in on itself.”
This was “more a technical argument” and still had to be negotiated with the EU, Fox said. The Labour leaer, Jeremy Corbyn, said the briefings were sowing confusion.
“I’ve campaigned to leave the European Union for a very long time,” he said. “As long as we leave in March 2019, then I’m happy as long as we’ve got a very time-limited transition to make it work for business.” “It seems quite extraordinary that we’re having varying accounts coming out of every cabinet meeting about who said what to who and at what point in the meeting they said it, and everybody saying nothing actually happened,” he said.
“It’s a very strange meeting where nothing actually happens. Something must have been said by somebody and maybe a little clarity would be helpful.”