Will public sector workers get a pay rise?

Paul Johnson

Hello and welcome to this edition of the IFS Zooms In, I’m Paul Johnson Director of the Institute for Fiscal Studies, and today we’re going to talk about the extremely big and important question of pay in the public sector, that pay for the teachers and nurses, civil servants, police, armed forces and so on. Today I’m joined by Delphine Strauss, who’s Economics Correspondent at the Financial Times and has been writing a lot about this recently, and by Ben Zaranko, senior economist at the IFS who’s been doing a lot of work on public pay and public finances.

Now this is going to be one of the biggest issues I think facing this government, if we think of this as a new government, we spend well over £200 billion a year on public sector pay, and the decision over that therefore matter enormously from a fiscal point of view, clearly we have very high inflation and a cost of living crisis, and the public sector on the whole are not being offered pay settlements anywhere near the level of inflation. We’ve all seen talk about strikes across various elements of the public sector, and we know the public finances themselves are in a bit of trouble themselves over the next few years. So, very big issue indeed.  

So, Ben perhaps you could start just by putting the scale of that issue into a little bit of context. I’ve just said that we spend about 200 billion a year on public sector pay, that’s quite a lot, isn’t it? And a lot of what happens to the quality of public services over the next few years may depend on what happens to public sector pay settlements.

Ben Zaranko

Absolutely, 200 billion, more, £230 billion is a big number in the public finances, it’s around a fifth of all government spending and more than a third of what we spend on public services, and makes up a big chunk of what the NHS, the education system and so on spend. Relatively small sounding changes to what happens to the pay for those five and a half million or so workers can have big effects because of one percent change in a very big number equals a big number. And for public services trying to plan their budgets going into a difficult winter and in the years ahead, what happens to the pay of the staff that they employ will be a big factor in determining the health of their finances, the services they’re able to provide and their ability to deliver on public service objectives like clearing the back log on the NHS or the court system, or improving our school or perhaps the focus under the new government, making their contribution to a growth friendly United Kingdom

Paul Johnson

All of which is terribly important, broadly speaking, and well get into the details a little bit more. Governments offering public sector workers 5% or so across the board, against inflation of 10% or so, now that’s quite a big pay cut. Delphine, you’ve been talking to the unions, you’ve got a sense of what the response to that might be, but how fed up are people in the public sector about getting offered, broadly speaking 5% when inflations at ten?

Delphine Strauss

They’re incredibly fed up and it’s not just because of this one-year settlement where we have exceptional inflation, for them I think it’s the final straw in a very long running series of disappointments. Where over the last ten, fifteen years or so, public sector workers have been trailing private sector counter parts. And I think people are especially angry because it’s come after these two years of COVID where we had all of the rhetoric on key workers and recognising their contributions and so on, and people feel that it really didn’t amount to much. It’s coming at a time where it’s really difficult context for industrial relations in general. Employers can’t afford to pay more but they’ve also got huge recruitment pressures. Public sector workers don’t normally jump ship that quickly, but at the moment a lot of them have better job options going. And if public sector employers don’t have the flexibility that private sector employers have then they’re going to be having much worse recruitment difficulties.

Paul Johnson

That gets to the absolute nub of the problem, doesn’t it, the combination of things that you said there, first is this is the, another straw which is breaking the camel’s back, but also the issues around recruitment and retention, let’s get to the issue of the straw on the camel’s back here. Ben you’ve been looking at what’s been happening to public sector pay overtime and I think part of the issue here is that this is a real pay cut on top of real pay cuts over the last decade.

Ben Zaranko

That’s right, if we cast our minds back to the heady days of 2010, George Osbourne and David Cameron came into government and they froze the pay for public sector workers for several years. Pay increases were then capped at around 1% and then just as the pay cap was undone and pay started to rise a bit a faster than inflation, you then had the COVID pandemic, lots of workers had their pay frozen again, and what that adds up to is average real terms pay in the public sector being around 5% lower than it was in 2010, for some particular roles in the public sector. Current public sector workers are paid considerably less sometimes 10/15% less than their counterparts were around a decade or so ago. In general, it’s the more highly paid more experienced public sector workers who received the biggest pay cuts, and what that adds up to is quite a fed-up work force - as Delphine was saying maybe the straw on the camel’s back. And it means that relative to pay in the private sector, hourly pay in the private sector, once you adjust for workers various characteristics and so on, its at its lowest point in at least thirty years, and this is an ongoing steady thing that’s been happening for the last decade, and it’s added up to a lot of discontent I think it’s fair to say.

Paul Johnson

And one of the issues of course is the private sector hasn’t been doing terribly well over the last ten or fifteen years and indeed the private sector pay its been pretty much the worst decade since the beginning of the industrial revolution, and the public sector is doing even worse. Delphine that clearly brings real risks in terms of as you were saying, recruitment, retention, strikes and so on?

Delphine Strauss

It does, I mean we’re seeing those risks getting bigger on both fronts. When it comes to strikes, most of the big public sector unions are now planning to ballot their members over the autumn on industrial action. Some are running indicative ballots first some are now at the stage where they’re now going out to members to ask whether they’ll vote for industrial action or not. It will be quite a big operation, and I don’t think we’ll know for a few months yet exactly what the appetite for confrontation is, and it’s not clear cut which way it will go. But we are already at the same time seeing recruitment and retention pressures worsening. When you look at vacancy rates in the NHS, they’re going up quite sharply, I think the overall vacancy rate across the NHS is now at a record high and for some, for nursing staff, medical staff it’s not quite as bad as it’s been in some previous years but it’s gone up very sharply recently. There are also very bad results coming out of staff surveys on morale.

In teaching, I think you’re also seeing some pressures starting to worsen, not necessarily in the vacancy rate itself, but when you speak to head teachers, they will say privately that they have far fewer candidates coming forward than in the past. And they may be making choices they maybe wouldn’t have had to make in the past. So, they’re recruiting people who are maybe less experienced or maybe not the candidate they would have gone for a few years ago. And I think that compromise on quality is going to be difficult at a time when we’re already worried enough about catching up from COVID learning loss and so on. So, I think you know whether or not the strikes happen, we’ve already got big problems.

Paul Johnson

What do we know about the efficacy of public sector strikes? I mean teachers have had periods of action over the last several years, is your impression that governments take notice of this or is this the sort of thing that teachers or nurses or whatever striking, it’s really the public that get fed up and it doesn’t really help their case? They are among the most unionised parts of the entire economy, but is that a unionisation that they’re actually able to really bring to bare effectively in defending their pay?

Delphine Strauss

So, I think that’s what we’re about to find out. I mean the calculation by the government both towards the end of Boris Johnson’s government and going by what Liz Truss has said during the leadership contest, is that they’re not necessarily worried about having confrontation. They think that you know workers who strike don’t get public sympathy for long, and that it will play in their favour. I’m not sure if that’s true, I think there’s been quite swinging sentiments as we saw when rail workers were on strike earlier on the summer, there was far less discontent amongst communities than you’d normally expect. The unions themselves are saying that their polling suggests they’ve got public sympathy on their side, but we haven’t had this big a test of it for a long time, we’ve had I think the last big set of strikes was in 2011 when we had strikes over public sector pensions. If this turns into you know large sections of the NHS and the teaching workforce and teachers going on strike more or less simultaneously it will be a very different affair.

Paul Johnson

So, Ben, there are clearly pressures for higher spending here, we’re already seeing pay rises of around 5% for most public sector workers, though not, it has to be said for civil servants who are doing very badly yet again.

Ben Zaranko

2% for junior civil servants, this year.

Paul Johnson

2%, and for senior civil servants?

Ben Zaranko

I think similar, they offered them the same.

Paul Johnson

2%, so 2% for-

Delphine Strauss

2-3%, yes. I think senior civil servants with a little bit of a skew towards bottom end of the pay scales.

Paul Johnson

And it’s worth saying that civil servants themselves have done even worse than the public sector as a whole over the last decade. Now they often don’t get a great deal of sympathy, but they are the people that work in job centres and HMRC tax offices and so on as well as in Whitehall. Indeed, the vast majority of them are off that nature rather than the mandarin sitting in their office with the minister in Whitehall, make up only a very tiny fraction of the civil service. But we’re looking at increases of 2% there, 5% for much of the rest of the public sector. But one of the problems, Ben, is that the amount of money that government departments actually have to spend and therefore the amount that schools and hospitals have to spend was set a year ago when we thought inflation would only be 2.5/3% something like that. And they’re having to adapt the inflation at a much higher level with a fixed budget.

Ben Zaranko

That is absolutely the problem. You’ve got on the one hand public sector workers and their families looking at a pay rise of 4-5% for most of them, which is just not going to keep pace with rising prices and means real terms pay cut and probably a real terms hit to their living standard. Then you’ve got on the other side, the government are also unhappy, or at least the public service providers are because they’re being asked to make these pay awards of around 5% using budgets that were predicated on pay awards of more like 2 or 3% and that money’s got to come from somewhere. Now you maybe you can make some savings by a recruitment pause, maybe you make cuts to the budgets, you cut back on non-essentials, I think there’s stories about schools no longer hiring teaching assistances for example or cutting back on how much they spend on text books, these are all inevitable consequences if you say you have to spend the same amount or more on pay, and you have to do it from within the same budget, something has to give and I think what may give in some case is the quality of public services, we may see deterioration there, further deterioration at what these public services are able to achieve and offer to the population. And this to some extent the gamble that the government is taking or the choice that it’s making at least in the circumstances.

Paul Johnson

And that’s when giving only 5%, if it were to give 10%, then the impact would be much higher still.

Ben Zaranko

Yes, maybe you can make up a 2% gap in the short term, although it must be said having to do that whilst paying more for energy, more for food, more for fuel and so on. But if you’re looking at a 10% rise or a sustained rise above what was planned it just does not, something has to give, and I think what has to give ultimately is the government will have to come forward with more money. It simply is not feasible to offer a 10, or a 12 or a 15% pay award without extra cash to pay for that, the numbers just simply do not add up.

Paul Johnson

So, I would bet on another spending review and despite the new prime ministers’ commitment to a smaller state, more money coming forth because it’s simply not feasible, or is it, to carry on with the current level of promised spending?

Ben Zaranko

Well, people who regularly listen to this podcast Paul may remember you betting me £5 a few weeks ago that would indeed happen and I’m happy to stick to that bet. I think that some moment, yeah is likely to come, to have to be announced, if they are going to announce again a pay award of in a region of, let’s say inflation next year is hovering at 8, 9, 10%, the 2% pay award is not going to fly, you’ve got to look at a higher pay award and you’re going to have to eventually have extra funding. I think that’s right but the scale of that and what the government is willing to countenance, at the same time as wanting to make big tax cuts and wanting to do all sorts of other things remains to be seen and of course the economic outlook is changing extremely rapidly at the moment, we don’t know where we’re going to be in a years’ time and so I’d be hesitant to put more than 3% behind that.

Paul Johnson

And Delphine you I think have been looking at to some extent the consequences of all of this for the actual public sector workers in terms of their cost of living and the impact that its having and how that compares to others. I mean to what extent are we seeing actual evidence of people starting to struggle?

Delphine Strauss

We’ve been hearing some interesting stories, in particular from a call out we did to readers asking them you know how they were feeling the cost-of-living pressures and what changes they were making. You know to be honest we were expecting to hear back from some fairly comfortable FT readers who were you know maybe buying fewer branded goods at the supermarket. But what actually came across really strongly was that, you know of course we have some of those readers, but we also had a lot of responses from pubic sector workers who were having to put quite big life decisions on hold, and I mean we’ll be writing more about all of this soon. But you know we were hearing from NHS workers who maybe had been planning to move to the southeast of the country they put that on hold; one lady who had a seventy-mile round trip commute with petrol costs that had gone sky high and she was having to sort of nudge her teenage kids to get jobs just so they can cover a few more of their own costs; and somebody else who put a wedding on hold. You know just a lot of personal stories and the difference it makes when you have that really under-par pay settlement or you know we’re still waiting for that pay settlement to come through.  

I think we’re also hearing a lot more people now are trying to manage the budget juggling, Ben was talking about the trade-offs that public sector managers have to make, if they’re trying to make these pay rises from a budget that hasn’t grown, that’s particularly acute in teaching, because of course the decisions get handed straight down to the headteachers and deputy heads and are not done centrally. And so, we’ve been talking to lots of school leaders who are already saying they have to make incredibly difficult choices because their wage bill is going up, and they can’t hire teaching assistance, or they’ve got an energy bill that’s gone up at the same time, or they can’t make school trips or whatever it is. So that’s sort of, that’s pointing really quickly.

Paul Johnson

Those are really striking stories. One of the things that is across some parts of the public sector at least, one of the responses to that has been to be a bit more generous to lower paid workers than to higher paid workers, for example brand new teachers are getting much bigger pay rises than more experienced teachers. Senior civil servants have had their real pay cut a lot over recent years. Ben is that a reasonable response to this? To focus what money there is on the least well paid.

Ben Zaranko

I think it’s certainly an understandable one. I think that as heart wrenching as some of the stories are and how difficult about those stories about delaying a wedding for example are I think that there is perhaps greater concern for those at the very bottom of the pay distribution, for whom the choices might be you know heating or eating. And I think that there’s a desire to protect the lowest paid and it’s understandable I’m just not convinced that public sector pay is the right tool to be using if you want to help those individuals and their families, there are lots of low paid people in the private sector as well, if anything the lower paid people in the public sector do especially well compared to the private sector, they are higher paid counterparts actually – while they paid premium for those at the bottom end, roughly speaking is the opposite of the pay premium, a pay penalty for those at the top end of the way distribution. So, what we’ve had since 2010 is repeated policy of prioritising the lowest paid, urm offering a pay freeze to everyone but the lowest paid who got £250 for example and then more recently a pay pause, it was billed as, with exceptions for the lowest paid. What you’ve had is basically a compression of the public sector pay distribution where you’ve seen the lowest paid closing the gap with their higher paid counterparts.  

Now that’s not – it’s a completely legitimate policy choice to have made, but it does mean that for many people the financial rewards and climbing up the ladder might be smaller than they once were, maybe the additional stress you get from taking on that management role no longer feels worth it giving the fairly meagre increase in your pay packet at the end of every month. And there has to be a risk that if you continually only give pay awards or can only give the biggest pay awards to those at the bottom end, you maybe impede your ability to keep hold of your more experienced workers or maybe you blunt some of the incentives for people to take on extra roles and become more senior and go on extra training courses or whatever it is. And it just potentially stores up some problems for the future, and I think it’s something that you couldn’t do indefinitely but as I say, in the current circumstances it is a decision that is perfectly understandable.

Paul Johnson

But it’s one of the curiosities isn’t it, we often worry about inequality in pay for every good reasons but the public sector has much lower levels of inequality than the private sector. In other words I think you’re saying that high paid public sector workers earn less than they would do if they went into the private sector, and lower paid workers earn more than they would do if they went into the private sector. Is that consistent with the sort of stories that you’re hearing, Delphine? I mean you were talking about people moving into the private sector in some of the conversations you had and problems recruiting in the health service, is this problem right across the distribution or more towards the lower end of earnings?

Delphine Strauss

So, as Ben said, we’ve seen this policy repeated in a number of pay rounds that the government has for various reasons chosen to focus what money there was available on people in the lower pay bands and give them slightly more generous rises. There are obviously very good reasons to do that at the moment both on ethical grounds, if those are the people with the heating or eating choice, and it’s also in line with a lot of the evidence that’s gone to the pay review bodies saying that actually that’s also where you might need to focus the resources if you’re going to address the worst of the recruitment problems. I think for teaching especially you know the problems have been in actually getting high enough applications into initial teacher training. And with early career teachers you know leaving too quickly after they’ve trained, and what we find is that senior level teachers are, do feel very badly underpaid, but they’ve invested a lot of years in their career already and they don’t necessarily have a great option to jump off to, so, you don’t necessarily see people leaving. What you do see is people who’ve reached senior level and don’t think its worth going for the extra promotion, maybe don’t think it’s worth moving from being a deputy to a head teacher, they sort of see the career risks and the workload issues and they don’t want to make those final steps. And so, then I think as Ben says, this is sort of a policy decision that can make sense in the individual year, but the longer you do it for the more the pressures build up.

Ben Zaranko

I think that’s a really good way of thinking about it. And just to, another example of what you were talking about there Delphine is the NHS pay review body this year were very clear that actually its their lowest paid, so maybe your porters or your non-clinically qualified staff where there are opportunities of working in retail or in warehousing or other sorts of professions where just the pay is better, the hours are better, and the stress is lower, and they’re struggling to keep hold of lots of those people. And I think in those circumstances, you absolutely can and should justify focusing pay awards where recruitment difficulties are most acute. I think it’s just that doing so continually every year, you perhaps end up with a pay distribution and you look at it – like the boiling frog - and you look at it and say “oh, well how did we end up here and why are we struggling to keep hold of our best top end staff?” But it’s understandable in any given year to go down this road.

Paul Johnson

But its interesting, you almost said Delphine that there are some groups in the public sector, perhaps experienced teachers who don’t have much choice because they’d been doing it for a long time and might struggle to get an equal job in the outside world, who the government can effectively exploit because they can up to a point as least, they can keep cutting pay and be fairly confident that they’ll stay. Whereas if you’re thinking of becoming a teacher, or you’re a newly qualified teacher, you’ve got a lot more options and therefore it’s a lot harder to keep the wages down.

Delphine Strauss

I mean this is what unions, what the head teachers union would say and its probably true of any profession that when you’ve invested ten, fifteen years you know working your way up in terms of experience and position, you know you have more to lose by leaving that profession, and making an entire new career start, it will take you several years to regain your level of earnings, even if you weren’t very happy with your pay. And so, it could well be that people who are either in less skilled roles, or who are early in their careers are more of a flight risk in the immediate term. But if you continually underpay more experienced people who will end up with big problems with motivation and incentives to progress.

Paul Johnson

And of course, junior people many of them hope to become senior people at some point and the impact on their decisions shouldn’t be neglected either. They may stay a little bit longer if the initial pay is better but if they can see that the future pay is less good, then this isn’t a policy that’s time consistent or sustainable over long periods.  

We ought to talk, since we’re talking about public sector pay, we have to talk about pensions, don’t we? Because its all very well to say that public sector pay has been falling behind the private sector and we’re worried about public sector workers and so on. But on average they have much more generous pensions than people in the private sector. I mean does that sort of undo really all of this concern? These pensions are, I mean they really are a lot more generous, aren’t they? Once you take account of that, the total renumeration package in the sector looks a lot more generous relative to the private sector, and maybe it’s fine to cut pay because we know that lots of private sector generous pensions have been closed over recent years, reduced a bit in the public sector but they still much more than they are elsewhere, are we worrying unnecessarily given the scale of that?

Ben Zaranko

One number to put some of that in context, in the public sector, almost half, 47% of people get a pension contribution from their employer worth 20% or more of their pay. In the private sector that’s 2%. That’s just an enormous gulf and the average pension contribution you get in the public sector is just much more that what most people in the private sector are receiving. And if you take that into account and you look at the gap in total remuneration between the two sectors, there is still a positive public/private differential, so on average renumeration in the public sector is higher than for similar people in the private sector. The problem is the way that that is structured and I think one big question that I don’t think we adequately know the answer to is to what extent take home pay is really the important thing, particularly at a moment like this where people’s living standards are being squeezed, you can’t heat your home with a pension promise for thirty five years into the future. It might be nice to have but if you’re more focused on the immediate term, then what actually you get taking home in your pay packet each month which may well be higher in the private sector, even if the overall renumeration is lower, might become more important. And so, I think that we absolutely need to remember that yes, pensions are much more generous in the public sector, and that does mean that there probably is overall a positive renumeration premium, it does not take away from these difficulties about retention about recruitment about motivation, and I think that’s only heightened at this present moment in time when take home pay is probably especially prescient.

Paul Johnson

So, Delphine is there a deal to be done here, I mean what about a deal whereby nurses, teachers, what have you, agree to a lower pension in the future in return for higher pay now?

Delphine Strauss

That sounds like a tough deal to sell to me, is all I’d say. I think the argument is going to be over pay now, and if you try and pull the pensions into questions at this point, it’s not going to go well.

Paul Johnson

I mean presumably its part of the reason it’s a hard deal is there’s a pension promises there and of course you may increase pay now but you can always cut it again in the future.

Delphine Strauss

Yeah, and again, I think I’d second everything Ben said is that there clearly is an understanding at the moment that one of the main reasons you work in the public sector despite all of the workload issues and the meagre pay increases is because you know, everybody knows perfectly well the pensions are extremely good relative to the private sector. But that doesn’t alter the fact that the overall package has been worsening over the last few years and that it might not be top of your mind right now.

Paul Johnson

It’s an odd deal isn’t it, why have we ended up in this weird position where these pensions are so much more generous in the public sector than the private sector, but the relative pay appears to be going down and down and down?

Ben Zaranko

Relative pay is certainly going down and down, don’t have the, I’m not able to provide a full history of how we ended up exactly where we are, I think one part of it has to be is just that pension rates are harder for our government to erode than our headline pay. I think I can see why if I were a trade union negotiator, I’d be reluctant to sign away employer pension rights and promises that are you know written down in law and contractually solid in return for pay awards that the government might make now and then roll back on. There’s a sort of commitment problems, the government can’t credibly commit to keep to its pay awards in future, particularly given you know changes of government minister and so on. But there’s another perhaps option where even just ignoring what the employer pays, individuals in the public sector often face very high employee contributions, especially those that are at the higher end of the pay distribution, you know doctors and so on often face very high employee contributions and you can imagine a world where it’s all their money, they might just prefer to have a bit more today and a bit less of it in future. So, maybe you can lessen the employee contributions a bit, knock off whatever the actuaries say you have to knock off pensions to make the numbers add up. And the doctor is left with more pay each month in their pay packet, a slightly lower pension in future, no change in the overall cost to the public sector provider, in this case the NHS and maybe everybody’s happier. It feels like, well most people perhaps are happier. It feels possible, at least in theory, that you could similarly with civil servants, make some sort of deal like that, without touching the employer element. But I imagine it’s much easier for me to pontificate than it is to actually put it into practice in the negotiating room.

Paul Johnson

I mean its worth putting some of this in a little bit of perspective, I think it’s right to say, isn’t it, that if you’re a life time low earner in the NHS, maybe you’ve been working as a porter there for a long period of time, you will literally have more money in pension when you retire and once you’re taking out the state pension and the NHS pension, than you earnt each year during your life.

Ben Zaranko

For some people that would be true because of the way that past services operated, when the old parameters of these pension schemes were fixed, I don’t think people are expecting such abysmal pay growth and productivity growth and so getting say CPI or CPI plus three or CPI plus something uprating on your past service, that’s much more than your pay would have been going up by, so yeah your pension rights would have been accruing faster than your pay has been and you can end up maybe in your late fifties, early sixties in a world where yeah, you’d be better off if you quit work, which really isn’t good for keeping hold of your experienced workers where we need to hang on to help clear the backlog or whatever. So yes, I think that there are some quirks of how these schemes work that give some people peculiar incentives, doctors pensions are clearly one that’s high in the news at the moment and of interest it seems that the new government is potentially fixing, maybe we’ll see an announcement on that this week. But yes, there are lots of quirks of this scheme that could be ironed out.

Paul Johnson

But difficult to iron out for all sorts of reasons. But yes, I’ve a slightly different issue but I’m quite shocked by the number of my near contemporaries in the civil service who are retiring on nice big pensions at the moment which is not an option open to us, to those of us who don’t have those sorts of pensions. Delphine what’s going to happen next, I mean this is clearly, this whole issue of pay in the public sector I mean I introduced this by saying I think it is one of the biggest questions, one of the biggest decisions facing this government because they could go down the route of no extra money for public services, no more money than they’re saying now for public pay, they might end up with strikes, we’re going to get more vacancies in the NHS, you know real problems here or they can decide to make more money available and if not break Liz Truss’s promises, certainly go against her general ambition to reduce the size of the state. I mean how are we going to, where are we going to go from here?

Delphine Strauss

As you say it could go in two very different directions. And you know what we had during the leadership contest was very confrontational, it was very much you know Liz Truss promising a new wave of legislation to make it harder to strike, to raise the ballot thresholds to require you know a minimum service in the public sector during strike periods. All kinds of measures that would make it harder to take action, and no sign whatsoever on movements on the overall amount of funding available to public services. I imagine a lot will l depend on the economic context and whether it leaves workers feeling brave enough to take action or not. At the moment we’ve been in a very tight labour market for the best part of a year, a lot of people are feeling that they don’t have as much to lose as in the past if they do strike because there are jobs out there and lot of them are offering decent pay, decent pay relative to, you know relative to previous. But we’ve seen in the last couple of months of labour market data that things might be on the turn, the vacancy, the number of vacancies out there are coming down, people are starting to be more cautious about hiring, employers are string to feel a lot more cautious about pay offers. And if in six months’ time we have unemployment rising, perhaps inflation coming down, then I guess we could be in a very different context.

Paul Johnson

That’s really interesting, I mean that’s kind of saying that if the unions want to be taking action, they kind of need to get a move on, if they’re going to take their members with them, but equally if you’re sitting in government, you might think if I can weather the next six months then maybe I can get through to the next election and reassess then.

Delphine Strauss

I think from the unions point of view yes, there’s a window of opportunity right now that they’re trying to take.

Paul Johnson

Well, I think our window of opportunity for this edition of IFS Zooms In is coming to an end. So, thank you so much to Delphine and to Ben, and thank you for listening to this episode. If you enjoyed it, we have also recorded an episode on public sector pensions which if anything is even more exciting than public sector pay, earlier just a month or two ago with Lord Hutton of Furness, one of the architects of the current public sector pensions systems so do tune into that if you’d like to learn more about public service pensions.

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