Labour hints at support for civil service pay review body

The shadow chancellor today opened the door to a major change in Labour party policy on civil service pay. But, speaking to TUC delegates in Brighton, he confirmed that Labour had no intention of abolishing controls on public sector pay in the current economic environment.

In reply to a question from Prospect president Alan Grey at TUC, Ed Balls said he was sympathetic to the idea of setting up a pay review body for the civil service, along the lines of the current bodies for doctors and dentists, senior civil servants and other public sector workers.

During the question and answer session with Balls, Alan Grey said civil service pay was “in desperate need of reform”.

He pointed to Ed Balls’s action as education secretary in the last Labour government when he set up a negotiating body for school support staff, and asked if Balls would support a pay review body for the civil service.

Balls answered that he could not “make up policy on the hoof” but said he had always been a supporter of the review bodies. They had helped ensure fairness for public sector workers and avoid “a race to the bottom” on pay.

“My instinct is to expand the remit of the pay review bodies,” he declared.

Afterwards, Prospect’s president said the union would write to the shadow Treasury secretary, Rachel Reeves, asking for a meeting to stress the importance of injecting fairness and independence into the current arbitrary mechanisms for determining civil service pay.

In his speech, Balls warned delegates that a future Labour government would have to continue with policies of pay restraint in order to avoid declaring compulsory redundancies across the public sector.

He defended Labour councils who were following that policy, calling it “the right choice”. The current government’s wider failure on the economy made that a necessity, he argued.

“We have always said that we put jobs first. I know it is hard but we want things to be done in a fair way.

“We must be honest with the British people that under Labour, there would have been cuts, and that – on spending, pay and pensions – there will be disappointments and difficult decisions from which we will not flinch.”

Balls criticised the government for undermining the independent pay review bodies by pursuing an agenda for wholesale regional and local pay bargaining, “which will set hospital against hospital, school against school and be both unfair and cost us more.”

He said that in tough fiscal times, government should set out long-term reforms to unlock long-term investment, tackle insecurity and invest in skills, “which is the only route to long-term prosperity.”