He will tell public sector workers that from 2011 those at the higher end will see an absolute pay cap and that 700,000 middle-ranking civil servants, including police officers, nurses and teachers, will have pay rises capped at 1% for two years. That could amount to a real-terms cut.’
http://www.guardian.co.uk/politics/2010/mar/10/budget-date-24-march
Brown appears to be following the economic prospectus outlined in the current edition of the Economist magazine in its special briefing ‘dealing with fiscal deficits’. The high priests of neo liberalism argue strongly for cuts in public sector pay and pensions. It pulls no punches on the bloody social consequences of such measures pitching taxpayers against public sector workers and old against young:
'…..short of debt default or implicit default via inflation, that leaves two other ways of closing the deficit. Spending must be cut or taxpayers must pay more. Many political battles of the next few years will be fought on these simple lines, with taxpayers on one side and the beneficiaries of public spending on the other. One imminent battle will be between taxpayers and public-sector workers. In some countries, one party can be seen as representing taxpayers (the Conservatives in Britain and the Republicans in America) and the other the workers (Labour and the Democrats, respectively). Another of these fights will be between generations. In America the biggest medium-term budget busters are pensions and health care for the old. A big deficit may ease the economic pain in the short term but risks saddling the next generation with a growth-sapping burden of higher taxes and interest payments. The battles are also intertwined: taxpayers finance the pensions of public employees which are, by and large, more generous and predictable than in the private sector.’
http://www.economist.com/business-finance/displaystory.cfm?story_id=15604130
Former Labour cabinet Minister Michael Meacher MP, writing in the Morning Star, sets a far more progressive role for the state and public investment in dealing with the economic recession:
‘A major public investment programme in job creation in house-building, infrastructure enhancement and the new green digital economy would provide a triple whammy to meet the current impasse. It would boost aggregate demand to compensate for fading private investment as the unsustainable housing and credit bubbles finally burst….. so why hasn't the obvious policy of public-sector reflation taken root? The culprit is the neo liberal agenda. It remains dominant in both the main political parties and dictates that private markets must be the exclusive mechanism for economic activity.’
http://www.morningstaronline.co.uk/index.php/news/content/view/full/87723
The implications for local economies of the neo liberal slash and burn approach to public services is highlighted in a report in the Liverpool Daily Post headlined ‘Merseyside women will suffer most from public sector cuts’ in which it is reported that:
‘Almost half the women who are in work on Merseyside – 48% or 137,070 of the total female working population – are employed in public services like the NHS, schools, and caring services. That compares to just 20% of men working for the public sector in the region.’
UNISON North West Region Manager Lynne Morris makes the important point “The simple truth is that, if public services are slashed now, as some politicians and pundits are demanding, it will be women who will suffer most. It is women’s jobs which are most on the line as a result of this bankers’ recession.
http://www.liverpooldailypost.co.uk/liverpool-news/regional-news/2010/03/08/merseyside-women-will-suffer-most-from-public-sector-cuts-92534-25983658/