Why limit top pay only in the public sector?

In an article in today's Guardian David Cameron proposes establishing a fair pay review into pay inequality in the public sector and asking it ‘to consider how to introduce a pay multiple so that no public sector worker can earn over 20 times more than the lowest paid person in their organisation’.

Putting aside the vagueness of the language – Prime Ministers have to make decisions, not pass them over to a review to consider and I’m left wondering what would happen if the review refused to contemplate the idea? – this is a proposal with some merit.

But why limit it to the public sector? David Cameron argues that a pay multiple would ‘help tackle unfair pay policies’ and ‘improve cohesion and morale’. Shouldn’t unfair pay policies be tackled in the private sector too? Wouldn’t improved cohesion and morale in the private sector help the economy recover more strongly from recession?

Whatever the result of the general election, the next government will expect senior public sector workers to behave more like their counterparts in the private sector. They will be expected to deliver the ‘efficiency savings’ that both the main parties hope will prove to be a painless way of reducing the budget deficit (they won’t, but that’s a different story). They will be charged with lifting productivity growth in the public sector into line with productivity growth in the private sector.

So why not treat senior workers in the public and private sectors the same. Forget the review. Just stop anyone in any organisation earning more than 20 times the pay of the lowest paid person in their organisation. According to David Cameron, ‘Some of our most successful private sector companies operate a pay multiple’. Let’s try it out on all of them.

Tony Dolphin

Apprentice pay

Apprentice pay might not be top of everyone’s agenda as we head towards a general election, but making sure apprentices get a decent wage is an important way of guaranteeing a bit more fairness for young people. So it’s great that government has agreed that all employed apprentices will be entitled to a minimum wage of £2.50 an hour from October. This single rate will replace a series of complex arrangements where some apprentices in England were paid a minimum £95 a week, but there was no minimum pay level for apprentices in Wales, Scotland and Northern Ireland.

ippr carried out some research with apprentices last summer and we met many apprentices doing hard and menial work four or five days a week for £95 a week, or less – in Belfast, we found hairdressing apprentices earning just £60 for a five-day week. Our research found that low apprentice pay was often linked to poor quality training and was a particular problem for young women in sectors like hairdressing and social care.

The apprentices we spoke to didn’t expect to be paid the same as friends working in call centres or offices, or more experienced colleagues. But they did expect a fair deal in return for their passion, commitment and growing skills.

The rate of £2.50 an hour can be criticised as being too low – apprentices will have to work at least 38 hours a week to earn the equivalent of the £95 weekly rate currently in place in England. Given the problems with youth unemployment at the moment and the difficulty in convincing some employers to take on apprentices, the £2.50 rate was probably the most that the Commission thought it could recommend.

But the move creates a framework for apprentices of all ages to receive an hourly, legal minimum wage, which is reviewed annually by the independent Low Pay Commission - and a rate that can be built on in future.

Kayte Lawton, research fellow, ippr