Lex: UK public sector

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There’s gratitude for you. The annual rate of public-sector job creation in the UK under the Labour government has been two-thirds higher than that for the private sector. Yet, according to data released this week by the Office for National Statistics, the public sector accounted for 72 per cent of the time lost to strikes since 1997, even though it employs only one in five workers. Worse, public sector militancy has actually increased since 2000, when public spending took off.

Gordon Brown ought not to be surprised. Extra jobs and generous pay deals have not been matched by reform. Productivity growth in the public sector has been half that for the economy as a whole under Labour, according to the Centre for Economics and Business Research. At 43 per cent, the public sector’s share of the economy is now the highest in 12 years. That emboldens its relatively large unions but drags down overall growth in the economy, removing the scope for further pay increases.

Hence Mr Brown’s call this week to keep public sector pay increases “low” over the next couple of years. Even if the government, so late in the day and with its popularity much reduced, can do this, it is unlikely to do much to improve the public’s perception of what they are getting for their taxes. It will, though, certainly provoke a few more strikes.

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