I think what you’re saying is that the job market is going to hold down public sector pay quite well without requiring any assistance from politicians. That may well be true, but it follows that politicians can scarcely take any credit for it, and cannot reasonably declare that their policies are anything very diferent from what any other party would do.

I know it’s possible to prove anything using statistics, but it’s a curious fact that the most recent figure for wage inflation in the private sector (excluding bonuses) is 1.8% – for the year to July 2009 – which is identical with CPI inflation over the same period.

When Vince Cable cites in justification of his proposed (overall) public-sector pay freeze the fact that in the private sector “wages have been cut in many industries”, he is very far from giving the full picture.

Let’s assume you meant public sector. True enough comment then! Paying a good pension lets them get away with paying less up front. But that’s the deal. Changing it, and reducing the overall value of a public sector job, is what won’t work to any great extent in practice. The job market will fight back!

I share the scepticism. You can’t buck the market. If public and private sector pay are forced to move in different directions, powerful market forces will very soon pull them back into line.

None of this is to denigrate Vince. We are streets ahead of our competition in openness and willingness to engage with reality. Streets ahead – but also, not far out of the starting blocks!

As I thought, this has already been put forward, as a means of funding the education proposals published earlier this year:
“The majority of extra funding [for the Pupil Premium] would come from taking those above median earnings out of tax credits.”
[Equity and Excellence: Policies for 5-19 Education in English Schools and Colleges.
http://s3.amazonaws.com/ld-migrated-assets/assets/0001/0387/89_-_Equity_and_Excellence.pdf ]

If that money is going to be used for “fiscal consolidation” instead, where does that leave the Pupil Premium?

Thank you for picking up on that important point. What the document actually says is this:
“A zero growth assumption is not the same as a pay freeze since some groups would get more or less depending on decentralised bargaining and independent pay reviews.”

In other words the groups fortunate enough to be covered by independent pay reviews – and those with the muscle to negotiate a favourable settlement – would continue to receive pay rises, while the less fortunate would actually have their pay cut – not just in “real terms”, but in terms of the number of pounds in their pay packet.

I would be interested to know whether what Vince Cable is proposing for public sector pay has ever been achieved – or even attempted.

@Hywel – there may well be a list of things we will switch to bigger priorities and a list of things we would cut to reduce the deficit.

@Roger – our leadership has consistently identified reducing tax evasion and cutting loopholes as ways of bringing in money. Nothing in this paper changes that.

Shame.

Now, in what is pretty much an emergency situation he can only put forward items costed (by Liberal Future) at £14bn or (by Herbert Brown) at £16bn – and which include Trident which policy last Autumn was to renew so couldn’t have been in the £20bn.

That should barely get him an E for effort. Instead people are so in love with Vince that he’s praised for a “tour de force”!

I also worry that it is a list of all the things that superficially sound bad or boring, rather than the things we can actually cut effectively. For example, we can scrap a load of IT schemes which have over-run their budgets, but what are we going to do then? Discover that those darn computers still need replacing before they stop working, and start up a whole load of even more expensive IT schemes!

Isn’t that already policy, as part of the package already agreed, originally intended to fund the lowering of the basic rate of income tax, but now to be devoted to raising allowances instead, if I understand correctly? (Admittedly it’s a bit difficult to keep track of all these different proposals.)

This bit suggests that Cable now sees the priority as cutting expenditure rather than raising taxes:
“He argues that a fiscal consolidation of 8% of GDP over five years is more realistic, with the emphasis on controlling public spending, not higher taxes.”

I may be wrong but I think this paper is solely concerned with the issue of public expenditure. I too hope that the party has not gone cold over closing loopholes used by the super rich but I think that is another issue.

(That was all I was going to say but apparently comments have to be a bit longer than that – as this one now is).

It’s timing is terrific. It puts Labour and Tories on the spot just before their party conferences. They must come up with clear ideas of their own; which neither wants to do, or look inadequate.

@Herbert Brown
In the spot that New Labour has got us into, there is no sensible policy that is going to have public sector workers – or taxpayers – dancing in the streets. But a great many of all groups will vote for a policy which offers solid hope for the longer term.