David Cameron: public sector chiefs will be forced to take pay cut

Exclusive: Tory leader promises to link top earnings to those of lowest paid

The following correction was printed in the Guardian's Corrections and clarifications column, Saturday 10 April 2010

In a commentary by David Cameron and a related news story, it was suggested that Boris Johnson introduced the "living wage" in London government (as defined by the Living Wage Campaign, this is "the minimum pay level required to provide a low-cost but acceptable standard of living for a family"). It was, rather, his mayoral predecessor, Ken Livingstone, who committed the Greater London authority to this concept and started applying it internally. Boris Johnson took a further step last year, promising to extend this wage to all staff working under the GLA and to "all new contracts for staff working on our sites, such as caterers, security guards and cleaners where allowed"

Public sector chiefs earning hundreds of thousands of pounds a year would have their salaries cut back by a Conservative government under a radical scheme to link their earnings to the lowest-paid workers in their organisation, David Cameron announces today.

In his first newspaper article since the general election was declared earlier this week, the Tory leader writes in the Guardian that his party has now assumed the mantle of progress as he pledges to tackle "unfair pay" in the public sector.

Cameron also uses the article to launch a withering attack on Gordon Brown, describing him as an anachronism whose government is past its sell-by date, and claiming the Tories are today's radicals.

A Tory government would establish a fair pay review to ensure that no senior manager in the public sector can earn more than 20 times more than the lowest- paid person in their organisation.

The scheme could mean that up to 200 senior public sector executives would face pay cuts. Public sector chiefs whose salaries would be cut include Ed Richards, the chief executive of Ofcom, whose £392,056 salary is 22 times higher than the estimated lowest full-time salary in his quango, £18,000.

Cameron writes: "We are already committed to pay transparency and accountability, but I think it is time to go further. The government plays an important role in helping to shape society, so if we win the election we will set up a fair pay review to investigate pay inequality in the public sector."

The Tory leader declares that pledging to tackle unfair pay shows how he now leads the most progressive party in Britain as he issues a direct appeal to Guardian readers to overcome their "prejudices" about the Conservatives.

"I believe the choice at this election is between a reactionary Labour party and the old ways of command and control, or radical change with the Conservatives – a progressive party in tune with the modern world," Cameron writes. "To Guardian readers everywhere I say: overcome any prejudices you may have. We want to change our country, and we want to do it with your help."

Cameron's move is his most far-reaching attempt to drive down pay in the public sector. He has also expressed support for the £7.60 "living wage" introduced by Boris Johnson, the mayor of London. The Tory leader says he is interested in introducing this in Whitehall, although he has made no commitment.

The Labour party agreed today to introduce a living wage for Whitehall workers, paid for by pay restraint for top earners. The policy, agreed at a meeting of Labour's national executive committee and cabinet today, would not apply in the NHS or to quangos but would encompass thousands of civil servants.

Under the announcement, a Tory government would follow the example of private sector companies, such as John Lewis and the international architectural practice run by Richard Rogers, by introducing a "pay multiple" to ensure greater equality in salaries.

In his Guardian article, Cameron writes: "We will ask the [fair pay] review 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. There are many complex questions that the review will need to address, but I am confident it will not only help tackle unfair pay policies, it will improve cohesion and morale in the public sector too."

The Tories cannot make exact calculations of the impact of their policy – designed to drive down high salaries rather than necessarily increase lower salaries – from outside government because they do not have precise figures for salaries. But figures from the Taxpayers' Alliance suggest that more than 200 public sector chiefs could face a salary cut. The alliance says that 223 public sector executives earn more than £211,000. This is the sum that is 20 times more than a minimum wage annual salary of £10,556, the lowest pay in the public sector.

The Tories do have figures for public sector chiefs whose salaries would be safe under their scheme. The highest-paid police chief earns £253,620, 11 times the lowest police salary of £22,680. Mervyn King, the governor of the Bank of England, just slips under the wire. His salary of £296,818 is 19 times higher than the lowest Threadneedle Street salary of £15,415.

Cameron uses the announcement to burnish his credentials as a progressive as he highlights the Tories' opposition to ID cards and detention without trial. "There has been a strange reversal in British politics. Labour have become a reactionary force while the Conservatives are today the radicals," he claims.


Nicholas Watt, chief political correspondent

The GuardianTramp

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