How about a staff pay "triple lock"?

[Bletchleyite]

As things are, every couple of years we have industrial strife while a new pay deal is sorted out.

So how about going more "long term" and applying something like the pensioner triple lock on a long term basis, e.g. maybe a ten year deal or more? That is, an agreement that each year wages automatically increase by, for example, the higher of general inflation, RPI or a fixed percentage?

Obviously separate discussions could be had regarding productivity changes and the likes, but this seems a reasonable basic? I'd be happy with it.

 

[Western 52]

I'd be happy with that too. I guess for employers though it would not always be affordable, although it may allow easier long term budgeting. When unaffordable, might it lead to redundancy for some staff in order to pay the rest a bit more? I think it might work that way where I work!

 

[JonathanH]

Would the same triple lock apply to fare increases?

Why would it be done on the railway, and not across all of the public sector?

What other industry can guarantee its workers above inflation pay increases year on year?

 

[Bletchleyite]

What other industry can guarantee its workers above inflation pay increases year on year?

Absolutely everyone should be in receipt of an inflationary pay rise each year. Otherwise you're getting a pay cut. It's only super-inflationary if inflation is very low.

This used to be the norm, but seems to have gone away in these days of corporate greed and Government penny pinching.

 

[LYradial]

How about a system whereby the first £12700 of a salary is “triple locked” but the rest is negotiable.

That way life’s essentials like food and clothes are covered, that’s how a pensioner survives.

 

[John R]

As things are, every couple of years we have industrial strife while a new pay deal is sorted out.

So how about going more "long term" and applying something like the pensioner triple lock on a long term basis, e.g. maybe a ten year deal or more? That is, an agreement that each year wages automatically increase by, for example, the higher of general inflation, RPI or a fixed percentage?

Obviously separate discussions could be had regarding productivity changes and the likes, but this seems a reasonable basic? I'd be happy with it.

It would be a remarkably reasonable basis as far as the unions are concerned, but completely unreasonable for those paying the bill, whether taxpayer or farepayer.
The triple lock has resulted in a real terms increase over both earnings and prices of 11% since it was introduced in 2011/12. I'm not sure on what basis that could be justified, as it guarantees real increases year on year, due to the cherry picking of the best of three bases each year.

See here for a (relatively) plain English explanation of why the triple lock guarantees above inflation increases over time.

x.com

x.com

 

[Bletchleyite]

It would be a remarkably reasonable basis as far as the unions are concerned, but completely unreasonable for those paying the bill, whether taxpayer or farepayer.
The triple lock has resulted in a real terms increase over both earnings and prices of 11% since it was introduced in 2011/12. I'm not sure on what basis that could be justified, as it guarantees real increases year on year, due to the cherry picking of the best of three bases each year.

But could a concept similar to it be applied?

It just seems silly how we seem to have ended up in a situation where there is a load of strife every couple of years just to get inflationary pay rises, which should really be a basic expectation for every employee in every industry.

 

[Dr Hoo]

In the context of this thread I suppose that there needs to be a Triple Lock on government tax yields to pay for it.

Obviously tax revenue tends to rise loosely in line with inflation anyway but in a sluggish economy or sudden demands on government expenditure, such as a pandemic or military inperatives, the actual rates or thresholds might need to be increased.

It would certainly be sensible to do things like ‘un-freezing’ fixed levies and charges such as fuel duty.

 

[Bletchleyite]

See here for a (relatively) plain English explanation of why the triple lock guarantees above inflation increases over time.

Pensions are maybe a little different, but a state pension you can actually live on is something I would fully support, even if part of it was means tested/recovered via taxation for richer pensioners. It was more the concept I was looking at here than a direct comparison.

 

[Manutd1999]

It doesn't need a triple-lock, just some grown-ups in the room.

Pay-rises to match inflation should be the norm. Combined with a sensible government and open dialogue with the workforce, this should be enough to avoid constant industrial action. At times of very high inflation this gets problematic, but hopefully those days are behind us (for now....).

After that, the idea of a triple-lock is a non-starter. I don't see any justification for above-inflation pay rises for most railway staff. Drivers in particular are well paid compared to the general public and asking them to pay more in taxes to fund further pay rises is unjustifiable.

 

[Bletchleyite]

It doesn't need a triple-lock, just some grown-ups in the room.

Pay-rises to match inflation should be the norm. Combined with a sensible government and open dialogue with the workforce, this should be enough to avoid constant industrial action. At times of very high inflation this gets problematic, but hopefully those days are behind us (for now....).

After that, the idea of a triple-lock is a non-starter. I don't see any justification for above-inflation pay rises for most railway staff. Drivers in particular are well paid compared to the general public and asking them to pay more in taxes to fund further pay rises is unjustifiable.

So are we saying a "double lock" of general inflation vs. RPI, whichever is higher, would do?

As I said inflationary pay rises should be a given for everyone in every job. It says a lot about how wrong society has gone that it isn't just done by default for everyone, every year.

 

[John R]

Pensions are maybe a little different, but a state pension you can actually live on is something I would fully support, even if part of it was means tested/recovered via taxation for richer pensioners. It was more the concept I was looking at here than a direct comparison.

It’s the concept I object to in respect of a formula for pay rises. The thread explains why the concept is flawed, in that it guarantees above inflation (and indeed above average earnings) pay rises over a period of time. Why should the rail industry workforce be guaranteed a formula that increases their pay in real terms year after year after year?

 

[Meerkat]

As things are, every couple of years we have industrial strife while a new pay deal is sorted out.

So how about going more "long term" and applying something like the pensioner triple lock on a long term basis, e.g. maybe a ten year deal or more? That is, an agreement that each year wages automatically increase by, for example, the higher of general inflation, RPI or a fixed percentage?

Obviously separate discussions could be had regarding productivity changes and the likes, but this seems a reasonable basic? I'd be happy with it.

Unaffordable and highly risky in a workforce you can’t quickly lay off - what happens when inflation is really high? It would make railway investment too risky and the government would just move the money elsewhere.
If everyone gets a cost of living increase inflation just keeps going up doesn’t it? You get inflation because the economy is knackered - you need adjustments.

 

[Bletchleyite]

Unaffordable and highly risky in a workforce you can’t quickly lay off - what happens when inflation is really high? It would make railway investment too risky and the government would just move the money elsewhere.
If everyone gets a cost of living increase inflation just keeps going up doesn’t it? You get inflation because the economy is knackered - you need adjustments.

Not so. Deflation is damaging because it makes people put off spending, so a small single-figure inflation figure is the optimal position of a capitalist economy.

Not all costs are wages, so putting wages up doesn't cause an inflationary spiral.

 

[HSTEd]

Obviously separate discussions could be had regarding productivity changes and the likes, but this seems a reasonable basic? I'd be happy with it.

Would the unions have any reason to entertain working practice or productivity changes?
They would be guaranteed a one way ratchet of pay increases either way.

A triple lock for rail pay is just as much a terrible idea as the triple lock for pensions is.

 

[LNW-GW Joint]

As things are, every couple of years we have industrial strife while a new pay deal is sorted out.
So how about going more "long term" and applying something like the pensioner triple lock on a long term basis, e.g. maybe a ten year deal or more? That is, an agreement that each year wages automatically increase by, for example, the higher of general inflation, RPI or a fixed percentage?
Obviously separate discussions could be had regarding productivity changes and the likes, but this seems a reasonable basic? I'd be happy with it.

At one point in the Tory years, I think it was pre-covid, the rail minister* suggested indexing salaries by CPI rather than RPI, which was the then plan for fares indexing.
That went down like the proverbial lead balloon with the unions.
I think the unions still have to come to terms with being part of the public sector wage round, having dumped the despised private sector which had brought them significant rises over 25 years or so.

* Chris Heaton-Harris I think

 

[A0]

As things are, every couple of years we have industrial strife while a new pay deal is sorted out.

So how about going more "long term" and applying something like the pensioner triple lock on a long term basis, e.g. maybe a ten year deal or more? That is, an agreement that each year wages automatically increase by, for example, the higher of general inflation, RPI or a fixed percentage?

Obviously separate discussions could be had regarding productivity changes and the likes, but this seems a reasonable basic? I'd be happy with it.

Why should wages automatically increase if there is no commensurate link to either revenue, productivity or cost management targets ? The taxpayer shouldn't be on the hook for railworkers salaries increasing automatically with no question.

 

[A0]

Would the unions have any reason to entertain working practice or productivity changes?
They would be guaranteed a one way ratchet of pay increases either way.

A triple lock for rail pay is just as much a terrible idea as the triple lock for pensions is.

There is at least a moral case for having it with pensions as many pensioners have no or limited other sources of income, yet often have higher than average costs for things like heating where they are at home more.

 

[Meerkat]

Not so. Deflation is damaging because it makes people put off spending, so a small single-figure inflation figure is the optimal position of a capitalist economy.

Not all costs are wages, so putting wages up doesn't cause an inflationary spiral.

Wages are a significant part of inflation - if increasing costs don’t reduce spending then it keeps going.
Public sector wages rising would be a big problem if government revenue is dropping.

 

[HST43257]

As things are, every couple of years we have industrial strife while a new pay deal is sorted out.

So how about going more "long term" and applying something like the pensioner triple lock on a long term basis, e.g. maybe a ten year deal or more? That is, an agreement that each year wages automatically increase by, for example, the higher of general inflation, RPI or a fixed percentage?

Obviously separate discussions could be had regarding productivity changes and the likes, but this seems a reasonable basic? I'd be happy with it.

I, a completely uninformed bystander, think this makes so much sense. All staff gets the fair and realistic pay rise they should have, and as far as I can see, no one is cheated out of money

 

[Manutd1999]

I, a completely uninformed bystander, think this makes so much sense. All staff gets the fair and realistic pay rise they should have, and as far as I can see, no one is cheated out of money

But the money has to come from somewhere...... Why should taxpayers pay more to give train drivers an above inflation pay rise?

I'm all for inflation-linked pay deals but trying to justify more than that is a non-starter IMO.

 

[Meerkat]

It also allows no adjustments between jobs - it’s basically setting differentials in stone, ignoring all market factors.
But then I think in principle wages should be market driven - what it takes to recruit and retain the desired number of properly qualified and skilled people in that geographical area (and no national pay deals). That’s how you get an efficient allocation of people and funding. If the treasury don’t like how much that costs then they have to instruct a cut in services to match what they will pay for.

PS You still need a minimum wage in a system where the government will otherwise just make up the difference via tax credits etc.

 

[Magdalia]

Reading all of this I don't know whether to laugh or cry.

 

[HST43257]

But the money has to come from somewhere...... Why should taxpayers pay more to give train drivers an above inflation pay rise?

I'm all for inflation-linked pay deals but trying to justify more than that is a non-starter IMO.

I’m saying on-inflation pay rise

 

[Magdalia]

What short memories you all have. Who became Prime Minister just 2 years and 4 days ago? What happened when they tried to introduce an economic policy that was widely regarded as unsustainable?

This is a speculative discussion, so I invite you to speculate. If you gave the Wages Triple Lock policy to the Office for Budget Responsibility (other economic forecasters are available) what do you think would be the impact on the forecast trajectory for inflation? What would be the impact on the forecast trajectory for government borrowing and debt?

Now let's imagine that you are the Chancellor of the Exchequer, announcing the Wages Triple Lock policy to parliament. What do you think would be the reaction of the international financial markets? What would happen to interest rates on UK government debt? What would happen to Sterling on the foreign currency markets?

How soon would you have to do a U turn?

 

[yorksrob]

All the lego bricks will be hurled up in the air when AI finishes off half of the job market. My guess is that there'll have to be a universal basic income, then you'll really have to pay people to do what work remains !

 

[AM9]

What short memories you all have. Who became Prime Minister just 2 years and 4 days ago? What happened when they tried to introduce an economic policy that was widely regarded as unsustainable?

Now let's imagine that you are the Chancellor of the Exchequer, announcing the Wages Triple Lock policy to parliament. What do you think would be the reaction of the international financial markets? What would happen to interest rates on UK government debt? What would happen to Sterling on the foreign currency markets?

How soon would you have to do a U turn?

That was my thought when I saw the direction that this thread is taking. Having public employees on a continuous automatic inflation busting pay settlement is naive to the extreme. The UK economy does not operate in a vacuum, - it is like any other country that relies on international trading, operated in a competitive market where inflation is never welcomed.

 

[Magdalia]

What would be much more useful would be a speculative discussion on how to end the triple lock for the state pension, which is becoming unsustainable. A few minutes ago the Office for National Statistics published their first estimate of the annual average earnings increase that feeds into the triple lock. The figure was 4%, meaning that the state pension is likely to increase by 4% next April. But the pension cost for the UK government will go up by more than 4%, because the unstoppable forces of demography means that the number of pensioners is also rising. This has significant implications for government finances.

 

[AM9]

What would be much more useful would be a speculative discussion on how to end the triple lock for the state pension, which is becoming unsustainable. A few minutes ago the Office for National Statistics published their first estimate of the annual average earnings increase that feeds into the triple lock. The figure was 4%, meaning that the state pension is likely to increase by 4% next April. But the pension cost for the UK government will go up by more than 4%, because the unstoppable forces of demography means that the number of pensioners is also rising. This has significant implications for government finances.

I agree in principle there, but any change would need to recognise that the ability of individual pensioners to change their lifestyle or economic situation to accommodate a below inflation income progression is generally much more limited than that of a working person. That would suggest that chages to pension levels would need to apply to new entrants only, so those arguing that it is somehow unfair to working adults should be careful of what they wish for.

 

[I'm here now]

It would be a remarkably reasonable basis as far as the unions are concerned, but completely unreasonable for those paying the bill, whether taxpayer or farepayer.
The triple lock has resulted in a real terms increase over both earnings and prices of 11% since it was introduced in 2011/12. I'm not sure on what basis that could be justified, as it guarantees real increases year on year, due to the cherry picking of the best of three bases each year.

See here for a (relatively) plain English explanation of why the triple lock guarantees above inflation increases over time.

x.com

x.com

Nothing is more unreasonable than ridiculous corporate profits for government contracts. At least better pay for the public sector would actually have tangible returns.