Pay, price squeeze to curb RPI
Saturday 13th June 2009, 2:30PM BST.
B
USINESSES will be pressured to reduce prices under a Policy Council plan to control the island’s cost of living.
An anti-inflation strategy revealed in the new States Strategic Plan shows that ministers want to attack prices on two fronts.
Firstly, a competition authority will be formed, with legislation to back it up.
Secondly, the States will attempt to persuade employees to accept increases of less than the full cost of living.
Instead, chief minister Lyndon Trott explains in the document, they will be urged to accept pay settlements based on the RPI figure minus the cost of housing – the so-called RPIX figure.
The Billet d’Etat for debate at the end of the month also looks to set an inflation target – expected to be RPIX at 3%.
Unions said yesterday, however, that they are not looking to make the change.
Unite regional industrial organiser Ron Le Cras (pictured) said: ‘We are of course unable to chop and change from RPI to RPIX and the States of Guernsey would need to agree with us on any change; currently we are not looking to change from RPI to RPIX.’
Teachers’ union NASUWT said RPI was more appropriate for Guernsey because of the cost of mortgages.
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If you think I am cutting the cost of my services in order to save the Guernsey fat cat some money, you can think again!!!!!!!!!!
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Where does the recent more than inflation payment fir into the new Strategic Plan?
Perhaps Mr Elliott the HR Head and Howard Roberts, HM Comptroller will try to persuade us that receiving an extra £4000 a year for doing a job, is not remuneration?
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‘the States will attempt to persuade employees to accept increases of less than the full cost of living”?!!!
Lucky the civil servants have already had their huge pay rise (above and beyond) because they’d ‘already agreed it’, ay?
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The building trade has done their bit for the next 12 months by agreeing a 0% increase now lets see everybody else follow their initiative.
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Ahh, but, 0% on top of already vastly inflated prices is but a small token
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Inflation is a basic economic concept which is primarily influenced by the balance of supply and demand. I can’t see how tinkering with State’s pay levels is going to change that. States employees form only a small part of the working population in Guernsey and, even if they were subject to pay restraint, most employees in the finance industry and elsewhere would continue to earn relatively high wages.
Cutting public spending on major projects is necessary and would help a bit, but in a relatively affluent place like Guernsey I think it is the demand from the private sector which drives inflation.
As for trying to control competition – that is all very well in theory but, realistically, how on earth are the States going to enforce that legislation without spending a fortune trying to formulate and impose effective regulations? I just don’t think our politicians are clever enough to over-ride free market economics.
At the end of a day, if a business charges unrealistic prices then no one will pay for their goods or services. Prices and inflation are high in Guernsey because most people (and I appreciate not all) can afford to pay them. No amount of States interference is going to change that and, personally, I think there are more important issues they need to address. For a start, how about getting rid of Zero 10 so that the Island can start deriving a reasonable income from the finance industry again?
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CD
The objective is to try to limit the States wage bill.
Full stop.
I like your views on zero 10. Somehow I cannot see many in the finance sector fleeing the good life they enjoy in Guernsey.
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nobby
Ahh, but, 0% on top of already vastly inflated prices is but a small token
i take it then that you are qualified in how to price building projects?
it makes me laugh when i hear people complain about building costs when many have no idea about how much it should be. there`s one simple answer just get a Q.S. to price which are supposed to be the correct rates.
thing is that everything over here is expensive, building materials cost a fortune over here.
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nobby
You are very naieve about builders rates. It is extremely competitive right now with people nervous about their jobe and the staff having to cope withouit an increase. You don’t happen to work for the civil service by anychance to do you with your gold plated pension!
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