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Iain Mackinnon

Iain Mackinnon

24 Jun 2008 | 06:00

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“Pay rises push up prices” is the core of the chancellor’s argument in calling for pay restraint. Yet for the further education college which I chair, the government is telling us to put up our prices to those students who pay (most don’t), as part of its drive to get adults to pay half the cost of their college course by 2010. Which means, ironically, that almost the opposite is true of what the chancellor wants: the fact that we are putting up our prices makes it more possible for us to afford to put up pay (though there are rather more counter-pressures on our budget pushing us the other way). And if we put up pay by more than the 2 per cent which Alastair Darling recommends – which we certainly will – it will have absolutely no effect on our prices. Curious stuff, the economics of public-sector pay!
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