Michael White: regional pay policy needs greater attention

Ideologically selective attitudes towards evidence, for one thing. An over-casual attitude towards detail for another.

In an angry exchange on the radio I caught one campaigner complaining that the “granny tax” raid on pensioners’ perks and the “any advance on?” 40p price for a can of white cider are part of the same Tory attack on the poor, since the better-off can still afford to bathe in cider if they so desire.

Maybe, but a more worldly response is that binge boozing, rowdyism and wrecked British livers are aspects of deeper cultural dysfunction that will not be cured by price alone. Just look at Scotland.

After all the trouble Tony Blair got over party fundraising (much of it unfair) I have no tolerance for Number 10’s careless appointment of City wide boy Peter Cruddas as party treasurer, even though those seeking backdoor influence are usually chasing an illusion: the agenda of the rich is promoted quite openly without secret dinners. The Cruddas Tapes showed less finesse than a high IQ gorilla. Just the kind of guy they want to run an NHS trust, I expect.

I admit to a slight sympathy for the chancellor’s dilemma. His Budget was widely leaked, mostly by anxious Lib Dems promoting their low-income tax agenda, so that the hit on pensioners was the only big surprise of the day. But pensioners had largely been protected from the coalition’s cuts and, as with wider society, there are well-off as well as poor ones.

Low interest rates on savings and the RPI to CPI switch on inflation has hurt them much more, but serve a purpose in keeping the economy afloat. If cutting the 50p tax rate generates more investment than lost income tax that’s fine, although the evidence is shaky. Both distracted from a Budget policy switch that should have had more attention: regional pay bargaining in the English NHS and public sector.

Free market economists argue that high NHS pay in Newcastle or Newark stops talent starting businesses that will generate jobs and taxes to fund the NHS. It’s more supply-side theory and my hunch remains that, what with union leapfrogging tactics (“they got more in Manchester”) pay fragmentation will not be worth the trouble in real life. We’ll see.

Andrew Lansley, who is rarely far from a suspected arson job these days, stands accused of bowing to the food and drink lobby (are they Tory donors?), which I doubt; he’s too stiff-necked.

More significant surely is that, in their moral panic (or was it done to distract from the granny row?) he and Cameron ignore the evidence: apart from Fighting Eric Joyce, the boozy MP, most people are drinking less. Alas, I certainly am.

Policy formation under 24/7 pressure and accusations of bad faith and incompetence is never easy. Does minimum pricing simply hand over £1bn in extra revenue to supermarkets which cynically raise other prices to pay for loss-leader packs of Stella? They can use it to subsidise fruit and veg instead? Yeah, right. Even evidence that alcohol-related hospital admissions have “doubled” is blamed by some on new data-gathering rules designed to impress Whitehall, MPs tell me. Talk about perverse incentives.

Incidentally, fashionable US “nudge” theorist Richard Thaler, who has influenced Mr Lansley, argues that a better way to slow down binge drinking is by running a shared “tab” in the bar instead of the “your round” approach. Sounds a bit sophisticated for our own tabs – the redtops.