Is inflation really the issue when it comes to police pay?
I need someone who did better in their university economics than I did to explain Gordon Brown's response on police pay to me.
He defends the decision not to backdate the pay settlement on the grounds that to do so would be inflationary. Mmm.
The deal isn't big enough to cause inflation by forcing the Government to borrow. So he can only mean that a large amount being paid to police would encourage other large pay increases.
Fair enough. Except that the headline amount, the permanent part of the increase, is the one that will drive other wage claims and any increases based on comparability. If inflation was the issue it would have been better, surely, to have offered a smaller headline figure and then backdated it.
So it seems more likely that public spending is the reason for the decision.
Or maybe I am missing something. Anybody?

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