Sam McBride: Inscrutable Murphy’s approach to public sector pay reflects Sinn Féin minister’s caution

Next month he will surpass the 10-month tenure of the only other Sinn Féin finance minister in the history of Northern Ireland, Máirtín Ó Muilleoir.

Both men were able to take the powerful Stormont post because the DUP, which as the largest party gets the first pick of ministries, changed its long-standing policy of always selecting finance first and instead opted for the Department for the Economy, perhaps in part due to an aversion to allowing another minister into that department to see the full gory detail of the RHI scandal.

Mr Murphy is one of Stormont’s most experienced ministers and one of Sinn Féin’s ablest.

But thus far his time in office has been marked by gaffes – the debacle of the China PPE order and subsequent investigation, anguished criticism from the parents of murder victim Paul Quinn over Mr Murphy’s carefully-worded apology for saying that their son was a criminal, breaching Executive pandemic guidance at the huge funeral of former IRA intelligence chief Bobby Storey, and a bizarre claim that if it was not for Tory austerity the health service could have coped with the pandemic (later retracted after it was pointed out that almost every health service in the world has struggled to cope with the virus).

Yet for those searching to identify how Mr Murphy’s appointment has changed things in the Department of Finance, there has been scant evidence that having a Sinn Féin minister has led to upheaval.

Nevertheless, the inescapable consequence of being a government minister – even a cautious one – is that major decisions have to be made every week, and sometimes every day, meaning that over time a picture emerges as to a minister’s priorities and their style.

This week saw one of the most consequential decisions by Mr Murphy, even if it was, like him, unflamboyant and ambiguously expressed.

On Wednesday Stormont’s Department of Finance issued a brief 176-word press release to say that Mr Murphy had approved public sector pay policy for 2020-2021. So low key was the announcement that there was not even the standard quote from the minister about what had happened.

And yet this is one of the most significant decisions taken by a finance minister – not only are the financial implications vast, but it is a decision which speaks to the ideology underpinning the minister’s politics.

The real meat of what had been decided was contained in a letter issued that day by Bill Pauley, one of Mr Murphy’s most senior officials, to finance directors in each Stormont department, in which he conveyed the minister’s policy.

To understand what Mr Murphy is doing, it is helpful to compare that letter with the one communicating the decision of the last DUP finance minister in February 2016.

The first difference between the two documents is their length – what was once a 20-page letter is now a mere five pages; a letter which once included 12 footnotes and two annexes now has one footnote and no annex.

Secondly, it is written in a more accessible style – if not intended for public consumption (the content is as dry as cornflour), it appears to at least intended for easier digestion by public sector workers, with less abstruse language and jargon.

That in itself is no bad thing. Civil servants too often speak and write in a vocabulary impenetrable to the uninitiated. That is not just frustrating for outsiders trying to understand what is being transacted on their behalf but can conceal either deliberate or unintended traps. As George Orwell observed, “the slovenliness of our language makes it easier for us to have foolish thoughts”.

If civil servants write and speak in unnecessarily obscure diction, it makes it harder for errors to be recognised because they are camouflaged in language which implies high-minded technical clarity.

But actually, despite this letter being far shorter and written in simpler language, what it conveys is vaguer. The old letter was prescriptive, but now there are more areas of ambiguity – there is no mention of bonuses, no reference to following Treasury advice, and in fact no mention of the Treasury at all. The department denies it is less prescriptive, saying it “builds on” past guidance.

But the most significant change of policy since the last finance minister is that there is now no ceiling for pay awards – they are, on paper, limited only by the money which each department can find.

That is a radical change from what went before. The central element of these letters had under past Executives always been the figure which they set as the cap on public sector pay increases.

So does Mr Murphy’s discarding of this central element of the process indicate a far more profligate approach? Perhaps not. Although it is understood that Mr Murphy met with the Irish Congress of Trade Unions over the summer and the union representatives made clear that they did not want him to set a ceiling for pay increases, what he has done here has merely put off the real decision as to what staff get paid.

And what he has done is in line with what his permanent secretary, Sue Gray, had done for the last two financial years where she followed Whitehall by relaxing the strict limit on public sector pay increases, introducing a new “flexible” approach to each set of public sector workers.

Therefore, far from a Sinn Féin minister tearing up the rule book and demanding vast pay increases for public sector workers, he appears to largely be following the path marked out by London.

From the perspective of the unions, what Mr Murphy has done allows for more meaningful pay negotiations without a predetermined outcome.

From the Executive’s perspective, it may also allow for more significant pay increases to be used as a carrot for wider reforms which civil servants would otherwise resist.

But it also carries the potential of fuelling unrealistic expectations among public sector workers – whose individual unions are now in pay talks with the Executive – that they are going to get huge pay increases. Some of those workers – nurses and doctors are just the most obvious example – are in some cases already arguing that their work during the pandemic now deserves to be rewarded and they will have significant public sympathy.

But there has been no public evidence that this Executive is seriously considering moves towards raising more revenue to fund greater expenditure.

Without income tax powers, that revenue-raising would only ever form a small percentage of Stormont’s budget. Yet without even making a symbolic effort to do so there is little reason to believe that the hearts in the Treasury which were hardened as news came from the RHI Inquiry of Stormont’s culture of ‘free money’ will be softened by fresh pleas for more cash.

And the figures involved will be significant – even if pay increases are relatively modest. Northern Ireland’s total public sector pay bill is £6.8 billion – so for every 1% pay increase £68 million has to be found.

That means that a 2% increase would cost £136 million – more than the total combined annual cost of running the Assembly, The Executive Office, the Public Prosecution Service, and the Audit Office.

Perhaps Sinn Féin’s hope of taking real power in Dublin soon explains why Mr Murphy has been so circumspect in attempting to prove to southern voters suspicious of Sinn Féin’s economic credibility that it is responsible and restrained.

But caution can leave one vulnerable too and the absence of any clear fiscal strategy by Mr Murphy means that if the pattern of the last nine months continues then there will be little but the gaffes for which his tenure can be remembered.

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