Sunday, 30 May 2010

It's a huge s*** sandwich and we're all gonna have to take a bite...

I was going to write about the issues of the week, from Laws to Campbell, but throughout the last week or so, on the internet and on the TV, this question continues to be posed almost relentlessly:

"Why should Civil Servants pay for the mistakes of bankers?"

And it will continue to be asked over the next few months/years as the cuts are planned and take effect.

So I just wanted to return to this issue, briefly...

I have seen comments on social media that say public sector workers get 'paid less' than private sector works and this is one of the common misconceptions that are generated from the public sector, unions and the left wing media.

I'm sure civil servants are sick of seeing all these contract cleaners, warehouse staff, factory workers, call centre workers, admin staff, bar/hotel staff, waiters, care workers, etc, etc, etc, driving around in Porsches or the like, mocking their impending plight..!

The misconceptions and propaganda seem to confuse the whole of the private sector with the financial services. As if all the workers listed above are on massive wages and bonuses. A common quote I've heard over the years from public sector representatives when confronted with the issue of their pensions and benefits, was that they wished they could have the 'bonuses of the private sector'. (Well apparently some government agencies do hand out bonuses, just to perfectly contradict this oft-repeated mantra. One fine post-crash example was the FSA)

It may be true that some industries, particularly the financial services, have a bonus culture, but it is far from all and certainly few at the lower levels.

It has been the low paid private sector that is currently being criminally over looked during the election and now as the issue of cuts takes centre stage. Unemployment has been an issue, but not the conditions in the private sector as belts have tightened for two years. Gordon Brown even tried to take credit for keeping unemployment low even though it is in the private sector that changing working conditions (e.g. going part time, reducing hours, etc) meant many clung onto their jobs.

Times have been very hard for nearly two years, but apparently it is civil servants paying for the downturn? That doesn't really ring true in many circumstances.

Those rejecting the need for cuts seem to use the word 'victims' quite regularly, again as if they alone are feeling the brunt of the crash, just two years after it happened. That's a painfully slow shockwave...

The simple fact is we should all have to deal with it. It is actually quite insulting to those who have suffered, the unemployed and the low paid.

It has also been harder in non-unionised industries, obviously recent examples of Network Rail and BA have shown that changes in conditions are not forced on to them without a fight. While my opinions of unions have altered over the years and I do believe in collective action in principle, these actions are unlikely to ultimately help. Workers in many any other industries have simply have to put up with changing conditions, or leave, if they so wish.

Public sector unions will mobilise over the cuts, of course attempting to defend the interests of their own members, but I think ultimately that is the problem of modern British employment. The solidarity throughout the working population, formerly found in industrial labour, no longer exists and the influence is much more limited. Unions will be looking after narrow interests that wouldn't necessarily benefit the larger population, those who have already suffered, no matter how well intended any action is.

There is huge scope for cuts in the public sector and while the private sector has largely been squeezed it within an inch of its life, little has changed for public servants and surely it is only right and fair that the situation changes.

It is now close to two years that this downturn has effected the world economy and as it transpired the two main culprits have come away largely scot-free.

It was the banking sector and Government, through action and inaction respectively, that caused the crisis. However, with the banks having been propped up by Government and the cuts in public spending having largely been postponed until now, in many ways these two sectors have not felt the full effects of the downturn, or at least no as perhaps they could have, should have...

Yes there have been job losses in the banking sector and the Labour Government was thrown out at the election (though only just, Brown was clinging onto the door of No. 10 with his fingertips...), but the banks were saved from extinction and they have in some ways returned to business as usual. Perhaps they are trying to balance the books a little better, so have tightened their belts (much to the dismay of some would be borrowers), but bonuses are back. While in terms of Government as I have stated clearly for nearly two years the public sector has been largely saved from cuts.

The debt has gone from the debt of banks to sovereign debt, the debt of the nation. So who will take the greatest relative proportion of that debt? Not the rich, the rich will not suffer in the downturn and that was clear and identified long before the crash actually happened. In the global economy the super rich will prosper over the long term as the Times rich list has already illustrated quite clearly this year.

And in terms of my two protagonists, the Labour party don't seem too disheartened by opposition, since they weren't completely annihilated. I mean Big Al Campbell is having a right laugh on Twitter, on Question Time and while getting publicity for his trashy book.

Alastair Campbell

A man utterly convinced of his own importance

The fact is the level of economic growth was unsustainable therefore the level of investment in the public sector was also unsustainable. Cuts have to be made.

The idea of sustainable growth reminds me of the huge of amount of rubbish stated about Brown's economic record. The absolute best was early on in the crisis when on Jeremy Vine's Radio 2 show John Prescott claimed that Brown had delivered 10 years of "sustainable" economic growth. It so completely nonsensical it doesn't require analysis.

I don't think Vine picked him up on it properly. It astounds me that the likes of Prescott and Campbell get away with such nonsense so easily, or are allowed to by professional presenters and journalists.

John Prescott

F***ing clueless

Stick to what you know best John

Spot on

Maybe in a few years' time the higher level of investment could return, if significant growth returns. But probably not if the Tories have anything to do with and greater efficiency does need to be brought to the sector. This is a main aspect in the disparity between the public and private sector and I do intend to look more closely at Labour's legacy in the public sector and employment in Britain.

The issue of debt reduction and cuts is complex, but many of those fundamentally opposed to spending cuts are suggesting that the debt should be paid by increasing taxes.

This blog article is along those lines

So effectively the private sector pays, even if some public sector workers suffer de facto pay cuts, the basis of the debt would be paid from wealth generated in the private sector.

Taxes will have to be increased of course, but the idea of just taxing the rich, or the banks, or whoever; will not work without the corresponding cuts. The rich should pay their fair share and banks need to be levied (something Labour was waivering on), but tax increases have to be combined with spending cuts.

To put it simply, the rich will avoid the taxes as best they can and the conditions at the wrong end of the private sector will continue to deteriorate as the burden of the tax is shifted. Even if the low paid are not directly taxed, companies will cut further in attempts to maintain profits.

I have to admit that this scenario adds some credence to the Tory and business leaders claims about the NIC rise, the 'tax on jobs'.

Job cuts, pay freezes, etc, etc. The low paid in the private sector shouldering an even greater level of the burden to maintain the conditions in the public created during an
unsustainable boom.

It's just the way the system is now. Labour and their supporters may not like it, but then they had 13 years to at least try to do something about it.

I don't know if I'm hammering the point home... I would hope the point is clear enough, there is more than just the disparity between the rich and the poor in this society Tory and Labour alike have mangled over the last 30 years.

A bit bogged down by debt and cuts. I will move on this weekend...

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