Sunday, 10 July 2011

A Future Fair for the Public Sector..?

The News of the World is now making the news or were they always doing that, to some extent…? There is outrage and hopefully the clear criminal actions receive appropriate treatment, but so many other more fundamental problems are put on hold for news like this. Is it a surprise how low the gutter press will go? And I don’t know how much of it was the readership’s appetite fuelling such story chasing. Anyway, maybe people want their revenge, these papers have made a lot of enemies. I'll leave them to it...

As I’ve written this post about Public Sector pensions and work has taken up my time and Internet Explorer delayed the publishing; the Office for Budget Responsibility has come to my assistance and kept the issue in the news: Public sector pension liabilities top £1 trillion

But in truth it’s always relevant, this problem isn’t going anywhere for a while…

I was going to write about the Labour party and the affects of their time in Government (again); illustrated in Newport and Wales at large. And I will get around to it, but this post is looking at the (relatively) recent public sector strikes. The public sector is of course at the heart of what the Labour Government did during their years in power.

Strikers on 30th June

The issue of cutting services was not even on the agenda. I agree services should be protected as much as possible, but public sector pensions? The contracts shouldn’t have been agreed in the first place.

And their conditions? Well they never go into that too much…

'You scratch my back and I'll retire at 60'?

A lot of people would be probably be more accepting if it were simply the armed forces, police, nurses, etc, those in difficult frontline positions, who were retiring earlier for relatively decent pensions, but it isn’t. This is about the rest of the roughly six million employees that Labour maintained, in what was a greatly inflated public sector.

There has long been talk of public sector pension reform; even Labour mulled it over when in power. I’m not sure how far they would have gone and how they would have faced down the Unions, but they knew reform was necessary. Ed Miliband tried to distance Labour from the current action, whatever he said this might be in some part because he knows reform is necessary and Labour would have had to do something similar, but perhaps also because he’s worried about losing wider support.

Ed takes another moment

'Gordon give me strength...'

It almost seems that many in the public sector have not heard of the ‘pensions time-bomb’ (A.K.A the pensions crisis) and all the problems associated, certainly there seems to be little objective concern.

Years of market forces and global economic change have caused the erosion of company provision in the private sector, but the public sector is shielded from the direct effects by Government and legislation. And of course the Labour government did a very good job of protecting and actually vastly improving life in the public sector, while the market went to work on the conditions in the private sector and now here we are; with massive disparities between the sectors, as well as within the private sector.

While I appreciate complaints about reneging on contracts, the changes aren’t about losing anything that has already been contributed; the outcome just isn’t as attractive as when signing up. Things rarely are… Changes are constantly made to contracts and conditions in every part of the economy and surely Gordon Brown’s changes to pensions could be seen as the same.

Whatever they say the average eventual pension amount is, the terms and contributions are very agreeable, it is all funded by tax and has to change like everything else. And with regards to raising the retirement age, I think some people need to simply get a grip. This is not France...


With the aging population and changing economic conditions pensions change is inevitable. The public sector has been protected by government from the change, while market forces have stripped the private sector, bit by bit. Because the change in the public sector is conducted differently, it is nationwide and appears sweeping; it can be construed as an attack and ideological at that. Raids have been going on in the private sector for years and I didn’t hear too much about solidarity from the likes of Laurie Penny (PennyRed), or is she just too young..? When the private sector was paying the way, everything seemed cosy and they didn’t have a clue what was going on elsewhere…

Oh Penny if only you'd got here a few years earlier...
With your red pen.

And where the f**k was this guy when the private sector was shedding jobs in the hundreds of thousands?

Oh yeah, school.

The talk of affordability and these pensions becoming 'more affordable', is verging on irrelevant, when it can also be said they will become 'less unaffordable'. The cost is in the news again as mentioned previously and the forecast fall in the proportion of GDP spent is stated once more, but it is a long projection and it's because of reform. We probably could always finance these pensions, we could probably finance another foreign war, but should we? Maybe public sector pensions will take up a relatively smaller proportion of GDP, but the rest are going to have to work longer, should everyone else be working to fund such liabilities? And who really knows what is going to happen over the next 50 years?!

As less people will be working for every pensioner as time moves on, the majority of the private sector will have to work longer to maintain the conditions in the public sector, is that fair?

And there it is; the Left’s notion of ‘fairness’. Labour’s tagline for a nauseating election campaign. ‘A future fair for all’?

Fair for "all"?? Not a chance. Not with Labour in power.

And what is fair anyway?

You think he knows?

This guy?


Does he really know anything..?

Is the situation where there are significant disparities between the sectors fair?

The statistics are twisted back and forth in arguments from both sides, how much the pensions cost and how much the average person receives, ‘gold plated’ may not be a fair description throughout, but what is clear and pretty much undisputed, is that the provision is much better in the public sector. In fact most in the private sector have no pension at all.

The other statistics banded about and hotly disputed is the issue of the pay gap between the sectors and there are a lot of given reasons for this discrepancy. There are differences in the nature of the jobs; comparing roles is not a simple matter especially when considering fundamentally different working conditions and there may well be a greater percentage of people in the public sector with degrees. Although I’d be interested to see the statistics to warrant the claim in the linked article that there are more “highly skilled” workers in the public sector.

Of course there are nurses, doctors, police, etc, but as a percentage how many? And how many in administrative and managerial functions? And having a degree to enable you to take on the role of a community or diversity co-ordinator might be pushing the definition of ‘highly skilled’… Having a degree and being more ‘highly skilled’ are not one and the same. ‘Highly qualified’ and perhaps many ‘over-qualified’, as is the case in so many call centres. They’re not all Doctors and nurses and having so many qualifications in an unproductive sector is that good for economic balance..?

Everyone should have a co-ordinator

The issue of pay in terms of skills and like for like jobs is further complicated by distortion in the private sector from the high earners, this is rarely touched upon. Highly paid bankers and so on will increase the overall average, when so many more, graduated or otherwise, earn so much less.

Justifying the amount you’re paid is one thing, that is your worth in a defined role, but for an unspecified length of time (although even in the event of an early severance public sector workers also get quite favourable redundancy terms as a further benefit). Pension benefits are not the same and become a burden on an economy, whichever way you look at it.

A slightly bizarre attitude pervades from some in the public sector and the Unions, that they deserve such benefits (retiring early with guaranteed sums) and considering the poor provision in the private sector, they are therefore more deserving; ‘hard working public servants’, as if people don’t work hard in the private sector to produce the tax revenue that funds the public sector. Some are certainly seen as deserving by the wider population, as I’ve mentioned (forces, nurses, etc, teachers? Not so certain where public opinion lies…), but the rest getting off early (from decent pay and conditions) and paying them until they eventually die? Maybe paying them more now would be a fairer compromise…

In terms of the pay for comparable jobs, where many in the public sector claim they are paid less than equivalent roles in the private sector, nurses and teachers are perhaps easier to compare, but the example I often see is for I.T. workers. It is stated quite clearly they could earn more in the private sector and this is more than likely true. Well I.T. must be a relatively small percentage of employees, otherwise there’s something seriously wrong with the sector. And they are of course perfectly welcome to go and find a job in the private sector… Are they so arrogant to veil a threat to remove their ‘highly skilled’ services? Do they really think there won't be someone else to take their place?

The consistent claim is that employees have ‘accepted’ poor pay, but in the knowledge they have good pension provisions in place. Well how very gracious of them, to be so accepting. The attitude almost comes across, particularly from the likes of I.T. professionals, as if their own motives in taking the job have been altruistic. They have sacrificed ambition for the common good... So it wasn’t about choosing a reasonably well paid job with very good terms and conditions and of course, with no competition...? No, not at all...

Hardest game in the world...

Other roles that also comparable, and certainly in greater number and almost always over looked, are in basic administration. The pay fluctuates in the private sector, by industry and region, but starts at a reasonable level in the public sector and when you consider the conditions, pension provision and factor in such things as career progression; the overall picture is particularly favourable.

Public sector defences of pay and conditions often involve accusations of unfounded assumptions about the sector and then contradictorily turn to assumptions about the private sector. The bankers and their bonuses is an example readily given without an apparent thought to the percentage of people this actually involves. The average pay debate keeps cropping up and the figures now seem widely accepted on all sides, and usually there is little consideration of the massive variation in the private sector.

I have also seen comments about private sector employees being at fault in some way for the pension inequality. One accusation stated that private sector employees ‘invested in property’ during the boom times and it is therefore their own fault they have little or no pension provision. A gigantic sweeping generalisation from a seemingly knowledgeable Twitter contributor, when so many in the private sector cannot afford property of kind, let alone a decent pension. Even if many in the private sector did join a company scheme, they are barely comparable to public sector and Brown did nothing to help this.

Everyone makes assumptions, of course, but with the assumptions public sector employees make about the private sector it almost seems like during their induction it is drilled into them how they could do so much better in the private sector. Or sorry, they're told to say that if ever asked to comment…

Labour and the Unions claim Tories are trying to drive divide a wedge between the sectors, but then the Unions and employees ask why public servants should pay for the mistakes of the private sector. The divergence has already occurred…

The issue of pensions is not even about cuts to services, it’s something much more fundamental; a benefit the nation can ill-afford, unfairly afforded to a particular section of society. If everything was genuinely ‘fair for all’, then we’d all have decent pension schemes, however, that is not going to happen and most people realise and accept that.

I don't necessarily trust the Tories to get this right. Funnily enough I think the LibDems seemed to have the best understanding of the situation in the run up to the election and I have absolutely no trust in Labour as is.

The Eds united

A frightening prospect...

Many Leftists describe the situation as a ‘race to the bottom’ as if it is about dragging the public sector down to the private sector’s level, but it is tax from an increasingly pressured private sector that funds their conditions. Is that fair when funding is now a matter of either making cuts or increasing taxes?

And where do the unemployed fit into this way of thinking? A priority should be returning people to work, including many that remained unemployed in Labour’s boom years, but the Left’s idea is simply to tax to provide for all these groups. Well fortunately the mantra of ‘tax and growth’ doesn’t seem to have made it much further than the Left of Twitter…

That means all of you...

'Oy! Bragg!'

Billy is still down with the kids...

Maybe Labour could have done something about the situation when they came to power, improved private sector provision, put restraint on the public sector, or a combination of the two. Instead we find ourselves here.

Labour created the current situation; where in the public sector people were still joining expecting a job for life and favourable conditions, while the private sector went the other way. Labour allowed this, Brown created his ‘socialist’ ideal in the public sector without any apparent regard for what was happening elsewhere. How on earth did he think it was a good idea?! It beggars belief.

Labour and the Left bang on about fairness all the time but TUC General Secretary has admitted that the public sector is a "fairer" place to work than the private sector and that just about sums up the situation the Labour Government produced.

The public sector can be seen as a ‘progressive’ workplace in terms of the conditions; ensuring equal opportunities, providing stability and facilitating a work/life balance for its employee and enabling career progression. But this is maintained by Government and it is not open to competition and the global markets, the very forces that have altered and eroded conditions in the private sector.

Labour continued with this ‘progress’ in spite of significant economic change, but the pension provision that is disappearing from the private sector, is still based on ideals established in the post-war years. In the social-democratic years following the war, conditions radically improved and all things were promised to the workers, without an apparent thought given to how the world might change. This is all part of the problems with the Baby Boomer generation, but what Brown and Labour developed in the public sector was providing the best of both worlds; new and old.

The economic boom leading up to the crash was in part facilitated by the cheap labour in the developing world, but as the likes of the BRIC economies develop further and their middle classes increase, will they continue to prop up our economic systems? The UK economy is going to face many serious challenges; funding services and conditions for workers will have to be compromised, whether we like it or not. The whole country has to face these challenges and adapt to a changing world.

Laurie Penny can dream about her revolution and everyone can shout about fairness as much as they like, but there’s going to be change whatever happens. How Unions and so many Public Sector workers can expect everything to remain the same in the face of global economic upheaval is pretty much a mystery.

The world is changing, are they being ‘progressive’?

Is he still teaching..?

Should be able to manage at least one...

Throwing a sickie is now considered 'resistance'??!

Times have changed...