Thursday, 15 September 2011

Public Sector Pensions and the Shadow of Fred Goodwin

First up before I start, I'd like to thank anyone who voted for OutspokenRabbit in the Total Politics Blog Awards - A final placing of 27th in the Libertarian section in an annual poll is something with which we as a site can be proud, given that we've only been in business for some four months. I'm very grateful to anyone who took the time to acknowledge our existence - muchos kudos.

Anyway - Oscar acceptance speech over, back to business. The decision of various trade unions across the Uk to take the gloves off and wage war against the planned reform to public sector pensions of course prompts comparisons with the Winter of Discontent in 1979 and even the 1926 General Strike, probably the most widespread nationwide withdrawal of labour in Britain's history. Dave Prentis (Unison) has told his members to prepare for "the fight of our lives", round one of which would appear to be a "day of action" that has been pencilled in for 30th November. Judging a book by its cover is rarely a wise thing to do, but the thought of Prentis entering the picket line to the theme tune from 'Rocky' made this bunny smile nonetheless.

Meanwhile, the magnificently moronic Mark Serwotka (Public and Commercial Services Union) offered an insight into the situation that is certainly unique "there is no case whatsoever to make any changes to public sector pension schemes". The fact that the privately-employed are paying more into the public sector pot than those actually on the state payroll, with the net result of a £1trillion black hole, clearly do not represent 'a case' as far as Serwotka (£82k salary and £25k pension contribution) is concerned.

I don't blame union members for attempting to look after what they have. Faced as many are with the prospect of paying slightly more for slightly less, then retiring five years later, most of us would put up whatever resistance we could (it should be added that in the largely non-unionised world of the private sector, the box of potential weapons would be comparatively light). Self-interest is a perfectly rational drive and so the action in itself does not antagonise this bunny nearly as much as the likes of Serwotka, whose attempts to dress this up as a 'modern day class war' or 'all about protecting public services' are painfully transparent.

The real question is - does a case exist for those in the private sector subidising the superior pensions of state employees, especially when one considers that the gap in basic salary between the two was wiped out by a decade of New Labour's generosity with other people's money? Then consider that the deal on the table would still leave the public sector with a superior pension scheme across the piece and there is really only one answer - this change, albeit a modest one, cannot come soon enough.

However, this is also a massive challenge for Dave and his government on a number of levels. Firstly, he may come under real pressure from large swathes of the general public to cut some sort of deal - either because they sympathise with the strikers, or due to the visible absence of some frontline services (most worryingly, gravediggers are said to be on the list of potential dissidents). After flip-flopping over NHS reform that were not all that radical to start with, another backward step to a vested interest group is likely to do irreparable damage to ConDem credibility (not that this would necessarily be a bad thing in isolation).

Politically, this could become very difficult. Having allowed and practically encouraged a wide-spread demonisation of public sector employees, then done nothing to counter it, he might be bitten on the proverbial to some extent in opinion polls and the like, though there is some truth in the suggestion that most of those effected were never likely to vote Tory anyway. Many went LibDem last time out though, and the prospect of Nick Clegg turning windsock to prop up their flatlining share of the vote, ratting on his mate and collapsing the ConDems' majority is a more realistic one than some imagine - failing that, around 30 of his MPs following that course of their own accord would have a similar (though less symbolic effect).

Then there is a real problem that is almost certain to resurface - remeber Fred Goodwin and his £703,000 per annum pension (total pot would require £28million of contributions from you or I)? The former RBS bigshot was among the 20 directors of banks bailed out by the taxpayer who pocketed yearly payouts totalling over £6million. All of this was before Dave's time, but one gets the impression that his disgust at this situation was half-hearted and less than completely sincere - like Prentis, Serwotka and co, the fatcat class symbolised by Goodwin sought taxpayers' money that was clearly unmerited. Unlike them, they got it and were ultimately rewarded for clear and demonstrable failure.

This might be the caviar communists' best weapon in terms of winning hearts and minds, so Dave had better have a credible answer - if he's going to attack the undeserving rich, he'd do well to at least sound like he means it this time. Take care and I'll catch you soon.


  1. The government should put a chunk of their salary onto a pot that they only get at the end of the year if they have not gone on strike. We will see how keen they are to take yet another day off. Fuckers.

  2. You've swallowed the government rhetoric hook, line and sinker! Of course private sector workers should have better pension schemes - but how does reducing the public sector scheme achieve that?! In the public sector, pensions are effectively deferred wages - so how would you feel about having your wages cut by between 10% - 15%? The government are attempting to divide and rule on this one, and you've fallen for it; the way the 'facts' are being presented is laughable (liability figures are discussed as if they have to be paid now, rather than over several decades). Here's the bottom line: the average state-sector pension is £4,000 - that's 80% per week; how do you fancy living on that Mr. Cameron?