Tuesday, June 22, 2010

Another Tory Government, Another Cut in Public Sector Pay.

I can't be alone in thinking that George Osborne is wildly over playing his hand when he claims that, unless he cuts frantically into public sector spending, Britain will be on "the road to ruin" and heading in the same direction as Greece.

One can't help but feel that the Tories are getting to do what they always want to do anyway, but are now claiming to be doing so as a matter of emergency to save the nation from itself.

But public sector workers have traditionally always been paid less when the Tories are in power, so there should be little surprise that they are once again trying that well worn Tory tradition of dragging down public sector wages.

Public sector pay did catch up with the private sector under Labour, although the gap has not narrowed much in more recent years. But much of that was in response to public shame about the poverty pay that nurses, for example, received. Politicians and parents agreed that gifted headteachers should be rewarded well. Our armed forces remain underpaid by most standards.

In the lean years under the last Conservative government, many low-paid public workers could not even afford the contributions to their supposedly lavish pension schemes. Now reformed, you will receive just 1/80th of your final salary for every year you spend in the NHS. Thus after 20 years, a qualified, experienced nurse will see a pension of just one-quarter of final salary, say £7,500 or so.
Labour restored good pay in the public sector which the Tories the instant they have come to power are seeking to dismantle. Nor is their constant comparison between Britain and Greece particularly honest either.
Britain is not Greece. We have our own currency, so we are not trapped in a currency zone unable to devalue; our debt has a much longer maturity, so we don't have to roll it over so often and risk a crisis; our national debt will peak at about 75 per cent of GDP – better than most of Europe, and where it was in the 1960s. At the end of the Second World War it stood at 262 per cent of GDP, and we went ahead and built a welfare state. Most of it is owed within the UK. It is not "out of control".
And it is rather galling to hear the Liberal Democrats, who campaigned against cuts of this sort, now sit idly by as Osborne prepares to take an axe to public sector pay whilst claiming to be going after "fat cats". Nothing could be further from the truth.
The money that goes into the public sector is not uniformly wasted on fat cattery, an obvious point that is worth repeating in the present feverish climate. Most of the core functions of the public sector need to be done, and the state cannot be suddenly cut back without any harmful effects. Students will still need to be taught by lecturers, rotten teeth extracted by dentists, babies delivered by midwives, a war to be fought in Afghanistan, drunks to be arrested on a Saturday night, children to be protected from harm. Less emotively, we will still need stats to be gathered, weather forecasts to be made. We may soon discover just how difficult it is to find real waste in the public sector, and how meanly in reality we look after those who help us with extraordinary dedication. Or is all this more ideologically driven?
Osborne is claiming that circumstances are forcing his hand, but what he is doing is what the Tories have done as long as they have existed. Forgive me if I take his protestations with a large pinch of salt.

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Steel Phoenix said...

I don't know much about the situation over there, but here in the U.S., public pay is out of control and sucking the life out of our economy. federa salaries/benefits have increased by 50% since the recession began. Increasing public pay at the expense of the industrial base that is struggling is just insulting. You really do have to take into account all the various health benefits and pensions when doing such calculations.

I don't know how you guys manage to stay afloat with all of the time you take for vacation over there. My only explanation is that unlike us, you don't keep your military budget pegged to the total expenditure of the rest of the combined world.

Kel said...

No, our military commitment is simply nowhere near the fantastical costs your country spends every year.

I think I read somewhere that you spend more than the whole of Europe combined on defence, perhaps even the rest of the world combined.

It becomes impossible to even think of social services when you are spending all that money on defence.

Steel Phoenix said...

Yes, we keep our military spending right around that of the rest of the combined world. It's an anachronistic concept that almost made sense in the 1950's, but now is just wrong.

Kel said...

The MIC in the US has such a hold over the government that I think it is rather scary.

There are so many better ways that those vast sums could be spent. Especially since nations which arm themselves in the way yours does, tend to go to war eventually to try out those bright new shiny things.