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Just a couple of things Davy:
(i) Jon Snow challenged cabinet minister Francis Maude on the proportion of GDP figure over the next 30 years. Maude had no argument to offer but simply sang the praises of John Hutton!
(ii) But given all that, what does it mean to say that the "proportion of our Gross Domestic Product that goes on paying public sector pensions" is going to fall over the next 30 years? What's going to rise? And at the expense of what? (I acknowledge my ignorance here)
(iii) mention of the word "average" in the same sentence as "pension for public sector worker as compared to those from the private sector" always makes me turn off. These are meangingless phrases unless all the parameters are described.
(iv) half a million millionaires is actually an incredibly tiny % of the UK population. And strange when/ if you take into consideration house prices/ house values. That makes it comparatively easy (!) for people to be millionaires. Perhaps what one means is multi-millionaires - makes mores sense.
We're all in it together !
We're all in it together !
Wednesday, 29 June, 2011
As teachers, civil servants and other public sector workers prepare to strike over pensions, it’s good to look at some facts. The average pension pot for FTSE Company Directors is now £2.8m. The average annual pension for local government workers is under £6000. Notice how it is the CBI and the private sector bosses who are baying for the most blood when it comes to cutting public sector pensions. The reason they give is that private sector pensions are much less than those in the public sector – except of course for their own, and the other private sector fat cats who get richer and richer under this (and the last Labour) government.
The myth of the pension crisis
But the clinching argument is always that we just cannot afford public sector pensions any more. David Cameron told the Local Government Association (LGA) conference: “the reason we can’t go on as we are is because as the baby boomers retire – and thankfully live longer – the pension system is in danger of going broke.”
This is a straightforward and much repeated lie. It is in fact a deliberately invented political myth. The proof is in a table on page 23 of Lord Hutton’s report on pensions. This table shows the proportion of our Gross Domestic Product that goes on paying public sector pensions. THIS FIGURE IS SET TO FALL PROGRESSIVELY OVER THE NEXT 50 YEARS. Currently the figure is around 1.9%. This goes down to around 1.8% by the end of this decade, to 1.7% by the end of the following decade, and lower each year till it reaches just 1.4% in 50 years time. There is no public sector pension crisis. Pensions are being cut for ideological reasons.
The myth of the untenable budget deficit
This is not the only economic myth being peddled by the Government to justify its ideological attack on the public sector. We are also told that the overall budget deficit is unprecedented and totally out of control. Except that it isn’t. The budget deficit was much higher as a proportion of our GDP for most of the 20th century including the post-war period when a Labour Government built up most of the welfare state ! The cuts in the public sector are designed to make sure that the bankers who caused the economic crisis don’t have to pay for it. Those who depend on the public sector or work in it will pay for it by reductions in pay, pensions, services, health and well-being.
There’s not enough money to go round !
Ah but there is – it’s just that a tiny minority of powerful people have far too much of it. There are over half a million millionaires in the UK. They will do everything in their power to prevent their wealth being shared round more fairly. As gross inequality grows almost by the day, one is reminded of King Lear: “So distribution should undo excess, and each man have enough”. Or even Karl Marx: “From each according to his ability, to each according to his needs!”.
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MAIN POINT: our protest tactics need to change with our culture - instead of strikes a modified form of civil disobedience will achieve more.
Strikes have got a bad reputation in the UK and are seen by many people and most of the media as negative and pointless. The tabloid media is licking its lips, ready to portray the teachers' strikes as pointless, unpatriotic, militant, etc etc.
BUT THERE ARE OTHER WAYS OF PROTESTING. Strikes are not the only way of registering disquiet with Government proposals.
What would be better than strikes would be to go to work but REFUSE TO TEACH THE NATIONAL CURRICULUM FOR THAT DAY. Instead, every teacher would go to school, but would teach:
- Davy's interesting points
- the history of labour relations and trade unionism
- about how pensions work
- what different people are saying about the pensions crisis
- where the errors are creeping in
- about the lies being peddled by vested interests
The teachers could deliberately and provocatively teach a purposely unbalanced set of lessons, showing why the government is being unfair.
By refusing to teach the National Curriculum, and instead opening the pupils' minds to the injustices being perpetrated against teachers, this would be a way of using CIVIL DISOBEDIENCE to make a strong point.
Of course, it isn't easy to wheel out a whole day's teaching for all pupils ... so the teaching unions would need to prepare strike day teaching materials, enough for a day's lessons, planned for every age group. It would be necessary to make sure that the day was interactive and fun, to maintain interest, and to gain media attention.
All this would need preparing in advance. Too late for tomorrow's strike action, but this approach could be used for the next wave.
Then the media coverage would hopefully be about the content of what had been taught, and not about disgruntled parents having to take a day's holiday to look after their kids.
And the big payoff would be that the pupils would get a much better understanding of the key issues, and consciousness would be raised in the rising generation.
I like the idea of responsible civil disobedience, such as transport workers not striking but just refusing to take any payment for the day(s) of the action.
Thanks for the interesting comments.
I think we have to defend absolutely the right of people to take strike action if they feel they need to as the only way to get the public's attention and to show the strength of feeling. But I have sympathy with the two comments above about more imaginative tactics. I think the idea of balloting members to take civil disobedience actions is an interesting one. The more the action can hit directly the employers rather than the public, and the more the action actually acts as an educator to a wider audience about the issue the better.
Interesting that some of the mainstream media have picked up on the facts about the alleged untenability of pensions, and that Government spokespeople are totally unable to answer it !
The fact that there are only half a million millionaires show how the rest of us are held to ransom by this tiny rich powerful minority. Also important to realise that wealth is just as unequal within that minority. The richest 1000 people in this country have assets of £353 BILLION pounds !!!!
Matthew Oakley in the Guardian 30/7/11 says: On Tuesday the prime minister told a conference of local government leaders that public sector pensions were unaffordable and were burdening households with an average extra tax bill of £1,000 a year. Meanwhile, the unions have corralled 750,000 public sector workers into walking out today in protest over proposals that would require them to contribute more to their pensions in order to take pressure off the taxpayer. Whether the prime minster or the unions is right depends crucially on the data and on what is fair.
Public sector workers get paid more and receive more generous pensions than their private sector counterparts. This is a stark statement, but it is what the data shows and it is within this context that the prime minister's comments on Tuesday and the strikes that are happening today should be viewed.
Defined benefit pensions and the final salary schemes that many public servants still enjoy have largely stopped in the private sector. If we compare the average pension across the country of just £3,900 a year to that of an index-linked £24,000 for a teacher retiring at 60 after 40 years of service, it is clear what the size of this disparity is. It should also be remembered that this pension does not come out of savings that have accumulated over a working life. Most public sector schemes in the UK are "unfunded", meaning that payouts come from current taxpayers.
On pay, there are arguments over which measure – mean or median, hourly or weekly, accounting for skills or not – should be used, but the simple fact is that under each of these measures, as a recent Policy Exchange report showed, a significant pay premium exists. Even the most conservative measure puts the average public sector worker on an hourly pay level around 8% higher than comparable workers in the private sector. This increased to around 25% for those closer to the bottom of the income scale.
If we combine the higher pensions with the higher pay it is apparent that current remuneration in the public sector is not affordable, nor is it fair. However, that is not to say that public sector workers are not valuable, or do not do a good job. In fact, Policy Exchange has argued that we should be rewarding our best public sector workers better – linking pay to performance and the cost of living in the areas people are working.
By comparison the reforms that the government has laid out are modest. They will ask the average public servant to contribute just 3% more to their pension and to move towards retiring at the state retirement age. Working in the Treasury as a civil servant I realised the great pension deal I was on – these reforms seem to be a good balance between protecting the exchequer and protecting the conditions of essential public sector workers.
The above, it seems to me, is a measured, rational argument regarding pensions. It is not a politically-biased or emotional rant. Nor does it draw on 'they have more than us' jealousies or resort to the language of ideologies to reinforce its point.
Thanks for your comment.
I don't believe this Guardian opinion piece is at all fair and unbiased. It reproduces all the tired old cliches about public sector pensions.
First, are public sector pensions better than most in the private sector ? Yes. But why ? Because private sector employers have shamefully slashed their staff pensions in recent years. I believe it is just as logical to argue that the privater sector MUST IMPROVE their pension offer, as it is to argue that the public sector must join this "race to the bottom" and offer just as poor pensions. My argument is that everyone has a right to a decent pension - not just those in the public sector. Why are you not asking the private sector which has seen staggering increases in profits, and top executive pay and pensions over recent years why they have at the same time cut pensions for the average and lower paid private sector employee ?
Second, I repeat the vast majority of public sector employees get a pension of around £6000pa or less. There are of course the occasional stories of vast pension payouts to ex-CEs (though even these are nothing compared to the obscene amounts of money paid in pensions to private sector CEs/Directors, as my original post made clear). My sister after 40 years of nursing is getting an annual pension of under £5k per annum after spending her whole life contributing to the scheme out of her paltry wages.
Third, most people get tax relief on their pensions. We spend £37bn a year on this. But what is not spoken about is that a quarter of all this tax relief goes to those earners in the top 1% of incomes, ie the very rich. So we could save £9bn a year on pensions by not giving tax relief on those who get these massive unjust pensions pay-offs - enough to mean that pensions for the vast majority of public sector workers would not have to be cut at all.
Finally, you refer to "more than us" jealousies, ranting and ideological polemics. My blog used some FACTS about the so-called pension crisis and the so-called budget deficit to show that in fact they are being used as ideological cover for transferring money from the poorer sections of society to the rich. It was the incompetent, irresponsible, rich scroungers known as bankers that got the world into the economic mess it is in. And they are now getting their friendly politicians (the Tories are after all funded overwhelmingly by bankers) to ensure that they don't have to pay for it - instead it is people who work in low or medium sized jobs in the private and public sectors, the unemployed and the sick who are being asked to continue to pay for the lavish lifestyles of the rich. I am not jealous of the rich and famous. I just want their ill-gotten wealth to be redistributed to those who deserve it.
A friend has just pointed out to me that the CBI no less, that constantly whinges about excessive public sector pensions itself has a final salary pension scheme - yes, the very same schemes it claims are unaffordable in the public sector ! Their shameless hypocrisy knows no bounds !
