Mar 2010 24

Strikes and the Budget9

As I passed – and, I confess, paused to heckle – several PCS union strike pickets on my way through Westminster this morning, two things struck me.

The first was that the strike is clearly a flop. Most of the pickets I saw were down to a skeleton crew of one person per office, which is even less than the previous strike a couple of weeks ago.

The second was how massive a political mis-step this is for the public sector unions. No doubt their intention by holding the strike today was to piggy back on the Budget and force Alistair Darling to cross picket lines on his way to deliver the speech.

In practice, though, how does this look to ordinary taxpayers? On the day the Chancellor will be talking about the pain of recovery, outlining the latest figures on our vast national debt and probably demanding that taxpayers accept the pain of tax rises for what he would characterise as the greater good, the public sector unions are selfishly walking out.

One striker I spoke to this morning repeatedly hollered "why won't you stop and debate this in detail" – my answer was "because I, unlike some, have to go to work". For ordinary taxpayers around the country who just want to get on with their lives, pay their bills, raise their kids and hopefully one day retire, the contrast is just as stark.

While the rest of the country pulls together and fights on, the PCS are throwing their toys out of the pram and demanding more sweeties.

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  • RichS

    I guess the reference to ‘going to work’ means you pay UK tax. That’s something I suppose.

  • Josh FG

    Was the reason you didn’t stop to debate because the tax dodgers alliance don’t understand the level to which investment in public services stimulate the economy.

  • An Uncivil Servant

    Possibly, unlike civil servants, you have an employer who respects a contract of employment and doesn’t just tear it up as they see fit.

  • I’ve worked in the private and public sector and can see the difference

    Uncivil Servant – I worked in the private sector, for a software company for 10 years – over performed each year I might add (see later). Half way through November 2008 I was advised that my job was at risk of redundancy, by the end of November I was out – my contract of employment ripped up. I now work in the public sector – having worked in the NHS and a local council – where not even a poor performer can be made redundant, never mind dismissed, in less than two years. THIS is a terrible waste of tax payer’s money – I’m hoping that when the job cuts happen the spongers, dead wood and pretty useless people are made to leave before those that can actually do a good job.

  • An Uncivil Servant

    As you were made redundent, the level of redundency pay was determined by your contract of employment. (unless you’re saying you were entitled to a larger payout and your employer did breach that right – which is what this strike is over)
    Even Maggie recognised that existing civil servants had a right to the existing levels of redundancy pay when the scheme was last capped in 1987.

  • Simon

    UncivilServant ,
    People are only too willing to accept pay cuts etc if the alternative is their employer goes to the wall , in which case
    there will be insufficient money to honour their contracts of employment anyway .
    The public purse is bottomless so employment contracts naturally carry a lot more weight there .
    Surely employment rights need relaxing as they deter job creation . It has to be better that a job exists for a while than never existed at all .
    How would you recommend going about replacing defined benefits pensions with fully funded defined contributions pensions ?

  • An Uncivil Servant

    Simon,
    People accepting pay cuts are exchanging pay for job security. This is fine.
    The proposals are to cut redundancy pay which you only get when you lose your job. So exchanging a lower payout for …. no job anyway.
    Employment rights have already been relaxed through new contracts which enables the creation of new jobs.
    There is already precedent with those in post before 1987 having different rights to those employed after.
    Your analogy with a pension is a good one.
    The classic and premium schemes have both been closed to new members, but both are still open to existing members. This is what has happened to the closed schemes in the private sector. Even where schemes are frozen, existing members are still entitled to their frozen pension. Unlike the proposals to redundancy pay, the pension is not reduced.

  • Simon

    Uncivilservant ,
    I take your point , reduced redundancy terms appear to be a pre-cursor to mass redundancies so why should a turkey vote for Christmas with nothing in return .
    I’ve got friends who have basically been sole traders who want to create employment and even for them the regulations and obligations are such that it makes employing someone a heck of a lot of hassle .
    For a company of 30 people you need a personnel manager or to outsource the personnel function .
    One mate recruited a woman who announced she was pregnant a month later so now he has to tell her replacement that he can’t offer him/her a permanent job only a temporary one .
    The next generation are getting an even rawer deal if they have to honour public sector employment contracts drawn up in a world vastly different to that which they will be living in .
    Worse still is that current defined benefits pensions are nowhere near fully funded . I don’t know any way of funding an index linked DB pension without putting the risk on the next generation without using the risk-free rate investment growth rater which is about 1.25% above inflation .
    Based on that we should be contributing something beween 30% and 70% of wages of various public sector employees rather than the 20% odd .
    There ought to be an obligation for public sector remuneration to be properly costed and the fairest way in the current climate would be by paying them more upfront and letting them choose what to put into a pension .
    Beyond the current climate there needs to be some compulsion for everyone , public sector , private sector , to spend less now and save more for old age . Perhaps the only way of doing it is by deductions from salary in the same way NI is taken .
    We’ve got a heck of an adjustment to make in this country .

  • An Uncivil Servant

    Simon,
    Like those in the private sector taking a pay cut to avoid redundancy, civil servant don’t want to be made redundent. Preventing redundancies would avoid expensive payouts. Most (as Mark Wallace puts it) just want to get on with their lives, pay their bills, raise their kids and hopefully one day retire. Instead, as you point out, there will be mass redundancies, at great expense to the tax payer. Vacant posts will be filled on the quiet with expensive agency staff as a service will still need to be supplied. Civil servant numbers have fallen by 38,0000 over the last 5 years without widespread redundancies. It would be cheaper to use the same ‘natural wastage’ to cut numbers gradually than to make redundancy payments.
    However saving money without making large cuts doesn’t grab headlines.
    As for affording defined benefit pensions, cap pay increases to 1% (reducing benefits and future liabilities) and increase pension contributions (increasing the pension fund or the one that would be there if the government didn’t Maxwell it). Defined benefit pensions need constant adjustment to fit the market conditions.
    I agree about making savings compulsary for old age. Roll on NESTs.