Nov 2011 30

TaxPayers’ Alliance information on public sector strikes, pensions and unions20

Below is some background information on public sector pay and union pension myths, as well as an assortment of recently published work that you may find of use.

The TaxPayers’ Alliance is today also releasing a new online calculator that allows someone in the private sector to assess how their total remuneration per hour is comparable to that enjoyed by public sector workers on significantly lower salaries.

Click here to use the online calculator


Public sector pay background

Public sector workers are significantly better paid than those in the private sector.  Research at the Office for National Statistics concluded in July that “after accounting for: gender, age, occupation, the region that the job is located in, and factoring in qualifications, the public sector, on average, earned 7.8 per cent more per hour (excluding overtime) than the private sector in 2010”.

Public sector pensions

The unions are propagating two key myths about public sector pensions:

1. They claim that Chart 1B in the Hutton Report shows public sector pensions are affordable. But that chart is based upon pension accruals and pensions-in-payment growing with CPI, rather than RPI, which is one of the measures the unions are striking against. They cannot have it both ways. The projections shown in that chart are also the result of assumptions about public sector workforce and economic growth that may prove optimistic.

2. They claim that the “mean average public sector pension is £7,000” and “the majority” receive less. But that average will include a large number of workers who were only in a given public sector job for a short period of time, and have therefore only accrued a small public sector pension.  With a 30-year career in the public sector, workers can expect generous pension provision:

  • A local government manager who retires on £60,000 a year could expect a pension of £30,000 a year
  • A more junior worker who retires on £25,000 a year could expect a pension of £12,500 a year
  • A worker in the NHS who retires on £40,000 a year could expect a pension of £15,000 a year and a lump sum of £45,000
  • A teacher who retires on £50,000 can expect a pension of £25,000 a year


Recently published TaxPayers’ Alliance research

Public Sector Pension Gap (Nov 2011) – Research showing how, excluding the NHS, there are already more public sector workers drawing a pension than there are working and paying in to the system.

Taxpayer Funding of Trade Unions (Nov 2011) – How the taxpayer subsidises trade unions to the tune of at least £113 million each year through direct grants and “facility time”.

Trade Union Rich List 2011 (Sept 2011) – The comprehensive annual run-down of the now 38 trade union bosses who took remuneration packages worth more than £100,000 in 2010-11.

Reacting to the strikes, Matthew Sinclair, Director of the TaxPayers’ Alliance, said:

“It is incredibly unfair that taxpayers already struggling with the bill for the higher pay and better pensions enjoyed by public sector workers are now facing the disruption of a massive strike. Even after the proposed reforms, staff in the public sector will still get a great deal. The unions need to be more realistic and stop expecting everyone else to pay so much for public sector pensions.”

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  • Anonymous

    Please stop propogating the myth that public sector workers are paid better. I am a public sector IT consultant and I get paid around 20% less than I would doing the exact same job in the private sector. There seem to be a lot more highly-paid senior management positions in the public sector and that would throw off the average. However, if you compare like for like, public workers don’t exactly rake it in.

    • http://www.taxpayersalliance.com The TaxPayers’ Alliance

      The ONS did exactly that, and concluded that after accounting for gender, age, occupation, location, and qualifications, the public sector earned, on average, 7.8 per cent more per hour than the private sector in 2010.

      The report is here – http://www.nomisweb.co.uk/articles/ref/stories/8/public_private_sector_pay_july2011.pdf – and they’ve even made a video – http://youtu.be/rZsbsZ-gvDU

      • notgullible

        I’m a forest manager in the public sector in Scotland, my pay is about 14.2% lower than in the private sector forestry.  My forest district actually returns a financial surplus to the treasury.  ONS stats are dubious and by their own admission it is difficult to compare like with like between the private and public sectors.  I’ve worked in both the public and private sectors and in ALL countries of the UK (how many on this website have worked in all countries of the UK?).  A lot of right wing ‘public sector is bad’ twaddle is being written on this website.   My brother is a private sector dentist, but much of his income is derived from the pay of those who work in the public sector, so that hardly means he is wholly in the private sector does it?  No one in the ‘private’ sector works in a bubble isolated from public sector funding, it’s ludicrous to suppose otherwise.  If someone in the so-called ‘private’ sector berates the so-called better conditions in the so called ‘public’ sector, then why not move to another country in the UK like I have and also to the ‘public’ sector.  To all you moaning ‘private’ sector ‘I don’t earn my money from the public sector in any way (yeah right) and don’t see why I should fund the public sector’, then get a job in the public sector if you can, and wait till you get made redundant like over 710,000 are planned to by 2016.  Reading comments on this website I’d be convinced the taxpayers alliance and it’s supporters would like to see no public sector in the UK.  Fine, privatise the lot, but David (call me Dave) Cameron’s ‘big society’ i.e. the general population (those in the private sector) can run the prisons, build roads, police the streets and fight wars for free in their spare time.  That requires a draft on zero pay.  That’s a laugh.

    • James

      Simple solution. Nobody’s forcing you to work in the public sector. 

      Problem solved. 

      • Anonymous

        Actually, I am being forced to work here. At gunpoint. But you weren’t to know so I’ll let you off.

    • John Moss

      If you are a consultant, you are self-employed and therefore have a choice over who you work for and at what rates. What other compensation do you receive apart from the “lower” pay? Do you have a long-term contract perhaps? Most consultants (I am one) live in perpetual fear of instant dismissal – just ask the IT consultants who worked for MF Global – they’d give 20% of our fee to have long term security I’m sure

      • Anonymous

        How did you work that one out? I’m a permanent, salaried employee…

      • Demosthenes0384

        Ignorance is bliss

  • Blarg1987

    Please can the TPA, say what information they are comparing, are you comparing  a school teacher to a private school teacher or to a baby sitter, a nurse with a private sector nurse or a person who works in a care home on miniumu wage, a police officer to a private bodyguard or a minimum wage security guard on a night shift.

    I could name countless more examples but untill you have an actual breakdown of what you are comparing it to any analysis will be flawed, I appreciate a quick reply to this comment.

    • http://www.taxpayersalliance.com The TaxPayers’ Alliance

      Full details of the calculations involved, assumptions made and links to the primary sources can be found on the calculator page, here – http://www.taxpayersalliance.com/pay-slider

      • Blarg1987

        The ONS is an average over all areas, therefore it does not compare like for like, could the TPA please do research to compare like for like in future comparisons as it would be interesting reading :)

        • Dave

          However interesting it might be, it would not serve the TPA’s political agenda to pursue such research, any more than it would serve the trades unions political agendas to be more objective in their arguments.

          The simple reality is that none of these organisations is at all interested in balanced discussion. And so, whilst it is probably the case that there is some truth is what everyone says, that “truth” is careful selected to advance the political position of the organisation concerned.

          It’s interesting that the Hutton report specifically did not find that public sector pensions were “gold plated”. It’s equally interesting that TPA is singularly uninterested in exploring the gross under provision in the private sector. Hutton was keen to avoid a race to the bottom – a race that TPA appears all too keen to see.

          Whilst the role of government in this mess is shameful, let’s not forget the private sector pension holidays and asset stripping that went on. Shareholders were all too keen to maximise their returns on the back of such antics, but all too quick to deny responsibility when the cash cow faltered.

        • Demosthenes0384

          It is irrelevant that on a like for like basis some in the private sector may get paid more. That is why the public sector has compensating benefits, some of which need trimming.

          The point is the public sector is unsustainable as it stands. Those in the private sector have made sacrifcie. Those in the public sector are unwilling to.

          I know no one, (including some in the public sector) who is in support of this action.

          I don’t expect my comments to move any body in Unison. But then again it is notoriously difficult to get the selfish to think of the bigger picture and consider other poeple.

          It doesn’t matter if the country gets completely trashed just as long as you get to retire when you want on your comfortable (more comfortable than most) pension. 

          • Blarg1987

            Why is it irrelevent? by that logic would you say it is irrelevent to compare the public sectore in anyway shape or form?

            I am curious what compensating benefits do the public sector get, as I know many people in both sectors with the private sector offering more benefits then the public sector, that is if you inclde a pension as a benefit.

          • Demosthenes0384

            It is largely irrelevant because we simply cannot afford to pay the public pay bill. Despite years of Gordon Brown tyring to do the opposite we simply cannot spend what we don’t have.

            Very few people actually realise the depth of the state we are in. You assume that the money is inexhaustable and that the tax payer can continue to pay the public debt simply by increasing the amount of tax they pay. So I have to give up my future and the future of my children so that some selfish ingrate can have a more comfortable retirement?

            Cut your pension or you will lose you job. And striking about it won’t change reality. You may think that there is an alternative to austerity measures but there isn’t.

            Sure a nurse in the private sector could earn double, triple or even more what a nurse in the NHS does. Could is the operative word. If that nurse is an agency nurse _when_ she is working she could have a much higher hourly rate. She has however no garauntee of work, no job security and until the advent of the (union supported) Agency Workers Rights legislation earlier this year, no employment rights what so ever.

            However, I suspect that the salaries of nurses working in private nursing homes and hospitals is highly variable, and in many cases inferior to the NHS.

            Another way in which it is irrelevant, is that most of the people paying the public wage bill aren’t working in like for like jobs. Ask those on minimum wage working in shops and warehouses what they think of working up to 60 or 70 hours a week so a teacher can retire early. The green box up top takes account of like for likeness.

            There are jobs that feed and jobs that eat. For the most part public sector jobs are jobs that eat. Most have no direct productivity or positive ecconomic impact. (That is not belittling the importance or essential nature of the work done by many public sector workers).

            This is very much a matter of life and death. Private sector workers have already made many sacrifices, with little or no complaint. It is time for Public Sector workers to step up.

            Every penny paid to a public sector worker, including what they pay in tax, has already been paid in tax by a private sector worker.

  • David Spencer

    I run a small business. I have no job security. My privately funded penson ( SIPP) has fallen in value by around 30% over the last year, reflecting the reduction in value on the world stock markets. There are days when all I seem to do is write cheques to the government – Corporation Tax on my company’s profits, VAT, and then there’s PAYE as well as  employees and employers NIC.  

    Add to that I know so many people now that are younger than me, retired, in fine health and drawing public sector pensions. We are now for sure a two class state – those with state pensions & those without….

  • Demosthenes0384

    The strike is a betrayal of the British people.

    Selfish people who are unwilling to pull their weight in the current National and International crisis. Somebody else can make sacrifices but not us they cry.

    It is partly the fault of government propaganda, blaming the bankers for the problem. Propganda designed to shift the blame away from themselves. There are many reasons and causes for the turmoil we currently face, but the public sector is one of them.

    Truth is the public sector is too big is too expensive and is unsustainable. A private sector nurse does get paid more than a public sector nurse, but that is not the point and is irrelevant.

    You can’t have what you can’t afford.

  • Jon

    There was a report in the Express this morning in which it was mentioned that workers at GChq on £25k could doulble their salaries in the private sector, and that employee turnover is a big problem.

    • Demosthenes0384

      My god. Somebody who believes the journo’s ;-)

  • gobsmacked

    Again like for like not compared. Bar tender in your local pub, £7.00 per hour, degree qualified neurosurgeon in an NHS trust £30.00 per hour. Hey presto, over paid public sector, but now like for like…. degree qualified forest manager in Forestry Commission, circa £27k/year for 44 hour week, degree qualified manager doing similar job in large private sector forestry company, £34k/year for 50 hour week. Any real diffo? As for job security in the forestry industry, your more likely to lose your job in the public sector. How about some intelligent analysis on this website instead of bollox?