Old Socialist confronts a modern day Scrooge! Or is he a Bagehot?
Headline: Yes, public sector pay is low — but the blunt truth is they’d be worse off at a private firm
Inflation surging. Tickets for Abba selling like hotcakes. And now, yes, a wave of public sector strikes. As 2023 dawns, modern Britain appears to be just a few pairs of flared trousers away from a full-blown 1970s tribute act. In fact, the truth is rather more reassuring.
Despite the best efforts of some union barons, we are not (yet) seeing a repetition of the Winter of Discontent. The disruption to ambulance and nursing services has been less than feared, partly because of a shared desire to minimise harm to patients. The borders stayed open. No one is using the trains anyway. And Britain is hardly the only country where people are striking over what inflation is doing to their pay.
Note the ‘union barons’ is not capitalized, as a further degradation of those bad actors. This, an old @TheEconomist trick of minimization, that reinforces that degradation! Just read the sullen ghost of Bagehot, Adrian Wooldridge! The pressing question might arise what ‘tickets for Abba’ has to do with the pressing question of the strikes, and those mendacious ‘union barons’?
The Patient Reader realizes, that it doesn’t take too long, before this child of privilege to shame the greed of these Public Sector Workers, for demanding a fair wage. Mr. Colvile plays the part of Ebenezer Scrooge, before the visitations of Ghosts of The Present, The Past, and The Future. Mr. Colvile labors, aided by the toxic Ghost of Thatcher/Hayek, as a corrective to those ‘union barons’ and greedy, overpaid Public Sector Workers: who hold aloft a Nation State by their endeavors. Or does Colvile provide a political reminiscence of Bagehot?
But the blunt truth is that the average public sector employee still gets more than their private sector counterpart for doing the same work — even if the gap has been shrinking. And when you add pensions, the divide becomes cavernous. As the Institute for Fiscal Studies says, more than four fifths of public sector employees are still in gold-plated defined benefit schemes, compared with just 7 per cent of private sector employees. Every year, the state pays another 18 per cent of salary into the average employee’s pension pot, compared with 6 per cent in the private sector. This sends the raw hourly pay gap between public and private shooting up to 21 per cent.
It is not just unfair, but unaffordable. Experts calculate that the liability from public sector pensions exceeds £2 trillion — effectively doubling the national debt. In the past year alone a change in life expectancy formulae and other factors raised the expected pensions bill for the NHS by £140 billion. That’s almost as much as we spend each year on the health service itself.
If the government tried to take away these rights by force, it would face the mother of all fights. But what about giving public sector staff the right to take more of their pay upfront, rather than let it pile up in their pensions (and ideally making that the default for recruits)? That would deliver the huge pay bump nurses want, while easing the long-term pressure on public finances. It would stop the next year degenerating into a pantomime re-enactment of Scargill v Thatcher. And it would help address the increasingly unfair divide between a public sector that gets the lion’s share of the perks and protections, and those of us who foot the bill.