[Stu Littlefair]

I'm interested in this idea that public sector pensions are affordable as they are. How can this be with an aging population and an expanding public sector? Can someone summarise?

That aside, there's a more serious problem with the economy in general when the public sector (net tax consumers) starts reach the size of the private sector (net tax producers). This is clearly unsustainable and there are only 3 solutions:

1. Grow the private sector
2. Shrink the public sector
3. Kill everyone in the whole world and drown Middlesex in a vat of wine

sorry 4 solutions....

4. Pink Anasazi

Quickly, it's because changes were made to the pension schemes to make them cheaper, and the unions agreed that the employee would near the brunt of any future increases in life expectancy.

Also, you've got some funny views on the public/private sector there. Public & private sector alike generate wealth and both pay tax. You may be surprised to learn that most people, both public & private sector are net consumers of tax. It's only in the upper income levels that you pay more than you get back. To call the public sector net tax consumers is to believe that their wages are somehow different to private sector workers. Maybe you should read this

http://timharford.com/2011/12/you’re-wrong-–-we-are-all-wealth-creators/

[john horscroft]

Escellent work Offwidth. Particularly the mugger analogy.  Call me an old hippy if you like, but I like the idea of common cause, that we are, in a funny kind of way, all in this together....

[BB]

To call the public sector net tax consumers is to believe that their wages are somehow different to private sector workers.

Public Sector wages are paid for by taxes, no?

[GraemeA]

Public Sector wages are paid for by taxes, no?

Public sector workers are tax payers, no?

[BB]

Public Sector wages are paid for by taxes, no?

Public sector workers are tax payers, no?

Does the amount of tax they pay exceed their wage? No.

[BB]

Yes, but. What the Tim Harford article says correctly is that both public and private sector work within the economy are value-added. If public services were privatised we'd pay directly rather than via tax.

That certainly holds true for front line services like the NHS police, teachers etc. Although, one could argue that you might get a better level of service if private companies were in direct competition to perform these services.

That aside, what about the questionable jobs like the FSA HR diversity consultant being paid £60k a year or the 'walking co-ordinator' for Islington council on £30k etc. Would we really be that much worse off if these jobs didn't exist?

This all sounds a bit Daily Mail doesn't it? Sorry.

[Stu Littlefair]

It does a bit, and you can probably find equally useless people successfully employed in the private sector. Homeopathy, or Carole Caplin spring to mind.

[GraemeA]

Public Sector wages are paid for by taxes, no?

Public sector workers are tax payers, no?

Does the amount of tax they pay exceed their wage? No.

No of course not but the rhetoric seems to be that the private sector are the only ones paying tax. The rhetoric also seems to forget that the pensioners currently enjoying their lovely public sector pensions are also major shareholders in The Bank of Mam and Dad and therefore are continuining to contribute substantially to the economy.

The Works (which pays a large amount in tax and employs quite a few people) would not exist without The Bank of Mam and Dad Who Are Either Currently Public Sector or Ex-Public Sector Workers.

Just pointing out that the rhetoric provided by the government ignores the knock-on effects.

[Oldmanmatt]

Public Sector wages are paid for by taxes, no?

Public sector workers are tax payers, no?

Does the amount of tax they pay exceed their wage? No.

No of course not but the rhetoric seems to be that the private sector are the only ones paying tax. The rhetoric also seems to forget that the pensioners currently enjoying their lovely public sector pensions are also major shareholders in The Bank of Mam and Dad and therefore are continuining to contribute substantially to the economy.

The Works (which pays a large amount in tax and employs quite a few people) would not exist without The Bank of Mam and Dad Who Are Either Currently Public Sector or Ex-Public Sector Workers.

Just pointing out that the rhetoric provided by the government ignores the knock-on effects.

Amen...

[mrjonathanr]

That certainly holds true for front line services like the NHS police, teachers etc. Although, one could argue that you might get a better level of service if private companies were in direct competition to perform these services.

Lots of right-wingers do, so you've got company. You'll be able to see this in practice in a few years as state education sector is being substantially privatised.

As to whether that will make for better performance, it definitely will ffor those with the cash to buy it. If you can't you're not the right type of voter (for this type of administration) anyway.

That aside, what about the questionable jobs like the FSA HR diversity consultant being paid £60k a year or the 'walking co-ordinator' for Islington council on £30k etc. Would we really be that much worse off if these jobs didn't exist?

What about them? Are you saying they're significant and representative of most public sector work? Or are they weird little herrings of a reddish hue?

[BB]

What about them? Are you saying they're significant and representative of most public sector work? Or are they weird little herrings of a reddish hue?

I'm saying that I found two examples from 15 seconds googling, so imagine how many you could find if you actually put some effort into it. If getting rid of two pointless jobs saves the country 100k per year in direct salary costs (not to mention indirect costs and of course pension contributions) then imagine how much the UK taxpayer would be saved if you got rid of them all.

Is that not logical? Or was I born too far South of the Left/Right divide?

[dave]

Although, one could argue that you might get a better level of service if private companies were in direct competition to perform these services.

yeah, cos the trains and busses in the UK are fucking amazing and never been cheaper since privatisation. awesome.

[mrjonathanr]

BB: Saving money is good, we agree. There's buffoonery and waste of shareholders/taxpayers cash in all domains. Seek and ye will find. As to an informed judgment, all you have is the job-title, so I'd be more circumspect about what your research is showing you.

That's by the by - my point is that yoking together a few dubious job titles with a comment about private competition perhaps offering a better service is fallacious.

Show me some real evidence which supports your contention.  The internal market of the NHS? The egalitarian education system of the USA? PFI? The academy roll-out?

[Stubbs]

What Dave said.

BB have you got a good example of something that's been privatised that is running better?

[webbo]

So if the public sector is the great gravy train in wages and pensions. How come all you folk with the education and the grades CHOOSE to work in the private sector.

[tomtom]

Although, one could argue that you might get a better level of service if private companies were in direct competition to perform these services.

yeah, cos the trains and busses in the UK are fucking amazing and never been cheaper since privatisation. awesome.

I agree with you Dave, but a keen neoliberal would argue that poor privatisation performance is a result of bad (or badly designed or no) regulation...

[benpritch]

BB I defy you to give me an example of an industry that is now run better since privatisation. As far as I can tell private entities that run post public owned firms are essentially asset strippers who fail to invest in infrastructure and prioritise profit above all else. A prime example would be care homes for the elderly. I can't remember the name of the last one to go to the wall but it seems obvious to me that when a service like care for the elderly is run as a for profit business people, the customers as they are now, are seen as little more than figures in a balance book therefore compromising their care and leading to abuse and neglect.

[Jaspersharpe]

Spot on Ben.

[slackline]

Very true, but its also worth remembering the public sector health care also puts a price on each persons health and the associated treatment/care.  Instead of profit its given the fancy acronym QALY (Quality-adjusted Life Years) and it underpins a lot of the recommendations made by National Institute for Health and Clinical Excellence (NICE) with regards to treatment and care regimes.

QALY's are also why the new wonder cancer drug that has the potential to extend a patients life for five years, but in most cases will only add another six months on but at the cost of £20000, don't get recommended as useful treatments.

Thats not to say I wish to see the NHS privatised at all, far from it, but they do have limited funds to work with which, just as in the scenario of private care, resulting in a figure being put on people's care, just for a different reason.

Yet again I've gone 

[Fultonius]

Ah, but privatisation leads to competition and customer choice.

Just like the energy utilities, yeah, I get to choose which one is going to massively rip me off with rubbish customer service for the sake of profit maximisation.

Oh, and also, well - no matter what side of the fence you sit on re: offshore wind vs nuclear - the reason offshore wind is being developed and nuclear is struggling, is mainly because the utilities cannot raise the required capital to fund a nuclear project. Individual wind projects are much smaller, so investors take the risk.  If the utilities were still nationalised, we'd be doing what the Koreans are doing:

You, build power station, there, now!


I scan see the NHS being slowly privatised for the sake of "consumer choice and market competition" and all we'll get is massive medical insurance premiums and not much better care.

 

[dave]

Another good example of privatisation fostering competition: sheffield busses, where this year I seem to remember reading that First and Stagecoach instead of directly completing with each other are going to work as a syndicate, i.e. effectively a price fixing ring. Lucky they've only got 1000year contracts.....

[slackline]

Should have included this in my post but left it too long and can't edit...

Plenty of evidence abounds as to whether financial incentives affect patient health (was a talk here the other day).

Anyway, back to pensions.