Let’s Just Blame the Public Sector!

Last week in the UK we have seen a further descent into nastiness by our unloved government.  First we had a massive strike by public sector workers and then the Chancellor’s Autumn Statement.  Both were used by the government and their lackeys to blame or further punish workers in the public sector.

The strike which was about proposed changes to the pensions of public sector workers was pretty well supported and even brought out on strike for the first time in history, headteachers.  Yet another great triumph for our nasty Coalition.  The government’s proposals will mean that public sector workers will have to pay more, work longer and in return get less of a pension.  A triple whammy indeed!  The government’s line is that the country can no longer afford the supposedly “generous” pensions paid to public sector workers.  This is because the private sector, which apparently, creates all the wealth can no longer bear the taxes needed to pay for public sector pensions.  To rub salt into the wound as it were, the Chancellor then announced that public sector workers would see future pay increases limited to 1% per annum for the next two years.  This after two years of no pay increase at all.

All of this is based on premisses which are not just untrue but wicked in their implications.  Let’s take a brief look at the nonsense presented by the government.

1.   The taxes of workers in the private sector pay for the pensions of public sector workers.  This is pure economic illiteracy as the government does not distinguish taxes by who pays them.  It just collects them and then spends the money.  Taxes paid by public sector workers are just as essential to the government as those paid by the private sector.  Otherwise I would like all the money I have paid in taxes back please.
2.   It is only the private sector that creates wealth for the country.  Again this is pretty stupid stuff.  The wealth of a country is normally measured by GDP (Gross Domestic Product) or GNP (Gross National Product).  Though different both measure roughly the same thing, namely the value of all goods and services produced in a country in 1 year.  It makes no difference to the total whether the goods or services come from the private or public sector.
3.   Part of the government’s argument is that the private sector produces or makes things.  In the popular image this is generally regarded as a good thing. However our private sector in the UK does not actually produce or make many things.  Most of the private sector is in services and one in particular - the banking and financial sector has not exactly covered itself in glory recently.  Not only has it not contributed much to the economic wellbeing of the country, it has in fact been the major source of our current economic and financial woes.  Another prominent industry in the private sector is Advertising and PR.  Again not clear how they really add to the country’s economic wellbeing.  But to the extent that they encouraged people to go out and take on extra borrowing to buy things, then they too have had a negative impact on our wellbeing.  
4.   It is difficult to make a positive case for private good, public bad, when in many sectors the same or similar services are provided by both the private and public sectors.  For example are we to believe that the taxes of a retired policeman, who now works for a private sector security firm, are worth more than the taxes he previously paid while working in the public sector?  While education and health are, still, predominantly public services in the UK, there are many private sector companies which work in both education and health.  Again are we to believe that the taxes paid by a nurse in a private hospital are worth more than the taxes paid by a nurse working in the public sector? 

All this of course is deliberately repeated by the government, and rarely challenged by our supposedly independent media, in order to engineer a split in working people.  If you can get one group of workers - those in the private sector - to blame their fellow workers in the public sector, then the heat is off the people who are really guilty.  The elites in the banking and financial sector to start with.  Followed by those in government and the so-called regulatory sector who failed to foresee what was happening.  Not to mention the very rich and the top companies that continue to pay little or nothing in taxation.  If we were really “all in it together”, there would be no need for any of these changes to public sector pensions.  Instead we could be making sure that there was decent pension provision for everyone, irrespective of where they work.  As one of the wealthiest countries in the world, the money is there.  We just need a fairer taxation system to ensure that this wealth is fairly distributed.  However our politicians would much rather blame the public sector than face the wrath of their ultra wealthy friends in the City.