Britain – a Self Harming Economy

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Britain – a Self Harming Economy 

By Martin Odoni

We, by which I mean the Western world and further, have gone through over five years of the worst financial crisis since before World War II, so we are told. The crisis has been cynically blamed on widescale ‘over-spending’ on welfare, accusations of public sector self-indulgence that I and many others have debunked elsewhere. In truth, the damage was done by ridiculous risk-taking in the financial services sector, chiefly in the United States of America, but by no means limited to there.

But irrespective of whose fault it is that the financial crisis happened, the simple fact is that it is still here, and one of the consequences for the UK was that the last Labour Government, headed up by Gordon Brown, chose to hand the banks a series of enormous bail-outs of public money to prevent the whole financial system collapsing. This more or less quadrupled the National Debt owed by the British Public Sector in the blinking of an eye. The exact debt the country owes depends very much on which calculation, and indeed which definition, you use. By the kindest calculation i.e. the one that leaves out all private sector debts, including ones that have public sector overlaps, the country owes roughly £1.4 trillion. By other, more realistic calculations, it is somewhere between £5 trillion and £6 trillion.

Since the present Coalition Government came to power, it has been in the grip of what seems a frenzied obsession with paying down the National Debt as the only way it can think of to end the crisis. To do this, it thinks it would need to dismantle the structural Deficit i.e. put a complete stop to the amount it has to borrow each year to meet its spending commitments.

This is not quite the case though. While there is no doubt that the National Debt is too high – it damages the country’s credit rating and also can put an unhappy strain on international relations – it is certainly not the out-of-control runaway locomotive that the Government seems convinced it is. Indeed, it’s not exactly a problem. It contains an absurdity, for sure, and one day it might well evolve into a real problem, should economies in certain other countries collapse, but as things stand, it really is not a big deal at all.

The National Public Sector Debt is largely just the sum total credit belonging to non-Government agencies (which we shall call ‘the creditors’, although a lot of them are exporters instead) in deposit accounts within the Bank Of England.

What happens is that, when the UK Government purchases goods or services from a foreign country, it sets up a deposit account (yes, just like the sort of deposit account you get in a regular High Street Bank) within the Bank Of England in the creditor’s name, and credits that account for the full cost of the goods purchased. Whilst the money is in the deposit account, it can’t be used for purchasing anything (again, just like in a normal High Street Bank deposit account), but it receives a high rate of interest. This account is sometimes called a ‘Gilt’, a ‘Bond’, or a ‘Security’.

Now, when the deposit account ‘matures’ i.e. reaches the date when it needs to be paid back, all the Government has to do is to transfer the whole sum into a current account in the creditor’s name, again within the Bank Of England. (Yes, yet again it works in exactly the same way as a current account on the High Street; low interest rates, if any, but the sums can now be used for making payments.) Then the Government simply has to forward credit notes for the total to the creditor. That credit note will allow the creditor to claim any British goods available for sale up to that total, without having to pay any money for them.

Once that total is off the creditor’s deposit account and into the current account, the debt is officially paid off. That’s all that most of the National Debt really is, just a combined total of credit notes that haven’t been printed yet, because the respective deposits haven’t matured. As soon as one of these credit notes is printed, its sum is no longer part of the Public Sector Debt.

And that’s it. That’s all that happens.

This is happening with trade deal after trade deal every single day. But new deals are also being struck every single day, which is one of the reasons why the Debt never seems to go down.

And the most important point, before anyone asks, is this; no, the credit notes cannot be cashed in by the creditors. The creditors cannot demand money in their place, or that they be paid off in gold, or some-such; the pound-sterling is not signed up to the gold-standard, it is a non-convertible currency.

The upshot of this is that the British Government doesn’t have to send its creditors any actual money. All it has to do is just give a guarantee to let the creditors claim British-owned sales goods to the value of the amount owed – in other words, it has to give them the credit notes. What the creditor chooses to do with a credit note once received is really up to him. He can leave it in limbo, he can use it to open another deposit account within the Bank Of England to increase the interest further, he can genuinely use it to claim sales goods (in the unlikely event that he can find any available on the British market worth having), or he can even trade it to someone else. But those are pretty much the only options the creditor will have. There is near enough nothing that he can do to get the money itself.

There is a point of bad honour in this, in that the UK has effectively taken vast quantities of goods from countless trading partners without really paying for them (“What else is new?” cries most of the Commonwealth). But looked at in purely practical terms, there is no real need, as things presently stand, for the UK to pay off the National Debt at all. The creditors would have known the risks when they sold their goods to the UK (and indeed to other countries) in the first place – that they were never going to receive any actual money for the goods, only credit to their agreed value that they could eventually purchase British-owned market goods with in return. Such a trade is merely an exchange-in-waiting. From the moment the value of the sum is transferred to a Bank Of England current account, the creditor can use it to make purchases on the British market, therefore he has received the ‘purchasing power’ the deal entitles him to as though the credit were real money, so the debt is classed as ‘paid off’.

Even if the creditors find there is never anything on the British market that they wish to buy, there is every possibility that at least some of them will continue trading with the UK, depending mainly on which country he is from. For instance, countries that are ‘export-driven’ (see below), such as China, are more or less compelled to keep selling to the UK – and yes, even more so to the USA – even though there is seldom anything they can do with the credits they receive. This is because if they do not keep exporting, their own economies will collapse; they will only have their own markets to sell to (and maybe a few countries with much smaller markets of their own), but if they have little or no internal demand because of inadequate pay-rates among the general population, which is usually the case, most of their goods will go unsold, and the industries will have to stop retailing or producing, causing surges in unemployment. This is why the Chinese Government currently holds an ever-growing mountain of over $2 trillion at the US Federal Reserve, and hardly ever uses any of it – because it needs to keep exporting to the US to keep its heavy-manufacturing base turning over, but can hardly ever find anything it can use from the US markets to take back in return.

Because Britain has little native manufacturing industry, it has to keep importing, as it would struggle to meet its population’s own needs if imports stopped. (This is quite different from the position of the USA, which still has a large native industrial base that can ‘kick in’ very quickly if necessary.) So for the sake of trading relationships, it would be best for the UK if it can get the Debt down quite substantially in real terms – say by going back to manufacturing goods again that creditors would actually want to buy – especially in case circumstances in exporting countries were to change. Say the Chinese economy didcollapse, then the British would have to look elsewhere for many of the imports it needs. Not all prospective trading partners will be ‘export-driven’ in the same way as China, in which case the bad real-terms record of the UK as a trading partner would come back to haunt the negotiations – the new prospective exporter might say, “You people never produce anything that I would want to buy, so what use are your credit notes going to be to me? Pay me in dollars or euros, or something!” But one way or another, this has almost nothing to do with the methods the Coalition Government are trying to employ to reduce the Debt anyway.

The Public Sector Debt is not really a crisis after all, and it’s not even an issue to any great extent, at least not yet, and it won’t be until a major export partner collapses. But the problem is that nobody in Parliament seems to be aware of how the National Debt really works, of how little pressure there really is to pay it off, or of how simply (and automatically) it is paid. All they do is see the huge numbers involved, nearly have a heart attack, and respond by taking a hatchet to necessary services in order to cut costs. In-so-doing, they cause economic slowdowns that reduce tax yields and so make the borrowing requirement grow even bigger.

The Government’s whole approach is quite pointless, and it has caused much needless suffering for many people, to no achievable end. We are still lumbered with a crisis that is in large part a phantom, even though its effects are very real.

That the crisis is ongoing after half a decade is a testament, not to national self-indulgence, but to national self-harm.

How can pay rise be unfair when mega-rich get tax cut?

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In reaction to a letter in the local press, COUN JIM GRUNDY (Lab),  Hucknall member of Ashfield District Council replied:

I was saddened, if not surprised, by Mr P’s response last week, to the news that Ashfield District Council had signed up to the Living Wage (a promise to ensure that all employees receive at least £7.45 per hour, around £275 per week or £14,300 p.a.).

He argued that this was unfair since other workers, particularly in the private sector, won’t receive it too. Perhaps Mr P doesn’t know that public sector workers are in the third year of having received no pay rise whatsoever, meaning that they’ve seen their incomes cut in real terms. Has that made anyone else feel happier about their lot? Thought not.

It is sad, indeed, when the classic divide and rule tactics employed by the Tories and the Lib Dems gain any traction. But what it does best is to betray a certain lack of imagination in this kind of thinking, that there is no alternative than to accept that low pay is inevitable, whilst having nothing to say about the £107,500 p.a. tax cut handed to 8,000 multi-millionaires by George Osborne.

If anyone can explain to me what’s fair about VAT being raised to 20% and pay being held down for everyone else to fund a tax cut the size of which the rest of us could hardly dream of ever receiving as a salary, let alone as a tax bill, then I’ll think paying people enough simply to get by is unfair.

Low pay is hardly a badge of honour for those unlucky enough to be included in that bracket.  And if someone manages to secure a fair — if still modest — pay settlement then how is the unfair treatment of others a sensible reason to oppose it?

A commitment to the Living Wage shows what can be done, beyond a race to the bottom that will do nothing for anyone struggling now or in the future.

Applying the same ‘logic’, if you’re with a friend and they’re attacked and mugged, the only fair thing to do would be not to help your friend fight off the mugger, but to insist that you hand over your own wallet too. And, I suppose, if someone’s seriously ill, don’t try and cure them because you’ll only make the dead jealous.

There is a wider practical purpose to this move. Putting more money in the hands of low paid workers makes perfect economic sense. Where will this money be spent? It will be spent in local shops and that can only help to maintain the viability of our town centres. Or, since gas prices have risen 31% in the past three years, it might be spent on luxuries like keeping warm.

Where will the lucky 8,000 multi-millionaires spend their extra £107,500? It’s just a hunch I have but I’m guessing it won’t be in any shop in Hucknall.

Even at the level of their new ‘unfair’ salary, council staff would have to work for seven and half years merely to earn the same amount that is being given away as an unearned tax cut each year to people who are hardly struggling. We are not all in it together, are we?

We all have to ask ourselves who’s side we are truly on? Low paid workers or millionaires? I know where I, Hucknall’s other district councillors and those who will contest the Notts County Council elections for Labour next May stand.

Can Mr P tell us who he stands by?

The Heartless Coalition has no Respect for the Elderly

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ACTIONS SPEAK LOUDER THAN WORDS

It is not difficult to see that David Cameron does not respect his elders, when we see how he treats experienced colleagues in the House of Commons (2) such as  Dennis Skinner.  He despises them, just as he does the young, the sick and the disabled. He has no respect for anyone it seems, valuing the financial sector for his own gain and those of his friends, – I think we can guess who.

David Cameron tried to shake off the Conservatives’ “Nasty Party” image, but  he forgot that actions speak louder than words. The ACTIONS of this Liberal-Democrat-supported-Conservative-Government speak very LOUDLY indeed.

  • State Pension Age extended – women not forewarned.
  • Attacks on Public Sector Pensions
  • Private Pension Schemes failed ( as speculators move elsewhere)
  • Cuts to Elderly Care in the Community
  • Privatisation of Care Homes, despite evidence of failure
  • Imposition of a ‘Granny Tax’

STATE PENSION AGE

In November  2011 the Coalition government announced the intention to further increase the state pension age. (13) State Pension age will now increase to 67 between 2026 and 2028. Meanwhile changes have been made to others nearer to retirement age, and these changes have been made at short notice. The government said it took this decision because of increasing life expectancy, to help manage the cost of State Pensions. There is no consideration as to the nature of the employment or as to whether jobs would be  available with rising unemployment or suitable as people become less physically able, and perhaps slower mentally due to ageing.

Furthermore changes  made over recent years come as a shock to people who have budgeted through their lives, expecting to receive pensions at 60 or 65. Many women, who had been led to believe that they could  retire at 60, and who had planned accordingly., now find that they cannot receive their state pension until at 65 will find themselves with inadequate savings,

Working later is absolutely fine, and in fact desirable for many people are who are fit, and wish to continue work, but these policies are ill-thought out.

ATTACKS ON PUBLIC SECTOR PENSIONS

Recent attacks on public sector pensions show no understanding of the consequences. Public sector workers, often on lower pay than some in the private sector after years of study are expected to pay greater contributions to their pensions and to retire later.

Many workers face  an impossible task, to continue working in physically and mentally demanding jobs. If people wish to retire at 55, and young people are fit and  qualified to take over, then it is reasonable that they should have that option. Why is working longer  being inflicted on our caring, hard-working public sector?

 Work Until we Drop? (6) From the BBC News

..Martin Powell-Davis  “public sector workers – whether

they are in hospitals or schools or anywhere else – cannot work at the kind of pace we are asked to work at until the age of 68”.

“People know that we will be asked to work until we drop – and we won’t get a pension because we won’t live that long.”

..Kate Paton  “No-one wants to see teachers and health workers doing the job at 68 when we need to make way for younger people.”

The government hopes that the unpopularity of public sector strikes will be divisive. In fact there has been wide scale support for public workers. Now, the government is pursuing whole-scale privatisation seeking to silence people through fear.

PRIVATE PENSIONS FAILURE

The government seeks strengthen its case, by weakening the opposition by dividing public from private. ( See Think Left’s “Public and Private Workers, Unite “) (7)  Working for very low pay is the plight for many in the private sector. Often these workers have no effective trade unions to state their case, due to the attacks of the trade unionism by Margaret Thatcher.

Neoliberalism has meant that speculators have been predatory without any conscience. They seek to profit at others expense and there are many people who sensibly invested in private pensions only to have found on retirement that their pensions are half what they expected. Gambling with the income and welfare of our elderly population is callous. All workers are entitled to and deserve a decent pension, and  workers need to fight this together, and not allow this government to divide and rule.

Whether public or private, working people pay for their pensions while working, and there is an expectation, a contract that this is investment for the future. This is a contract which they have honoured and paid for. The financial sector must honour the contract too.

 As Richard Murphy 1) writes:

A fundamental pension contract  should exist within any society. This is that one generation, the older one, will through its own efforts create capital assets and infrastructure in both the state and private sectors which the following younger generation can use in the course of their work. In exchange for their subsequent use of these assets for their own benefit that succeeding younger generation will, in effect, meet the income needs of the older generation when they are in retirement. Unless this fundamental compact that underpins all pensions is honoured any pension system will fail.

Download Richard Murphy’s Making Pensions Work here (5)

CUTS TO COMMUNITY CARE

Community Services for the elderly have been cut by over  a billion pounds since the Coaltion government came to power.. These cuts are not only heartless, but a false economy. These are crucial  services which have allowed many people to continue to live independently, and loss of this independence will come at a cost to us all. Caring, admirable people who are working in the care sector for low wages face further cuts.

8)

PRIVATISATION OF CARE HOMES

It is only about a year ago that there was an uproar about a private company called Southern Cross which, having privatised a chain of Care homes for the elderly, went into receivership and a host of Care Homes had to close. 10)  But regardless, the government relentlessly pursues its programme of privatisation of public services, and elderly care is targeted, along with everything else we value, including state education and health. Across the country, care homes are privatised, despite the inevitability of a decline in standards.

The Guardian  3) reports: The Equality and Human Rights Commission’s report last month found that council-funded home care provided to elderly people was, in some cases, in breach of the European Convention on Human Rights. Many people were surprised at the report’s findings. But not me. It was the wholly unsurprising outcome of the wholesale transfer of care homes out of local authority care and into the private sector. The council may have funded the care, but they were not responsible for actually providing it. It was consumerism meets care head on and no one could be in any doubt as to who the victor would be.

It is totally immoral that caring for people should be a source of profit. It’s just plain wrong. When we are young we pay taxes to care for our futures. Today’s elderly people did so  during their working lives – they did not make those contributions so the  financial sector can make profits to line the coffers and top up hedge funds. This is theft.

IMPOSITION OF A GRANNY TAX

The “granny tax” (4) was the biggest revenue-raising measure in the budget. Some four million pensioners over 65 will have their personal tax allowances frozen. This is another cynical attempt to make cuts at the expense of ordinary people, in a budget which saw the cuts in corporation tax – a budget for the wealthy. The chancellor’s austerity policy is not working, We continually people suffer cuts to their living standards and all because of Osborne’s  obsession with a deficit caused by bankers –  not ordinary people who have already paid taxes all their working lives and now hope for a comfortable retirement. It is most unfair!

The NPC says it has been inundated by complaints from pensioners that those on modest incomes will have to contribute more, while people earning more than £150,000 a year will see their top rate of tax cut from 50p to 45p. It says there is a perception that pensioners are being asked to bail out the super rich, which is unfair.

Labour has released figures suggesting that “well over half” of the pensioners affected by the tax have incomes far below the average taxpayer, in spite of the government’s claim that the better-off will shoulder the burden.

Labour MP Katy Clark called for households to be given sufficient time to cope with the planned changes: “This is quite a substantial drop in income for people on modest and medium incomes at short notice. Channel 4 News (4)

WHY TARGET THE ELDERLY?

The arguments are shallow, contradictory and transparent. The state pension age has been raised with the expectations that everyone is now expected to work longer. There are many, many people who love to work, are fit and want to continue, and that is wonderful. Others feel they are ready to enjoy the later years in life, which is why they paid  for pensions, only to find someone changed the rules, and the pensions have been hijacked.

We have heard all their excuses  that “we are living longer”, so “we can’t afford to give you the pensions you paid for,  or the health service you paid for and the elderly care,  which you paid for. It’s no joke to have struggled all your life and then see your assets stolen for private profit. It might be a joke to some, a comedy show as they cry, “Carry on Working” , despite a million young people looking for work, and  being forced onto dole queues. All of this demonstrates how the Coalition abuses its power. The electorate remember Thatcher and the nasty party.

Labour must show that there is an alternative. The electorate may forgive New Labour’s courtship with neoliberalism which opened the way for the Coalition to privatise our services.  The electorate needs to see Labour showing it is the caring party it was set up to be,  developing policies for recovery which will invest in all of our people provide fair pensions for all, and develop a National Care Service.

Labour must demonstrate its priorities are for people and not for profit. Actions speak louder than words.

1,Richard Murphy – Why our Pension schemes and Arrangements do not work

2. Metro: Cameron accuse of ageism in Commons  against Dennis Skinner

3. The Guardian: Privatising care will inevitably lead to lower standards

4. Channel 4 News : Pensions confront MPs over Granny Tax

5. Document: Making Pensions work by Richard Murphy

6. BBC Public Sector Strikes – Work until we drop

7. Think Left -Pensions – Public and Private Sectors – Unite!

8. The Daily Mail – Elderly Care Crisis

9. Think Left’s More Care Homes to Close

10. Guardian Datablog: Southern Cross Care Homes

11. Think Left -Public Service or Private Profit 

12. Think Left – A National Caring Service

13. Direct Gov Changes to State Pension Age

PUBLIC AND PRIVATE WORKERS – UNITE!

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The TUC  public sector strike on November 30th is , in effect, a General Strike, the biggest concerted  day of action since the General Strike in 1926.  The attack on public sector pensions follows months of pay freezes, cuts to staffing, to budgets affecting working conditions, extending working hours and adding to stress levels, with inevitable effects on the mental and physical health of workers.

Lies about the previous government’s deficit and the need to cut public expenditure has been justification for cuts to the public sector, and the lie that fair pensions are unaffordable is similar justification in their eyes. Lies, lies and constant government propaganda which amounts to drip fed indoctrination aimed to frighten the electorate, to divide the working class into public and private sectors, each blaming the other for the country’s ills.

MYTH: The private sector props up the public sector

“It is not a one-way street, but a complex relationship. Public sector workers and employers pay for the vast majority of pensions in payment through contributions.  Without an effective public sector, the private sector would be far less productive. The public sector contributes significantly to GDP and it is entirely unfair to suggest that the public sector is any way a drain on the private sector.” TUC Myths and Pensions

MYTH: Public sector workers all have comfortable pensions

“Five million employees working in the public sector qualify for pensions, including 1.3m in NHS, 1.6m in local government, 600,000 teachers, 600,000 civil servants, 200,000 in the armed forces, 150,000 police officers and 50,000 firefighters. The mean average public sector pension is £7,000 but the majority of public sector pensioners have pensions of less than £5,000. The average public service pension is around £7,800 a year, for women working in local government the average is £2,800 a year, while the median for women working in the NHS is £3,500 a year: hardly huge pensions. Saving towards an occupational pension in many cases means a person is receiving fewer welfare benefits during retirement, saving the taxpayer money.”

MYTH: Public sector  workers are lazy and inefficient

In 2010, a study found that public sector workers do an estimated 120 million hours of unpaid overtime a year – the equivalent of employing an extra 60,000 people.   They went on to claim that 46 per cent of employees in education, health and social care in the “non-profit sector” work unpaid overtime, compared with 29 per cent of their counterparts in the private sector.

MYTH: Losses to jobs in the public sector will be replaced by jobs in the private sector 

If David Cameron expected this to be the case, he has been proved wrong ( See C4 News). Job losses caused by cuts to the public sector will not be replaced. Increasingly we hear of firms making job cuts despite their profits, for example Top Shop owner Philip Green has announced further job cuts despite profits. People fear for jobs and won’t spend.

The private sector workers, are seen by many in the public sector as being on high salaries, inflated incomes with perks such as cars, private health schemes. It may be evident that some industries pay ridiculous salaries to directors and this is what springs to mind to those working in the public sector. The reality is that the profits are not fairly distributed. The toils of the workers in the private sector are not fairly rewarded. Salaries have not kept up with inflation. Demands from employers and union rights are not universal. Women in particular may face discrimination.

MYTH: All private sector workers all are paid high salaries 

Lowest and Highest Pay Top Ten Data from ASHE (Annual Survey of Hours and Earnings) for ONS, and published in the Guardian shows median salaries for 2010 and 2011, shows the highest and lowest median salaries. It is interesting data and clearly shows that many in the private sector are on very low pay.

It shows that roles which have been historically carried out by are women are particularly low-paid. It also shows that pay cuts seem to be hitting the poorest paid most. It does not show the whole picture however and there are several important pay factors that Ashe cannot show.

  1.   The data only applies to employees on company payrolls, so cannot reflect the earnings of the self-employed entrepreneurs, athletes and celebrities who between them constitute many of the country’s really top earners.
  2.  The survey only measures base pay and does not take into account additional methods of reward such as bonuses, pension payments, share options and so on.
  3. It cannot reveal the earnings of those with multiple income streams, such as legal and accounting partners, or directors of multiple companies.

This may explain why Ashe figures for directors and financial workers, although top ranked, look surprisingly low. The median full-time base pay in this category rose by 15.3% this year, partly due to a trend of shifting executive earnings away from bonuses and towards basic pay. If the sectors as a whole are compared we can see that the gap between public and private sector pay is at its highest in ten years, as Richard Murphy writes.

MYTH Private sector offers better prospects, perks and conditions for its workers. 

“It’s an inconvenient truth, (PCS Union) that the press who look for negative reporting of trade unions, in saying that they are outdated and membership is declining fail to explain the full story. In fact any declining membership is directly connected to overall job losses in that sector.  They decline to explain about the union wage premium  which refers to the degree that union wages exceed non union wages.”

The last BIS report (2010) re-affirms the importance of the union wage premium, in that:-

  • Collective agreements cover 64.5 per cent of public sector employees and 16.8 per cent of private sector employees
  • The hourly earnings of union members is reported to average £14 in 2010, 16.7 per cent more than the earnings of non-members (£12).
  • The union wage premium is much larger for employees in unionised sectors than their non-unionised counterparts.
Hourly wage rates for (unionised) public sector employees were 21.1 per cent higher among union members than non-members and 6.7 per cent higher in the (less unionised) private sector. PCS members working on Hewlett Packard central government contracts currently have an opportunity to ‘opt in’ to collective bargaining and it is no accident that the company is making opting in look as unattractive as possible. 
A member said: “I took the decision to opt-in in 2010, when my salary was £17,500. Since then I am looking at over a £1,300 consolidated pay increase on my salary with most of that increase counting towards my pension.”   
One member commented: “As a low paid HP employee ‘My choice’ has me trapped in a downwards pay spiral. For the last five years my pay has been frozen whilst my costs of living have been rising and I have to sell my benefits simply to stay afloat.”  

And so it remains true, many in the private sector are denied rights to fair pay and conditions, while in many cases massive profits are being made at the workers’ expense. All workers’ rights to be a member of a trade union and the potential benefits must be preserved. The very rich and the Tories will look after their own. So, too, workers must support each other, in unison.

MYTH Private Sector workers  have great pensions 

Private sector employees have been hit hard by the employer retreat from good pensions. But this does not justify punishing public sector workers. Two wrongs do not make a right.

The real inequality exists in the private sector, where highly paid executives receive the real gold-plated pensions. The TUC’s 2008 Pensions Watch study of 346 directors from 102 of the UK’s top companies found that they are set to earn a yearly pension of £201,7003. This is 25 times the average workplace pension that ordinary workers receive (£8,100).

Private sector schemes need to be funded because there can be no guarantee that the sponsoring employer will still be around when staff retire. Public sector employers, ie the state, will exist in perpetuity and, as in other countries such as the USA, we tend to have unfunded pensions for central government functions such as health and the armed forces but funded schemes in local government.

The study also revealed that the most senior directors of these firms had average pension funds of £5.2m, with an annual pension forecast of £333,400. In reality, most directors of the UKs largest private sector companies can look forward to retiring on a full pension at age 60, accrued on generous terms in a final salary scheme.”

WHY WE WORK

Let’s take a step aside, those of us that are lucky to be in work are motvated by a number of reasons.

  1. We need to work to live
  2. We may want to make a difference to other people’s lives
  3. We want the opportunity to use our skills
  4. We enjoy the social contact which work brings to us
  5. We want to contribute to society

Most of us go to work for all of those reasons, but , let’s face it, it is the first and foremost which gets us out of bed on wet, foggy November mornings.

THE REALITY WHICH DIVIDES SOCIETY

One thing is certain, none of us go to work in order to line the pockets of the very rich. When we pay our taxes, even if we do so grudgingly, we know – and hope that – that investment will be returned to us, if we are too ill to work, to pay our pensions when we are old, if we have children who need care, to provide homes, roads, hospitals and schools. We are not happy that people in poorly paid jobs pay taxes disproportionately compared with those on inflated salaries. In contrast, those that make profits of millions and billions from the toil of poorly paid people in the private sector pay no tax at all.Their funds are secretly  hidden in “ made up” City-States which make their own tax rules, where nobody really lives and works. Yet that money may have been made from retail workers at your local shop, or by teachers at some new Free School sponsored by some private company using assets stolen from the British people.

These are the enemy of the workers.   We call for the Public and Private workers  to unite! Support each other! Support the trade unionists who fight on, despite attempts from Margaret Thatcher, and Winston Churchill, and David Cameron to defeat them.

The Tolpuddle Martyrs went to the ends of the earth to stand up for the rights of workers. Thatcher sullied the name of Trade Unions. Let us remember what we owe to them, and support the rights of workers everywhere.

Unemployment is soaring; now at 8.3% of the work-force. There are over one million unemployed young people. Where is the sense to insist people work  well into their sixties if they feel spent and ready to enjoy a deserved retirement. Just to deny them the pension they have paid for. To save money? All this will be to the cost of the young to whom the nation must pay dole rather than pay well-earned and well-deserved pensions to the more mature population. This is absurd!  There are now the highest number of female workers out of work for twenty-three years. The increase in female unemployed is directly related to the attack on the public sector, where workers are predominantly female. Do not be fooled. It suits the Tories for unemployment levels to be high – it enables them to cut wages, to make more profits for their friends. It engenders fear – it  pitches public against private -, private against public – social friction which detracts from the real enemy , the plutocrats that have increasing power over us throughout our daily lives. Poverty will increase, hunger , homelessness and suicides. And therein is fuel for the far right, as in the nineteen thirties. It suits them to believe the workers have not noticed, that we are besotted by X factor and Big Brother. They are wrong, three quarters of the electorate in a recent Mori poll think that the government have done a poor job in keeping unemployment down.

The government  under-estimates the working -class- all of us who go to work, for that is what we are – not Class A, B or C – we are all workers.

Labour Party Policy must address:

Trade union rights for all

Inequality in the workplace and in pay

Redistribution of wealth including a modernised clause 4 and workers co-operatives

Tax Injustice

It might seem an old cliché, but it is true. The workers, united, will never be defeated. And it will be forever true. But divided, we fall. They win.

Think Left On The Public Sector Strike:

We will not cease from mental fight, nor let swords sleep in our hands. Think Left

TUC Day of Action, November 30 Think Left

The Progressive Left should support the Strikers Think Left

OTHER REFERENCES AND FURTHER READING

Richard Murphy: Why Tax Evasion matters so much 

Red Pepper Union Mythbuster

Public Sector Pensions: Myths TUC 

Pension   UNISON

PCS The inconvenient truth of trade union membership

George Osborne and Norman Lamont -Unemployment Guardian 

General Strike 1926 

Lowest Paid jobs in UK November 2011, Guardian 

Highest Paid jobs in the UK November 2011, Guardian

TAEN Experts in Age and Employment Blog

Mori Poll October 2011

Unemployment Figures October 2011

Top Shop job cuts, Daily Mirror

Poverty and Suicides

Do cuts kill? Guardian –  on suicide

Tolpuddle Martyrs

David Cameron – attack on unions, Daily Mirror

Margaret Thatcher -attack on unions -BBC 

The Miner’s next step Churchill attack on miners with troops Tonypandy