Which Side Are You On?

Over in The Week/The First Post, the ubiquitous Neil Clark writes:

Whose side are you on in Britain's biggest industrial dispute since the 1920s? The public sector trade unions, who are leading Wednesday's national strike of up to 2.6m workers, say they are fighting to maintain the living standards of their members, who are being hit with wage freezes, cuts to their pensions and a higher cost of living.

Prime Minister David Cameron says that far from being hard done by, many public sector workers will still receive pensions "far, far better" than ones in the private sector. And guess what? Dave's right. The concessions announced by the Government earlier this month mean that public sector workers will retire with pension deals worth up to 20 times that of the average worker in the private sector. According to Treasury figures, a civil servant on a final salary of £29,000 would earn an annual pension of £24,300. A private sector worker would need to accumulate a pension pot of £650,000 to achieve the same annual income.

Unfair? It most certainly is. Therefore it surely follows that private sector workers should be siding with the Government this week against those selfish strikers fighting to protect their "gold-plated" pension deals which the rest of us pay for.

Er, no.

We've got to ask ourselves why the Government is targeting the wages and pensions of those in the public sector. The stated reason is to cut the deficit. But is it really true? We have a Government that spent, according to the analyst Francis Tusa, around £1bn on the war in Libya and which, if reports are to be believed, is making contingency plans for war with Iran, a conflict which would surely cost even more. The Government hasn't cut spending on other areas that could easily be reduced. On the contrary, it is actually increasing the money it spends on foreign aid, for example, from £8.7bn to £12bn in 2014, a whopping 34 per cent rise.

To find the real reason why public sector workers are being targeted, we need to step back and consider what is the Government's core philosophy. As I wrote here last year, this is a coalition of free-market Orange Book Liberals and free-market Thatcherite Tories. The overriding aim of Cameron's administration is to "roll back the frontiers of the state" and "finish the job" - begun by Margaret Thatcher - of privatising or outsourcing the entire public sector, with the exception of the security forces and the judiciary.

The intention is there for all to see in the government's Open Public Services White Paper, published in July. The document calls for "greater diversity in the provision of public services" and for the state's role to change from being a provider of public services, to one that will just ensure "fair access" to them.

But there's one problem with this plan. Profit-hungry PLCs wouldn't want to take over the direct running of public services when public sector pensions are so much higher than those in private sector. Reducing pensions is therefore an essential preliminary to "finishing the job". "Pension obligations are the biggest barrier to more privatising and outsourcing of public-sector services," writes Peter Wilby. "Public services, we are repeatedly told, are run for the employees, not the public. They are being 'reformed' so that they can be run for the benefit of capital."

In relation to the Royal Mail, the Government has already announced that the taxpayer will take over responsibility for the company's pension fund - which has an £8.4bn deficit - "as part of the preparations for the sale of the company". But clearly there'd be an ever bigger outcry if they tried to do the same for schools, hospitals and other public services, hence the pressing need now to go on the offensive.

Pro-privatisation zealots will claim that allowing private corporations to provide services hitherto offered by the state will enhance "choice" and lead to a better deal for the consumer. But having seen what happened to our railways and to our gas, electricity and water companies when they were privatised - do we really want to see our health service, customs and immigration agencies and our state-schools go the same way? Of course not.

Which is why private sector workers ought to be putting to one side their envy over public sector pensions, and supporting Wednesday's industrial action. It's not so much that the Government's changes are inherently bad, it's the motivation which lies behind them that makes them so objectionable.