Wednesday, 29 June 2011

Why the private sector is no model for the public sector to emulate


Last week John Cridland, director of the CBI, dismissed the impact that public sector union strikes could have. He said: "Today the most they can do is disrupt people's lives – it probably won't disrupt the economy." (reported in Guardian)

Does that mean we should discount today's ramblings by the British Chamber of Commerce (BCC) which told the BBC "many parents would lose pay for taking the day off work to look after their children, and productivity would be hit" - while demonstrating the private sector's longstanding flexibility, understanding and provision of childcare needs.

With an even greater ability to demonstrate why the public sector doesn't want to be leveled down to the private sector, David Frost of the BCC went on to give his view on pensions, adding "reforms to bring them into line with those in the private sector are essential ... The private sector has had to wake up to the tough realities of pension provision in a rapidly changing world".

Mark Serwotka, PCS general secretary, rebuts this point in today's Morning Star,
"The truth that private-sector workers have suffered horrific attacks on their pensions is indisputable. It neither follows from this truth that public-sector workers should suffer the same fate nor that public-sector pensions are unfair on private-sector workers"

The "rapidly changing world" the BCC refers to has seen the number of private sector workers entitled to an occupational pension slip from nearly half a decade ago to under one-third today. Yet, corporate profitability has increased through that period, and the directors of large companies have pension pots that have continued to rise unabated. The average chief executive of a FTSE 100 company now has a pension pot worth £5.6 million.

What the private sector bosses are worried about is neither the impact of the strikes nor the injustice of public sector pensions, but the fear that the pensions debate might highlight the injustice of private sector pensions.

See the LEAP guide: Public Sector pensions - the Facts

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