Some people are still not listening – 8/11/2011

 

 

Some people are still not listening – 8/11/2011

It would seem that many people in the UK’s Public Sector, and in those of Greece, Italy and Spain, are still not taking on board just exactly how indebted our respective Countries have become.

Our own Public Sector in the UK, and their Unions, seem to think that it would be a good idea to take strike action whilst the Country as whole is desperately trying to survive the previous Government’s massive and indiscriminate overspend. Presumably, their delusion also extends to the belief that strike action will somehow incur public sympathy, and may even force the current Government to change their intentions regarding their massively generous public sector pensions.

There will be little or no sympathy for such industrial action.

What is it that is so complicated, or difficult to understand, about an obvious statement of pure economic fact? – “There is no money left”. Even the last Government left a note to that effect. 

For several years now, here in the UK, there has been a new and growing sense of “class distinction” between those “with” public sector pensions, and their stupidly generous contracts of employment, and those “without” them. The paying public is becoming more and more aware of the vast, unjustifiable and unaffordable cost of it all.

Labour Party leaders and the Trade Unions would have you believe that the solution is to borrow even more money, in order to maintain employment in the public sector. However, borrowing even more money would actually throw our ability to repay it into severe doubt, and therefore cause a several fold increase in interest rates. Indeed, this has already been amply illustrated by Italy, Spain and Greece.

Such a catastrophic increase in borrowing costs in the UK would inevitably increase mortgage payments, and further reduce the amount that we all have available to spend in the high street. As a direct result, even more small businesses would then fail, along with the vital employment which they provide. Ironically, it is precisely those types of small businesses which we desperately need to flourish, not only to develop additional employment, but also to fund the public sector from their tax revenues.

Right now, some statesmanlike honesty from our Labour politicians about the size of our national debt and our borrowing requirements, would be most welcome, and some genuine national leadership from the Public Service Unions concerning their members massively generous employment benefits, would not go amiss either.

Having said all that, most of us do have a great deal of sympathy with public sector employees as individuals, especially those at the point of service provision. After all, nobody likes to lose their job, or have their employee benefits reduced, but there has to be some sort of public realisation, that the private sector does actually pay for the public sector, and at this moment, the truth is that the former cannot afford to pay for the latter.

The Government is absolutely correct in reining in public expenditure, and increasing taxation, assuming we do not want to become a bankrupt economy like Greece. The poor people of Greece have yet to appreciate the full implications of their own politicians refusal, over the last five years, to get their own public spending in order. Now it is too late. Their alternatives are stark to say the least – stay in the Euro and endure massive forced cuts in public expenditure, or leave the Euro and endure a very large dose of inflation in the next few years.

In the UK, those of us who are old enough can remember a similar catastrophe in this country in 1978 and 1979. During those two years we incurred 50% inflation as a direct result of our politicians’ overspending in the late 60s and early 70s. In case that was before your time, it meant that all our personal savings, and all our pensions, as well as many other assets, halved in value in two short years. We certainly paid for the follies of our politicians at that time, and unfortunately, the poor people of Greece will inevitably have to pay for theirs, one way or the other.

Once people in the UK accept that there has been a huge overspend on our public services, then spending cuts, along with some increased taxation, becomes entirely understandable, and inevitable. However, the Government really must give a lead to the managers and administrators of our public services, and clearly point out what has to be cut and who has to go.

I say this because the overspend is almost exclusively at the top of those services. In other words, it is not the numbers of police on the beat, dustmen on their carts, nurses in the wards, teachers in the classrooms, or soldiers on active service, which are the problem. It is the vast array of overly promoted upper management at the top, who have generated managerial roles and functions for themselves which, quite frankly, simply do not exist. At the very least, they are pointless functions which we do not need and cannot afford.

I regularly hear of local Councils who now have a dozen or more Councillors where five or ten years ago they only had half that number. I also remember some statistics a year or two ago which talked about 80,000 administrative staff in the Ministry Of Defence, when we only had 120,000 frontline troops. How on earth can it take one full time person to organise and supply one and half fighting men? Overstaffing at the higher managerial level is a huge problem throughout all our public services.

The Government has handed down the command for expenditure cuts, but the people who are supposed to be administering those cuts are themselves the very problem. Without some leadership from the Government, higher managers and public servants are not going to make each-other redundant rather than cut front line services unless they are told to do so.