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The Good Old Days

Date 21/07/2008
Penny Sleuth | By Tom Bulford

It is enough to make me feel quite nostalgic.

Inflation, the public finances in a mess, striking council workers leaving rubbish piling up in the streets - and now Dave Prentis.

This throwback to the days of Vic Feather, Hugh Scanlon, Arthur Scargill et al is out to protect members of Unison, which with 1.3 million members is the largest public sector trades union in this country.

Prentis is General Secretary of Unison, and he is not happy. ‘The pounds in local government workers' pockets are turning to pennies,’ he says. ‘The cost of everyday essentials like milk, bread, petrol, gas and electricity are going through the roof. Our members cannot afford to take another cut in their pay.’
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Prentis wants a big pay rise for members of Unison and I have no sympathy for his cause whatsoever. But thanks to the Labour Party’s lack of funds and a blunder of catastrophic proportions by Alastair Darling, Prentis must be feeling confident of getting his way.

The backdrop to the flexing of public sector worker muscle power is provided by two things. The first is Labour’s reliance on the Trades Unions, which provide three quarters of the party’s funds. Already there is talk of the Unions presenting a shopping list of demands to Labour MPs as the price of their continued financial support.

But already Labour knows that, with its reputation at such a low ebb, the last thing it can afford to do is antagonise the Trades Unions and public sector workers, always the core of the party’s support.

That is why last week’s revelation that Alastair Darling is thinking of ‘redrawing’ the golden rule on public sector borrowing is so alarming.

It is no secret that Government borrowing is going to massively overshoot the target this year, but the admission that this chastity belt will be eased just because the economy is going into a downturn is a disaster.
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Lead by example

At a time when the Government should be setting an example of sound financial husbandry it is doing just the opposite. And, having already effectively thrown tax-payers money at the 10p tax problem and the road haulage lobby, the admission that it will be prepared to go yet deeper into debt undermines its own message to public sector workers that a pay rise is simply not affordable.

Not that consideration of what is affordable cuts any ice with Prentis. Having described last week’s two day strike of council workers as ‘the biggest demonstration of industrial action since the General Strike of 1926’ he clearly lives in cloud cuckoo land.

‘Local government employers,’ he says, ‘are sitting on £3 billion worth of efficiency savings they could use to settle the strike now.’ The very idea that local authorities could make efficiency savings of £3bn is pure fantasy, and in any case were such a thing possible the most deserving cause is surely the council tax payer who has seen his bills rise inexorably year after year.

Fantasy, too, is the word to describe Prentis’s assertion that Unison members are suffering from a ‘pay cut.’

A 2.45% pay increase, which is what has been offered, is a pay rise so far as everybody else in the country is concerned and if it fails to keep pace with the cost of living then that is another matter. But there are two reasons why public sector workers should get no more than 2.45%.

The first is that the country cannot afford it - although by its intentions on borrowing the Government seems to think it can.

And the second reason is this.

I work in the private sector and the cost of my everyday essentials is going through the roof at no lesser speed than that of public sector workers. Inflation does not pick upon the workers in the public sector. It affects all of us. But private sector workers are not only worried about that. They are worried about their jobs.

It may have escaped the attention of Prentis but a recession is enveloping the private sector, and men and women are being made redundant each and every day. Private sector workers are not even expecting pay rises. They are just hoping to still have a job this time next year. They know that their employers are struggling and that the Government is in no position to ease their pain.

While private sector employees live in the real world Prentis and his public sector union members, with their job security and guaranteed pensions, clearly do not. Private sector workers would view a generous pay award to the public sector as a political bribe and little short of repulsive. ‘I am,’ says Dave Prentis, ‘the voice of 1.4 million people.’ Well you may be, Dave. But you are not the voice of the other sixty million or so of us here in the UK. And not many of us agree with you.

Regards,

Tom Bulford
for The Penny Sleuth

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Fleet Street Daily is an unregulated product published by Fleet Street Publications Ltd. Information in Fleet Street Daily is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Appropriate independent advice should be obtained before making any such decision.