'Like student protests today’s strikes boil down to ‘who pays?’ blog discussion

MatthewGaskin

spikyone wrote: »

...and here is someone, as antonia1 says, using hearsay and cherry-picking to support the cause.

I wasn't actually trying to 'support the cause'; just pointing out the disparity between the pension on offer to the people making the demands versus the people having it imposed on them and suggesting that less of a difference might make the bitter pill easier to swallow.

Oh and the article you're quoting was published AFTER I'd commented but let's look at it, shall we?

"MPs have a funded final salary scheme, they pay a fixed contribution and the Exchequer is liable for the balance. Commons Leader Sir George Young is expected to make a statement about MPs' pensions before the summer recess."

Hmm, doesn't sound like the deal the rest of the public sector have. And if we don't even get a statement until the recess it's hardly done and dusted, is it?

"Lord Hutton's review of public sector pensions did not include MPs' arrangements" but "The Exchequer contribution to the MPs' scheme is higher than "employer contributions" to other public sector pension schemes including teachers, the NHS, civil service, police and fire service schemes, according to Lord Hutton's report..."

And if you look at how far back they've been talking about reform being needed, they're hardly treating it as a priority. I concede I was unaware of the changes they'd made so far but maybe that's because they've been too modest to make a difference. The broad point I was making still stands: MPs are entitled to a pension that is far in excess of anything available to pretty much every other worker in the UK. If MPs want to say 'we're in this too' then they should be reforming their own benefits before going after people who can only dream of a £65k starting salary.

After ten years as an MP, at the lowest contribution level, for a backbencher who's never been on a committee or in the cabinet, would have a pension of £11k a year. With a bit of good fortune, most MPs will retire with more money than an average teacher can earn, and for a far shorter career. In my mind, that screams 'in need of reform' far louder. Why shouldn't they reform their own scheme first? They'd be better able to impose the same changes on others without it looking like a double-standard.

In what way is that hearsay or cherry picking?

wozearly

anoneemouse wrote: »

Well - for someone who says how impartial he is being in the article - then Martin Lewis is coming over as very biased indeed against public sector employees. All that talk of "insiders" and "outsiders".

Ooh....get them...those "insider" feather-bedded public sector peeps - ooh! ooh!

To me - the whole article comes over as written from a standpoint of "I know that the largest proportion of MSE readers are likely to be from the private sector - because thats where most jobs are these days. Therefore I will write an article pandering to their prejudices. I want to keep the majority of my readers on board after all. so - never mind fairness. Therefore I had better write an article in which I am in favour of the public sector employees having their pension cut, but I will try to have it both ways (ie by saying 'This isn't a biased article - honest guv'). That way I keep most of my readers happy".

It didn't work. Unfortunately for him, most public sector employees will indeed read this article as "Get them too - that should keep the rest of my readers happy".

I didn't read that from Martin's article at all - I think that actually he's expressed the reason for the difficulties around both student loans and public sector pensions well.

If you look at the (IMO excellent) graphic of where government money is spent, state pensions is a huge single spend of £62bn - more than the entire schools budget and about 2/3rds of the NHS budget. Its not clear if public sector pensions are part of that at a glance, but however you cut the data they are going to be a huge investment by taxpayers just by the sheer amount of money involved in total.

Clearly its possible to continue funding public sector pensions in their current form - the Hutton report made that clear. It also recommended that this isn't the right answer, and the government has locked horns with the unions over this issue.

No-one is ever going to be happy at any decision that adds cost to them as individuals, particularly when money for everyone in the UK has become tighter. The government isn't necessarily on a crusade to hurt public sector workers out of principle (although some clearly believe they are) and the idea that Martin has sat there wondering about how best to appeal to his website readers and written the article on that basis as opposed to, say, trying to inject his view on the debate from a more general stance, doesn't ring true to me.

On a personal level, I have no problem with hearing out any and all arguments in favour of ensuring greater generosity (on average) for public sector pensions over private ones. But my current inclination is in favour of the changes - not because I stand to gain personally, but because I feel there are more convincing arguments for seeking greater parity between the public and private sector approaches in terms of the wider issue of 'fairness' (e.g. contribution levels, payment date, overall pension value) and I've yet to see any excellent arguments to refute that.

Just to add, I also feel that should apply to MPs pension arrangements as well, which look highly generous in comparison to what is on offer to virtually every worker in the UK...and yes, for any public sector workers who are currently getting a worse salary or pension deal than their comparable private sector counterparts, I'd be amongst the first to line up with them in campaining for a change in their favour.

random324

The post reminds me a lot of Bastiat
bastiat.org/en/twisatwins.html

2sides2everystory

random, thank you.

Should be compulsory reading for all.

Having been reminded, I find it astounding that Bastiat's name appears in only 12 posts in the entireity of the history of MSE's forums - well 13 now

WhiteHorse

danothy wrote: »

... to the simple lack of money the nation seems to be suffering from, so I end up on the fence about spending cuts despite wanting to contribute to the debate.

There isn't any shortage of money. What there is a shortage of is honesty and competence.

Maddox

Public sector workers, who often do grisly jobs for rubbish wages, keep society's wheels oiled - and now the Government is trying to save billions by putting the screws on their wages, retirement ages and pensions.

Just compare their situation with that of the tax-evaders, non-doms and bankers who got us into this horrendous financial situation in the first place.

Collect all the taxes that are due from them and let's see how the deficit picture changes!

spikyone

MatthewGaskin wrote: »

Oh and the article you're quoting was published AFTER I'd commented but let's look at it, shall we?

The article was live on June 29th, the day before Martin's blog post.

MatthewGaskin wrote: »

"MPs have a funded final salary scheme, they pay a fixed contribution and the Exchequer is liable for the balance. Commons Leader Sir George Young is expected to make a statement about MPs' pensions before the summer recess."

Hmm, doesn't sound like the deal the rest of the public sector have. And if we don't even get a statement until the recess it's hardly done and dusted, is it?

The rest of the public sector have a final salary scheme. They pay a fixed contribution and their employer (the government, via our taxes) pays the rest. Sounds like a similar deal to me. And whilst it's not "done and dusted", your previous post said that MPs "plan to keep their own even-more-outrageous pensions exactly as they are". Which is not the case, on more than one count.

MatthewGaskin wrote: »

And if you look at how far back they've been talking about reform being needed, they're hardly treating it as a priority.

As Martin says in his article, it comes down to orders of magnitude in terms of the difference it will make to the public finances. Small savings by immediately changing MPs' pensions pale next to larger savings attainable through reviewing the rest of the public sector, so it's quite obvious where the priority should lie.

MatthewGaskin wrote: »

If MPs want to say 'we're in this too' then they should be reforming their own benefits before going after people who can only dream of a £65k starting salary.

That kind of argument sounds like envy of others who are better off. £65k is not an enormous salary for someone who represents on average 92,000 constituents. Neither is it a starting salary - it's the salary, unless you're in the cabinet.
Your later example of a teacher is tenuous; you simply cannot compare the two. FWIW, there are over 1,000 headteachers in the UK earning more than £100k (with apologies for the source, I wouldn't normally go near it), against 650 MPs. If you consider an MP as a top-level civil servant, then MPs could actually be better paid as a top-level (i.e. head) teacher - whose constituency, if you like, is a tiny fraction of the size. The campaign for better-paid MPs starts here.

I wonder how you reacted to the news on Monday (after your most recent post, I appreciate) that public sector workers are typically higher-paid than private sector, because many lower-paid public sector jobs have been outsourced. And the figures quoted in the article to which I've linked are "compensated" figures that take into account the "higher proportion of graduates and better-paid older workers" in the public sector - which means the real difference in average salaries is even bigger. Public sector jobs are not, as we're often told, jobs with low pay. Moreover, 9,000 public sector workers earn more than David Cameron (£142k).
So it's clearly wrong to claim those affected can "only dream" of earning £65k - this is by no means the "haves" taking away from the "have-nots".

MatthewGaskin wrote: »

After ten years as an MP, at the lowest contribution level, for a backbencher who's never been on a committee or in the cabinet, would have a pension of £11k a year. With a bit of good fortune, most MPs will retire with more money than an average teacher can earn, and for a far shorter career.

Even ignoring the myth that the whole public sector is poorly paid, and the irrelevance of comparing an MP to a teacher, that MP will have contributed more (in absolute £ rather than %) to their pension pot.

MatthewGaskin wrote: »

In what way is that hearsay or cherry picking?

In that you'd made assumptions that MPs are doing nothing about their own pensions. And that your most recent post neglects the larger financial contribution that an MP will make to earn their "outrageous pension".

spikyone

Maddox wrote: »

bankers who got us into this horrendous financial situation in the first place.

Well done, you certainly get the bonus points for mindless banker-bashing.
:T

Let's make this very clear - bankers did not, in any way, create the UK's deficit. All that bankers can take responsibility for is that when the (retail banking) loans and mortgages in the US started turning toxic [boring bit left out for ease of reading!] and the availability of easy credit dried up, it shed light on the amount of debt that the UK and other countries were in.

BobbinAlong

I'm a public sector IT worker, having worked in private sector mostly in my career and am only in this job because I needed a job when I was made redundant previously. As an IT worker I can compare on a level with the private sector for my specific skillset and equivalent jobs there are paying 50% more than I earn in the public sector.
My pension is the main compensating factor for the low pay and I feel the higher pension is already contributed to by the difference in earnings. If it has to change to match private sector pension contributions then let us have pay equality too.