Facing Down The Unions

Impartial BBC journos off-duty

It's just like old times. The teachers are going on strike, the Post Office workers are going on strike, and even those most essential of essential workers, the BBC journalists are going on strike. The common theme? They're all employed by the public sector.

As you know, the public sector is the last bastion of British trade unionism: 60% of today's union members are employed in the sector, even though it contains only one-fifth of the workforce. And these unions will strike at the drop of a hat - even while Blair's government was busy ramping up their members' pay. 

Here's the latest version of a chart we've posted before. It shows the number of days lost to industrial action annually in the public and private sectors (the figures are rolling three year averages):

In the private sector, the number of days lost annually has fallen to around 100,000 pa, or roughly 0.004 days per employee. However, in the public sector it's running at 20 times that rate. Moreover, while private sector employees have stoically swallowed pay freezes and tougher working conditions since the Crash, public sector unions seem to think their members are entitled to same rewards as during the time of plenty. There is no acceptance that the world has changed, and hence this fresh wave of strikes.

Of course, the Coalition did impose that two year pay freeze, but as we blogged here, in reality that turned out to be a freeze in name only. Depending on how you measure it, pay increased by between 5 and 10% over the two years, and it's still increasing. Moreover, public employees are already paid getting on for 10% more than their private sector equivalents, on top of which they get those famous index-linked pensions that are simply not available elsewhere. As we estimated in the BOM book, the total reward gap could be as much as 30 to 40%. Even after recent pension reforms kick-in, it will still be well North of 20%. 

But credit where credit's due: the Coalition are certainly having a go at addressing the issue. They have reformed the public sector pension schemes to make them less generous, and although there's more to do, over time their reforms will save taxpayers some serious cash. 

And they are now tackling the issue of progression pay - the automatic annual pay increments received by a substantial proportion of public employees. Virtually unknown in the private sector, incremental scales deliver year-on-year pay rises irrespective of freezes or indeed individual performance. George says:

"We will seek substantial savings from what is called progression pay. These are the annual increases in the pay of some parts of the public sector. I think they are difficult to justify when others in the public sector, and millions more in the private sector, have seen pay frozen or even cut."

Quite right George (and yes, we do realise Chancellors have never enjoyed such increments, and you haven't had a pay rise for three years).

But it's going to be a helluva battle, with the teaching unions already launching an all-out assault on the Gove Line. The Association of Teachers and Lecturers passed a vote of no confidence in him and his Chief Inspector earlier this week, and the NUT is following suit. A protracted series of strikes looks well on the cards.

The Coalition must stay strong on this. Closing the public sector pay and pensions gap will ultimately save taxpayers at least £25bn pa. And although it will obviously be painful for public sector employees, they should understand it's a lot less painful than the Irish solution. There, public employees had to accept pay cuts averaging 15%.

PS Did anyone miss the BBC journos who went on strike last week? It should have encouraged more people to try out Sky News, and I suspect a good proportion will not return. A few more outages like that and even Mr Cam might start thinking about break-up and sale. Let's hope so. 

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www.gudanggrosiran.com Categories: public sector pay, unions

Masters Of Self-Interest

Like the man said, always ask who benefits... it probably won't be you

Today the TPA publishes the Trade Union Rich List. The list makes facinating reading:

• 38 Trade Union General Secretaries and Chief Executives received remuneration of over £100,000 in 2008-09.
• Numero Uno is Gordon Taylor, head of the professional footballers union, who got a total £856k. (he's presumably being rewarded for achieving what all union leaders seek to achieve - getting their members mega-pay for pants performance - and see Jeff Randall's excellent plan for a vanity tax on England's... er... "footballers" ).
• Many of the big public sector union bosses - the ones who will soon be leading strikes against pay freezes and pension reforms - are paid well over £100k, far more than most of their members, eg:

These people are masters of self-interest. A self-interest that rests on promoting a state of conflict between their members and the employers - something we'll be painfully reminded of over the next few years (eg Mr Crow's call this week for a "wave of strikes").

Now, we have no problem with self-interest. Indeed, we applaud it. We reckon it's been one of the key drivers of human progress throughout the ages.

But where we do have a problem is when self-interest gets dressed up as something else. Such as those old favourites "the national interest", "the public good", and "fairness for all".

Right now, we're getting rather a lot of that. As we face up to our decade of spending cuts, it's coming from all the various industries that are currently being propped up by tax-funded subsidies.

Needless to say, the Arts industry is centre stage. They reckon cuts will be disastrous to the national interest, and may mean the end of James Bond as we know it. As we've blogged many times, the £600m we give them through the Arts Council every year, plus the dosh channelled into the arts via the £3.5bn pa BBC, plus the subsidies to the film producers, are all prime candidates for the chop. There is zip overall economic benefit (eg see this blog), and it is outrageous that poor taxpayers are forced to subsidise middle class rentiers like Mr and Mrs T when they toddle off to the RSC or the Chichester Festival.

Then there's the tax-funded science research industry.  They've been squealing to Newsnight about how cuts to their budgets would be disastrous because their work is essential to our future prosperity. Oh yeah? Like how? As it happens, Tyler once took part in an international research study seeking to quantify the economic return to basic scientific research funded by taxpayers. After about 2 years, many weighty papers, and research meetings right across Europe, we could find no serious evidence of any return whatsoever. Yes, scientific knowledge definitely drives technological progress, but we British taxpayers would be better off if we cut British science subsidies and simply coat-tailed on the yanks (which to be frank, we've been doing anyway for the last 50+ years).

Then there's the Foreign Office, whose alumni are currently touring TV studios to warn of the dire consequences if we cut their budgets. Apparently, cuts will mean we will no longer be able to "punch above our weight". Sorry? Did I miss something? Falklands aside - a war launched against Foreign Office advice - post-Suez, when exactly did we ever manage to punch above our weight? Where's the benefit to taxpayers?

There are a host of others, too tedious to recount, but you'll see them popping up over the next few months to explain why cuts to their budgets will be disastrous for you.

As always, you need to treat all such claims with extreme suspicion. Identify the self-interest of those who are making the claims. And demand clear hard evidence of the benefit to you.

In our cash-strapped world, where your taxes have already been increased, arm-waving on Newsnight is no longer enough. The burden of proof is now on those who want continued public funding. It's back where it always should have been.

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www.gudanggrosiran.com Categories: cuts, humbugs, unions

The Working Class Can Kiss My Rail Pass

TPA factcheck catches out union fatcat

It's scarcely believable. After everything we learned and did in the 70s and 80s, the bolshie trade union boss has come back to wreck our economy all over again. 13 years of Labour misrule and he's back on the picket line, as destructive as ever.

And what prize humbugs these people are. Bob Crow - head of the National Union of Rail, Maritime and Transport Workers - telling us with a straight face that the first national rail strike in 18 years is all about passenger safety. Tony Woodley - semi-head of the hilariously misnamed Unite union - telling us the BA strike is down to management's fanatical mission to destroy the union. Mark Serwotka - head of the Public and Commercial Services Union - telling us that a public sector pay freeze is impossible because his members can only just exist on their current diet of peanuts (for the real facts see here).

But at least today the TPA's Matt Sinclair landed one on Dave Prentis, fatcat head of Unison, another union that will soon be bringing our public services to a halt.

As it shows in the vid, although Prentis reckons his members have to subsist on peanuts, he himself was paid £127 grand in 2008-09 (salary and benefits).

And just so you know next time they're on the telly, here's what those other jokers got:

• Bob Crow - £105 grand
• Tony Woodley - £72 grand
• Mark Serwotka - £111 grand

And you can peruse the full list of what other union bosses get here (Appendix 5).

Personally, I don't care what unions pay their bosses, but (a) I don't want to fund it - as Labour has forced me to do - and (b) I don't want to hear maxi-wedged humbugs lecturing me about why I should pay higher train fares/air fares/taxes to support their members - mainly so that they themselves can keep their own cushtie jobs.

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www.gudanggrosiran.com Categories: humbugs, strikes, unions

Old New Same Old Labour

In another 5 years they'll have control of the police too

Once upon a time you knew where you were with Labour. They spent shedloads of your dosh on half-baked social engineering projects undermining the social fabric, they wrecked the economy, and they were hostage to the unions.

Then Old Labour got replaced by New Labour. They spent shedloads of your dosh on half-baked social engineering projects undermining the social fabric, they wrecked the economy, and they were hostage to the unions.Very confusing.

So it's good to see New Labour replaced by Same Old Labour. They spend shedloads of your dosh on half-baked, etc etc.

Labour's financial dependency on the unions stinks. The unions fund the party, and the party gives the unions millions of your money in the form of various douceurs such as the £7m so-called Modernisation Fund.

Even more damagingly, the party also gives the unions a whole raft of workplace regulation - like statutory paternity leave - that imposes a huge cost burden on business (eg the notorious Warwick Agreement, under which Blair gave the unions increased holiday entitlements, and they gave Labour £8m to fight the 2005 election campaign).

Of course, post-Thatcher, the big unions are now mainly confined to the public sector. We've blogged this many times (eg here), but here's the key chart showing how union density (ie the proportion of employees who are union members) is nearly four times higher in the public sector compared to the private:

Unsurpisingly, the public sector's strike record is much worse than the private sector's:

The TPA has just published an updated analysis of this strike record relative to numbers employed in each sector. They find that the average public sector worker is 15 times more likely to strike for a day than his counterpart in the private sector.

BA is one of the few big private companies with high unionisation, reflecting its origins as a nationalised industry. But there the similarities with the public sector end. Unlike our Old-New-Old Labour government, BA management have made it quite clear they are prepared to take the unions on.

And take them on they must. According to Tyler's correspondent airside, BA cabin crew are ludicrously overpaid relative to industry averages. Judicious exploitation of allowances can apparently bring BA long-haul cabin crew up to £70 grand pa, which is simply not sustainable in these straightened times.

Indeed, it's no more sustainable than the existing pay and conditions of our unionised public employees. As we've blogged before, whoever wins the next election will have to prune the public sector paybill drastically. It's now running at 15% of GDP, and must be cut. Some combination of redundancies, pay freezes, and increased employee pension contributions, will have to be imposed.

Now, does anyone see Bottler Brown suddenly turning into Willie Walsh?

PS So even the Big Government European Commission reckons Labour's budget plans are wildly irresponsible. They say “The fiscal strategy... is not sufficiently ambitious and needs to be significantly reinforced. A credible timeframe for restoring public finances to a sustainable position requires additional fiscal tightening measures beyond those currently planned.” We'll take a closer look at the EC report later, but this is a pretty clear vote of no-confidence, and sterling has already taken another downward lurch.

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www.gudanggrosiran.com Categories: new labour, unions

Tanks Back On The Lawn

What happened to the lawn last time

All Labour governments end up in serious difficulty over their union paymasters. They spend their first years pandering to union demands, and their final ghastly Götterdämmerung months impotently trying to explain away the resulting inferno (and see Mr Dale's post yesterday with an update on the disgraceful issue of union Danegeld).

In the late 60s, Wislon famously ordered one union leader "get your tanks off my lawn" - just before Wislon himself abjectly capitulated on promised legislation to rein in their destructive antics, thus setting the scene for the dire strike-ridden 70s (In Place of Strife).

In the 70s, union man Uncle Jim Callaghan dragged us into a wintery nightmare of public sector strikes and unburied bodies lining the streets.

And now, the tanks are massing again. Bruvvers and sisters in the Post Office are already there, and their union is busy balloting for national strike action. Leeds refuse collectors are out, and rubbish is piling up on the Council Leader's doorstep. The Fire Brigade Union is threatening unspecified industrial action "of the like which they have never seen".

Thanks to the Iron Lady's reform of union law, and crucially the realism born of global competition, union power in the private sector is now properly limited.

But in the public sector there is generally no competition to concentrate minds. And union power is still a major block to necessary reform (a block that stands even where there is a clear and present danger from competition - eg with the Post Office).

As BOM readers will know, there is a huge difference in the unionisation rates of public and private sectors. As we blogged here, the public sector is four times more heavily unionised than the private sector, with a near 60% membership rate. Which means the unions have far more power in the public sector. Here are the latest official stats:

And public sector workers are far more likely to strike (see this post): even in the relative industrial calm of the last five years, they have been 30 times more likely to go out.

The result is that the public sector loses many more days to industrial action than the private sector, even though it employs only a quarter as many people:


The outlook is pretty grim. Public sector pay, public sector pensions, and public sector employment are all going to come under the knife over the next couple of years. And with 60% sector unionisation we must expect a lot of strikes.

Will Cam be any better than Labour at facing them down?

It must be said patrician toffs don't have a great record in that regard - unlike a Thatcher or a Tebbit, they suffer from too much Jimmy Carter-style plantation guilt. But if Cam is serious about cutting spending, he has no choice. Wages and pensions constitute around a quarter of public spending, and will have to be cut (as everyone, including St Vince, now recognises).

Cam will have to face the tanks head on.

PS The union leader ordered by Wislon to remove his tanks was of course Hugh Hughie Scanlon, the Marxist president of the Amalgamated Engineering Union from 1968 until 1978. "For most of his career he was the wild man of the Far Left, bogeyman of the Right and a vociferous critic of ermine-clad politicians, particularly the Socialist variety. Indeed, he had called the Upper House a "bastion of privilege". Naturally enough, on his retirement Callaghan offered him a peerage - for services to a grateful nation. And naturally enough, he accepted. Just like our old friend my Lord Kinnockio. Why do we put up with this again?

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The Message From Bruvver Crow

Two previous messages...






And now we have his new message: a full-blown 48 hour strike on the London Underground, starting now.

So what's it over, exactly?

To start with, it seems Bob and the bruvvers don't like the pay deal they've been offered. They reckon that a five year deal giving them inflation plus 1% for the first year, and inflation plus 0.5% pa thereafter, is just plain mean.

What! you exclaim.

What the FFFF!!????

Isn't it a fact that tube workers are pretty well wedged already? Don't tube drivers get paid £40 grand as a starting salary, and station supervisors £35-39K? And come to that, isn't it a fact that earnings in the private sector are actually falling?

Yes, well, OK... park the pay issue. The RMT have other grievances.

First, they want a cast iron job guarantee. With such lucrative positions, members are naturally keen not to lose them. Especially given the chill blasts blowing above ground, where everyone else is facing the chop every single day.

And second, it turns out they're also striking for the reinstatement of two suspended comrades facing disciplinaries. One comrade is being victimised by means of a criminal trial for theft, and the other is being picked on over a trivial matter of opening the doors on the wrong side of his train, nearly losing his passengers overboard, and then lying about it afterwards.

So Bob's message today is that ordinaryhardworkinghardpressedwageslave Londoners must suffer so that his members can grab an even bigger slice of the pie, enjoy even more job security, and be even less subject to management discipline.

But Bob's real message is of course much bigger.

His real message is that now is the best chance in years for public sector unions to go for gold.

Think about it. As we blogged here, the public sector is four times more heavily unionised than the private sector, with a 60% membership rate. Which means the unions have far more power in the public sector.

And public sector workers are far more likely to strike (see this post): even in the relative industrial calm of the last five years, they have been 30 times more likely to go out.

The result is that the public sector loses many more days to industrial action than the private sector, even though it employs only a quarter as many people:

So against that background, public sector union bosses are looking at a once in a career opportunity.

Here we have a reeling dispirited government who no longer care if they give away the shop. They're way beyond that. Their main aim now is to minimise the scale of their defeat, which definitely DEFINITELY means no Winter of Discontent style public sector strikes.

Sure, if they give in to big union demands they'll be increasing the problems facing the next government. But why should they worry? They don't care if they make life more difficult for Dave and George in 12 months time - in fact, that would be a positive bonus.

And the union bosses ain't quite so dumb as they look (they can hardly be that dumb). They know that life will be much tougher with Dave and George across the table, if only because D&G will be aiming to stick around for a decade.

So if you're a public sector union boss, there's only one conclusion: now is the time to strike.

Literally.

Update 10-6 - interesting cross reference on transport pay in today's Times: "Data from the Civil Aviation Authority (CAA) shows for the first time how much higher BA’s wage costs are than its rivals. The average salary for BA’s 14,000 cabin crew, including bonuses and allowances, is £29,900, compared with £14,400 at Virgin Atlantic and £20,200 at easyJet. BA’s pilots earn an average of £107,600, compared with £89,500 at Virgin and £71,400 at easyJet." Interesting.

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www.gudanggrosiran.com Categories: strikes, unions