Those Oligarchs Again

December 16, 2008

The reference to “oligarchs” in the title of the last post was sarcastic. This one is precise.

While millions of public sector workers are being unfairly targeted by right-wing attacks and vested interests, the public sector is home to a breed of oligarch of its own.

One of the great scandals of this Labour government has been the unchecked multiplication of highly paid chief executives, management gurus, consultants, troubleshooters, czars – you name it – in the public sector.

Delivering public services has been hijacked by a clique of well-paid, sometimes able public servants, but often disastrous oafs.

This fuels right-wing campaigns against all public sector workers. The Taxpayers Alliance, for example, compiled a report showing that over 200 public sector workers earn more than the Prime Minister (£189,000).

As the Scotsman reports, the Alliance’s figures “suggest a 10.9 per cent average rise, between 2006/7 and 2007/8, among the 387 public servants earning more than £150,000 a year…That dwarfs current earnings growth of about 3.5 per cent and the 2 per cent the pay restraint imposed on the vast majority of civil servants, teachers and firefighters.”

Now these people will take home final earnings pensions – skewing the final bill upwards – and barely deserve half of it.

Their pensions could do with a little slashing, along with those of executives everywhere.

Groups like the Taxpayers Alliance make quite a lot of the unfunded “pensions black hole” in the public sector, and one of the reasons that their attacks hit home is because there is a staggering amount of waste in… the public sector.

Few voices on the Left are arguing that instead of defined contribution pensions for all, we should be aiming for a fair system which steers a middle way.

A final earnings related pension is not fair. It discriminates against the poorly paid, or those who have not worked a great deal, which may include child-bearers or carers.

A defined contribution scheme is similar, yet places all retirees at the mercy of the market.

The other option is a pension system based on need, and funded via a graduated scale. This could be capitalized from income, capital gains, land, sales – or a combination of sources.

Pensioners don’t generally want to live extravagant, “gold-plated” lives, but do want to be able to afford to heat their homes, travel abroad a little, get around town, clothe and feed themselves well, and treat their grandchildren to gifts.

We are trapped in a false dichotomy, in which real need is not considered. Some elderly people need more money than others, for treatment, travel, housing etc…

This leads to gross inequalities in basic services for the elderly. Both the final salary and defined income models are poor routes to addressing human needs.

Our ambitions are too poor to afford a real change, it would seem, which is a rather depressing thought.


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