Wednesday, June 22, 2011

It's Balls...again!

We are waiting for the promised wave of public service strikes to hit the UK with a pronounced feeling of déjà vu.

Ed Balls is right. It is a trap set by the Tories. Handled properly it could be a case of ‘With one bound Dave was free’. Maybe I am over-optimistic about the Government’s backbone and cunning but if they play it right they could do for the public service unions what Maggie did to the miners. In retrospect it is perfectly obvious that the Tories had long-laid plans to smash the NUM. They had stockpiled huge quantities of coal to ensure that there was no repetition of the 3-day week. And a consequence of joining the EEC was that cheap coal from Europe was readily available. Scargill fell straight into the trap.

The NUM dared not have a ballot because it was obvious that a majority of miners wanted to work and negotiate. This time there was a ballot; a majority of those voting are in favour of strike action but only a minority voted. Solidarity seems to be missing so far.

Some of the issues appear to verge on absurdity.

Of course the retirement age must be raised. When state pensions were introduced in Edwardian times the life expectancy of a male was about 48. It is now 78. And public service pensions are inflation-proofed. Like the miners, the Unions are asking for the impossible; the money simply isn’t there. There are too many Golden Oldies like us around and more of us every year.

Their pensions are based on 80ths, so that a full half-pay pension is available after 40 years service. There is also a provision for up to ten added years in appropriate cases such as redundancy or forced early retirement. This means that it would be possible to take a deferred pension at age 46, although the pension could not be drawn until age 50. In the 80s and 90s it was very common practice for public servants to retire well before 65. Pension schemes were very well funded. Mine required a contribution from the employee of 8.5% whereas the employers’ contribution was tiny because the funds were very well managed. And they enjoyed very good tax breaks.  Gordon Brown put paid to that and neither the pension funds nor the Stock Market have ever recovered.
Of course, the politicians might be more credible were it not for the fact that their pension benefits are exactly double; they are calculated on 40ths, not 80ths.

Ed Milliband is between the upper and nether millstone. Because of the eccentricities of the Labour Party’s voting  system, David Milliband won the first ballot but Ed won when the union vote was added. So he is hostage to the unions, leaving Ed Balls, his great rival and possible successor to make all the running. Ed Balls can play the sagacious statesman and advise the unions not to take the bait, and reap his reward when the unions ignore him and come to grief. If the unions win because Dave loses his nerve, Ed Balls wins again.
It’s all Balls right now.

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