Public sector pensions

Here we have something totally unsustainable, that is broken very badly indeed and desperately needs to be fixed and, as ever, the unions are in total denial. The new coalition government have inherited a problem that is going to cost trillions of pounds and they have had the courage to take some modest sensible steps to make the situation less bad.

The final salary pension scheme comes from the days when Britain had a small and efficient public sector who managed all the red bits on the map. When they retired their life expectancy was such that they usually only drew their pension for a few short years. So the system was very easily affordable out of taxes.

But of course it has just mushroomed totally out of control. Statism and socialism mean that more than half the workforce is now in the public sector, totally parasitic on the earnings of the private sector to finance their wages and pensions. And now life expectancy is such that individuals can spend just as many years being paid to do nothing in their retirement as they were paid to do nearly nothing when they were “working”. Added to which is the icing on the cake that their pensions are based on their final salaries, so a quick promotion near the end of their career seems like a friendly gesture to help a friend out. At the taxpayer’s expense.

Meanwhile over in the private sector, where the money is earned to finance everything, things are looking bad. Company pension schemes are largely unaffordable. Gordon Brown raided pension funds of £150 billion to help pay for his profligate spending. Salaries are lower than in the public sector. Interest rates are far lower than inflation so savings are going down in value. And we have the huge burden of paying for the public sector.

Currently the coalition, with their “cuts”, are merely turning the clock back a bit. Likewise their public sector reforms are merely fixing the very worst problems. They are going for the low hanging fruit. But we have a public sector that was designed to service a global empire and which was then massively bloated by the disease that is socialism. What is needed is root and branch reform to create a state that only provides the services that people cannot provide for themselves. Then tax us far, far less and let us decide ourselves how to spend the money that we earn. This is what successful countries are doing.

Meanwhile the unions are threatening industrial action. This is amusing because when the public sector goes on strike nobody notices. And if the police march in protest who is going to kettle them?

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