Saturday, October 22, 2005

An explosive U-Turn

It will be time for fireworks soon, but in Downing Street I suspect they will not be confined to November 5th. A long-term betrayer of the values of the original Labour Party, Blair took a very odd turn last week. It is one that now conflicts with his beloved New Labour project and is potentially a harbringer of all sorts of unrest.

I refer to his agreement over pensions with the public service union. Civil servants have always been on to a cushy number. Unless they are really senoir, they don't get paid that highly, but (since they are largely beaurocrats) their life is frequently one of undemanding paper-pushing and subservience to the dictates of the state. In return, they have uniquely received a retirement pension linked to their final salary. Thus, around age 60, they settle down to a reasonably comfortable old age. Such generosity has never existed in the private sector and these days there is little security for life-long workers in those sectors at all.

Assuming corporate administrators do not hi-jack the funds for their own devices, pensions are supposed to be paid for with money held for and invested safely on the part of the worker. They are the one "tax" that is eventually refundable with interest. Or they were! Decades of unwillingness to increase contributions coupled with the refusal to accomodate longer lifespans have left the whole business in a complete mess. The Blair government's response has been to push foward legislation and policy that allows them to abdicate the obligations of the welfare state and corporate schemes in forcing the population to make financial plans for their own retirement years.

For those starting their adult life, this may be fine - assuming they can find any institution left willing to offer such long-term secure investment. For those already retired with modest resources, there is the threat of ever-dwindling resources. For those still working and yet to retire there is also much insecurity - largely linked to one's current status in the now massive rich-poor divide. This latter is the "black hole" between any future system and the old.

Essentially, unless you are already well-off, we are now told that we will need to work longer and save more of our own money from wages that are diminishing anyway if you are at the lower end of the pay scale. It is tough already and will be tougher in the future - unless, that is, you are a government employee. The new agreement means civil servents will be exempt from working extra years and their rewards will remain linked to their final salary. In other words, no such changes for them!

This is the kind of "favouritism" that will lead to major unrest in other areas of society. It is also, to my mind, no major surprise that such exemption has been granted to those who provide the machinary of state. The new authoritarianism will need them! The biggest irony is that such exemption does cover other areas of social and public services. If civil servants get this privilage, why not the others who strive to keep the country running on lower salaries than that of the average civil servant?

An explosive situation looms. How long before Blair is "The Guy"?


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