I am entirely in favour of civil service redundancies, and even more of local authority redundancies. We have a crazy economy, heavily dependent on vastly over-rewarded people who perform useless financial casino services for much of the world. The taxation this brings in goes to fund many more people who fill in forms all day relating to government targets.
The number of people who actually make anything is miniscule. The entire economy is not sustainable.
I suggested how to cut the foreign office here:
https://www.craigmurray.org.uk/archives/2010/06/for_william_hag.html
and gave more general views on cuts here:
https://www.craigmurray.org.uk/archives/2010/06/budget_day.html#comments
I support redundancies. But I do not support the attempts – started by New Labour – to cut civil service redundancy terms for existing employees. Civil servants entered into employment with a contract with their employees. New Labour lost two court cases in their efforts to unilaterally revoke the contractual redundancy rights of civil servants. The notion that the government may now pass primary legislation to give itself the right to change redundancy temrs of existing employees is contrary to natural justice. Private sector employers cannot unilaterally change employment contracts of existing staff. Nor should the public sector.
Redundancies are an initial cost which must be found, but lead to long term savings. As I have argued in relation to the FCO in particular, sales of government property should be used to help meet the redundancy costs. The MOD has vast tracts of land and a great many buildings which could be sold. Chevening, Dorneywood, Windsor Castle and Osborne House would bring a few quid. If you can enact primary legislation to cut civil service redundancy pay, you can enact primary legislation to allow you to sell those. I would nationalise the estate of the Duke of Westminster too, then sell it off. That would meet a lot of the redundancy costs.
I have no objection to changing conditions of employment – including on redundancy and pensions – for new employees, within reason. The impact on recruitment and retention must be carefully weighed. But to abrogate existing employees’ contracts is plain wrong.
“I would nationalise the estate of the Duke of Westminster too, then sell it off.”
Now that would be fun 😉
The London Mayor (plus hangers-on, fancy buildings, etc.) seems like a huge waste of money and worth ditching, too.
I’ve not noticed any improvement in London thanks to that extra layer of government. Seems entirely redundant to me.
“The number of people who actually make anything is minuscule. The entire economy is not sustainable.”
I agree completely. I simply cannot understand how anyone looking ‘in’ at the situation, is unable to come to the exact same conclusion. The ‘system’ is running itself into the ground. Something has to give.
Soon.
What do you “make”?
“I support redundancies”: I suspect the reason you say that, Craig, is to get your retaliation in early as the full horror of the ideological cuts your government are about to make becomes clear.
alan,
no. I think the public sector is much too large. I have said so consistently on this blog or five years.
Craig, people who work in local authorities actually do things. They keep the streets clean, provide housing, renovate theatres, commission sculptures, run welfare, raise taxes, spend taxes, organise recycling, license pubs, provide transport and so on and so on. Working in an LA is a good, public spirited thing to do. I think it’s a shame that so much hostility is directed towards our ‘public servants’, in fact; better to be a public servant than a corporate tool, surely.
Craig,
How does the average worker and his or her children benefit from all these redundancies you propose? Of course there are some civil servants who are overpaid and others who are entitled to exaggerated redundancy packages, the rights of the latter whom you now defend, but the redundancies, as you must know, will have a far bigger impact on the families of the many more numerous low paid workers who struggle to make ends meet as it is. Will losing their houses motivate them to participate more enthusiastically in your beloved free-market system?
I no longer live in Britain, but I was there when the last lot of Milk Snatchers were in charge in the 80s. I therefore have a good idea of the kind of pain that is about to be inflicted by Clegg, Alexander, Cameron and Osborne. I’m amazed at how casual you are talking of redundancies. These are people’s lives.
PS As male unemployment and marginalisation increases over the next couple of years, I suspect you’re going to see many more examples of people “shooting up the neighbourhood”.
My employer went through a very difficult patch last year. We were all asked to forego a month’s salary and accept a new employment contract which reduced redundancy terms. I accepted this as did many others, because the survival of the company depended on it. As a result, I now have a job rather than a redundancy payment.
It therefore seems reasonable to me that public sector redundancy packages are at least looked at. Some of the quoted figures seem to me astronomical, compared with private sector amounts.
Julian
I don’t have a problem with that kind of renegotiation with the unions, where a trade off ends in a voluntary agreement which employees can accept, as you did, or reject and face the jobs consequences.
I would favour a £100,000 cap on redundancy payments.
But the key is such changes should be negotiated, not rammed through by primary legislation.
‘But I do not support the attempts – started by New Labour – to cut civil service redundancy terms for existing employees.’
Nothing new in this. I was an industrial civil servant back in the early 80s. I tell you the truth, so help me God. Our union went to management and demanded that our redundancy be cut by (approx) £2,500. Our union said it was because we were getting jobs with the private sector employee that had won the contract and it wasn’t fair that we should get full redundancy (our workforce and premises were going to be taken over by them (american company)). My union then said we have to have a vote to give another (approx) £2,300 off long term employees redundancy to give to employees who had less then two years service, as these people would be getting nothing. Our union said if we didn’t vote for all this then we would ALL be out of a job. Our union was sogat.
The members of the union NGA who worked at the same factory as us, told them (when asked to submit to the same deal) to “get stuffed” they got all their redundancy in full and jobs.
The leader of sogat was Brenda Dean, sorry that should now be Baroness Brenda Dean (for services rendered no doubt).
My redundancy of (approx) £12,500 was cut down to £7,300 by the time they had finished, for 14yrs service.
So, the above don’t stand a chance.
The government cannot change contracts of taxpayer owned bankers but they seem to think the poor lower end worker are fair game?
Somemore union leaders getting fitted for ermine gowns and all the trimmings…methinks.
Craig,
I can’t remember whether I made this point the last time you vented on this subject or not, so pardon a possible repetition:
Do you really think that the redundancies now seemingly inevitable in the public sector will not be targeted disproportionally on those on the front-line; the ones who actually *do* things?
After all, the redundancy payments due to middle/senior managers would be far more expensive than those to the PBI; if you made, say, 1000 front-line staff redundant, you could claim that you had made far greater savings than you would have done by getting rid of 100 useless managers, and it would reduce the head-count far more so that you could claim that the poor middle classes now had to support far fewer ‘pen pushers’ with their ‘gold-plated pensions’ than previously.
If you say that this is unlikely, as such a reduction in front-line staff would render the department (whatever it is) unable to do its job, then consider how such a situation would prepare the way for a groundswell of Mail and Express readers’ support for the wonderfully liberating (and Liberal) experience of ‘outsourcing’, thus handing over even more of our public services to organisations determined to make a profit at our expense.
You and the Orange Bookers in your party should be careful what you wish for; you might just get it.
I’d nationalise the Duke’s estate, but wouldn’t sell most of it off. You get far more long term financial benefit when the state owns things that bring in revenue rather than flogs it off cheaply and relies on taxation later on.
Craig,
I partially agree that public spending in national and local government has been too high, and that many people get paid for pretty useless jobs. Especially, it seems, the higher you go in the local council, the more you get paid for doing very little.
I also agree when you point out that the economy is unsustainable, in that we have moved from a production economy to financial speculation.
However, to suggest that the situation can somehow be corrected or improved simply by laying people off in the public sector is misguided; in fact it will make the situation much much worse, as we are about to witness in the next few years.
People out of work will not miraculously start making useful things. Britain’s manufacturing system will not automatically rise from the ashes. The economic problems that you point out are much, much deeper rooted than that.
Many stem from the fact that capital is now free to move around the world, yet there is no mechanism for ensuring globally balancing trade. In economics speak, the ‘theory of comparative advantage’ is no longer valid: we are competing on absolute terms with low-cost economies, and manufacturing will simply move to where the absolute cost is lowest.
People laid off in the UK now will spend less money and buy less things. Demand will drop, business confidence will fall further, and the remaining domestic industries which do make real things will find it hard to get credit. Instead, the banks will be quite happy to step in and take over real and worthwhile assets in exchange for the paper money they originally lent the businesses. High unemployment will be used to drive down labour costs further, and take away many employees rights.
Keyne’s key argument was that to break this loop, government spending should increase during a depression, in order to put people back into work and stimulate demand. He argued that this government spending should be on useful things as far as possible: building and refurbishing infrastructure etc, and that it should be spent where it has the biggest impact on unemployment and spending. For example,we could have a massive effort to refurbish the UK’s aging housing stock to reduce energy demand, employing carpenters, glaziers, plumbers etc.
Of course, this kind of bailout won’t happen as our government can’t issue currency – we have to borrow it from the same global financial institutions who got us into the mess. They now dictate our economic policy, just as the IMF and World Bank have done so well in developing countries. Just look at Greece.
Apologies for the gloomy economics essay. If you’re interested, David Harvey has an excellent animation of a recent lecture he gave presenting his take on the problems:
http://comment.rsablogs.org.uk/2010/06/28/rsa-animate-crisis-capitalism/
If our manufacturing sector was booming, I would be all for making government genuinely more efficient. But increasing unemployment now is economic suicide.
‘If our manufacturing sector was booming’
We have a financial sector, a service sector. I don’t think we have much of a ‘manufacturing sector’ left, most it went abroad a long time ago.
Craig
You are becoming parodic. At times, you sound like Norman Tebbit or Richard Littlejohn. For a start it is spelt ‘minuscule’. Secondly, people who work in local government produce many things. They clean our streets and collect our rubbish, they clean our drains and ensure that food establishments are well run. They provide housing and regulate bad landlords. They provide street lighting and roads. The list is long. Remind me, what do you do exactly? Do you add to the general welfare of mankind?
Your sneering contempt for the Labour Party, who sacked you for your incompetence with a six year salary payoff, is merely an attempt on your part to divert attention from the fact that you now find yourself in the difficult position of supporting a coalition government that is making massive cuts, that is following broadly a Tory agenda and that is carrying on with the “war on terror” that you have spent the last few years attacking. You find yourself in a situation that the Marxists used to call false consciousness, supporting something that you either do not believe in or do not understand. The tensions of this position will lead you to lash out more and more stupidly until you cannot tolerate the tensions any longer. At that point you will leave the liberals and revert to your former isolationist position. I give it six months.
anon poster at 6.34pm –
“However, to suggest that the situation can somehow be corrected or improved simply by laying people off in the public sector is misguided”
I have never suggested this is a simple solution to anything. It is one of dozens of necessary steps.
Technicolour gets it right. The ‘public sector’ conjures up a picture of pin-striped fast-track civil servants. What it really consists of is nurses, teachers, home support workers etc. The fabric of society in other words.
Good article from Guardianista Jackie Ashley on the human cost to come:
http://www.guardian.co.uk/commentisfree/2010/jul/05/cuts-scroungers-all-suffer-pain
And cutting that fat allows a little more individual freedom.
I get that politicians are eager to deal with this deficit. And one would presume they’re prepared to do all that’s necessary to do just that. But it seems that’s not the case. Seems there’s a lot of eagerness to line up to kick the pubic sector in the balls, but when it comes to the topic of tacking the ‘tax gap’, they stick their fingers in their ears and sing “lalalalala”.
It is estimated that £120 billion in taxes goes uncollected, avoided or evaded in the UK every year. One has to question why they don’t consider pursuing this as a viable alternative or compliment? Instead, the very department that could actually tackle this, is just about to taken out back and kneecapped along with the rest of the civil service.
I wonder why this is.
technicolour, I agree entirely. Home carers for our ageing population, bin-men, these are the the basic jobs which a society needs. These are not spurious ‘pen-pushers’. I agree that over the past 30 years, much ammunition has been directed at the public sector, for ideological reasons. I’m not saying there aren’t things to mock or that everything is useful and appropriate. But we’re talking now about cuts on core services, that means cuts to our society, to the body not merely the couture. Oddly, perhaps, I find myself in agreement on this matter with Eddie and Alan Campbell and the others as well. People are beginning to crack under the strain of having to do more and more work with less and less pay. The assault on local government – whatever party has been in power – has been a product of authoritarian centralising power over the past 30 years. It started under Thatcher and has gone on ever since.
No war. Regulate the financial institutions. End tax evasion by millionaires. Build-up our manufacturing sector, invest in the manufacturing we’ve got left. Of course, one of the ironies is that some of this will be arms manufacturing. What a situation!
Sorry – I didn’t mean to post anonymously the first time.
“I have never suggested this is a simple solution to anything. It is one of dozens of necessary steps.”
I know, and your stance on stoping funding for trident and the war in Afghanistan is admirable,and your ideas for reducing unecessary government spending seem pretty sensible.
My point is that these steps need to be done in the right order and at the right time. Joseph Stiglitz would call it sequencing and pacing, because economists like to use fancy words. I don’t see a recovery happening.
I just don’t see a recovery happening. I see a risk of a global depression.
http://www.youtube.com/watch?v=Z9hDpndQjrQ
One final link:
http://www.independent.co.uk/opinion/commentators/joseph-stiglitz-fiscal-conservatism-may-be-good-for-one-nation-but-threatens-collective-disaster-2000517.html
Thanks for the link, Sam. Why is no-one listening to this? It seems a large number of people, inlcuding people I know, have been brainwashed; reciting ‘there is no alternative’ like robot Thatchers.
Exactly, technicolour. As I said somewhere on these boards, we are still asleep.
I would like to see numbers and statistics.
I simply takes a certain amount of people to perform a certain amount of government related tasks (collecting taxes, controlling and supervising) for a population of a certain size.
In order to make the administration more effective (and cheaper) there are several possibillities:
– introduce new, more effective administration techniques (computer programs…)
– reduce the laws and regulations
But simply saying there was too much bureaucracy is not enough.
Germany has been cutting its bureaucracy by 1% per year for more than ten years and for some reason everyone claims that there still was too much bureaucracy. ?????
In truth the German tax offices do not have enough staff any more to properly check the tax forms handed in by citizens. As a result there is an unbelievable amount of tax fraud and tax evasion.
Cut.
Cut.
Cut.
That’s all I hear.
But I never read any concise points why cuts are necessary, resonable, rational and effective.