Thursday, June 30, 2011

Public sector pension reform: my advice to the Prime Minister

Today, the march against austerity measures begins. Or does it? Several different trade unions have taken to the streets. Uniting the unions is anger over the government's reforms for public sector pensions. The short version is that many will have to work longer and pay more in order to receive less in retirement. So much for our never having it so good. We are told these reforms are necessary. The Labour Party didn't save for a rainy day and we're faced with storm clouds for months to come. We are also living longer and pensions becoming more expensive to maintain. Oh, and the government argues that the public sector does rather well on pensions compared to the private sector. Arguments against take various forms. One is that wages are higher in the private sector: public sector pensions are paid in lieu of salaries. A second is that a great number of public sector workers will earn a comparatively low pension. Each side has their arguments and the confrontation begins. (Further details from the BBC here.)

My advice to the Prime Minister is this: you should lead from the front to help clarify your message to better win support. There have been a dizzying array of reforms and so-called "u-turns" in the coalition's first year in office. For parties that have a coalition agreement no one else agreed to they do seem in a hurry, something noted recently in a New Statesman editorial by "ABC" (or the Archbishop of Canterbury, Dr Rowan Williams, to people like us). People are certainly confused by these many announcements and nothing induces more fear than worry about - to borrow a phrase from Donald Rumsfeld - "unknown unknowns". The government's task is to better clarify the message to end confusion and perhaps soften opposition.

I would advise the government to lead from the front. Too often the public believes that politicians fail to see what's good enough for the goose isn't satisfactory to the gander; or, to put it differently, that "we're all in this together" except the small group of politicians cutting pensions only for other people. Politicians care only for themselves, or so members of the public may say. This was only reinforced by the Parliamentary expenses saga. They say all challenges offer new opportunities: this challenge presents a new opportunity as well.

The government should act to ensure that MPs face a reduction on their pensions no less than proposed for public sector workers. They should lead by setting an example. If we are in it together, then they shouldn't tell us -- they should make it a reality. If politicians took a pension reduction (and, of course, many could easily afford it), then they could claim they want to win the public's trust post-expenses fiasco and that they understand something about what people are going through because they took a reduction first.

The Prime Minister has every reason to follow this advice. After all, he has busied himself in recent years to "de-tocify" (not his term) the Conservative Party brand. For example, consider the great lengths he has gone to sell NHS reforms as good for the NHS and the public. Plus, it would lend a better air of sincerity. Many are suspicious of whether a genuine concern about the economy or ideology lies behind some reforms. This would be a concrete example that the public could better identify with. The public can see that even the politicians (at least...) took a reduction. This might not end future strikes, but it would help the government win over public opinion.

Of course, I don't agree with the government's position. Some pension reform may be necessary, but I am not yet convinced -- nor are the many marching today -- that it is necessary and that it must necessarily look a certain way. It is also a problem that the government (on the one hand) says that reforms are necessary and (on the other hand) they are willing to negotiate still (which sounds like the reforms are kinda maybe necessary which isn't quite the same thing).

Either way, it will be interesting to see if the government takes this advice. It would be an improvement on their current strategy, but have they already made up their mind?

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