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Monday, 19 March 2012

Public Sector Regional Pay Cuts in Context

The British Treasury is publicly advocating a new policy concept: that state employees [from driving examiners to Head Teachers to tax officers] should be paid according to an index of private sector remuneration in the locality where their jobs are. This would replace nation-wide pay scales iin the public sector, and would begin - of course - with categories of staff who have the least power to disrupt everyday life for the rest of us by going on strike. This proposal is part of a reaction to two forces: the 'excessive' total cost of employment by the state as a demand on the national budget, and the fact that employment in the private sector outside London has become much worse-paid than government service as deindustrialisation has devastated the regions that were historically major drivers of the economy.

Thirty-three years after the onset of the Thatcherite revolution the economy displays precisely the opposite outcome to what the cohort of advisers who gathered around the new Prime Minister and her guru, Sir Keith Joseph, intended. Their aim was to free the economy to expand, by releasing it from the restraints of the welfare state, from intensive regulation of trade and industry, and from what was perceived as the Keynesian delusion that full employment and general prosperity can be provided by government intervention in the total economy. Selective 'support' for chosen industry sectors was also seen as a costly drain of resources, and was an early casualty of the new policy. The unsupported [and heavily taxed] hard work of inventors, engineers and entrepreneurs has kept 'manufacturing' in being as a strong sector of UK export markets, with the result that surviving British firms are increasingly targets for technology capture by firms from both both old and new economies that have more rational industrial policies. This is in defiance of the Thatcherite and Blair-Brown regimes and the do-nothing coalition. 'Manufacturing' makes a positive contribution to the balance of payments, pays heavy taxes, and conforms to oppressive health, safety and labour laws. But it does not provide a great pool of unskilled employment: on the contrary it requires relatively small numbers of specifically skilled people with very little low-skilled support.

Retailing has grown massively over the decades while fewer and fewer people have contributed inputs to the material economy; but shop work is differently structured from the pattern that prevailed until 1970 under which families shared coverage of the long hours and varied tasks in family businesses which mostly stuck to specific trades like drapery, butchery, grocery, or hardware. Now huge general retail supermarkets [supported by drop-in stores run under the same logos] take most of the cash that is spent in retail stores: while small household items, especially newspapers and payment points, are still taken from family stores that are [mostly] kept by the small minority of Asian immigrants whose work ethic is rarely replicated in either the uneducated indigenous population or the mass of non-EU immigrants who have come to exist on benefits in 'free' housing.

Alongside employment in retail outlets [much of which is on part-time contracts] the only significant growth in recorded employment in most regions of the country is in the public sector. The inexorable growth of the bureaucracy - including the administrators of benefits, housing and the health service - has meant that many people have been able to get jobs that are paid according to national pay scales. This has enabled many such people to buy higher-priced houses, cars and  commodities that most of the surrounding population; though the minorities who have lived by crime and in the black economy have also been relatively affluent customers for the shops, pubs, betting shops and casinos. Lawful spending will decline in the areas that most need trade, causing the closure of more shops: especially specialist shops whose main customers are people with above-average incomes. The rise of internet shopping makes it less disadvantageous for affluent consumers when   local music shops or fashion specialists close down: and today's report that Britain is the world leader in internet shopping is in some measure a reflection of the fact that the retail infrastructure in the regions - especially the least affluent regions - is being reduced. One consequence of the disappearance of higher-priced shops from local high streets is that poorer people who have always looked in the windows during the sales and occasionally decided to make a purchase [with which they were highly satisfied] are less likely to look at the offers on financially 'inaccessible' websites and consequently miss out on the opportunity for random enhancement of the consumer experience. This is all contributory to life becoming grimmer in the already-deprived regions.

When I was young, some people - a far smaller proportion of the population than now - were 'deprived': some suffered disabilities or the consequences of illness which made them unable to earn a satisfactory living standard. Some people were impoverished as a result of their own fecklessness or bad behaviour. Few whole regions could be described as 'deprived'. Then came the twin curses of de-industrialisation and the immigration - especially into areas where housing costs had plummeted - of the mass of benefit-seeking immigrants. The government policies that bolstered both those adverse developments created the 'deprived regions'. Above all else, the withdrawal of common-sense government policies and the increasing shift of power from local authorities to central government made areas 'deprived'.

And now the coalition has decided to make things worse for the mass of ordinary people by its proposal to allow businesses to tinker with roads, by applying modest investments, and then taking tolls from users of those roads. There can be little doubt that the first and biggest investments will be in the areas where the drivers are most likely to be able to pay: leaving roads even more under-funded in the poorer areas, and so left largely to decline. For longer than the lifetime of the oldest person now driving the government has taxed car users, notionally to pay for road construction and maintenance. The driver's windscreen disk was originally a certificate that the Road Fund had been paid. Then successive governments raided the fund to pay for other things, paying for roadworks as part of the annual budget. The twerps who advise the coalition presumably think that people have forgotten - or never knew - that they have traditionally paid a licence fee for the use of roads, on the assumption that satisfactory roads would be provided [leaving plenty of opportunity for argument about what is a 'satisfactory' system]. Now the government propose to introduce a wholly new pay-for-access system to the existing road network, subject to cosmetic changes. Like so much other policy: it stinks!

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