Bishop Hill Fixing the country - a dilemma
Apr 24, 2009 Economics The Heresiarch wonders where the money has all gone. The answer, he notes, is that a great deal of it has been blown on shiny new schoolsnhospitals and bloated salaries and pensions for the Labour voters who work in them.
The capital costs are gone, of course and it's fair to say that this particular aspect of the spending spree will have to be brought to an abrupt halt. Whether the current incumbent of Number Ten has the will to switch the taps off is another matter; perhaps he's going for the scorched earth strategy and reform will have to wait for a change of government.
The fat salaries, and the pensions that can only be described as "obese", are different though. Here, the government can take steps to reduce costs. So, faced with an urgent need to cut back on the costs, what will Messrs Cameron and Osborne do?
If they have programmes of redundancies in the public sector, they will end up with smaller numbers of employees and lower costs, but those left behind will still be grossly overpaid and the services they deliver will inevitably be adversely affected.
Can an incoming government persuade public sector workers to take reductions in pay and benefits, just like the private sector? You can't see the unions taking that one lying down, can you? This road looks as though it will end in tears.
What then? The answer is, of course, full-scale privatisation and the introduction of competition. This is really the only reliable way we have of dealing with overpaid workers. However, when you look at Cameron and Osborne you don't see two men with the character to take these sorts of decisions. They come over as slightly naive fops rather than economic reformers. Will Dave and Gideon really sell off those schoolsnhospitals? Didn't think so.
It's hard to see a way out of this.
Reader Comments (8)
Look forward to a turbulent Conservative government, probably ending in failure to make the real reforms necessary, followed (when people blame "the right" for these problems) by a harder-left Labour government. It's probably downhill (with the odd moment of false optimism) for another 10 years.
Nice idea, but have you heard of the TUPE regulations?
Maybe you should check them out.
The elephant in the room strikes again!
Pericles: Decimation is inadequate. This is not a ten percent problem. It's a ninety percent problem.
Bruno: It starts to look like a great depression doesn't it?
Andrew: It's EU is it? It will only affect the value you get for the business though. The important thing is to get rid of the civil (ahem) servants.
Frederick: One can't help but wonder that even if Dave had gene therapy with Mrs T's DNA, he'd still be limp.