A superb article: Ordinary workers should be protected from the evil influence of public sector unions

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Bravo, Tim Pawlenty!

He has written an excellent comment piece in today's Wall Street Journal.

online.wsj.com/article/SB10001424052748703766704576009350303578410.html

Pawlenty is a bit of what we used to call a "wet" Conservative - think Ken Clarke - the Americans have the more perjorative term RINO - Republican in Name Only. But this article is spot-on.

Public sector unions should be made illegal. As the article so deftly explains, public sector unions are deeply exploitative.

no other country has had the confidence to resist big business. We had a very conformist, deferential society with national service, and many other nationally beneficial institutions that came out of christian welfare expectations. Its important to remember that in a world with diminishing resources, and multiple competing influences on expenditure, profit will be an increasingly useless marker of success - profit, remember, means that some of the income goes to shareholders, not the business, its customers or the country and whilst its easy to take money out of any concern, its less easy to make that concern work well.

The NHS is actually astoundingly good, even though we all have our problems with it - the amount of times I have been in hospital when an international friend has come in and asked open-mouthed how much it is to be 'in a private hospital like this' when I am in an NHS ward is quite phenomenal.

We need to be careful that we don't forget that amongst the odd failed complex operation and some drug lotteries, what the real benefit is constant available healthcare that doesn't mean that our whole careers are on hold and our houses lost because we break a leg.

I believe that the public sector proportion of GDP should go down from 50% to about 30%.

We have far too many public sector workers - especially in local councils. The numbers should be cut.

The priority is balancing the budget, but after that, there should no increases in non-capital public spending, and further current spending cuts, to pay for tax cuts.

The boost that this will give the private sector will help move people into productive, tax-generating private sector jobs, instead of tax-consuming public sector jobs.

At the same time, the clampdown on welfare, together with the Duncan-Smith universal benefit reforms, will help tackle the worklessness culture.

I would free as much as possible from the shackles of State control. Push power down from Whitehall to town halls, and from town halls to citizens. Publish everything, and let people make informed choices.

Interesting.. but naive.

1.How do you know how many public sector workers are needed without knowing what they do? This is something you 'think' but its based on prejudice.

1. Why cut spending when we are negotiating underpayment of tax with 'profit-making' businesses that is bigger than the deficit?
2. That tax non-payment is going into shareholder (often non-uk) pockets and reported as 'profit' when really it should be reported as government subsidy of profit-making businesses
3. Not all private sector jobs are productive many make a loss for the firm but contribute to an environment that is profitable.. in exactly the same way as the private sector does (how much more, for example, would banks and businesses have to pay if they had to pay for their own police force, medical care for staff, planning decisions, access road maintainance, street-lighting, traffic lights etc etc??)
4. Many hundreds of thousands of private sector companies make their money from public sector contracts.
5. Public sector jobs also contribute massive tax bills to the economy.. and they have to pay them and can't wriggle out
6. many public sector operations support a whole local economy of profit-making business using shared management skills, provision of customers, salary incomes etc etc
7. 'worklessness' paid for by the state keeps really poor and unmotivated workers out of the labour pool and makes it more 'pure' for recruiting companies.
8. you really want unaccountable 'citizens' and town hall elected councillors (often unemployed or retired) to have more responsibility than accountable officials??

Heroine, well done and well put but you are pushing against ignorance with LFN.

that's alright :) I often find that many people who are knee-jerk anti-union are pretty naive about employment law, industrial relations etc etc. Worrying really!

TBH I sometimes think LFN is on a wind up, no normal person with an ounce of human empathy could post some of the things she does.

Doesn't matter who gets hurt, what services are lost. Doesn't matter who cannot afford their rent or mortgage due to the ConDemn actions.

Force people off benefits into non existent jobs.

Wants to change strike laws so as the union has to give 3 months notice and can only strike for one day at a time.

No right to strike for pay or to protect terms conditions.

It,s OK for Philip Green and other rich companies and individuals to avoid taxes they should morally be paying.

The world of LFN, Robothatcher :o

Heroine

1. The starting point shouldn't be what the public sector does (or even whether it is valuable), but whether it can be affordable and economically sensible in the long-term. If we can't afford a council swimming pool, we shouldn't have a council swimming pool, no matter how lovely (or, as is more likely, filthy) it might be.

It is prudent to have a big cushion in terms of private sector GDP over public sector GDP, to generate fiscal surpluses as a precaution against recessions. I think a public sector GDP figure of 30-35% is much healthier than 50%.

2./3. I very much doubt we are negotiating underpayment of taxes bigger than the deficit - the deficit is around £160bn. The biggest tax avoidance figure I have seen is around £40bn a year. I applaud tax avoidance, and will avoid as much tax as possible by investing in ISAs, bringing forward purchases to beat the VAT rise, etc. If I have a dispute with the Inland Revenue, and we come to an arrangement in my favour, I certainly won't voluntarily pay more tax. Big corporate tax avoiders like Vodafone and the Guardian Media Group do exactly the same thing - but prudent tax avoidance helps them be more competitive, which can help generate more jobs and growth. The law is the law is the law. If the government wants to prohibit certain avoidance strategies, it can do so. Indeed, although Labour decided to ignore closing loopholes, the coalition are closing many - perhaps going a bit too far and hitting competitiveness, in my opinion.

1. I am not denying that some public services are essential. We need police, armed forces, etc to be provided by the State. We need councils to organise and fund (though not necessarily run) rubbish collections. We need state financed social services. I just think the level of State spending under Labour ballooned out of all proportion, especially as after 2003, it was not financed from tax, but by debt. That is even ignoring the PFI elephant in the room!!

1. Good - they can continue to do so - but that doesn't mean we should throw good tax money after bad just to keep contractors employed. Serco and IBM do not rely exclusively on government contracts, and rightly so.

1. Public sector workers pay tax but they don't generate tax (except for a select few, mainly in the Inland Revenue and Treasury). They can also facilitate the payment of more tax - for example, if a surgeon cures a patient working in the private sector, enabling them to get back to work. By and large though, the public sector is a cost sink.

1. Again, good, but this is unsustainable without genuine, organic growth elsewhere in the private sector. The public sector workers either have to be paid through tax or debt.

1. I'm not even going to bother with this. This is just you arguing for the sake of argument - not a serious point, surely.

1. I want citizens to be increasingly responsible for their own actions, and that of their families and neighbourhoods - they can be responsible to themselves and those around them. And last time I checked, councillors were elected! If they have more power and responsibility, there will be more interest in local elections too. If we have more local referendums, local people will be able to directly control more policy.

Interesting but...

1. Council swimming pools - you are talking incorrectly about 'affordableness' If a council pool doesn't make profit, and is subsidised such that the takings don't pat for its operation, this can be down to many factors and not all of them sensible economics - pools that are only sustainable through profit aren't feasible - large international facilities (eg the pool in Manchester) would only either be financed by borrowing (which you seem against, yet the private sector borrows far more than the public sector - Orange PC took 25 years before it broke even) or not be present - and if they are not present, then we are not internationally competitive

1a Council pools being profitable is not sensible, since the delivery of council facilities is a service rather than a series of one-offs. One pool being unprofitable that closes is not providing a service to all - when buses were deregulated, the 'profitable' journeys were maintained at the expense of the service,and because people could only travel at 'profitable' times, they bought cars for all the 'non-profitable' journeys and never went back to public transport again, and you and all the businesses that use the roads want them to expand their capacity for free!

1. you forget that £40bn x 4 is £160 Bn yet even in your answer you cite 2 companies with huge tax 'avoidance' (though that point is a little moot - as some isn't true avoidance, it is negotiated evasion which isn't quite the same ethically). Tescos, Vodaphone, Sainsbury's, Vodaphone, Guardian Media Group, Sky.. etc etc the list goes on for companies who have negotiated bulk payments that represent a small proportion of what they owe. 160bn underpaid is representative.
2. Not as much as you think was financed by debt - most of the deficit comes from the bank subsidies (which we have yet to fully realise our profit on actually), as well as a devaluation of our currency against the Euro and Dollar helped along by the general election
3. Don't negate interdependence - it is a feature of modern economies
4. In order to judge if it is a cost sink or not you need to also do a value calculation, that you have neglected here - if economic value is higher than cost these are not sinks.
5. Not true actually, organic growth in the private sector does not necessarily contribute to profit-making enterprises conducted by the private sector - in fact in some cases shrinkage in private sector activity allowes public-sector fuelled profitable enterprises to thrive.
6. Plenty of business leaders acknowledge that having to manage difficult problematic mployees, the disabled, people who need flexible work patterns, alcoholic and drug addicted people, older workers, is less profitable than recruiting non-problematic workers, overseas staff and people they can exploit (I also argue that this is because of weak management skill in the private and public sector because of class issues (but will reserve that for another occasion) and that the benefit system keeps these people out of work OR stops these people becoming an extra cost in terms of crime, anti-social behaviour etc (which will absolutely rise if you cease to pay them a dependent income - see the states for high crime rates and high security costs).
7. Sorry but this is naive - I do agree that a more socialist community approach should be in evidence in our culture, but that is not the same as moving accountability from paid officials to volunteers If cameron's big society is to work, it can't be on the basis that all the difficult interim stuff is done by well-meaning but unaccountable people and only the easy quick wins are done by central government - we had a minor version of this idea in the late 80s and we had an absolutely awful country where racist, disablist, and class attacks were commonplace, where poverty was so normal it even had to become 'cool' so people didn't lose heart (remember donkey jackets being fashionable (and cheap cos they could be old council issue) on pair of doc marten shoes for school and one pair of trainers, as well as social drugs being glue and solvents?? That's pretty bloody grim for a nation like ours and that is where your philosphy is heading..

'remember donkey jackets being fashionable (and cheap cos they could be old council issue) on pair of doc marten shoes for school and one pair of trainers'

sounds a bit like Billy Bragg's dream gear

Haven't got time to answer all your points - need to sleep - but on the first.

I didn't mean that the swimming pool should necessarily be profitable. I meant that there was a long-term way of sustaining its funding.

If council tax is already too high, then although a swimming pool might be a wonderful thing in principle, it should still be cut. (Of course quangocrats, diversity officers, five-a-day co-ordinators, and other various left-wingers should be culled from the payroll first!)

On a fundamental level, though, what I am saying is that we should decide first how much we want to spend on public services, and then decide how to spend it. Instead, governments over the years have done - primarily Labour, but also Tory - is to decide what public services they want, and then worry about how to finance it. It is philosophically the wrong way to approach the matter of public finances.

Quickly on your second point, you do realise the deficit is the annual increase in our debt? So even if all the hypothetical tax avoiders paid £40bn extra a year, the deficit would still be £120bn - in other words, our national debt would rise by £120bn every year.

sort of stuff that is worn when singing "Whose side are you on?" and other similarly pretentious, dreary dirges.

Goodnight

"Socialists have this disgusting sense of moral superiority"

Socialists? That's where LFN's massive ignorance really shows itself. Anyone who is not pro reduced state role to whatever % she insists upon is socialist. Mad. I'm not not a socialist.

And "disgusting"? That's pretty potent inflammatory language. And weird anger too.

I believe in justice. There is no way the private sector ever tries to deliver justice and a fair way. That is where the moderation of other elements like the state and unions come into play.

And the total disregard for social justice is not good either. Because that's what she stands for. Hence the energetic questioning of her views. You espouse such bollocks extreme opinions, then be prepared to soundly defend them.

As for her background, I think people are genuinely curious as to what background produced such extreme - and they are extreme - views. If people choose to have a bit of a laugh - nothing malevolent unless you are extremely sensitive, then so be it.

I wish I could join in these intellectual debates

Dittany I completely agree with your analysis of how important unions are.

That is and should be there job - too protect their members interests.

However, I do question their role as a wider political force. Many union leaders would prefer to see an end to capitalism in its entirety and spend a lot of energy and time (paid for, quite handsomely, by their members) on pursuing this.

They would say, I'm sure, that this wider political pressure is about protecting workers. However, do they have a mandate from their members to pursue it?

I'm really not convinced that the average train driver actually wants to see an end to capitalism and globalisation.
He or she wants to work in reasonabale conditions, then go home and watch Sky TV.

The way many union leaders effectively ignore what their members actually think and want smacks of patronage to me.

I wish I could run the local council. Their waste makes me weep, especially with regard to jobs. Last week in the paper the redundancy (with appropriate golden goodbyes) was announced of two people, each earning £140K. £140K! And the irony is that their jobs were dispensable!

And also I met an "Obesity Officer". I asked her what she did. She said that her job description wasn't active yet because the committee needed to be set up "to discuss protocols". So then I persisted in asking what she was intending to do to cut obesity in the area. She got a bit belligerent and said that nothing could be done until the appropriate committees were in place and again went on about "protocols".

I think local councils should be drains and dustbins. The end.

Litchick.

The way union leaders the ConDems and more so the FibDems effectively ignore what their members voters actually think and want smacks of patronage to me.

Doh

The way the ConDems and more so the FibDems effectively ignore what their voters actually think and want smacks of patronage to me.

newwave - you won't get an argument from me about that...but that doesn't give the union leaders carte blanche to do likewise.

I recall a very heated discussion between my Mother and King Arthur about the sale of council houses.

Arthur was making a lot of noise in our constituency (heavy mining area) about the policy, and while my Mum had some sympathy with his views, she pointed out that a. it would be mostly local miners who would benefit from the policy and b. it really really did have absolutely nothing to do with him as an elected union leader, and he should not be using his time on the campaign, nor assume that he spoke for miners on that particular issue.

Litchick, I take your point and sometimes the posturing is unnecessary, that said if i was in bother with my company I would want Bob Crow in my corner.

Heroine

To answer the rest of your points.

1. The bulk of the deficit is structural. Why were we even running deficits in the good years - oh, that's right - it's because good old Gordon Brown thought he'd abolished boom and bust!

1. I don't negate interdependence, but that isn't a sufficient excuse to pay for public services we can't afford.

1. There is some merit in this viewpoint - I do agree that opportunity costs should be considered - but you still have to look at affordability. Looking at capital expenditure, building £200bn of new rail might be a fantastic "investment" over 100 years, and pay for itself many times over - but if the government can't raise £200bn on the bond markets without going bankrupt, then they can't and shouldn't do it. But fundamentally, public sector workers just couldn't exist without private sector tax take.

1. Whilst you might be able to come up with isolated examples, in practice the private sector is far more innovative and productive than the public sector. All the evidence shows this. The private sector almost always gets more bang for its buck.

1. I agree with that - but that is very different to your original point 8. There, you said that business actively encouraged the State to have high welfare bills. That is just ludicrous. Who do you think pays the tax that pays for the welfare?

1. I believe in society, but in David Cameron's hackneyed phrase, it is not the same thing as the State. In fact, Labour's attempts to institutionalise Society into the State make society less personal, and encourage a penpushing, protocol-obsessed jobsworth culture. I would argue that Labour's approach diminishes society, precisely because it makes it remote.

well 4. a. no government has run surplus since 1983 ish?
b. you are more likely to run a deficit in good years! this is when you spend income on imports to accellerate your growing economy (similarly you might accellerate your economy after a slump by going into large deficit as the country invests faster than it outputs as is happening now...

1. non-affordability is not necessarily a case for not spending a. investing in lean times means acceleration out is faster and longer b. if by not investing you lose all.. better keep investing (labour strategy fuelled by (largely tory) bankers and free-marketeers.

6,see above, if some of that expenditure is spent on foeign companies using UK raw materials it reduces the deficit just before it increases it (increasing it is not necessarily bad .. see above

1. It depends how what you value as productive and innovative - certainly the private sector is more proftable (again some variation in defining this is possible) but empty 'innovation' is not necessarily productive or profitable. productive may just as easily represent consisttency stability and persistent return on effort...
2. No I didn't say encouraged, I said benefitted from. the way tax is spent is the issue, not how much is paid so this is really a moot point.
3. you can't have accountability without either monitoring or evaluation (or indeed legal robustness) which requires pen-pushing I'm afraid (cf global gang economics for a better model of unregulated free markets).

Yes. The private sector most definitely always gets more bang for it's buck. By fleecing others. Private cleaning firms used in hospitals for one example.