Retirement is a concept of the past

Opponents to the UK public sector strikes today are arguing that the public-sector workers all have fairly safe and secure jobs and get gold-plated pensions far higher than anything anyone in the private sector can expect. I heard on the radio this morning someone arguing that a teacher on £30k can expect a pension pot of over half a million pounds.

Supporters of the strike argue that there is a vast difference between the pension agreements of MPs and Whitehall mandarins and a frontline worker in a Job Centre. Also, they find it unfair that they signed up to a contract – that includes an agreed pension – and it is now being changed so they need to pay in more and work longer before seeing a penny. Public sector workers often argue that their pension is ‘deferred pay’ – they earn less in the present because they can get a greater pension.

There are examples supporting both arguments. It seems that never the twain shall meet. If you argue for reform, you are uncaring and not supporting the right of the public sector to expect the nice retirement they deserve for years of toil. If you support the public sector workers, you just fail to see the need for reform.

But isn’t the reality that retirement is no longer an option. It’s a dated concept. It’s something planned back in the post Second-World War era.

A male born in the UK in 1945 had a life expectancy of 63 years. A male born in 2001 had a life expectancy of 75. A male or female born today has a life expectancy of over 80 years (World Bank and UK Statistics Agency figures.)

With a retirement age of 65 in the UK, the state pension was designed to pay out a couple of years *after* the average male would have already died. Disregarding any tinkering with the retirement age and assuming it remains at 65 means the *average* person will have a couple of decades on state pension before they die.

If the state pension age had risen in line with life expectancy, people would not be able to claim a state pension until they are about 82 years old.

The unions don’t like this, and the employers (especially public sector) can’t face up to it either. The bottom line is that the post-war concept of retirement is not sustainable using the same methods to pay for it that worked 50 years ago. The entire system needs a top-to-bottom revision in both the public and private sector.

So the teachers can go on strike, and the government can hector them about needing to do something to help the reform, but the real reform is to wake up to the fact that we will all need to be working until later in life – unless you get rich early on and invest your wealth in paying for a future of leisure…

Students smashing shop windows in London

Students are tearing up London today. There are riots as a reaction to the government plans to triple the maximum annual tuition fee, from £3,000 to £9,000.

I can understand the depth of feeling. I think that as we face increased global competition, a country like the UK has to educate our young people if they are to compete. We can’t compete internationally with an uneducated workforce – low-cost skills can easily be sourced elsewhere for much less than they cost locally in the UK.

And I was recently working in Malta, the smallest EU nation, where they still pay students to study. Course fees are all covered by the government and the students receive a stipend… cash straight into their pocket. It used to be like that when I was a student in the 1980s, though I was studying right towards the end of the glory days when it was free to study and you got a grant just for being a student.

Tripling the cost of education when we need more educated young people is outrageous, but I don’t think any students have helped their cause today by smashing up London. Most people in the UK are more concerned about the 500,000 public-sector jobs that are about to vanish – and probably a similar number in the private sector that were supporting those public-sector people. That’s a million people on the dole soon.

Do the students really think that their desire to study for free is considered more urgent or important than millions of workers being cast out to the wilderness of unemployment?

The NUS can’t demand that Lib Dem politicians keep their pledges. Our electoral system created a coalition. That meant the two parties agreed to compromise and one of the pledges made by the Lib Dems was lost in the agreement. End of story. Do they really think that smashing up the city is going to get Nick Clegg to change his mind on this? And much as I sympathise with them, I’m afraid most people won’t be sympathetic… students tearing up the city and breaking windows while others lose their jobs.

Where do you think public sympathy is going to go?

Farewell British Airways

It was nice to know BA and to be a member of their Executive Club for many years, but with their ongoing battle with the ash cloud and now the battle against their own cabin crew, I fear this is going to be a battle to the death.

BA refuses to budge from the insistence that the changes they are enforcing are required, and the Unite union is insisting that the changes (particularly around the deal for new recruits) is unfair. It looks like both sides are prepared to go right to the brink and then to head over into the abyss.

Loyalty to BA is haemorrhaging amongst those I know who travel regularly. It’s bad enough trying to deal with all the random flight delays caused by the Icelandic ash cloud, but add a seemingly regular pattern of strikes and the chaos caused trying to get the service back to normal after each one, and there is not much hope for the future.

If the regular business travellers are giving up on BA and the union is going all out to bring down the firm then regardless of whether you support the striking staff or not, it really looks like they might be striking themselves out of a future.

First Class is now a two-week service

So the strike by Royal Mail workers is going to start at 4am on Thursday. Here we go again.

I have a lot of sympathy for the postmen and women who trudge the streets every morning. They work hard and they do a good job in challenging times. Their management seem to shift the goalposts regularly and engage in constant efficiency drives. I don’t know of many British people who would say that the post service has got better in the past decade, and it’s really the management that are to blame for that.

But times are changing. Almost all the mail being delivered is from one business to another, or from a business to a consumer. That’s really changing fast now, in fact so fast that there is no longer a correlation between the economic cycle and the amount of mail being sent – that always used to be an indicator of economic recovery.

And the government hasn’t gone for complete support of the postal workers or a complete privatisation either. So it would seem like the management and the government might actually like to see the postal workers out on strike, because it gives them both the right to take emergency action, whatever that may be…

All I know is that I went to the Post Office today and tried mailing three First Class packages. The clerk at the counter advised me that it could take at least two weeks for my packages to arrive ‘because of the strikes, we are all backlogged’. I asked her how a next-day delivery service can change to be a two-week service and all she could offer was ‘it’s the strikes’.

Even the workers are completely clueless when it comes to trying to earn some public sympathy for their cause.