Andrew Mitchell’s foolishness is only a small part of the Government’s bigger image problem

Giles Marshall 11.11am

Andrew Mitchell is an arrogant fool who should have kept his mouth shut, adopted a bit of humility and did what he was told when he left Downing Street on Wednesday night.

He might thus have saved himself and the Government a good deal of trouble, but the fuss over his alleged outburst  is indicative of much deeper and more serious problems.

First, there has been an extraordinary sea change – yet to be fully remarked on I think – between the Tories and the police force. From the time of the Bobbies’ formation by the Tory Home Secretary, Sir Robert Peel, there has been an almost symbiotic relationship between the police and the Conservative party. It reached its apogee under Margaret Thatcher, but in the mere two years of the Coalition government it seems to have all but collapsed.

Theresa May was booed at the Police Federation conference, and the Met’s Police Federation Chairman, John Tully, has lately wasted no time in taking every media opportunity possible to condemn Mr Mitchell.

Now Mr Tully is an intensely political individual. The issue at stake is not so much to do with the way in which policing is conducted. It is far more to do with perceived threats to police pay and conditions. Yet whatever the cause, the Conservative party has opened up a front in their war on public servants that even their most pugilistic leader in days past never dared to.

And the police are only the start of the problem. All over the public sector, the Government is now regarded with little other than suspicion and even loathing.  Mr Cameron’s fine words about school sports during the Olympics were – for teachers – hollow sentiments expressed by a man who had presided over the denuding of school sport with such apparent complacency. Meanwhile, Mr Hunt is going to have to bind himself closer to health service professionals than he was even to the Murdochs if he is to have any chance of winning some of them over.

The “public school snob” is the unwelcome description being ascribed to Andrew Mitchell, and there is a real danger for the Government that this becomes more generally applied to them all.

Despite the fact that Michael Gove, for instance, was educated in the state comprehensive sector, or that Mr Cameron himself relied enormously on the NHS during the years of his first son’s health difficulties, the perception persists that this is a team of ministers that sees public services as being only for the poor and non-coping.

It is a disastrous perception. It widens the gap between the governors and the governed to an unacceptable level. Mr Mitchell’s outburst, meanwhile, suggests a sense of entitlement and superiority hardly merited by actions.

Mr Mitchell has made a further statement this morning, which has hardly closed the lid on the matter. Yet I believe that this furore will subside soon enough, with or without his resignation.

What is less likely to go away is the lack of empathy between Mr Cameron’s Government and the people. The recent reshuffle was more ‘lurching to the right’ than appealing to a centrist majority. If he wants to have any chance of recovering the political narrative and being re-elected in 2015, he should return to the modernising roots that served him so well in opposition, and hang the rightists.  Battles with his own right-wingers are infinitely preferable to battles with the wider British public.

Giles is a teacher and a former chairman of the TRG. Follow him on Twitter @gilesmarshall

Conservatives must convince people it is the disadvantaged in society they care about most

Dan Watkins 11.58am

With our history as a trading nation, Britain has long favoured open markets and economic liberalism. Even in the presently difficult economic times, a majority of voters still believe that capitalism is the best way forward.

But despite the Conservative party being the country’s foremost supporters of capitalism, over the past two decades it has consistently polled in the region of 30 to 40 per cent. So the party’s Achilles heel is not its economics, but its social policy - or at least the public’s perception of it.

Rightly or wrongly, the Conservative party is perceived as the ‘party of the rich’. Lower income groups are discouraged from becoming supporters, fearing the party is not interested in them. Furthermore, many better-off voters seek to allay their social consciences by shunning the Tories. The two diverse groups represent millions of voters but can both be addressed by focusing on the disadvantaged - and if done successfully could push the party above the critical 40 per cent level of support.

In fact, it is only the Conservative party that can truly transform opportunities for the disadvantaged - the people who most rely on the public services that are in urgent need of reform. The Labour party’s strong ties to the unions and the large swathes of leftist supporters within the Liberal Democrat party, prevent either from taking the radical steps needed to improve social mobility.

The Tories are unencumbered by those vested interests and care just as much about helping all members of society as any other politician. But crucially, it is the belief in policies that fit the grain of human nature that give the Tories a genuine chance of success. The use of the ‘carrot and stick’, or positive and negative incentive, is what needs shouting about.

For instance, with welfare we have long offered benefits to people when they fall on hard times. For some recipients the ‘carrot’ works and they soon return to work. But for many others, the money is taken with no serious intent of finding further employment. They will only respond to the ‘stick’ - such as the threat of enforced community work or reduced benefits.

Consider another area - education - where again we are putting sensible incentives into play. We provide positive incentives to children from poorer families by improving their quality of education received via free schools, academies and the pupil premium. Yet those pupils who do not respond, and who cause disruption, will now face newly-liberated heads who possess a greater range of sanctions for pupils and parents. Teachers will also face positive incentives in the form of differential pay, syllabus freedoms and greater powers in the running of schools - but also the threat of dismissal if they consistently fail to perform.

This can be applied to all public sector workers. The Conservatives sorely need to improve their support among this group at a time when necessary public spending cuts threaten to offer them only the ‘stick’, not the ‘carrot’ (such as decentralisation or mutualisation). Examples such as the Civil Service Pension mutualisation should act as blueprints for other state institutions.

Of course, Iain Duncan Smith and Michael Gove have already begun implementing such policies in welfare and education. But we need to spell out to people time and time again how these measures shall directly help families on lower incomes. Likewise for reforms to the NHS, local government and social services. The Government’s programme is not all about deficit reduction in the slightest.

The next three years offer many opportunities to focus relentlessly on the disadvantaged in British society and demonstrate to voters that it is these people the Conservative party cares the most about.

Does a vigneron in Rousillon shed a tear for the Greeks?

Nik Darlington 9.42am

Suppose that North-Eastern England, the region tending to be most heavily dependent on internal transfer payments, went bust, à la Grèce. Would the rest of England feel happy, or even obliged, to bail the region out? Of course it would.

Even if Scotland went belly up, despite all the rumblings of independence, the rest of the UK would come to its aid - as it did, for instance, to bail out Scotland’s biggest financial institutions (and the North-East’s, come to think of it).

But does a vigneron in Rousillon shed much of a tear for the Greeks? Or more to the point, a bank manager in Berlin? Or a station master in Stockholm?

The emotional flaw at the centre of the European Union is that however many years of postwar ‘good Europeanism’ there have been, Europe’s citizens (has that term ever felt less secure?) still feel the tug of the historic, the local and the familiar, more than the modern, the continental and the abstract.

A Greek default and eurozone exit makes dreadful economic sense, unless, perhaps, you’re Greek. Yet Europe’s emotions are directing the popular response, and, in the case of those northern Europeans with apparently unimpeachable morals, even the economic response too.

Follow Nik on Twitter @NikDarlington

Don’t forget Gordon Brown’s hand in Britain’s great big pensions mess

Sara Benwell 10.03am

Nobody can reasonably deny that public sector pensions need reform. They are unsustainable. We simply can’t afford them in their current format and schemes which require constant taxpayer subsidy, paid by those in the private sector who won’t be offered anything like the same schemes, just aren’t fair.

The other side of the debate, however, points out that private sector pensions aren’t all that great, and argues that yes, the disparity between public and private sector pensions is unfair, but why should that lead to a race to the bottom, where public sector pensions are forced to emulate the private sector, rather than lead to reform giving those in the private sector access to better pensions?

When put like this it almost seems intuitive: shouldn’t we be giving everyone access to a decent pension scheme rather than taking the private sector pensions model and using it as a benchmark for the public sector, meaning that they too will be faced with little or no access to proper pensions schemes?

This is the argument that the TUC general secretary Brendan Barber recently put forward, saying:

“Pensions in the private sector are deeply unfair, and making public sector pensions more like private sector provision has nothing to do with fairness. It is just part of a long campaign by those on the small-state right to cut public services.”

But the two arguments are being confused. While it is possible to argue that the private sector pensions model isn’t one to emulate, it doesn’t therefore follow that public sector pensions don’t need reforming at all.

The arguments for reforming public sector pensions still stand strong: they’re still far too expensive, they’re still unsustainable due to increasing taxpayer subsidy and for that reason too they’re still vastly unfair.

Furthermore, it’s clear that the gold-plated deal being offered to public sector workers at the moment, is a far cry from the private sector industry, so the argument that they’re just involved in a race to the bottom would seem to be overshooting the mark.

While this argument clearly doesn’t illustrate that public sector pensions don’t need reforming, or that the deal they’re currently being offered isn’t good enough, as some of those using it had clearly hoped, what it does highlight is that private sector pensions are widely considered to be not only a bit of a mess but also inadequate. This concept is worth exploring.

The UK’s private sector pension system used to be pretty decent. In fact, I even once heard UK private sector pensions described as the best in the world.

That was before Gordon Brown decided to cash in on the system and tax our pensions system into the ground. Crucially not only taking the decision to axe tax relief on dividends paid into pensions funds, but also doing so at a time when the stock market was at a low, causing a double hit on the funds needing to make up the income in other ways, causing a further downward spiral in the stock market.

The UK Pensions Crisis, a report from the TaxPayers’ Alliance and Terry Arthur in 2008, says that occupational pension schemes lost between £150bn and £225bn in growth as a result of the tax grab in the 1990s and that consequently, the Basic State Pension was down 20 per cent or more from its 1950 level, relative to earnings.

Furthermore, the report stated that in 2008 there were more than 17,000 retired public sector employees with retirement benefits worth £1 million each, while unfunded public sector pension liabilities were estimated to exceed £1 trillion, or more than 70 per cent of GDP.

Private sector pensions were treated as a cash cow, with Gordon Brown’s decision forcing companies to make up for massive shortfalls. It was this that led to the beginning of the widespread decline in final-salary private pensions schemes. Gordon Brown’s poor timing - a mark of astonishing economic and financial ignorance - only served to deepen the negative impacts on private sector pensions.

The 1990s tax hike led to a greater widening of the gap between private and public sector pensions. Amidst all the outcry about public sector pension reforms, what we need to remember is that private sector workers are subsidising public sector pensions. This is the inequality and unfairness that really counts, that public sector pension schemes are being bailed out by taxpayers, many of whom come from the private sector where they don’t have access to anything like the same level of scheme.

Follow Sara on Twitter @sarabenwell

The strikes are wrong, but Conservatives mustn’t ignore the fears of the public sector

Giles Marshall 7.50am

For the first time in over twenty years, the school I teach in will be hit by industrial action today.

About half of its teachers, my colleagues, will be sacrificing a day’s pay to make their protest against the whittling away of their promised pension.

None of them are natural activists. All of them are dedicated professionals who will not have taken the decision to lose a day’s teaching lightly.

And, of course, as we all know, they are not alone. Across the full panoply of public services, strike action is taking place, often at considerable inconvenience to others. The strike is wrong and misconceived, but it is important to understand why now, of all times, it has generated such extraordinary support.

There will be no shortage of Conservatives happy to accept that the strike action is wrong. Their opinions will range from the slightly head-banging approach that tars all public servants as time wasters and scheisters in overly secure jobs for limited working hours who wouldn’t know a day’s real work if it came and blatted them across the face, to those who believe public servants have a genuine grievance but have chosen completely the wrong method at completely the wrong time. As a state school teacher who is working today, I fall – not surprisingly – into the latter group.

I do not waver in my belief that the strike action is not only altogether mistaken, but that it also severely harms the reputation and image of public servants. At a time when those in the private sector are suffering job insecurity, frozen or reduced incomes and all the hardships that come with a lengthy economic recession, the image of the state’s workers downing tools and parading through cities to demand that more of the private sector’s cash should be invested in our pensions is jarring indeed.

That we have jobs with a hefty level of security, and that we have pension pots which, no matter how reduced, still exist and to which we pay only a proportion of the actual contributions, are all factors which striking public sector workers have put too readily to the back of their minds.

At best, my colleagues are guilty of naivety. At worst, they are reminiscent of the most blinkered of the Greek protestors who felt that it was possible to maintain a hugely generous state payment system without regard to the state’s actual wealth.

A feature of the pension that teachers and others have ignored is that they contribute barely 10 per cent towards it. The contrast with the private sector – or parts of it at any rate – will be seen tomorrow at my school. While some of my colleagues are striking to improve their state funded pension arrangements, the builders constructing a new classroom block will be in at their usual early hour to carry on with the work of construction. In the construction industry today, you don’t lightly surrender the work that you have.

However, having established why the strike is erroneous, it is also important to know that the reasons behind it are not without serious foundation. Not for nothing has this action encouraged thousands of hitherto mild public sector workers out on strike.

The comparisons with the private sector – unhealthily mythologised in some parts of the Tory party – wear thin. It is the private sector, and notably its banking arm, that has got us into this mess in the first place.

While the hitherto contractually agreed pension arrangements of public sector workers have been ransacked by the government to help shore up its faltering economics, the rate of vast private sector bonuses and rewards continues unabated, even in those banks which might be seen as the cause of all the trouble. It isn’t easy for a public sector worker on a comparatively low income watching all of this to understand why their pension pot should be reduced but the inflated salaries and bonuses of bankers and corporate chiefs should continue unabated.

If the strike is wrong, but the concerns of public sector workers are not without foundation, what then has gone so awry in the body politic as to bring back a level of state disruption which we thought had disappeared in the 80s?

The issue seems to be, at least in part, one of serious lack of communication from the government, coupled with a lack of empathy for the public sector (most leading Conservative figures have made their way in the various manifestations of the private sector, whether it is party bureaucracies, family companies or self-built businesses).

The failure to communicate the real value of the public sector pension is a first base error; I suspect few of today’s strikers really appreciate this. The failure to hold out some sort of reform of the private sector financial industry is another. Public sector workers could more readily accept the mantra that “we’re all in it together” if there was a more serious effort on the part of government to show that that in fact is the case.

David Cameron and George Osborne will not be seriously hurt by today’s action – at least not politically, whatever alternative arrangements they may have had to make for their children’s schooling today. But if they want to head off a long, simmering dispute with their huge public sector, they need to avoid the temptation to succumb to the public sector bashing that exists in our party, and try and engage constructively with the large number of public employees who genuinely do undertake their jobs as a commitment to service and are looking for some sign that they are not simply deficit fodder.

The strike is wrong-headed certainly; but that doesn’t mean the fears of the public sector should be ignored.

Giles Marshall is head of politics at a London grammar school. Follow Giles on Twitter @gilesmarshall

Why the Conservatives could lose in 2015 unless we value the public sector

Paul Abbott 6.03am

A defining moment of the 2010 general election was when George Osborne, at a private meeting of candidates and volunteers, said: "We didn’t lose in 1997, 2001 and 2005 because a few thousand people went to fringe parties. No. We lost because millions of people went to Labour."

This is the most basic and fundamental political insight for the Conservative party. It should be writ large on the wall of every Minister, Member, think-tanker and researcher. It should scroll across our PC screensavers, and be inscribed on our mobile phones.

Why? Because as soon as we forget it, we will all be back in Opposition again for another thirteen years.

There is a strain of language out there today that confuses a desire to cut the deficit with a dislike of the pubic sector. Thus we hear constant attacks on Civil Service salaries, or libertarian fantasies about a no-holds-barred economy. We hear endless calls for tax cuts for millionaires, but not enough about tax cuts for the millions of people on ordinary wages.

This has to stop. Many low-paid workers voted Conservative in 2010. 
In fact, in June 2009, of the public sector workers questioned who were “certain to vote”, Ipsos MORI reported that 32 per cent would vote Conservative, 29 per cent for Labour and 19 per cent for the Lib Dems.

Everyone wants the public sector to be good value for money. Of course this means thinning out the quangos and endless back office administration. But surely we are happy to pay for positive outcomes? What is wrong with higher salaries for nurses, teachers, university lecturers, immigration personnel and police officers, if they are doing a good job? If we do not pay good wages, how else can we persuade bright young graduates to become public servants, rather than City solicitors?

There will inevitably be some hardliners who say that this argument is soft, liberal sogginess. To them, I say this: remember 1997. And 2001. And 2005.

There is nothing socialist about standing up for the admirable parts of the public sector. One of Tony Blair’s great domestic triumphs was to rebuild the public realm, which had been neglected in the 1990s. This was a large part of his electoral appeal.

The first political office that Margaret Thatcher held was in the Conservative Trade Unionists. One of her first acts as Prime Minister was to increase the wages of rank-and-file police officers.

Too many dodgy PFI deals were struck and billions of pounds were wasted, but there was a genuine public appetite for things like better motorways and more police officers. Such public policies should not solely be championed by the Left.

This is so often merely a matter of emphasis. Many Conservative Ministers are already quietly finding ways to reward deserving public sector workers. Academies and Free Schools can pay good teachers more than the national union rate. Nurses can set up co-operatives and have a stake in the success of their clinic. George Osborne has protected the pensions of the lowest paid civil servants, and boosted their income by £250, despite a general pay-freeze. There are lots of other examples. But we need to make more of them. Champion them.

I accept that Britain is still too dominated by the public sector, and that we need to rebalance our economy. I accept that Labour wasted our money, and hopelessly ran up debts. I accept that Ed Balls in particular seems to have an almost criminal disregard for our financial stability.

But we are in Government now. It is our public sector. We should look after it.

Follow Paul on Twitter @Paul_t_abbott

Thermopylae it wasn’t, as 300 ‘strong’ Rally Against Debt fell flat

Alexander Clark 3.48pm

On Saturday, I attended the Rally Against Debt outside the Houses of Parliament. If you even knew it was happening, you might already have heard about the low turnout and the early finish. If this was supposed to be the start of a fightback against opponents of cutting government spending, the verdict must be that it failed. A high turnout was never likely but I expected more than 300 people.

The rally featured speakers such as Nigel Farage, Paul Staines (aka Guido Fawkes), Bill Cash and Matthew Sinclair. A low turnout was a blessing in disguise for the organisers because faulty loudspeaker prevented the few attendees from properly hearing anything they said. The amateurishness illustrated a cultural difference between the political left and right: no self-respecting left-winger would organise a rally or march without at least one functioning megaphone.

It is unsurprising that most people weren’t interested in attending an anti-debt rally. The coalition government spent the first six months in office making the case for cutting back on spending. With the exception of the most entrenched vested interests, the majority of people, according to polls, have already accepted that public spending must be brought under control.

Matthew Sinclair, research director of the Taxpayers Alliance, called for immediate and deeper cuts. I disagree - for reasons both political and economic, the Government is right to reduce spending gradually (or, in fact, reduce the rate at which spending is increasing). Higher levels of debt will be sustainable in the short to medium term so long as international money markets and creditors countries believe that the UK is a safe bet. So far the Government has succeeded in quelling concerns.

In reality, if the Government implemented some of the demands made at the rally, tens of thousands more people working in the public sector would suddenly lose their jobs. Despite predictions, there is little present evidence that the private sector is creating enough jobs to compensate. This is partly because high taxes and increasing inflationary expectations have squeezed disposable incomes. If the Government intends to reduce public expenditure it must take a longer term view and plan major tax cuts for individuals, families and businesses. This is likely to incur more debt in the short-term. However, soon the private sector will begin to revive and create the jobs needed to shift the workforce from the public payroll.

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Anonymous said: I totally agree with what Giles Marshall said this morning on here. There needs to be more funds for more trained people to work within the public sector. I'm a nurse working within Surrey PCT and I cannot complain about my pension. In fact the NHS has one of the best pensions out there in my view. What I do not agree with is that Lord Hutton seems to be saying "work for longer, work for less" which by no means will get people wanting to take up a vocation within the public sector. I count myself fairly lucky at the moment. I have literally just started working in the NHS so my pension is barely affected by these changes.

To be honest the people I feel sorry for in all this are people like my parents of which both work in the public sector. They have contributed to the pension scheme on the understanding that it was a final salary scheme and now with this change they feel totally cheated. They could have found better pensions had they known that their pensions would be decimated like this. However, they are both now in their fifties, their time to pay into their pensions and options are now limited. Therefore, changing their pension scheme is not really an option for them. So they will have to work longer which is unfair and to be honest rather cruel.

I agree, final salary pension schemes will drain the public sector eventually but the government have literally done one thing and gone and done another. You cannot "mess" with people's retirement, the money they have rightfully earned to retire with and then change it because NOW the government realise there needs to be cut backs.

Egremont editor:

Thank you very much for your comments. Sadly, there is nothing ‘eventually’ about it - the public sector is being drained now, and unfunded obligations are increasing every year. As people live longer, society cannot afford such lengthy periods of retirement, hence the increased retirement age.

Your point about “work for longer, for less” is fair but regrettably necessary. It is precisely what the private sector is having to come to terms with too.

Whenever big changes are made, cohorts will be affected more than others. This is sad but necessary if we are to have sustainable pensions for the future. At present, they are not sustainable and Lord Hutton’s review is thoughtful & correct. They are also reforms that any government would have had to make.