Tuesday, March 16, 2010

Old New Same Old Labour

In another 5 years they'll have control of the police too

Once upon a time you knew where you were with Labour. They spent shedloads of your dosh on half-baked social engineering projects undermining the social fabric, they wrecked the economy, and they were hostage to the unions.

Then Old Labour got replaced by New Labour. They spent shedloads of your dosh on half-baked social engineering projects undermining the social fabric, they wrecked the economy, and they were hostage to the unions.Very confusing.

So it's good to see New Labour replaced by Same Old Labour. They spend shedloads of your dosh on half-baked, etc etc.

Labour's financial dependency on the unions stinks. The unions fund the party, and the party gives the unions millions of your money in the form of various douceurs such as the £7m so-called Modernisation Fund.

Even more damagingly, the party also gives the unions a whole raft of workplace regulation - like statutory paternity leave - that imposes a huge cost burden on business (eg the notorious Warwick Agreement, under which Blair gave the unions increased holiday entitlements, and they gave Labour £8m to fight the 2005 election campaign).

Of course, post-Thatcher, the big unions are now mainly confined to the public sector. We've blogged this many times (eg here), but here's the key chart showing how union density (ie the proportion of employees who are union members) is nearly four times higher in the public sector compared to the private:

Unsurpisingly, the public sector's strike record is much worse than the private sector's:

The TPA has just published an updated analysis of this strike record relative to numbers employed in each sector. They find that the average public sector worker is 15 times more likely to strike for a day than his counterpart in the private sector.

BA is one of the few big private companies with high unionisation, reflecting its origins as a nationalised industry. But there the similarities with the public sector end. Unlike our Old-New-Old Labour government, BA management have made it quite clear they are prepared to take the unions on.

And take them on they must. According to Tyler's correspondent airside, BA cabin crew are ludicrously overpaid relative to industry averages. Judicious exploitation of allowances can apparently bring BA long-haul cabin crew up to £70 grand pa, which is simply not sustainable in these straightened times.

Indeed, it's no more sustainable than the existing pay and conditions of our unionised public employees. As we've blogged before, whoever wins the next election will have to prune the public sector paybill drastically. It's now running at 15% of GDP, and must be cut. Some combination of redundancies, pay freezes, and increased employee pension contributions, will have to be imposed.

Now, does anyone see Bottler Brown suddenly turning into Willie Walsh?

PS So even the Big Government European Commission reckons Labour's budget plans are wildly irresponsible. They say “The fiscal strategy... is not sufficiently ambitious and needs to be significantly reinforced. A credible timeframe for restoring public finances to a sustainable position requires additional fiscal tightening measures beyond those currently planned.” We'll take a closer look at the EC report later, but this is a pretty clear vote of no-confidence, and sterling has already taken another downward lurch.

1 comment:

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