Belfast Telegraph

Monday 24 November 2014

Vast gulf between two sectors must be closed

Today's public sector strike is being watched with mixed emotions by the private sector. There are many who back the right to protest over frozen pay, pension cutbacks and job cuts.

In fact, anybody who says if they were in the same position they'd lie back and take whatever cuts were thrown at them is being a little churlish. It's human nature to fight against such things and, if we didn't have the natural instinct to fight against what we believe is justly ours, society would be a much less civilised place.

But there are also many who see it as a little rich of the public sector to be protesting about hardships which those in the private sector have had to face for the last number of years.

Pay rises in the private sector are as hard to find as hen's teeth, pension cutbacks have been taking place in companies at a rate of knots for the last 20 years and contracting headcounts have become a monthly event in many firms.

In each case there are good points to be made but neither side can be blamed for the situation they find themselves in. Instead the responsibility lies with government for allowing the public sector here to race away from it's lowly paid, under-pensioned cousin.

It can't have escaped their notice that the gulf between the two is vast in Northern Ireland.

We've already talked at length on these pages about the 41.5% premium paid to public sector workers over the private sector, an area which George Osborne's review into regional pay adjustments in the public sector announced yesterday will help to address but that's only the tip of the iceberg.

Take pensions. Industry expert Geoff Clarke from Xafinity Consulting, writing in this newspaper yesterday, offered up some sobering facts.

The average public sector worker will receive a pension of £7,800 a year. For a private sector worker to receive the same income on retirement they would need a pot of £300,000. To match the likes of a head teacher retiring on, say, £30,000 a year they'd need £1.2m. Only 43% of private sector workers are in employer pension schemes of which only 15% are on a final salary scheme. The remainder have a pension pot of £20,000, a sum which would pay out £1,200 a year.

Enough said?

We're not in the business of railing against the public sector but we are in the business of pointing out the impediments holding back the private sector.

Until this imbalance in pay and conditions is rectified the Northern Ireland economy will struggle to build itself back up to being a force to be reckoned with. Each sector, private and public, needs to work alongside the other in harmony, not in two completely different bubbles.

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