In the private sector such final salary pension schemes and their associated benefits have largely vanished and in the small business sector they have never really existed. Money-purchase schemes and tax relief on the money you invest is the best you can hope for. You have no entitlement to a large pension but are at the mercy of the markets to how well the investments perform and on how much you put it. If you are lucky it may be a scheme promoted as a group one by your employer and it will have associated with it death-in-service and other benefits. Final salary schemes worked well when employees committed to an organisation for their working life job and career. But the workplace has changed people don’t stay with one employer for the course of their whole career as they used to. People chop and change. Not one job but many, not one career but many and chop and change in and out of employment into temping, freelancing, self-employment and to setting up and running a small firm themselves.

Consequently to those in the private sector it means not one pension but many and, to some, no pension. If your private sector employer only allows entry to the scheme once you have served two years then you may not even sign up. Each employer may offer their own pension and so you will be left with lots of pensions all in little pots and all with their own charges. Of course as you have changed jobs with the economic flow out of choice or necessity there is no TUPE agreement to carry your employment and pension rights with you, they end up being reset every time you change jobs. But in the public sector you can move around health service jobs, local government jobs and teaching jobs and keep the same pension and hold onto those benefits. It is a far cry from what can be expected in the private sector.

Back in 1997 education and health were in crisis with teachers and nurses leaving the professions in droves mainly because it was underpaid and lacked investment. In 1997 there was support from the public to pay for better public services and therein better salaries for these staff. We all wanted better public services and today no one is leaving these service in droves voluntarily. Alongside those pay rises for teachers and nurses have been huge pay rises for so called council CEOs and their senior officers and large pay rises for GPs and other health service executives. While it is true that these only represent a small minority it doesn’t appear like that in the minds of the public. Paying higher public sector salaries was meant to attract people from the private sector, but that hasn’t really worked. Instead, careerist senior public sector executives receive private sector salaries alongside public sector job security and generous pensions without the risk of losing their jobs because of financial failure or poor performance. They can use the excuse of facing greater public scrutiny and accountable, for example, recently the well paid chief executive of North Hertfordshire District Council threatened legal action against a campaign group for questioning their qualifications for decision making. Fat cats in the public sector undermine the argument for the rest of the public sector workers.

Like many others I never really understood that there was such a gap between the public and private sectors until recently. I realise that the public pension schemes work like a sink that needs to fill up as quickly as it empties. But as more work has been outsourced less money has been going in, with workers living longer, and alongside huge executive pensions for a few, it is draining faster than it is filling.

The average person on the street working for a small firm can understand the need for fair decent pensions for public servants. But it sticks in their throats when they think the extra taxes they will be paying will be to feather the nests of these well-paid officials and executives and also that they themselves are not ‘entitled’ to a ‘certain’ pension but they have to take their chances. Reform is urgently needed, but we need to be sure that unlike other reforms to help the low-paid (such as TUPE) the biggest beneficiaries won’t be the public sector fat cats.

People want in their hearts to support them; they want to be persuaded. They want to be won over, but to do so the public sector unions need to move the argument away from one about entitlement to one about fairness. To win the argument on fairness they need to target and address excess and indulgence of the well paid in the public sector and empathise with those in the private sector then and only then will they be able to start winning the confidence and support of the public at large.

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