Ben Lowry: If Stormont politicians keep lifting public sector pay in Northern Ireland, many services will in effect be privatised
Enniskillen has needed a bypass for years, as have Northern Ireland towns such as Ballynahinch in Co Down.
But the plan for a road to relieve traffic in Co Fermanagh’s largest town has been shelved. It, and other congested towns, might have to wait decades before they get a bypass. Someone aged late 20s might, 30 years from now, approaching retirement age, still be waiting for such a road near them to be built.
If that sounds extreme, then anyone who is middle-aged – let’s say 40+ – should cast their thoughts back three decades to 1996 and reflect on the things that we thought then would have been done by now. For example, I assumed that a full dual carriageway Belfast to Londonderry would be in place by now.
The Enniskillen bypass plan was edging towards construction but is paused to find money for potholes and for public sector pay awards.
This prompts a simple question: which is more important, services or pay? Many people will answer ‘both’ are equally vital. But we can’t realistically prioritise both, and Stormont politicians are not even near to being candid about that. This will lead to many more problems such as potholes (even though the potholes themselves are now getting an emergency funding fix).
It will also lead to the subtle privatisation of many services. Look how dentistry has gradually been largely privatised. Is that a good outcome? That many of us get a higher salary but end up with no more money in our pockets because we are paying for things that were free.
We can’t prioritise both pay and services because you cannot have everything in society. We can have generous welfare states, as Sweden does, but then will have to pay more taxes (as Sweden does) or else cut back on things like defence (America spends huge amounts on defence, but less than Europe on welfare). But the assembly has tried to please voters by making sure we do not pay more, such as water charges, and instead shoved the tax burden on to businesses via hefty rates bills. Alternatively it goes pleading to Westminster (a footnote to unionists – when you join nationalists in such complaints it generates a sense that London can’t afford NI while Dublin can).
Another reason that we cannot easily have – for example – pay parity between Northern Ireland and the rest of the UK (including parts that have a higher cost of living) as well as first-rate services is that spending so much on salaries means less money for the service itself. In most businesses and government departments, wages are the biggest cost. This is obvious, yet has to be spelt out because our politics is not changing. We in the media often report on the symptoms of public service failure, not the cause – which is political pandering to ill informed public opinion that gets outraged at the said failures.
A third reason we cannot prioritise pay and services is that politicians have refused, both in Westminster and locally, to address the huge cost of lavish public sector pensions that only a privileged minority of the population enjoy (those who work for the state, which even in Northern Ireland is only 27% of employees). These pensions are ruinously costly in an age in which people are living longer (instead of working until 65 and dying at 70, they might retire at 60 and live to 90). They also make pay awards more costly (because already generous pensions go up too). They further fuel inequality between public sector workers and their less prosperous private counterparts, a gap that will become ever more stark.
The excellent economist Dr Esmond Birnie wrote on these pages (October 28) the ways Stormont could fund pay parity. One possibility was lower “quality of output” (worse services). I would go further and say that will certainly happen.
I intended to write a positive column today about how the first baby boomers turn 80 tomorrow (a baby boomer is someone conceived after Victory in Europe Day in 1945) but there is so much politics that I will write about that again. For now, I would say that it is a miracle that so many people are living fulfilled lives long past their biblical three-score-and-ten, but the strain on health, benefit and pensions is terrible.
Unless we are honest about the need to change how we provide things, how we fund them and the stage at which people are entitled to things like a free bus pass (Stormont cut the age from 65 to 60, instead of slowly edging it imperceptibly amid rising life expectancy). I would love to get free travel in a few years but such early perks will be unaffordable soon – and the loss of them will be the least of our worries.