Tuesday, March 23, 2010

Feeling The Pain

It has not been much fun working where I do in the last few years.  During the Summer of 2008 there had been a number of redundancies that had been horrible to be around, but nobody expected what was to follow in October 2008.  Of the staff in my office, about 25 of them (approx 30% of everyone) were called by name one by one over the tannoy to attend reception and one by one they were escorted off to a meeting room and informed that they had been identified as candidates for redundancy, they were to go upstairs to collect their personal belongings, turn in their laptops and phones and exit the building and they would be contacted within a few days regarding the details of the mandatory group consultation which would soon begin.

By 4pm that day the office was completely empty as we toddled off to the pub to join our fallen comrades.  I lost 4 colleagues and my manager from a team of 8 to redundancy in an afternoon.  (One colleague was lucky enough to be retained after a month of consultation, but alas was latterly let go in a later round of redundancies; just one month before his wife gave birth to their first baby.)

In February 2009 we were informed that there would be a temporary, but mandatory 10% pay reduction extending a six week period but applied to all employees worldwide.  The reasoning being that the company was forecasting that it would miss it primary targets, and though that meant it would remain profitable, it also meant that the banks that own my company through various credit agreements would exercise penalty clauses which would in turn mean there was no way we would hit the Q2 number, which would have lead to another fine which in turn meant we would never hit the Q3 number... you get the picture.  The board foresaw that if we missed the Q1 2009 number we might have a terrible year and they were clear that the company my not recover, or may have to drastically downsize further.  We took our medicine, and it was a bitter pill to swallow.  In the UK because we are salaried and receive a monthly payment it actually meant the whole reduction was applied to one months payment, so was 15% lighter than the one before and there were no promises it would be the last.  Being a newly wed of a one income house, it was not easy to endure.

Between April and August further redundancies were made but at a slower rate.

As a result of the staff sacrifice and downsizing we made that Q1 number and every subsequent target in 2009 and finished the year in profit.  Despite a drastic reduction in staff worldwide with no reduction in customer requirements nor overall workload we managed to find new ways to pick up the excess work and new ways of working.  Many of us spent much of last year arriving early and leaving late to do what we could to help.  One of my 4 colleagues that lost their job in October 2008 only managed their first day of work in a new job three weeks ago in March 2010, having not even managing to find temp work in the meantime.  This is not just my story, it is a shared experience of my friends and colleagues, and former colleagues. It is an experience that will not sound too unfamiliar with millions like me who are or were in the private sector in the past two years.  It has been horrible to endure, but despite the brutality we are in no doubt that if the company I work for had not of restructured it would not be in business today and instead of a third of us being out of work, all of us would have been.  We would not be taking on new heads today and looking at introducing new technologies and exploring new markets.

That is an unfortunate reality, and the private sector has felt the pain and companies that were not in a healthy position had to shape up or shut down.  We would all take back a Woolworth's or a Thresher's having watched them disappear, but we would have bemoaned the kinds of redundancies my company went through if they had of been announced in an effort to save those brands.

I understand the pain of redundancy, and the fear that I may soon face it - a fear that is still with me.  But, as a tax payer, I really cannot endorse the Government's inaction in not shrinking the size of the state, in fact I am angry that in the meantime, whilst the productive sector of this country, the bit that creates wealth and jobs and pays a hefty chunk of tax to the Exchequer the size and burden has increased to satisfy the political fetishes of Gordon Brown and Peter Mandelson.  The whole time the state is growing unsustainable, not only is the tax burden rising today to meet the wages and expenses of these workers, but also is the debt that must be repaid on the extra borrowing that is being extended.  Late in 2009 it looked like we would be spending more in debt payment in 2010 than we would be spending for all Armed Forces expenditure.  If we do not reverse this, now; I wouldn't mind betting that we will spend as much on debt as we will on the NHS which in a single year will far exceed £70bn.

Public Sector workers losing their jobs is inevitable, let us not stall and increase the overall cost at the expense of the economic recovery.  Where as my former colleagues could look to between 2 and 4 weeks salary to cushion the blow of losing their jobs, some junior and middle public sector roles are cushioned by 2 or 3 YEARS of redundancy payment.  My guess is that many of them are hoping for the call to come through.  It is a time-bomb waiting to explode, the people on these contracts cannot be supported on borrowed money forever, but we pay extra for not cutting now.

If there are two things I have gathered from my recent conversations with people from all ages and varied occupational backgrounds is that people want a BIG cut in the size of the state.  Secondly, people are angry at Gordon Brown and Labour for setting this whole situation up whereby we face the choice of a decade of heavy debt payments versus two decades of heavy debt repayments all mortgaged for no tangible benefits to the vast majority of people who live here, work here and pay tax here.  In more candid conversations the notion has been expressed to me more than once that we should affix to Gordon Brown a charge of criminality for his execution of the public purse.  A very popular notion that never fails to spontaneously invite participants to speculate upon suitable punishments for his crimes upon us.

Now imagine this is the lead story tomorrow morning:

Good morning. Here is the news. Because of the budget deficit, shrinking economy and untenable level of national debt, all public service salaries will be cut by an average of 13.5 per cent, with immediate effect. The charges will appear on your payslip as “government levy”, and will apply to frontline public workers in health, education, transport and local services and also to MPs, Ministers of State and the Attorney-General.
Judges will be, for the moment, exempt, but a mechanism is in place for voluntary payment of this levy. So far 72 judges have paid up. No undertaking can be given about when, or if, take-home pay will return to former levels. The severity of this measure reflects the good levels of public pay, security and pension rights compared with the private sector. Government regrets the pain this will cause, but regards it as essential. Thank you.

You don't have to imagine if you are from Ireland as this is what happened some months ago, as Libby Purves has set out tonight.  It is the remarkable but largely unreported story from across the way.  The Irish are showing us Brits the way forward.  Could you imagine if Gordon Brown sent around a communication announcing that everybody suckling from the public bosom must endure a 13.5% cut in pay - it seems pretty unimaginable, but the money has just about run out and it will not be long before the public sector stop getting paid on pay day.  Despite Ireland making the cuts, the hospitals and schools are still open, society did not collapse the sky did not fall.

It is exactly what we need here in the UK, and by not taking the lead on the matter Labour will not only leave office with the public finances in a state, they will have left the Unions well funded, highly connected and in prime position to disrupt any Conservative Government attempts to do what is needed.   Labour's first 8 years in power were funded because of the excellent state of the economy inherited from the Conservatives, but they not only drained the coffers, they drained the pension pot and indebted us for a generation.  This is their way of thanking you for electing them, and they would argue that it is what you wanted them to do.  The conservatives will be a spent force before the economy has recovered - this is not how things are supposed to be in a "free society" and it is not the background setting to a truly fair society.  

Labour, somehow, some way, must be made to pay a price for their criminal economic mismanagement.


1 comment:

cynicalHighlander said...

At least Ireland's government recognised the hole they were in and cut their own salaries first. Westminster feels that they are too important and (un)neccessary for the World to keep spining on its axis.