Michael Fry; Axeing public sector jobs will be good for us all

In 1997 the richest 10 per cent of employees took home 28 per cent of all salaries and wages, a figure which by 2009 topped 31 per cent.

Meanwhile the share of the cake going to the poorest 10 per cent of workers stayed the same at 1 per cent, or even slightly fell. There are more than 30 million men and women employed in Britain, so each of these groups contains about three million people.

And this was an era of redistribution, so the government claimed, culminating in an orgy of public expenditure.

We can hardly avoid the conclusion that, whatever the answer to the problem of poverty in this country might be, spending by the state is not it. Tony Blair and Gordon Brown were, for all we know, sincere in holding the opposite belief. But the experience tells us they were wrong.

Sincerity is a quality harder to attribute to those following Blair and Brown in the leadership of the Labour Party. Letting power slip from its palsied fingers, it has left the coalition to clear up the resulting splat while monstering every effort to do so. But Harriet Harman's harridan screech ought not to disguise the fact she was one of the worst wasters of money. She would, anyway, if still in power, have been making cuts too. A period of silence from her and the rest of them would be welcome.

They should, meanwhile, reflect on what, since they failed to solve the problem of poverty, the actual results of their own policy have been. Notable is the creation of what amounts to an entire new sector of the workforce. We have had a big state in Britain for a long time, but one big in terms of central power rather than of actual people employed.

All that has changed since 1997. When New Labour came in, it had less than one million people working for it directly in the public sector. By the time New Labour went out, the public sector employed six million people – one in five of the entire workforce.

This new branch of the economy is a prosperous one. Average pay in the public sector is 22,400 a year, compared with 21,000 a year in the private sector. The better pay is awarded for less work: an average of 25 hours a week in the public sector, against 27 hours and 30 minutes a week in the private sector.

Would it be too cynical to guess the cushiest jobs are in the back rooms rather than the front line? Oh, and the public sector also gets three days a year more holiday.

Most starkly, the contrast continues into retirement. The public sector pays into its pension schemes a sum equivalent to 19 per cent of its salary bill, while the private sector can only afford 6 per cent.

And public pensions have been absolutely secure, while too many in the private sector have learned how even the most prudent provision can be wiped out overnight through no fault of the saver.

The situation might have been more acceptable if this new sector of the economy had been successfully doing what nobody had done before, that is, solving social problems. But the period of its emergence has not been matched by any such achievement.

The Rowntree Foundation, which monitors these matters, finds there are today still about ten million poor people in Britain, just as there were in 1997. There are five million entirely dependent on benefits, just as there were then.

One in six households is workless, the same as a decade ago. The number of young adults without qualifications remains unchanged too. Half the people living in council schemes still have to get by, after 13 years of New Labour, on low incomes.

And so on and so on and so on. We could multiply the random examples over a range of further indicators but the point remains the same: social problems have not been solved even while the huge new class of people created to solve the problems continues to prosper on the money extracted for that purpose from the rest of us.

They remind me of the Soviet nomenklatura, the caste of apparatchiks rewarded for its loyalty to a corrupt and decrepit regime by privileges of which the toiling workers could only dream.

The main means of keeping the show on the road was the suppression of freedom (and we had enough of that from New Labour too). For the new Russia, the way forward has been to destroy the power of this class.

That is the context in which we ought to read Osborne's budget. It is a hard one, of course, and meant to be so, if on the well-tried political principle that the most unpleasant measures are better got out of the way first while a new government still has a stock of goodwill.

Being hard, the budget is also easy to condemn as an attack on the poor, though it contains plenty of provisions to protect them from the worst too. The fact is everybody will suffer, and no section of society can be spared even if we should want to.

If it is not an assault on the poor, it is certainly an assault on New Labour's nomenklatura. With spending everywhere slashed, there will be no need of six million people in the public sector.

When Joseph Stalin wanted to get rid of a class, the agricultural kulaks, he had to murder them, but in modern Britain we need not go so far. Still, we do have to make it clear that middle-class people with good qualifications would be better using them in the private sector.

There will be difficulties, of course, not least in Scotland. Here we have a public sector larger than anywhere else, and even a private sector largely dependent on spending by agencies of government. This is bad for Scotland. We, too, would be better off changing it.

It may be perilous to invoke Margaret Thatcher, but in her time Britain did see a large shift from manufacturing to services, now being in part reversed.

The fresh shift required today from public to private is no more daunting, and it will be more beneficial.