The day before yesterday we looked at the different approaches to the health and financial sectors when large companies make mistakes. I agree with those who wrote in to say one of the worst features of banking was the way the state bailed them out instead of making them pay their own losses and sort themselves out, whilst protecting depositors rather than bondholders and shareholders. You may recall I was against the bail outs at the time. One of my reasons for opposing the equity bail out was the likelihood it would fuel resentment at bankers on a large scale. Today I want to look at the different approach we take towards serious error in the public and private sectors.
This week came confirmation that a young man died of thirst in an NHS hospital. Instead of responding to his expressed need for a glass of water, the hospital overrode his wishes and he died. Apparently they did not understand his condition which left him short of fluid, and failed to monitor it. The hospital has apologised profusely for its mistake, and accepted much of the blame.
Mr Cameron’s speech this week on welfare reform was a thoughful and important contribution to the debate about the future direction of welfare policy.
He acknowledges that welfare accounts for almost £1 in every £3 the government spends. He rightly wishes to be generous to those in need through disability or ill fortune. He also wishes to promote work as the best kind of welfare for most people of working age. He identifies many of the perverse incentives in the system.
There are 400,000 more people in work than in 2010 when the government was formed. This is good progress, against a difficult economic backdrop. The private sector has comfortably created many more jobs than the public sector has shed, despite all the dire warnings to the contrary when critics saw the forecasts for job reductions by government. Mr Duncan Smith’s programmes to help people back into work are having some favourable impacts. The numbers for both employment and retail sales also make one wonder how accurate the GDP figures are, as they tell a different story.
Mr Cameron says he wants to carry on with his welfare reforms to show he is on the side of “those who work hard and do the right thing” He wishes to end features of the system which trap people in poverty and “encourage irresponsibility”.
George Osborne will say that public sector employees in poorer parts of the country should have their pay frozen until it is brought into line with local private sector workers.
Mr Osborne originally intended to introduce local pay rates in April 2013, but has decided to bring the plans forward by a year in an attempt to boost growth.
The move is likely to be met with a furious response from unions, which are already threatening industrial action over cuts to pensions.
The Chancellor will publish figures that show that in some parts of England and Wales public sector workers earn almost a fifth more than those in equivalent jobs in the private sector.
The Treasury argues that the pay gap leaves private companies struggling to compete for the best staff against public sector organisations, whose workers also enjoy better pensions and job security.