Category Archives: Economy

“Call Centre” jobs are positive, not negative

It so happens a good friend who works at Concentrix had tipped me off about the 1000 new jobs announcement at the very moment I wrote this, but it rather demonstrated my point! Twice in the last few months an announcement of 1000 new jobs for Belfast has come; such announcements are almost unknown in comparable cities in England outside London and the Home Counties.

There is a tendency to “chide” call centre jobs. That tendency is an example of the negativity I speak of. Actually, Call Centres are highly pressurised environment; teamwork is essential; IT skills are necessary; managers are consequently comparatively well paid; and in many cases language skills are also necessary (with an added salary bonus there too).

Furthermore, they may be below average salary level but they offer a clear skills progression route particularly to people starting out in work. In an era where “starter jobs” such as check-out attendant are in dramatic decline, we have to be forceful to fill the gap. These are 1000 jobs which had to go somewhere. They could easily have gone somewhere else – to Cardiff, or Newcastle, or Bristol. They didn’t, they came here. We have to compete for such jobs to create that skills progression route, and compete successfully. In this case and others, we have managed that.

All of this is not to mention that Concentrix derives from Owen Lamont’s “GEM” firm, so is to a degree a story of local entrepreneurial success as well.

It’s all good! So let’s say so!

Northern Ireland leads the way on skills

I noted last week the usual vague Twitter rantings from the usual vague Twitter suspects about how good things are good, bad things are bad, and we need to “invest in skills” and stuff.

Here’s the good news – we already are. Of course, when you do invest in skills, the results are not seen overnight – it may take years, decades even. But yet again, we in Northern Ireland should stop talking outselves down. There can be no question that Northern Ireland is doing all the right things in this area.

Here are a few:

  • tuition fees are frozen maximising access to higher education (we already have the highest social mobility rates in the UK);
  • we have added 1350 additional Undergraduate places, all in STEM subjects;
  • next year, we will have delivered a 60% increase in relevant PhD places over a four-year period, all in economically relevant subjects;
  • we have focused not just on academic places, but also on wage subsidies for younger people in work (as well as reviews of Apprenticeships and Youth Training Schemes);
  • we have trained 8000 people in customer care in tourism and hospitality;
  • we are assuring the delivery of skilled workers for inward investors via bespoke training programmes.

These are impressive reforms which will inevitably work through into a vastly improved economy prepared to create wealth (and thus jobs) by focusing on the most relevant areas – an economy which works well both for indigenous businesses and inward investors.

One more thing for those vague ramblers on Twitter – you can only deliver such things if you’re in government

Stop kidding ourselves: we don’t care about the poor

What really lay behind the refusal of some to countenance that the average public sector worker needs to make a contribution to our recovery after the Great Recession wiped off 10% of our overall wealth as a society (see yesterday’s piece and “Defending the Public Sector isn’t Defending the Poor“) was the common lack of solidarity towards poorer people. This is far from unique to public sector workers – but in the same way that it is often church goers who are most uncharitable, it is often the “Left” who are most unwilling to countenance doing anything themselves or making any sacrifice to help the poor in a meaningful way.

This takes us back to a truth which underlies this entire blog is this: we don’t care about the poor (we really don’t), in the same way, as I wrote last week, we don’t actually care about democracy. We only care about what suits us.

Sure, we like to think we care about others. We talk a good game. But we really don’t. In fact, inherently, we think they deserve it – as one correspondent put it in defence of public sector pensions: “Sure, why should a barman be as well paid as me?”

Just look at the raft of policies which have gone through Stormont, or been pursued by parties claiming to care about the poor:

  • Rates caps – the working poor person struggling to get by in a house valued at 120k pays 100% of their rates, but someone living in a house valued at 800k pays only 50%;
  • Prescription charges – the working poor person now has to look on as health services are cut to pay for the medicines of high earners and wealthy who could easily afford a tenner to pay for their own;
  • Water charges – the working poor person has to accept that water infrastructure is paid from the taxes they struggle to pay (i.e. from cuts to other public services), whereas wealthier home owners who would be paying directly for that infrastructure elsewhere in the UK get away without spreading the cost on to poorer people here;
  • Selection – the working poor person has no chance of paying for coaching for the transfer test, and thus their children are at an inherent advantage from age 9 to those whose parents can afford coaching (in practice paying for it, when you can, is almost obligatory);
  • Free Transport – the working poor person has to pay every bus and train fare, quite possibly merely to make their daily commute to work, while the wealthy working person aged 60 travels for free;
  • Winter payments – the working poor person’s taxes also go to winter payments for wealthy pensioners who do not even want them; and
  • Pensions – the working poor person is almost certainly in the private or voluntary sector (perhaps a support worker, a carer in a care home, a customer-facing retailer, a community worker or some such) and probably has no pension, but was almost going to look on as the Assembly took £1 billion from their public services over the next Assembly term merely to guarantee the pensions of those on higher incomes (thankfully, sense prevailed on this one).

Is that list not shocking?! Of course, well organised professional people’s lobbies will always get their way – on rates, on education, on payments and whatever. The working poor person who has to spend what little time they have working overtime or caring is left with the sharp end every time. Do we not care? I wonder…

Here’s the thing: I am clear that I am not poor and that thus I should pay prescription charges, water charges, and for my own pension; when I’m older I shouldn’t expect early retirement funded by others, nor even free public transport or random winter payments; others (because this doesn’t apply to me, but I’d say the same if it did) should pay full rates regardless of house value, should not benefit hugely from being able to afford to coach their children through tests, and so on; and by the way I am also clear that we will all have to work to 70 at least, changing career to do it if needs be – teachers will become college lecturers or inspectors; nurses will become Health Board workers or trainers; some of us will have to work check-outs or take tourists around the sites to top up our income (many already do, after all).

Fundamentally: that means we will all have to look after our health, we will all have to save some of our money, and by the way some of us will have to give up on second holidays or second homes to put more into the system to aid those who can’t afford one holiday or one home without going into massive debt. After the Great Recession, that’s the reality.

But are those of us who are not poor prepared to do that? I doubt it! Some of us simply deny we’re not poor, even when we’re among the top 15% of earners! For others, whatever we say, deep down what we really believe is that there’s something wrong with those who can’t afford one holiday or one home. Even if we really really don’t believe that, we will still find some excuse for suggesting that this is all for someone else to deal with and not us because even if others cheated their way to wealth, we ourselves indisputably deserve what we’ve got and frankly that holiday villa on the Mediterranean is really an investment for later in life…

And that’s just the poor in Northern Ireland. What about the Chinese workers building iPhones on a couple of dollars an hour (16 hours a day) so that we can afford them; or making toys for a quarter of the wage of a graduate Civil Servant so that we can “boost retail” at Christmas? Are any of us campaigning for them to be paid “Living Wage”, or to have pension rights funded by us the Western consumer in return for their willingness to work for so little? Of course not. The thought hadn’t even crossed our mind!

And of course, as noted last week, we can stuff everyone in Crimea, so long as it protects our energy sources and property prices.

We should stop kidding ourselves. We don’t really care about the poor – and certainly not enough to sacrifice anything to help them.

Public Sector Unions’ lack of solidarity with poor disappointing

I was unsurprised by the wide-ranging response to my blog post two weeks ago entitled “Defending the Public Sector isn’t Defending the Poor“. What was interesting was that not a single negative response provided any evidence whatsoever to challenge the point of the piece – inherent within the title!

There is of course a case for defending the Public Sector per se – and indeed the Public Sector Unions should do it. This very blog has argued that too much administration is being foisted on to teachers; the treatment hospital nurses are expected to put up with is outrageous; and most notably of all all workers should have a reasonable expectation not to be injured at work, and that very much includes police officers. Contrary to some of the nonsensical abuse which followed the piece, I have in fact argued consistently for removing administrative burden from teachers and increasing their pay (relative to other workers); for fundamentally re-assessing the requirements placed upon nurses particularly with reference to the burden of proof during complaints; and for politicians to stand up for the basic right of all public sector workers to be safe in the line of duty.

However, the fact is (and Public Sector Unions don’t seem too keen on facts) that Northern Ireland suffered a 10% real-terms decline in living standards during the Great Recession, more so than anywhere else in the UK. It is unreasonable to the point of being outrageous that anyone would think that they can get away without contributing to the very real burden this has caused us all.

Yet, thus far, the fact is the brunt has been borne by the private and voluntary sector suffering job losses, reduced hours and lower wages. At the same time (and note this is not an attack, it is a fact – let us be clear about the distinction) no compulsory redundancies and no pay cuts of any kind in any part of the public sector.

Despite this, no one is suggesting compulsory redundancies or pay cuts for the public sector – a remarkable piece of solidarity with public sector workers on the part of the rest of us. The Assembly has merely decided that, given the appalling economic circumstances towards for which absolutely everyone else has suffered, public sector workers should perhaps need to save more for their pension in order that we do not all collectively have hand over a £1 billion out of the NI public services budget during the next Assembly term.

The shocking lack of solidarity shown towards the working poor (almost universally to be found among the two thirds of workers in the private and voluntary sector) by Public Sector Unions will not be swiftly forgotten. Alongside business organisations’ appalling failure to advocate swift moves towards higher wages in the private sector, the Unions’ protectionist attitude of a single sector at the expense of the rest of us is a prime factor in “Sector Wars”. We should be thankful that, however reluctantly, the Assembly did what was right so that everyone pays their way in our recovery from a Great Recession in which £1 in every £10 has essentially disappeared from us.

I changed the title in response to an entirely reasonable point made by a Twitter correspondent – the type of constructive criticism I wish I had more of on this blog!

Why Scotland is really interesting for NI

This time last month the UK Government and Opposition both told the people of Scotland “If you leave the UK, you leave Sterling”. They are right. That is the case. They even explained, in detail, why this is so.

To be clear, leaving Sterling would be disastrous for Scotland. No one is currently in any doubt about that. This is why the SNP is intent on not doing it. It is something of an irritation to them when people point out the truth that the way for Scots to avoid leaving Sterling is to avoid leaving the UK.

What is more, as noted here, it swiftly became apparent that the SNP was making it all up as they went along. “They’re just bullying and bluffing”, they said. For a party once so sure of itself, this was just ludicrous nonsense. Perhaps they have just given up?

Here’s the thing though: since that intervention, if anything, the SNP-led “Yes” campaign has gone up in the polls. How can this be?

Mr Salmond has always been a master at being in tune with the instincts of the Scottish people. Given the choice between certainty over their economic future while being “bullied” by “Tory toffs” on one hand, and uncertainty over their economic future while getting rid of “Tory toffs” on the other, he (and one of his party colleagues on this very blog, judging by comments left at the time!) reckons they may just go with the latter – however irrational that may be.

Looked at rationally, the case for Scottish “independence” as presented by the SNP is bust. But here is the thing: when it comes to matters of nationality and such like, do people always vote rationally?

It’s a good question. We’re about to find out the answer. It has ramifications on this side of the Sheuch, either way…

UKIP – United Kingdom In Pieces

A piece I authored for the European Movement NI web site, in a purely personal capacity.

UKIP provided a welcome reminder last week that it really is a bunch of “fruitcakes”, with its contention that recent flooding in the UK was God’s punishment for same-sex marriage. “Ah, no, it wasn’t UKIP who said that, it was one member now suspended”, Mr Farage may insist, but the fact is this now happens all the time in UKIP.

A more interesting aspect to UKIP came last year when its entire leadership in Scotland was stood down. Meanwhile, in Northern Ireland, its prospective European candidate in Northern Ireland also turned out to be a fruitcake with some, well, interesting tweets…

However, the real issue is that UKIP’s core policy would actually leave the UK anything but “independent”; in fact, it would leave it in pieces.

For varying reasons, there is no real support in Scotland or Wales to leave the EU. If it became evident that a overwhelming anti-EU vote in England could force the UK out of the EU, Scotland (particularly) and Wales may well opt out of the UK – not just because they want to remain in the EU, but also because it would be further evidence of how different their political interests are from England’s. It is possible that an EU exit would also see the constitutional question put back on the table in Northern Ireland in a way which is not currently conceivable (not least if there are ructions in Scotland).

In short, it is hard to see how the UK stays together outside the EU. That’s one for Conservatives and Unionists to ponder, surely.

Currency debate derails SNP

“A devolved government will always act with one hand behind its back. On that hand there are several vital digits, the most important of which is currency.”

“Control of its own currency is a country’s most potent economic weapon. It allows government to control the money supply, interest rates and exchange rates, all of which can have a profound and relatively rapid impact on our economic growth and economic competitiveness. A country without its own currency is a country not only without a steering wheel, but also without brakes and an accelerator.”

So wrote Mike Russell, Scotland’s (SNP) Education Secretary, before he came to office. He’s probably right, of course. That’s the problem.

Alex Salmond’s own Special Adviser, on the other hand, said the SNP had “always recognised the benefits of Euro membership” in 2009. Mr Salmond himself put enough on record that even he cannot deny he was once in favour of euro membership.

In other words, the SNP has supported a separate Scottish currency (“a country’s most important weapon”), the benefits of Euro membership (which they just happened to mention at the time when Sterling was weakest against the Euro), and now, within a decade, they have moved on to a currency union with the rest of the UK.

Meanwhile, Jason O’Mahony wrote this, nominally with reference to Europe but actually with reference to just about anything. The currency argument shows, more than anything, that the SNP hasn’t quite gotten used to the idea that, in chess, the other side gets to move too. The SNP tends to forget that, if Scotland were independent, the remaining UK will be independent too. In such an event all the “benefits” of independence would apply to Scotland, but also to the remaining UK. What is more, as it is Scotland which would have opted to leave the UK unilaterally, it would have walked away from the “shared assets”.

That means the SNP can talk up the benefits of a post-independence “currency union” all it likes, but if the remaining UK opts not to have such a union, that’s that. The terms of any “independence” are not for Scotland alone, or even mainly, to decide. This has been demonstrated during the past week – and those voting in September are unlikely to forget it.

What is more alarming still is that the SNP has changed its position so frequently. Once it was Republican and for its own currency; then it was vague and for the Euro; now it is Monarchist and clearly pro-Sterling (to the extent not just of pegging a new currency to Sterling, but actually forming a Currency Union). It quoted Ireland and Iceland at their height and opposed Sterling at its lowest; now it forgets about Ireland and supports the rising Sterling. Every time it has simply swum with the tide rather than developing a long-term plan. Even the case for “independence” comes back in SNP PR to the “bedroom tax” – a highly short-term issue which in any case Northern Ireland will avoid even while remaining in the UK.

This was, of course, all before Mr Barroso suggested it would be “difficult if not impossible” for an independent Scotland to join the EU. I was astonished at his phrasing, and to be frank I simply don’t believe him; but it is yet another example of how “independence” means the independence of others as much as the independence of self. The SNP accuses others of talking up “uncertainty” – but that’s what a yes vote entails.

None of that is to say there isn’t a case for “independence” (I’m quite sure there is), merely that the SNP’s is ridiculously inconsistent, alarmingly short-term and frankly bizarre. Why not just offer a Scottish Republic with its own currency?!

“Better Together” will no doubt point out simply that if Scotland wants to exert influence on the Sterling Zone’s monetary policy and remove any “transaction costs” when trading with the rest of the UK, it would surely be better to, well, stay in the UK.

For all that, others argue this has nothing to do with the economy and everything to do with identity. Out of interest Mr Russell, Scotland’s Education Secretary, was born in England; and Michael Gove, effectively England’s Education Secretary, was born in Scotland.

Labour’s 50% tax is just balls

Shadow Chancellor Ed Balls said his party would re-introduce the 50% top rate of tax, and as planned earned headlines for doing so. I have no problem with that, really (although it is worth noting that since the rate was reduced to 45%, tax revenues taken from the top 1% have actually risen). However, I do have a problem with his ridiculous assertion that this would enable him to ‘cut the deficit more fairly‘.

He has no interest in doing this – because (leaving aside the “Laffer Curve”, which he already has) if he did, he would either increase the top rate to well beyond 50% (a near impossibility admittedly; many correspondents have pointed out the psychology of that renders it not viable) or he would reduce the threshold at which it is paid.

Therein lies the point that no one in the media (though some readers of this blog) raised. Fewer than 1% of the population of the UK would be affected by such a tax rise (actually almost nobody at all outside the London area). For reference, they earn 13% of all income in the UK yet contribute 30% of all income tax – the implicit suggestion that if only the rich paid more tax we’d all be sorted needs to be put to bed.

If he were really serious about taxing “the rich”, he would pick more than the top 1%. So one has to assume, well, that he isn’t…

Defending the public sector isn’t defending the poor

Some who would claim to be left-wing thought it would be a brilliant idea to breach parity and thus take over ₤1 billion out of Northern Ireland’s public services over the next Assembly term just to subsidise public sector pensions at the current unaffordable level (that is ₤1 billion in addition to the money which would need to be taken from public services to pay for any additional pensions guarantees).

It’s as if by defending public sector workers’ pensions, they are defending the poor. The problem is, they’re not… they’re actually hitting the poor.

This is one of the outrageous mischievous untruths of our time. We all want money taken from “the rich” – yet none of us admits to being so!

It is easy to understand the frustration of public sector workers who find themselves working longer for less pension, despite themselves having contributed.

But then, it is easy to understand the frustration of the private sector worker who saw their salary slashed 20% overnight without warning. Twice.

It is easy to understand the frustration of the voluntary sector worker who suddenly found funding was being withdrawn from their project at the end of the current three-year term, and who didn’t have a pension or any back-up for their new-found unemployment.

It is easy to understand the sheer despair of the self-employed person who had to dip into their savings which they had intended to use for their pension at 65 to pay their mortgage and home fuel bill at 35, rendering them pension-less.

Not once has any politician publicly considered such plights; yet they are commonplace. Let’s hear those who think it’s such a good idea to toss away a billion out of our public services to pay for public sector pensions explain exactly what they’re going to do for those suffering these plights…

For the truth is that, in Northern Ireland, public sector workers are at the top of the income pile. Even their pay “freeze” saw their salaries consistently increase within scale. Not one was laid off, aside from voluntarily or through retirement. Next were the funded voluntary sector workers, who actually did have a pay “freeze”. Some found their projects ending and were left unemployed. Next were the private sector workers, most of whom took pay cuts in absolute terms, often heavy ones; thousands were laid off. About even with those were the long-term unemployed or otherwise economically inactive (say, carers and students) who in fact saw their incomes rise marginally (but not in real terms), but were often further caught in the dependency trap.

To put it simply, public sector wages are now 45% above private sector. You can try to get around that any way you like, it means directly and indisputably that the income of your average public sector worker is 45% above your average private sector worker (and of course even more ahead of those who cannot find work at all). So who, precisely, are the poor ones in need of state support and public service provision? Incredibly, the “Left” in NI would take £1 billion from public services (A&Es packed, school buildings crumbling etc) over four years – hitting the poorest hardest – in order to guarantee the pensions of those whose income is 45% or more higher (and many times more secure).

It’s all the private sector’s fault apparently, for not paying enough. That looks to me suspiciously like blaming the poor… I didn’t think those on the “Left” did that?

Why the sudden Conservative interest in minimum wage?

I noted yesterday my concern that the UK’s “economic recovery” is a dangerous illusion, and worse still that this illusion was being deliberately politically motivated. Perhaps I’m just cynical?

It is hard to be otherwise, however, about the Chancellor’s sudden conversion to raising the minimum wage beyond inflation.

To be clear, there is a Conservative argument for raising the minimum wage. It is fairly straightforward – if you want to make work pay (a fundamental aspect of welfare reform), then you have to ensure pay is high enough. A minimum wage of £6.80 would increase the differentiation between working and not working (albeit, frankly, relatively marginally).

However, crude politics is the main reason. By buying into a rise in the minimum wage, regardless of whether it is economically sensible, the Conservatives can trump another aspect of Labour’s election campaign.

What next – a reversal of the hated “Bedroom Tax”?! Don’t bet against it…

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