Change to electoral system would help women in politics

Last month Mairtín Ó Muilleoir replaced Sue Ramsay in the Assembly for Sinn Féin, which selected Catherine Seeley to run for Westminster in Upper Bann but omitted Caitriona Ruane in South Down. The percentage of female Alliance Councillors elected this year fell from 40% to 25%. Not only is the gender balance in Northern Ireland politics abysmal, but it is getting worse – even parties which have traditionally been among the best in terms of female participation are evidently not able to do enough through their selection systems to maintain progress. The BBC The View programme discussing the talks – i.e. the political future of NI – had an entirely male panel of five. This was not the BBC’s fault, but obvious evidence of the difficulty of giving a fair say to women in a political system which is overwhelmingly (80%+) male.

All parties should give more consideration to the need for gender balance in their selection processes, but there is no getting away from the fact that the entire political scene is set up by men for men, even if inadvertently. It is somewhat macho, almost thuggish at times (literally during a recent Social Development Committee meeting). It is the nature of things that if a bias is inherent to the system, those within the system continue to maintain and even assume that bias, deliberately or otherwise. Candidates should indeed be selected on the basis of merit – but “merit” currently assumes male domination. This is seen in the culture of debate, positions on policy, and prioritisation of issues. It is a serious problem.

Despite some successes at civic level, it is now beyond dispute that the “gradual” approach to more women in politics, or simply relying on parties to ensure more women are selected, is not working quickly enough. This leads us to the notion of “quotas”, but I would suggest another change before taking that ultimate step – I would change the electoral system.

Among Northern Ireland’s neighbouring legislatures, only one has an even worse gender balance – the Republic’s 13% is shocking in AD 2014. Scotland’s is considerably better; Wales is best of all at 40%. It so happens that both jurisdictions in Ireland elect their legislatures by “Single Transferable Vote”, whereas Scotland and Wales both elect theirs by the “mixed member proportional” (MMP) system. It also so happens that those countries which have moved close to 50/50 – primarily the Nordic countries but also New Zealand – also use MMP or very close variants. The evidence is clear.

MMP works via a party list system, which is used to top up the results from individual constituencies to ensure the outcome is roughly proportional to the number of votes cast for each party. Instantly, this means parties are inclined to submit lists which have a reasonable gender balance – to attract votes, it is in their interests to do so. Even if that doesn’t work, it would be relatively easy to make it a requirement, or even have a system to select top-up members so as to ensure not just correct party balance but also correct gender balance.

There is an additional benefit that MMP is a far better way to elect a legislature anyway as it is simpler for the electorate to understand and legislators are inclined to consider the whole area when passing laws rather than just their own locality – which probably explains why only Northern Ireland, Ireland and Malta use Single Transferable Vote, whereas almost the whole of Continental Europe and many other places use MMP or a close variant. However, the main gain would inevitably be a better gender balance within our legislature – a first step in making politics more relevant to the voters.

NI’s Stark Choices – response

The Belfast Telegraph ran a long article entitled “Stark Choices” last week which is worth analysing.

Governance

The priorities of the article are a little strange, objectively. The immediate focus is on the direct cost of governance, i.e. the operation of the Assembly. Yet in fact Assembly running costs account for only 0.4% of Current Departmental Expenditure – and Current Departmental Expenditure accounts for less than half all public spending in Northern Ireland.

Perhaps MLAs should take a “normative” approach and show some willingness to share the pain, but the fact is moving from 108 to 90 MLAs or reducing their Office Costs Allowance further would make next to zero difference in the general scheme of things.

Economy

The article refers to the “highs of 2007” and even hints at wanting to get “recapture” those highs, but this is a false analysis.

2007 saw an apparent (but at best unsustainable and at worst plain illusionary) “boom” based on huge rises in public spending and a property binge. The Northern Irish were at one stage spending more money per week than any other UK region, despite earning around 10% below average (and producing 20% less per head). Therefore, the economy was in a shocking state in 2007 based on mass borrowing which inevitably led to mass indebtedness (including negative equity) and a tougher recession than anywhere else in the UK. We most certainly do not want to “recapture” that!

In fact, wealth is created by innovation and export, not bureaucracy and asset bubbles. This means that we need more businesses focused on innovation and export to create jobs to cover those which will inevitably now be lost from our bloated bureaucracy. It is certainly true that a big issue for investors and entrepreneurs when choosing location is political stability – but so is global connectivity and workforce skills. Our record on those is at best mixed.

Health

The section on “Health” was excellent – there is too little journalism like it these days!

It should be noted, however, that the “£75 per head” extra spending in Northern Ireland still sees us spending less on Health as a share of overall public spending than England does, and the gap is increasing (now around 19% in Northern Ireland and Scotland versus 22% in England).

What we do spend on Health is indeed spent far too disproportionately on bureaucracy. As noted, there are 42% more bureaucrats in NI’s Health System than in England, but fewer clinicians and nurses.

There are problems with pay too. GP pay has soared in the past decade even though GPs now work fewer hours (the days of the midnight call-out) are passed. However, nurses are indisputably comparatively underpaid (not least because there are too few of them) – the gap in Northern Ireland between doctor and nurse pay is one of the highest in the world.

Another issue, common across the public service but most common in Health, is the poor standard of management. Management techniques are among the least advanced in the Western World in NI – the boom in agency staff is just one example of where it has all gone wrong; another example is the failure to evaluate transparently the development of many of the Transforming Your Care reform plans.

Education

The situation in Education is not as bad as is being suggested, but the article is fundamentally right about the shocking political mismanagement of the education system. An attempt to stop transfer tests merely made them more pressurised; an attempt to merge Education & Library Boards into a single Authority took eight years; and progress on integration is snail-like. Worst of all is the underlying idea that schools with different academic intakes should just teach the same curriculum, with no thought for vocational linkages.

The Past / Policing

It is a cruel truth that the vast majority would prefer police resources spent on the present, to the absolute exclusion of the past if needs be.

One area omitted from discussion in the article is prisons. A successful reform has largely been carried out, but costs per prisoner remain high. “Patten-style” reform would be a good idea in practice, but seems politically impossible.

Local Government

It is hard to see where the projected savings of £12-£21 million per year in the new Councils come from. Fundamentally, the same number of bins need collected, and the original ideal of “co-terminosity” (shared boundaries with the likes of Health Trusts or police districts) has been abandoned for the sake of a grubby political deal. There are also issues around staff in mergers which are likely to cost ratepayers more, not less; and this is before we get to the £30 million set aside to subsidise rates in areas where they are going up rapidly as a result of merger.

Infrastructure

What isn’t made clear in the article is that the Budget cuts are coming off Current, not Capital, spending. As noted, this means that reductions in the Regional Development budget affect maintenance, not new building. The Maze has only been stopped because of politicking, and proposals Desertcreat need revised.

Arts

Spending on the Arts was already comparatively low. They are seen as an easy cut.

They are in fact nothing of the sort. A vibrant arts scene is central to the quality of life of any city or region, and actually a big reason people choose to invest or not invest in any given location.

This is to leave quite aside that orchestras, musical societies and drama groups are almost universally effortlessly cross-community, and provide in particular genuine skills – from teamwork to presenting to project managing – for young people.

On the contrary, if we wish NI to thrive as an integrated society which wants to keep hold of its young people, arts spending should be dramatically increased.

Political Alienation

There is a tendency to see political alienation as unique to Northern Ireland. However, elections in recent weeks from Latvia to Romania to America have all seen turnout fall.

Frankly, we have all come to expect politicians to perform miracles. We elect people often with no experience of anything outside the entirely theoretical world of political research or similar, and demand that they deliver complex public services of ever higher quality despite increasing strains on resources but we will not pay a penny more for those services. It’s ludicrous – but the electorate gets the politicians it chooses (or allows others to choose), and thus has only itself to blame.

Equality

This is described in the article as a “hefty price tag”, but it really isn’t, at 0.1% of public spending for an area which was the crux of the civil rights disputes in the first place.

The real issue is not the cost but the quality of Equality advice and services. It is concerning that Equality and Community Relations are to merge when logic (and experience from other jurisdictions) would suggest it should be Equality and Human Rights. Community Relations are an entirely separate matter from Equality, and the conflation of the two damages each.

Baltic states will pay for failure to forgive and include

I would imagine it was a bit like visiting Northern Ireland in 1964. On the face of it, it was a reasonably prosperous place. There was this thing about Catholics suffering poorer housing, higher unemployment and something close to a lock out from some senior offices, but they seemed to have accepted their lot (and an attempt at a terror campaign had ended in total failure). It was a little odd that symbols were so obviously British and even Royal when so many of the population didn’t really support those things, but life seemed to go on. Yet there would just have been a nagging doubt that this exclusion may come back, some day, to bite.

This was in fact Estonia in 2004, and the minority was not Catholic but Russian-speaking – specifically, people from elsewhere in the Soviet Union whose families had been moved to Estonia post-War. They accounted for a third of the population (similar to Northern Ireland’s in 1964, actually), yet held just seven of the 101 seats in Parliament – a much worse proportion, in fact, than Nationalists in the old Stormont. Locked out of power, they were subject to citizenship laws which they were not involved in passing which required them to learn Estonian; to symbols which were entirely from the Estonian Nation’s past; and to a West-leaning (pro-EU, pro-NATO) foreign policy which they had no role in shaping. In many ways it was a super, innovative country… and yet there was this nagging doubt…

Now the problem is very, very real. And it is much more relevant to global security than Northern Ireland ever was post-War; or indeed that relative side shows like Scottish referendums. In Estonia now nearly a quarter of the population have a vote in Russian elections, which they almost universally cast for Vladimir Putin; they watch Russian television (which is just mass propaganda which makes Fox News look genuinely fair and balanced); they do not yet consider themselves Russians in a citizenship sense (note foreign correspondents re-assuringly), but you know what, they probably soon will…

With Russian cyber-attacks on Estonian computing (essential, as all government data and business is carried out on screen) and even now incursions into Estonian territory to kidnap soldiers, that nagging doubt has been realised multi-fold.

Compromise. Why do they never compromise? Why do they always think minorities can just be wished away? I’d like to think it’s not too late now…

MPs – it’s not all about you!

The recent private member’s attempt to introduce the power to “recall MPs” was alarming. Not only was it a ridiculous and inappropriate attempt at Americanization but, far worse, it completely missed the point of the public’s disenchantment with politics.

It is of course perfectly reasonable to expect (perhaps even compel) MPs to resign their seats if they have committed a criminal act. It is something quite different to enable an MP elected by the people of a constituency to be recalled forcing another by-election just because the voters suffer a bit of buyers’ remorse or because a special interests group gets a bit aggravated. They will get their chance again at a General Election soon enough – that’s how it works!

People are fed up with politicians – that’s to say, the whole shebang. They are fed up because politicians spend so much time talking irrelevantly about irrelevance. Take Ed Miliband’s recent claim that he would work “with every fibre of his being” to “improve working people’s lives” in Scotland… what does that even mean? What it means is Ed Miliband hasn’t a clue how to improve people’s lives – and people know it.

In fact, when asked about their own MP, most people are relatively content. However, the notion that, even when they’re not, people are going to take the time and effort to gather the signatures for a recall, only to replace that MP with another politician, is ludicrous. That there are some MPs who don’t see this obvious point rather demonstrates the very problem they alleged they were seeking to solve!

The first thing politicians need to grasp is they cannot actually solve all our problems. Very few of the problems I encountered when taking over attorney for my father as his dementia developed, for example, had anything to do with politicians. Even the over-officious bank officials or ignorant mobile phone company managers cannot be legislated or even regulated out of existence. At no stage, in fact, did it occur to me that a politician could “make my life better”. The same applies with other family issues I am current confronting; and with some of my business challenges; and with the various illnesses of those close to me. In fact, I have found public-funded voluntary organisations and the Health Service absolutely superb. I appreciate this does not apply to everybody, but I am also sure I am not alone in saying that the public-funded services I’m using are great – there’s nothing useful a politician can do for me. So let’s not pretend there is!

The second thing politicians need to be open about is that if they do intervene in one person’s favour, this may well disadvantage somebody else. If my client gets their message heard better than a rival, that’s good for me; but in government your role is to represent everyone without favour. So yes, you can avoid bringing it water charges to save me a few quid a month, but you may need to sack a few public-funded workers to afford to do so; you may decide to protect the type of investment that has secured a good friend a good job, but remove a few college lecturers to achieve it; you may decide to protect my friend’s daughter’s job, but stop another hard-working civil servant’s chance of promotion to do so. All of these may be good for me, but bad for someone else – or, of course, vice-versa.

The third thing politicians need to be frank about is that they are often reacting to global phenomena. The rise of China, the threat of Ebola, or even the collapse of Tesco have nothing to do with politicians (even the latter, occurring within their jurisdiction). Nevertheless they could have significant effects (or not). None of these effects was planned or even foreseeable when politicians sought election.

In other words, even relatively senior politicians are relatively powerless. The start to restoring faith in them is to admit it!

Reasons to be positive about NI

I often interject on this blog to write pieces about what is good about Northern Ireland. It is surely the case that we are at best humble and at worst plain cynical about our own homeland!

No one is doubting we have our problems, but I have written before about some aspects of our Health Service which are the best in the British Isles (such as our innovative work and networks on dementia or e-health); some aspects of our investment or tourist offering which are genuinely world class (say the remarkable boom in our creative industries about which the Game of Thrones is the highlight, something which would have seemed impossible a decade ago); parts of our education system (notably our change in 2007 towards specifying that children have to be taught decision-making – the outcome of which was highest marks in Europe and the English-speaking world for literacy and numeracy in a recent Boston College report). We are now a host for significant events – like the Giro d’Italia start, the Police and Fire Games or the MTV Europe Music Awards. That is leaving aside golfing greats, literature laureates and famous film stars all coming from this tiny spec of territory…

Much more important than any of that, I feel, is that we often reckon our foibles are somehow unique to us.

Our politicians are a joke – but then gridlock caused a breakdown in the finances of no other country than the United States last year; it caused Belgium to wait more than a year for a government this decade; and are we seriously suggesting the voids at Westminster or parish pumpers at Leinster House are a marked improvement? We don’t have leadership – but would we really want it from the likes of Francois Hollande or Silvio Berlusconi?

Our crime stories can be appalling. Every morning, seemingly, we wake up to yet another outrageous racist attack, disgusting arson threat or some depraved lunatic setting fire to an animal. It’s genuinely shocking there are so many deranged fools out there. But there is plenty of gang crime in Dublin or Limerick; murders by beheading in London; and a murder rate nearly double ours in Scotland. It’s a problem – but it’s not like it’s unique to us.

Our economy is a basket case. But then, no country in the UK pays its way. The Eurozone’s national debt is now rising to higher than that of the UK. Germany’s, France’s, Italy’s and Spain’s economies are all in recession – and, you know what, Northern Ireland’s isn’t!

I recently dashed to Central Station (admittedly horrendously named, a good fifteen minutes’ walk from the City Centre and don’t I know it!) in an effort to catch a train home after work on a Friday so I could have dinner with my lovely wife – her Council work often precludes this. As I got to the ticket queue I inadvertently muttered aloud “Come on, let’s get on with this!” – far from thinking me a fool, the kind young woman in front of me turned and said “Are you going to miss your train? Go on in front of me – I’ve been there myself in the past”.

Well, she probably did think me a fool actually (an entirely reasonable assessment, of course), but the point is she didn’t let it show! And the bigger point is I got my train just as the doors closed, I had dinner with my wife for the first time all week, and I got to think to myself “You know, there can’t be too much wrong with a place inhabited by good people like that”…

Benefits of bilingualism specific to certain types

We often read of the benefits of the bilingualism – notably to delaying dementia. Research is confirming this – but only in particular instances. The difficulty surrounds defining bilingualism or, perhaps more accurately, defining different types of bilingualism.

One issue is the distance between the two languages involved. This language tree is a particlarly good demonstration of how close – both geographically and historically – different languages of Indo-European and Finno-Ugric origin are. The evidence is if someone speaks two languages which are very close together – say Norwegian and Swedish or Afrikaans and Dutch – then the benefits are extremely limited. The difference has to be at least as great as, for example, French to Spanish.

Another point is the context in which a language is spoken. If, for example, a Portuguese person moves to Brussels and uses French professionally but Portuguese at home, the benefit is limited – because the two languages are used in different spheres. Indeed, literally most people in the world are bi- or multi-lingual in such a way. A Berber, for example, may speak Berber at home, Arabic for trade and French for administration. These are three distinct languages but because their use never crosses over, the “bilingual benefit” is significantly reduced.

Then there is, of course, the difficulty with defining “speaking a language”. The ultimate benefit accrues to someone who grew up speaking two languages all the time and continues to use them – say, someone brought up in Belgium by one Dutch-speaking and one French-speaking parent who continues to use both languages professionally and in general daily life. It is more limited – though no doubt still present – for someone who grows up monolingual but learns and regularly uses another language fluently later in life. Then there is the issue of what is “fluency”? There is a range of levels – from being able to order to meal, to being able to “get by”, to being able to hold a conversation, to dreaming in the language; and then competence varies depending on how often the language was used and when it was last used (for example my own Spanish was somewhere between “hold a conversation” and “dreaming in the language” at the end of the half year I studied there; but it has dropped back a level, perhaps more, since).

Ultimately, research shows the benefit is specifically this: people who, when using a particular phrase, are “blocking out” another phrase from another language (because they are fluent in at least one other language) get the benefits referred to – this is something which keeps the brain exercised and thus has significant mental benefits including delaying dementia by an average five years. If, on the other hand, they are not “blocking out” another language – because that language is already similar, or because they would never be using it in that context, or because they’re not really fluent in the other language – will find those benefits reduced, to close to zero.

Whatever, this is a very interesting area for further research!

The frustration of referendums

Full version of article for Stratagem NI written pre-referendum:

One of the fascinating aspects of the Scottish referendum, for me, was that it demonstrated the clash of cultures between politics and economics. The fundamental debate seems to have settled on matters economic – yet these are being debated primarily by politicians. The result is that people seemed to sense they are ill-informed and are thus growing increasingly irritated, rather than filled with passion and vigour.

Why is the focus on the currency? Throughout the campaign, polls showed around 45-50% of people certain to vote “no”, and 35-40% certain to vote “yes”. The “undecideds” were therefore crucial to the outcome.

It was expected, early on, that this would mean the focus would fall on oil revenues. However, it became rapidly apparent that oil can be argued either way – “yes” supporters argued it would make Scotland one of the wealthiest nations in the world; “no” supporters argued the oil will run out within a generation (implicitly leaving Scotland worse off than its neighbours). So the economic issue turned to currency.

It turned to currency mainly because the “no” campaign realised it could attack on the subject. Rightly or wrongly, it had long ago decided to “play for a draw” and go for an essentially cautious (perhaps negative) campaign, not least because its job has been to defend a fairly firm opinion poll lead since the outset. On currency, the main pro-“yes” party, the SNP, was clearly divided – in 2004 current SNP Education Minister Michael Russell drafted a book outlining that the first requirement of Scottish independence would be its own currency; as recently as 2009 SNP advisers briefed that they may move to a pro-euro stance; First Minister Alex Salmond settled in the end on a “Sterling Union” with the Continuing UK similar to the Eurozone, but found all three main UK parties and the UK Treasury publicly opposed. The “no” campaign wished to promote the risk and uncertainty inherent in independence, and nowhere is this more obvious than on the currency it would use (and it is possible that Mr Salmond’s “three Plan ‘B’s” may, in the cold light of day, inadvertently have served to highlight that risk and uncertainty further in voters’ minds).

All of this serves two linked warnings about referendums which may soon apply across the UK. The first is that politicians are most comfortable when they are banding figures around and making grand economic warnings; the second is that, when they do so, there is no referee to determine the veracity or legitimacy of these figures or claims. This can turn referendums, supposedly the ultimate exercise in representative democracy, into events of great frustration and disenchantment.

As we look forward, the same warning applies to a potential ‘in/out’ referendum on the European Union. Already, we hear dire warnings from “in” campaigners about the millions of UK jobs which “depend” on EU membership; and equally dire claims from “out” campaigners about the “£17 billion” that constitutes the alleged “cost” of that membership. Most alarming of all, perhaps, is the way that each side will show absolute faith in their own side’s case, and give no credence at all to any of the other side’s. The people who determine the outcome, therefore, are people in the middle who merely become increasingly confused and disenchanted by the claim and counter-claim being thrown about by either side – that would apply to any EU referendum across the UK just as it does in Scotland currently.

We in Northern Ireland are familiar with the notion, currently being experienced in Scotland, that our side is completely right and the other side is completely wrong! It is small wonder that many people of more moderate view in Scotland came to regard themselves as insufficiently “informed”. They are! Unfortunately, we needn’t expect anything different in a prospective EU referendum across the UK later in the decade.

Left must cure its anti-intellectualism

This article isvery good for a number of reasons,but one is the issue that the Left becoming increasingly “closed“. Anti-intellectualism is a feature of “closed” politics, as is entirely obvious

The real issue, as expressed on BBC Newsnight by prominent American political philosopher Michael J. Sandel on Friday (the day after Russell Brand’s vague lunacy), is more that Western politics has become preoccupied by comparatively minor issues to which it takes a managerial approach. Hence, it is irrelevant.

As Russell Brand failed to provide any answers on BBC2, BBC Question Time gave yet another platform to UKIP’s “closed” and simplistic garbage. However, for once its representative was for once entirely overshadowed by a Trade Unionist, who treated us to a truly appalling demonstration of “closed”, unreal, anti-intellectual nonsense. Nominally he may be “Left” and UKIP may be “Right”, but the answer to anti-intellectualism is not more anti-intellectualism.

We were told that £120 billion is lost to the UK in “tax evasion” – a figure which, by definition, we cannot actually know but which we can reliably guess has been reduced under the current Coalition as convictions for tax evasion have increased by one third. We were told that £40 billion is lost in “tax avoidance” – except tax avoidance is perfectly legal, rendering this figure actually zero (actually the UK has one of the most efficient tax collecting regimes in the world). And to crown it all we were told that the banks are “holding” £500 billion – ignoring the fact that it’s not their money, it is the role of banks to hold money (at least 10% of deposits by good practice and convention), and that the very Credit Crunch was precipitated by the banks not holding enough money to cover toxic debts (the average UK bank had reduced its holdings to less than 2% of all deposits by 2008 – truly crazy stuff which enabled an unsustainable “boom” fuelled by bad debt).

it only got worse because, for all its apparent openness, the SNP also belongs to the ranks of the “closed”. Its outgoing Leader Alex Salmond, he of “decisions in Scotland should be made by the people of Scotland” fame, treated us to an outrageously hypocritical treatise of NHS England. In it, he failed to take account of the extra money the Coalition has borrowed to put into Health which has then been passed on due to Barnett Consequentials to Scotland – because he would have had to admit the SNP hasn’t spent all that extra money on Health; he failed to note that the protection of Health funding in England has seen the share of public spending on Health there rise to 22% – probably because he may have been asked to confirm that his own government has reduced this share in Scotland to 19%; and he castigated the Coalition’s desire to reform Health to make it more efficient so that the principle of free access can be maintained despite an increasing financial strain caused by an ageing population – despite the fact his government has an even bigger black hole to fill because it hasn’t carried out similar reforms, it has reduced funding comparatively, and it has not taken account that the strain in Scotland is more acute than anywhere else in the UK because its population is growing more slowly and ageing faster. Had Mr Salmond had his way. Scotland would have been the sovereign state with the lowest life expectancy in Europe in March 2016 (it is already the UK region with the lowest) – and its First Minister is telling the rest of us how to do it?!

There we had a Trade Unionist and a First Minister engaging, supposedly on behalf of the “Left”, in outrageous, anti-intellectual fiction. No wonder so many people are disillusioned by the whole charade!

NI parties must recognise need to reform welfare

Irish Nationalists think the UK’s welfare system as at May 2010 was absolutely perfect.

That is the logic of their current position in Northern Ireland. Much has been made of how Nationalist opposition to matching welfare reforms being carried out in Great Britain is leading to mass pot holes, delays in cancer treatment and increases in housing rents – all of which is probably true. However, rather less is being made of a more obvious point: Northern Ireland’s current welfare system isn’t fit for purpose, doesn’t work, and therefore obviously needs reformed. In fact, to be clear, Northern Ireland parties, if they opt against Great Britain’s system, are obliged to design their own and would be perfectly at liberty to do so without losing ‘parity’, provided it was designed to achieve the same outcomes as the one in Great Britain.

The truth, in Northern Ireland as in Great Britain, is this. As each generation goes by, proportionately more people are caught in the welfare trap, spending almost all (or even all) their adult lives on benefits. At the same time, the system has become so complex that many who are entitled to benefits and to whom the system would provide a useful safety net are deprived of access to it. Others, meanwhile, who are willing to work and who would gain from the social networks and self-esteem of doing so find it entirely financially unviable to do so. What kind of ludicrous system is that? Yet it is the one Nationalists have chosen to defend and indeed to try to implement (remember, Northern Ireland must implement its own system if it breaks from Great Britain’s, even if it happens to be identical to the old one) – and that is the key point here.

It needs to be pointed out, decisively, that lazily seeking to re-implement a broken welfare system which creates an ever more hopeless “client state” of people for whom benefits are a way of life is indefensible. Welfare was designed to be a safety net, not a way of life – and reforms are necessary to return it to doing what it was designed to do. This has nothing to do with “cuts” and everything to do with helping people live the most enriching lives they can – something the current system actually inhibits in many cases. (Note again here: even if we accept that in addition to the reform programme the Tory-led government is introducing benefits “cuts”, Northern Ireland is quite at liberty not to introduce such “cuts”, and in fact to invest more in its own reform programme. That would require our MLAs to explain what reform programme they will carry out and what else they will cut or where else they will raise revenue to make that investment. Has a single MLA done this?)

It also has to be pointed out that Nationalists are refusing to govern. Government requires compromise, not grandstanding for partisan gain. Even if they fundamentally believe the old system is perfect, they must recognise that others don’t and seek a deal accordingly. Instead, they are playing into the hands of those who wish to reform the system radically by refusing to operate the current system and thus threatening to collapse it (the benefits system, not the Executive) altogether.

So the challenge has to be clear and from all quarters: why are Nationalists seeking to put back in place a Welfare System which stops people from living enriching lives and fails comprehensively to meet the goals for which it was established? Let us hear from them what is so wonderful about that broken system that it must be re-implemented, almost literally, at all costs.

And while we’re at it, why are Nationalists refusing to govern, especially given this is a system they largely created in the knowledge that it requires compromise? Let us hear from them about why the current system of devolution should not be reformed (another area where Nationalists are universally unwilling to see reality or compromise), when they have failed to operate it in good faith. Those are the real issues here.

The West’s economic (and democratic) meltdown explained

Bankers, immigrants, the rich, the poor… it’s easy to single out a group to which we don’t belong and blame it for our economic ills. How about, instead, we deal with what has actually happened? Of course, what has actually happened is complex, but it is worth trying to simplify it…

The average Western household now contains six times as much “stuff” as it did in the 1950s.

The West has been on a consumer binge, starting in the late 1950s. As of then, most Western countries have run at a loss – both in terms of Balance of Payments (importing goods and services to a value greater than they are exporting) and in terms of National/Government Deficit (spending more on public services than they are raising in tax revenues). Of the three big Western Allies – the United States, the United Kingdom and France – not a single one has managed a balanced budget since 1962 and not a single one has managed a trade surplus since 1975. How can this be?

13% of US Federal Reserve borrowing comes directly from the People’s Bank of China.

The victorious allies after World War II went on this binge while the defeated powers ran surpluses and became economic superpowers. The standard of living, regardless of how measured, rose in West Germany, Japan and even Italy to exceed that of the United Kingdom or France by 1990. After the Fall of the Wall, while Germany and Japan stuttered and Italy’s economic fortunes went into reverse, they were replaced by China.

Then something arguably unprecedented in the history of the global economy happened. The rich world not only began to run a trade deficit with the poorer but growing economic powers (as the United States, United Kingdom and France had done with West Germany and Japan effectively in post-War trade), but it actually began to borrow money from them directly to fund public services and welfare provision. For a decade or so from the mid-1990s this option was beguiling for all concerned – China lent the United States money, and that fuelled a consumer boom with which Americans and those who traded with them most frequently (above all the British and other Europeans) bought Chinese goods.

In the Far East, you save up for your own Healthcare and Welfare provision.

With the money thus borrowed – not just by governments but also by corporations and households – the West (except Germany) went on a consumer boom and paid for welfare and health provision none of which it could actually afford on the basis of goods/services traded or (thus) tax revenue raised. The difference was made up from money borrowed both to raise tax revenue from consumer booms and directly by governments – largely, as noted above, from countries (notably in the Far East) with no heritage of government-funded health or welfare provision. Those countries could afford to lend because their people were starting from a much lower wage level and were grateful merely for the increased wages that exporting to the consumer boom gave them. In the Far East, it is typical for people to make their own savings for Healthcare and retirement, and for Social Care to be provided by the family unit.

Health and Welfare typically account for two thirds of public spending in the West. Therefore countries which do not fund this from public spending – like China – only need to raise at least a third of tax revenue per capita in order to have money over to lend to countries which do. The bizarre outcome of this is that far poorer countries (per capita) end up subsidising services in far richer countries which they do not themselves provide – but we need to understand that this is only temporary, because the money comes in the form of loans and they themselves will soon come under pressure to provide those services.

Property prices in the English-speaking world have more than doubled in real terms in the past 35 years, but have remained stable in German-speaking Europe.

The consumer boom in the West, meanwhile, hailed a property boom, particularly in the English-speaking world and Spain, where property ownership is culturally the norm. Pressure on banks to fund ever increasing property prices while expanding property ownership to the masses (as “ownership” came to be seen almost as a “right”) led to ever more complex financial “products” where dodgy loans were bundled up with more secure ones and sold on, effectively as an insurance gamble. Globalised banks – even outside the English-speaking world and Iberia – got involved in this high stakes game of musical chairs and in 2007 it was in fact a French bank left standing when the music stopped. Somebody should indeed have noticed that these schemes were becoming vastly and ludicrously complex – but then somebody should also have noticed far earlier on that a single parent in the American South with four children and no education probably shouldn’t be getting or even seeking a mortgage. Most of the people who had funded and insured that mortgage (and countless others like it) didn’t even know they had…

The result was a calamity as a property prices crash meant households could no longer borrow against property, a run on the banks meant businesses could not get credit from them, and thus consumer spending and collapsed just as businesses needed it most. This then saw a knock-on collapse in tax revenues just as governments needed more money to nationalise banks.  The central issue was that, in the English-speaking world and Iberia, property was effectively being traded in a different currency – whose value then crashed meaning that anyone who had savings in it (a lot of ordinary people, frankly) got burned and anyone relying on them to pay off debt, invest in businesses or provide vital tax revenue got burned as well. (This applied right across the Western World regardless of where the mortgages were because its banking system is so interconnected.)

Overall UK debt is now approaching seven times GDP.

There is a lot of focus on “national debt” – but this applies only to public spending (exactly what that means varies from source to source). The UK’s national debt is indeed atrocious – soon to be more than two whole years’ tax revenue – yet actually by most measurements it is now fairly average in the West. Where the UK is truly awful is in overall debt – add in households debt (say on cars or holidays or new kitchens as well as mortgages) and corporate debt, and the UK’s overall debt is among the worst anywhere in recorded history.

Here is the thing: much of that “national debt” is already borrowed from Chinese interests. Much of the other debt has been accumulated buying Chinese products – from toys to smartphones.

Want a bridge built? Ask the Chinese!

In other words, what has happened over the past 20-40 years is we have been borrowing money from the Chinese (and others) to buy their products. We did this because we thought they were cheap – but having bought them, we are now going to have in effect to buy them again as we pay the debt back.

In the meantime, remember, the Chinese have been subsidising our Health and Welfare systems but they are just reaching the point where they will want those themselves. In effect, this means we will have to subsidise theirs, from now on  – after all, we are the debtors and they are the creditors.

There’s worse (from a Western perspective), because the really crucial point is yet to come.

Recently, San Francisco had to rebuild a major traffic bridge. It sought tenders from within the United States for the work, but all involved closing the bridge entirely while reconstruction took place. So they looked globally and, sure enough, a company came forward to build the bridge while maintaining the current one in place for the duration of the work – from China. Remember, the work will be paid for, in part, by money borrowed from China in the first place.

Long story short:

To cut a long story short, what has happened in the past 20 years is the East has lent the West money to maintain a lifestyle – with property, employment rights, taxpayer-funded welfare/pensions and government-funded Health services – that is highly civilised but that it has not actually earned since at least the 1970s Oil Crisis. The East has gone without all these civilising things, but has used the situation to export goods and services of increasing value to the West, thus raising its own wages and (particularly) expertise. As the East’s expertise now exceeds the West’s, it will expect its wages to do the same – creating perhaps 2 billion more “middle-class” people in the next generation or even the next decade. It no longer suits the East to subsidise Western lifestyles which it can now legitimately aspire to for its own population.

The West’s Health and Welfare systems and even its property rights derived essentially from a national profit made through trade by being smarter and more innovative than the rest of the world. This is no longer so; therefore the money to fund those systems (as they are currently delivered) no longer exists – indeed it hasn’t for some time, as it has already been being borrowed for at least a generation (from people who had every motivation to lend a generation ago, but have none now).

Ostriches will become extinct!

Inevitably added to the West’s burden is a democratic meltdown alongside the economic one.  The skills required to get elected – basically getting attention – are utterly distinct from those required to govern effectively and realistically. It is much easier to blame bankers, or immigrants, or the poor, or the rich, or some other bogeyman and thus gain attention, than it is to face the very real re-balancing of global trade, power and influence which lies directly before us as explained above. It used to be we would just about be saved by Sir Humphrey, who would at least keep things relatively stable while the West cashed in on its expertise and thus its competitive advantage – not just in terms of technology, but also social order and governing institutions. This will no longer be enough, because not only has the Far East caught up in technological expertise, but it is getting more skilled at social order and government too. It even has the advantage of skipping some of the luxuries – like free elections and state-funded welfare.

We can bury our heads in the sand or we can accept this basic problem: the term “social justice” now only has meaning if it is applied globally. The days of paying pensions or inflating wages on the back of borrowed money in the West on the back of consumer booms for products or materials bought cheaply from the East are over.

What’s the solution? Before we come to that, can we at least accept and agree on the problem?

If we in the West want a welfare system (including pensions) and public services (including Health) which are better than those in China, we will have to work harder than the Chinese.

We don’t. There’s the problem.

 

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