Public sector employment: pondweed
Although David Cameron’s comments about Northern Ireland’s over-dependence on the public sector have done nothing to help the ill-fated UCUNF project, they are entirely appropriate comments and needed to be made. Northern Ireland is grossly over-dependent on the public sector.
Some of this over-dependence is understandable. Spending, per capita, on policing and security, for example, is still higher than in the rest of the UK despite the so-called “peace process”. But spending on healthcare, per capita, is lower than Scotland.
However, the main reason we eat up so much public money is not just because of public sector employment – it’s also because of massive social security payments – largely because a big chunk of our work-force is economically inactive.
Moreover a disproportionate percentage of our “economically active” are in fact not active at all – they are public sector workers. Public sector workers do not produce anything – they merely consume. The extent to which they contribute to the economy is purely through spending their wages: consuming retail goods and services.
NIPSA general secretary Brian Campsfield seems to think otherwise - implying there is some type of merit in having a large percentage of the work-force employed by the public sector – and that the private sector has in some way failed in the competition for employment.
Over on the BBC web site he’s quoted as saying: “[David Cameron's] faith in the ability of the private sector to provide sufficient jobs to replace thousands of jobs that would be lost to the public sector is sadly misplaced…the private sector in Northern Ireland relies heavily on public subsidy and yet its “entrepreneurs” have failed to create sufficient high value employment.”
These comments must surely rank up there as among the silliest assessments of Northern Ireland’s economic woes. Mr Campsfield seems to believe that entrepreneurs are overtly focused on creating employment – and that they somehow fail if they don’t. Entrepreneurs, in fact, avoid employment as much as possible because it is expensive. Moreover, entrepreneurs may not have the ability to employ the local workforce if that workforce simply doesn’t have the necessary skills to sustain revenue. In an economy where a huge percentage of the workforce is inactive or employed by the public sector, the private sector hasn’t much in the way of rich pickings. Moreover, given the nature of the workforce itself it yields very few entrepreneurs. Northern Ireland has an enterprise averse workforce – and a workforce unable to sustain high growth, high employment businesses – unless some drastic action is taken.
As for subsidy, the fact is that private businesses benefit little from state subsidy – indeed such subsidies are outlawed under European law. Businesses that thrive here do so despite government rather than because of it. Business taxation is substantially higher than in the Republic of Ireland and costs of doing business are higher here than in other parts of the UK. Despite this, Northern Ireland has produced some highly viable export focused businesses. However, not enough.
The public sector in Northern Ireland is like pond-weed – it creates the impression of healthy vegetation but, ultimately, it has the effect of crowding-out everything else. It starves the pond of nutrition. In many respects this is the effect that over-dependence on the public sector has had on Northern Ireland’s economy.
That’s not to say that public sector workers aren’t essential. Of course they are. But without the private sector there is no GDP to be divided. The private sector creates ALL of our wealth – but very little of the UK’s private sector wealth is created here in Northern Ireland. Something must be done to change that. Perhaps a reduction in the block grant will focus minds on the basic law that without real employment there can be no public sector employment. Very few of our politicians are prepared to admit that. More worrying, many don’t even know it.
Mr Campfield, unsurprisingly, is or was a member of the Communist Party of Ireland like many others in top public sector advisory, equality, and human rights posts.
Signed Joe McCarthy
Cameron is right, but reducing the State sector will not create employment. Much of the N.I. private sector has emigrated – clothing and textiles to India and China, shipbuilding to Korea, China, and other East Asian economies, where wages are a fraction of Northern Ireland wage rates.
The American Conservative Pat Buchanan said recently: “US manufacturing is in a death spiral, and it is not a natural death. This is a homicide. Open-borders free trade is killing American manufacturing.” The same is even more true of the UK in general and Northern Ireland in particular. The fake conservative David Cameron has no solution to this problem other than to reduce State employment and thereby increase unemployment.
The only solution is to create a protected European market, but all Cameron, Hague, Fox and Gove want to do with Europe is get back to bombing it. Tory belligerence toward the EU will, if they win the general election, be a disaster for us all.
Of course we need 16 councils, 6 health boards, 6 education boards, 500 quangos and a bloody parliament! more power to your cutting elbow david
Sir Reg Empey made the point, on the NI leader’s debate, that whoever is in power will be making substantial tax cuts, so I dont think it was necessarily wrong of David Cameron to spell out the need for NI to take its fair share of spending cuts.
What is lacking is a clear plan to make NI a much more “normal” economy. Owen Paterson has stated that he carried out a lot of research behind the scenes. He has also said that it will take 25 years to “normalise” the NI economy. However, apart from the impending cuts and the little bit of fiscal information we have on Corporation tax, Joe Public NI is not being given any real clue about what this big plan is beyond a statement of intention.
Cutting taxes busienss taxes regionally, coupled with investment in the transport and communication infrastructure is the best way for the Government to provide a fast-track to provide the climate for a faster than normal private sector growth in our region. There is no sign of any commitment to that yet.
In fairness to Cameron and Paterson, they had been expecting the UUP to come up with its own ideas to contribute to this debate, just as they encourage the Scottish Conservatives to develop regional ideas for Scotland.
Perhaps if there had not been so much messing around, pussyfooting and procrastination by the UUP over selection of candidates, etc, they might have had some time left to talk about and develop some ideas for a proper regional economic policy.
UCUNF, I’m afraid is like an incomplete bowl of fruit salad, with the Oranges discarded to one side because they are too immature and too sour to mix with the rest.
Seymour you are correct. There’s precious little in the way of policy wonks (vis a vis Westminster) in the UUP ranks. We have a line-up of ego driven candidates in the key seats. And some are simply annoying – you know who I mean. I’m not sure if many/any are ideologically Conservative from a fiscal point of view (I admit that I too am a Tory wet on social issues – although on fiscal matters am as dry as they come).
To be fair to Owen the enterprise zone idea is a good one. But any reduction in block grant will give people the jitters. No-one seems capable, in UCUNF, of rebutting the DUP propaganda.
Very poor.
I’m a resident in N.I who works in the private sector and I’m maybe playing devils advocate here but…
“Public sector workers do not produce anything – they merely consume”
Would this otherwise just mean that they are workers who do not produce profit? If that is the case, I would argue many public sector workers produce plenty, they might not be consumable goods or raw material but they ‘produce’ plenty to the government and provide value to those who pay their taxes, providing their services.
I believe what you meant was that they don’t readily contribute to primary or secondary economic sectors of the economy. The issue therefore is that the economy in Northern Ireland is top heavy without a this private sector base and we’re very dependent on investment from outside the hinterland of our regional borders. I concede in the short term that the resources we do have for manufacturing for instance, may be helped by a conservative attitude. However I personally believe that a green economy is the way to go and in the long run the conservative attitude to economics is flawed. Having a large public sector though surely isn’t to be blamed for all that is being pinned on it here. I’d say its current size is more a symptom of history of this locality and the need by the British government to support the area directly without the risk that would come with private sector investment pulling out.
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“Entrepreneurs, in fact, avoid employment as much as possible because it is expensive”
Would they not be very poor entrepreneurs if this were the case? For apart from high end technology or animals, aren’t people by capitalist theory, the only means to create profit in the sector of the economy you described as being ‘economically active’? Unless a capitalist has money, other people are the only things which can ‘create value’ aka, more money… or in other terms, be exploited to create profit.
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“Moreover, given the nature of the workforce itself it yields very few entrepreneurs. Northern Ireland has an enterprise averse workforce – and a workforce unable to sustain high growth, high employment businesses”
I would suggest the workforce’s unemployment rates may be due to reasons a little more complex than that. The history of Belfast’s past and its aversion to conservatism is based on the treatment but willingness to put up with hard labour demanded by those with the means to production over the centuries. There is a hard working ethos out there in the older generation, I would suggest the work averse are largely comprised of those who grew up during the troubles and can you blame them, if you see people work hard to build something which could just be destroyed, why buy into it?
The lack of private enterprise and private sector business native to these shores probably has at least a little bit down to the fear or disheartening nature of the troubles and the past, I mean who would want to have to pay protection money.
Stigmas out there still persist and with the UK the way it is now, the country of service industry pushed by Maggie Thatcher n’co, business is multi-nationals. The larger companies out there who have invested in N.I in the private sector are mainly British/Irish/American multinationals. The profit made here from our workforce/investment, largely, doesn’t stay here. Smaller companies have limited markets and with high competition, many small businesses fail.
What I believe Northern Ireland needs isn’t a larger private sector or decrease in the public sector per say, it needs a niche market in the primary/secondary/quaternary sectors and that can be in Green social enterprise industries, businesses where the profits will largely stay in the local economy and help to make us a net contributor and not just to overseas corporations.
Hoped that made some sense, just had to get it off my chest lol.
We need British withdrawl and the chance for the Ulster Scots and the Irish peoples to form a new independent country based on exporting pork to China, and horses to England.