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The fruits of the Lansdowne Road Agreement for the government… June 10, 2015

Posted by WorldbyStorm in Economy, Irish Politics, The Left.

Put aside all the stuff about salaries being ‘reinstated’ (whatever that may mean in a context where they’ve been pushed back for years – and given that the monies lost during that period aren’t coming back). Note this from an SBP analysis on the agreement, and not one that is massively sympathetic to the government:

But the biggest win for the government is the retention of 15 million extra working hours which were put in place under Haddington Road. They are worth around €300 million per year and were used by the government to pay for the recruitment of thousands of extra gardaí, teachers, nurses and doctors this year.
Despite much grumbling before the talks by unions, the increase in the standard working week for most public servants by 2.25 hours remains in place.
So too do the reduced overtime rates, the revised sick pay scheme and the career average pension scheme for new public servants.

I know this may not be the most popular opinion on the left, but as a trade unionist myself and one active in disputes over the years my own belief is that the focus on wages, while absolutely correct in regard to PS workers on lower wages, has functioned as a diversion from reversing those defeats on terms and conditions. And worse again while wage increases are somewhat easier to reinstate (albeit in the partial manner noted above), the loss of better conditions is one that will continue for the foreseeable future. Add to this the tiered nature wages introduced for many PS workers across the last six or so years and that defeat becomes almost appallingly comprehensive.

Nor is this the end:

There are other reforms which have yet to be delivered, such as the cutting of some civil service grades. It is in the new agreement again. There was also a promise of “significantly improved performance management” in the public service.

A strategic error is compounded.

More on Greece. June 9, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics.

Just to add to what was posted yesterday on Greece, the Observer business editorial has some harsh words for Brussels and the IMF on what is taking place in relation to that state.

While much of what the radical leftists want seems unreasonable – especially the slow pace of pension reform, which in effect would allow tens of thousands of people in their late 50s to grab early retirement – it is the demands being made by Brussels and the IMF that are unconvincing and, worse, untenable.


Running a larger budget surplus is only going to destroy Greece, not build it up. As US economist Joseph Stiglitz and many others, including former IMF staffers, have pointed out, the troika of creditors badly misjudged the economic effects of the programme they imposed in 2010 and 2012.
They believed that by cutting wages and accepting other austerity measures, Greek exports would increase and the economy would quickly return to growth,” Stiglitz said last week. “They also believed that the first restructuring would lead to debt sustainability. The troika’s forecasts have been wrong.”

But as is the way with orthodoxies the error is repeated, even exacerbated.

The current proposals repeat the same mistake. Seven years after the crash, the Greek economy is still 25% smaller than it was at its previous peak, 10% of households have no electricity and youth unemployment is running at more than 50%. Tsipras and his finance minister, Yanis Varoufakis, may specialise in needling their creditors, but the troika also need to take into account the fact that Syriza has formed a legitimate, democratically elected government and cannot be told that its electoral programme is irrelevant.

It is beyond belief that these basic facts are not admitted and acknowledged in the current discussions between Jean-Claude ‘Alexis is my friend’ Juncker and the Greek government.

In any other context this would be regarded as a society and a state close to the edge. That it is a European economy, an integral part of both the EU and the eurozone, almost beggars belief. It raises fundamental questions as to the nature of what that EU and that eurozone are about if they are happy to acquiesce to the impoverishment of citizens of the area. Indeed not just acquiesce but to seek measures that will in every way make the situation worse.

And the Observer doesn’t pull its punches.

So Lagarde and European commission president Jean-Claude Juncker must be the ones to table further compromises. Neither was in charge when the first Greek bailout set all sides on the current disastrous path. They should explain to Ireland and Portugal, also suffering austerity, that Greece is too weak to survive more bloodletting.

But Ireland and Portugal are not going to rock this particular boat. It’s a sort of anti-solidarity – something by the way that the Labour party here should have its feet held to the fire about on a continual basis.

One further point. For those, and we see them in various places, who bemoan the Syriza government’s approach, it is at the least educative to see how they have managed to hold off the EU and IMF even partially across quite some months now. It would also be educative to compare and contrast with the previous Greek administration whose approach was one of acceptance of the demands of the EU and IMF.

Taxing times… June 4, 2015

Posted by WorldbyStorm in British Politics, Economy, Irish Politics.

William Keegan in the Observer at the weekend noted that it was in 1970 that Tony Barber, Tory Chancellor of the Exchequer, introduced VAT.

As Keegan also notes;

When Geoffrey Howe became chancellor in 1979, his abolition of exchange controls had a lasting effect; and, when he ran into trouble financing his promised income tax cuts, the main rate of VAT was hoisted from 8% to 15% in one fell swoop.

The corresponding cuts in income tax saw the top rate drop from 83% to 60%.

1988 saw Nigel Lawson reduce the top rate of income tax to 40% and as Keegan notes ‘since he reduced the rate… there has been panic in the ranks at the very thought of raising it. You can see what an outcry there was when Labour, in the wake of the banking crisis, dared to raise it to 50%. it matters not that the British economy grew for many years at a respectable pace when tax rates were much higher; the mantra these days is that low tax rates promote economic growth – although there has not been much evidence of that in recent years’.

I spoke to someone close to the government and the minor party in the government some while back who was adamant that it was impossible to raise income tax rates, that any left project that had that at its heart was destined to failure. I think that that is contestable. And it seems to be expedient too, for in the immediate it allows Labour off the hook on many issues, but in the broader context it masks a reality, as Keegan notes implicitly above, that revenue will be found one way or another, whether through VAT, charges or similar. In a sense there’s a sleight of hand, one which is engaged in, indeed promoted, all too willingly.

Outsourcing the state: A vision of the future? Well, not so much… depending on where one is. June 4, 2015

Posted by WorldbyStorm in Economy.

This from the Guardian:

Allow me to be blunter still, and say that this fight in an outer-London borough forms the frontline of one of the most important battles in Britain today. Because the men and women who normally serve kids’ meals, pick the rubbish off the streets and look after residents with mental-health needs are having to defend their services from a threat that may soon be coming to your local council: their jobs are about to be handed over to a private company.

The process is usually described as outsourcing – but that term does no justice to what’s happening in this leafy part of the capital. Councils of all stripes have been outsourcing for decades, which is why your local traffic warden is usually tramping the streets on behalf of a private firm. But that isn’t enough for Tory-run Barnet – it is on a mission to make itself disappear. It has begun a programme to farm out so many of its services that the local trade union calculates staff will shrink from 3,200 in September 2012 to just 332.

But for some of us this all seems strangely familiar. In this state we have already had the dubious privilege of seeing aspects of this process already. Regard our waste collection ‘services’ and weep.

What’s telling is how in the UK the situation is bundled up almost entirely to a single company:

Everything from registering births to mowing the local cemeteries has either already been outsourced or is about to about be. And most of the key tasks have been given to the FTSE giant Capita. Not just for a few months or a couple of years, mind you: Capita will run these services for at least 10 years.

As the article suggests:

So an arm of Britain’s local government has in effect agreed to a friendly takeover by a £7bn multinational. Whoever Barnet residents vote for in local elections, they will always get Capita. Whenever they phone or email or visit, they will speak to a Capita employee. The FTSE giant will face no competition for the next decade; nor will it endure the same scrutiny as democratic government, as previously public information is veiled under “commercial sensitivity”.

It is an absolute reneging of responsibility by the state. It makes a mockery of the concept of ‘competition’ and it allows for no democratic control at all. Of course that’s no glitch to those who propose these things. It’s a feature allowing the state to remove itself from the scene, for the companies and corporations who are beyond proper oversight to function pretty much as they will and for the citizen. Well, we the citizens are essentially the least and most important aspect of this.

Of course this isn’t the whole story. There’s been some push back on the continent with such services being taken back into public control because private sector operators have proven incapable of doing what they said they would. Much depends on the ideological complexion of the governments pushing in either direction, as well as the push back by citizens.

Mandatory pension provision June 2, 2015

Posted by WorldbyStorm in Economy.

What an interesting press release from the SFA during last week in regard to its opposition to mandatory pension provision.

Well Patricia Callan, the director of the SFA is blunt about it.

“It is clear that the current pension provision needs to be enhanced to meet the demands of future retirees but we are by no means convinced that mandatory pension provision is the best option. Mandatory pension provision will prove costly to employees, to business and to the Exchequer, without any associated benefits in the long term. As such, the willingness of both employees and employers to accept compulsory pension savings is seriously questionable.”

I can’t help but feel the SFA is not entirely wrong in part of its analysis, though perhaps not the part they’d wish to be wrong about… What do they list as the reasons?

“With the economic recovery slow to be felt by small businesses, many are still struggling to keep their doors open. In this context, where cost control and reduction remain critical for small businesses, it is unacceptable to impose an increase in the cost of employment. Any direct contribution obligations on employers will simply add to the already high cost base, where labour costs are running at 121% of the EU average. Moreover, employers will be faced with demands for compensation by employees for any apparent reduction in their real take-home pay. These employees already have little disposable income due to our current high income tax / PRSI / USC regime, and very high mortgage variable rates and childcare costs. The cost of mandatory pension provision to the economy as a whole is also a prohibitive factor. The Exchequer contribution has to be funded by the tax base, which is made up of business and employees, so each group will effectively be hit twice. The introduction of a Universal Retirement Savings System will increase unit labour costs in Ireland, putting many jobs and businesses at risk. It will negatively impact national competitiveness and jeopardise foreign direct investment into Ireland. ”

Which is all very well, but what proposals are there as regards actually addressing the issues that have given rise to this debate? Well, first up there’s this diversionary nod…

“The Government’s focus is all wrong. There are many aspects of the pension system that require urgent attention, such as the inequity of treatment between public sector workers and those in the private sector, especially owner-managers,” continued Callan.

Hmmm… in a context where only about half of all those working in the private sector have any pension provision at all and where for most of those on such pensions are on defined contributions rather than defined benefits pension schemes, and where the actual value of such schemes are questionable one might not think that the most obvious inequity.

And what of this rather limp nod towards alternatives?

“The SFA strongly believes that credible alternatives to a mandatory Universal Retirement Savings System are available and should be pursued as a matter of urgency. These include encouraging supplementary voluntary pension provision, providing an adequate State Pension, reviewing public service pensions and increasing the numbers at work in Ireland,” concluded Callan.

One can raise various questions. How does increasing the numbers at work actually directly address the issues facing those currently on, or at some point in the future accessing, pensions? What about wages sufficient to cover pension supplementary pension provision?

But in truth the rather indigestible mixture of ‘alternatives’ seems in no way to be an improvement on the current status quo, does it? More chaos, more contingency.

Unless the government, any government, actually engages with the fractured system(s) we currently have, riven between insufficiently good state pensions, public and private sector pension coverage, and so on, there’s little point in these discussions, and no real sense that there will be anything like progress in the future – or even how we could define progress.

A deafening silence from Government TDs on the something someone said that someone else doesn’t want anyone to know about… and what of their views on parliamentary privilege… or… May 29, 2015

Posted by WorldbyStorm in Economy, Irish Politics.

And now the Oireachtas weighs in:

Oireachtas sources say they believe “standing orders were not breached and privilege was not abused” by Ms Murphy while moving a Private Members’ Bill through the Dáil last night.


Oireachtas sources also said they believe the current situation whereby the contents of a Dáil speech are not being reported to be unprecedented.

Why is it not being reported? How many citizens of this state would be so blessed?

The point was made to me this morning by a friend that it is long past time that a Government TD or two or four or perhaps the whole lot of them came out and upheld the principle of parliamentary privilege. Most telling that they haven’t as of yet.

Did you know the Dáil wasn’t sitting next week? I didn’t. But I think all of us would support the following from Micheál Martin looking for a recall… and credit where credit is due to him for this:

Fianna Fáil leader Micheál Martin has called for the Dáil to be recalled in the light of what he claimed had been the silencing of media outlets in relation to comments about businessman Denis O’Brien by Independent TD Catherine Murphy yesterday.

I think it is the responsibility of all TDs of whatever stripe to make noise about this both inside and outside the Chamber.

By the way, check this out from ‘a spokesman for Mr. O’Brien’.

James Morrissey questioned the accuracy of what Ms Murphy had said, maintaining Dáil privilege had an important role but could not be abused to have falsehoods misrepresented as facts.
Mr Morrisey said a core principle of a democracy is the right of every individual to their good name and reputation and it was important that people “stand up for democracy inside the Dáil and outside the Dáil”.
Hmmm… And:

Mr Morrissey said if there is wrongdoing involved it should be examined and investigated, but until then Mr O’Brien was entitled to his good name.
He also pointed out Mr O’Brien’s record of job creation in Ireland.

Which is relevant in what particular way?

This isn’t bad either, as Tomboktu noted in comments elsewhere:

The National Union of Journalists has criticised the media for not publishing the statement Ms Murphy made in the Dáil last night.
NUJ Irish Secretary Séamus Dooley warned that faith in the media would be “shattered if proprietors and editors did not challenge threats to parliamentary democracy and freedom of expression”.
Mr Dooley said: “It is gravely concerning that media organisations felt constrained from publishing the comments, made under Dáil privilege, by Deputy Catherine Murphy concerning financial matters relating to Mr Denis O’Brien and his alleged relationship with IBRC.
“The fact that the national public service broadcaster was constrained from broadcasting material freely available on the website of the Houses of the Oireachtas, and that other print and broadcasting organisations felt similarly constrained, raises fundamental questions about our parliamentary democracy and the right of the media to report freely on parliamentary proceedings.

By the way, for those that are interested here’s the wiki page on the issue…

And here’s a pretty good summing up from the Supreme Court of Canaada:

“Privilege” in this context denotes the legal exemption from some duty, burden, attendance or liability to which others are subject. It has long been accepted that in order to perform their functions, legislative bodies require certain privileges relating to the conduct of their business. It has also long been accepted that these privileges must be held absolutely and constitutionally if they are to be effective; the legislative branch of our government must enjoy a certain autonomy which even the Crown and the courts cannot touch.

Like any such mechanism it can operate incorrectly, but the principle appears to me to be of such compelling importance – and indeed the reality of its use is that it has overwhelmingly been a positive rather than negative – it is well worth upholding.

Meanwhile as also mentioned in comments the Guardian carries a good piece on the issue. Comments under it were disabled after being open for a while apparently.

In the late evening, the nightly discussion programme on TV3, Tonight with Vincent Browne, was presented (because Browne is on holiday) by Ger Colleran, editor of INM’s Irish Daily Star.
He read a statement from TV3’s management stating that there must be no discussion about Murphy’s comments following letters from O’Brien’s lawyers.
So there it is. The owner of the bulk of Ireland’s media outlets is using an injunction to prevent reports on his affairs appearing in the rest of the media he doesn’t control.
Clearly, there are questions to ask about the press freedom implications due to Ireland’s lack of media plurality and diversity.

All true. But again, where is the Government?

Someone said something somewhere about someone else but no one can be told what the something they said was… May 28, 2015

Posted by WorldbyStorm in Economy, Irish Politics.

…so much for Dáil privilege. RTÉ, the Irish Times, etc aren’t reporting on what Catherine Murphy TD said today in the Dáil due to legal pressure from you know who. The concept of Dáil privilege appears very shaky – does it not?

Addendum, Broadsheet are made of more resilient stuff. As is Murphy herself.

The other referendum question… May 21, 2015

Posted by WorldbyStorm in Economy, Irish Politics.

Elaine Byrne in the SBP points to some curious contradictions when writing about the referendum on the age of Presidential candidates. And she takes it in a most interesting direction in the following:

This is about the ageist institutionalised discrimination when it comes to income, insurance, mortgage eligibility and pension rights. A two-tier Ireland which offers different employment protections to predominantly younger temporary workers.

And she points to the manner in which under the post crisis ‘agreements’ something very strange happened.

The starting salary of teachers who began their career in February 2012 is 34 per cent less than teachers recruited in 2010. The staff rooms of public sector workplaces across the country are populated with people doing the same work but with substantially different take home pay on the basis of age. A policy which will be gradually phased out under the Haddington agreement – but only when new entrants serve their time.

She continues:

What was the bearded response by the unions to ageist pay scales? Young outsiders were sacrificed for the interests of older insiders. Instead of pay parity across the board, an older generation protected the guts of their pay by forcing draconian cuts on new entrants. “What do we want?” Worker solidarity! “When do we want it?” Once we are inside!

I loathe the outsider/insider stuff, probably more than I loathe the ‘bearded’ line, but there’s a real problem here. A two tier workforce has to be one of the most toxic outcomes of the past seven years, and one that suits the state and seemingly was of no significance at all to those who negotiated the ‘deals’. She notes too…

The first session of talks between the government and trade unions on pay restoration for about 300,000 public service staff ended this week. Unions are broadly in favour of a flat rate increase.
Does this mean that newer entrants will get the same flat rate increase as older workers but that the existing disparities remain? In the public sector, the generous pension scheme for pre-recession public servants is linked to the salary of the person presently occupying their retirement grade. So, if a current public servant has 20 years to retirement, their current pension contributions by the state are at the same rate as if they are at retirement age.
In contrast, pensions for new entrants (like most of the private sector) are based on average career salary rather than final salary.

It is bizarre, but then the emphasis on wages as against conditions has also been bizarre too, allowing extra hours for what was nominal retention of existing wages, when the reality was that these were wage cuts. Moreover, as many versed in union life will attest, pushing for the reinstatement of conditions is a significantly different challenge to reinstating salary cuts. Yet all this was lost on the unions during the crisis period.
And Byrne notes that this is true in different areas too…

The generation constitutionally barred from running for president must now contend with the causalisation of work contracts, minimal job security and access to fewer benefits.

Of course that generation will grow older and those issues contended with will become characteristic of the conditions of workers of all ages, so let’s not get too fixated on the age aspect. It’s about proper pensions, proper wages, proper conditions. It’s about work and all workers.

Conflicts of interest? No way! May 20, 2015

Posted by WorldbyStorm in Economy, Irish Politics.
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Elaine Byrne’s reports in the SBP from the Banking Inquiry – week 16, seeing as you were asking – are getting ever more interesting. This week she casts an eye across the sheer lack of interest in what to most would appear to be – at its kindest – potential conflicts of interest evident in auctioneers and valuers, the construction industry.
So bizarrely adrift from what we might like to term reality are those offering evidence that the Inquiry was treated to this:

Eoghan Murphy asked the former director general of the Construction Industry Federation if any relationship existed between donations and decisions taken by the government that would favour the industry by way of tax reliefs or incentives. “No way” was Liam Kelleher’s response.

No way!

Byrne notes how the banking industry was entirely uninfluenced and uninfluencing (to coin a phrase) by and on political matters. So they say.

No way!

Still, bad and all as that it is, and it desperately bad, there’s more still…

This Thursday, an entire day is dedicated to the former governor of the Central Bank.
John Hurley may provide clarity regarding the ‘he said, she said’ version of events around the alleged Jean-Claude Trichet phone call to Brian Lenihan and the ECB’s refusal to allow Ireland to burn the bondholders.
Trichet maintains he made no such request. But did his office make such a call to Hurley?
Hurley’s successor Patrick Honohan’s previous appearance before the committee and his subsequent letter may also feature.
Was Hurley aware of the powers he actually had to intervene? If so, why did he not use them?

Surely he was aware? Wasn’t he? Did he believe he could? I’m tempted to say… no wa…well, we’ll wait and see.

Business and workers “all in this together”? May 19, 2015

Posted by WorldbyStorm in Economy.

A great deadpan analysis in the Observer Business leader (always worth reading) at the weekend on the living wage:

Most company boards want to “do the right thing” on pay and conditions for their workers, according to the amply remunerated Lord Rose, chairman of Ocado.
If that’s true, then they seem to be going about it in an unusual way. Only about a quarter of FTSE 100 companies have signed up to the living wage, a measure of the amount required for people to live with dignity, based on research by the respected Joseph Rowntree Foundation. The Guardian and Observer are in the process of applying to be accredited.

And yet, the Observer notes that for all the touchy feeley rhetoric…

Some of the UK’s most respected companies are missing from that list, including all the major retailers. Sports Direct has been vilified for its treatment of staff, the majority of whom are on zero-hours contracts. But others are involved in practices which should make their boards blush.

And it gives this positively Kafkaesque example from the ‘hight street’.

Next – a company led by a man compassionate enough to have handed his bonus over to staff more than once – is one of them. Ten staff at the retailer are holding out against its decision to scrap extra pay for Sunday working – a move that hit about 800 people.

Here’s the kafkaesque bit:

The company deems those numbers a measure of how happy staff are to accept new contracts.

Except, except:

But more than one worker affected by the change described how they were persuaded to give up their extra pay: they were taken into a “forced change” meeting and told that if they did not accept the new conditions, they were effectively resigning. All have worked at Next for at least seven years.

And the leader notes:

Campaigners say that many retailers are now ditching traditional benefits, such as extra evening or bank holiday pay, as companies try to reduce costs in the face of a still-tough consumer market. With no collective bargaining in companies such as Next, staff have little support. The costs and career risks of challenging the company at a tribunal mean few take that route

And the pernicious dynamic which has been noted many times before where the state effectively supports private enterprise in paying wages continues and expands:

It is not just an issue for do-gooders. An estimated £11bn of taxpayers’ money goes towards “in-work benefits” to top up the wages of those on low pay. You don’t need to be an economist to realise that doesn’t add up any more.

We’re not in this together. We’re not even close.

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