Belfast Telegraph

Sunday 21 December 2014

Assembly out of its depth dealing with jobs crisis

Sinn Fein's tactical opposition to welfare reform puts it in the ambivalent position of 'Brits Out (but leave your chequebook behind)', says Robin Wilson

It is a huge irony that, with unemployment nearly double what it was when power was once more devolved to Stormont in 2007, MLAs are debating a measure which blames the 71,000-odd victims.

The whole premise of welfare reform is that unemployment is not, in the main, involuntary, as the great Depression-era economist John Maynard Keynes understood, but is simply a product of malingering by the feckless.

And, in Northern Ireland, it is a very short step from that prejudiced view to the ready sectarian stereotype that the 'feckless' tend to be doing-the-double 'Fenians'.

Thus, the DUP Minister for Social Development, Nelson Mc Causland, while presenting the Bill, which yesterday received its second reading, as a necessary echo of Westminster legislation which the Assembly has no choice but to enact, supports the ideology of the hitherto-anonymous NlO minister, Mike Penning, who told the Conservative conference in Birmingham yesterday that the measure was to "get people off benefits and into work".

This is what economists call a 'supply-side' concept of unemployment. But if it were true that the labour market was not clearing because the supply of labour was inadequate, then it would be impossible to explain the dramatic increase in unemployment since the global capitalist crisis of 2008.

It is that crisis and the consequent collapse of demand for goods and services which has caused bankruptcies and rationalisations which have seen jobless totals spiral - not the spread of some kind of worldwide laziness virus.

There are now several unemployed individuals chasing every vacancy in Northern Ireland. So, even if every one of those jobless was previously swinging the lead, but was, miraculously, to jump out of bed and into a job tomorrow, the vast majority of unemployed would remain just that.

Making housing benefit recipients find a smaller home, because they have a room to spare, or making disabled people undergo tests as to their capacity for work, will do nothing to create a single job - but a lot to damage the dignity of the already-stigmatised individuals involved.

Sinn Fein MLAs such as Alex Maskey oppose the Welfare Bill and have called for alternative arrangements to be "negotiated" with London. But this is no more economically literate than the DUP, merely replicating the politics-as-arm-twisting which Sinn Fein pursued through what was called the 'peace process'.

Wedded, as it still remains, to a 'British withdrawal' from Northern Ireland - if no longer expecting this eventuality by the centenary of the 1916 Rising - the party is in the anomalous position of wanting 'Brits Out', but the chequebook left behind.

What neither of the dominant parties has done is to engage with the wider debate across the UK between the Right-wing advocates of austerity - with its self-defeating deflation of the economy, rising deficits and rising unemployment - and the evidence-based alternative case for a measured reflation associated with a longer-run fiscal consolidation, achieved primarily through more progressive taxation.

Sinn Fein, of course, does not even go to Westminster, so was powerless to stop the original welfare legislation passed there. And the DUP only ever shows any interest in parliament - in spite of being nominally a 'unionist' party - when there are Northern Ireland questions to debate.

Had those parties behaved more strategically and with more political, as well as economic, nous, they could have made important allies in Scotland and the north of England - as well as highlighting how Northern Ireland's peripheral economic status means it has the highest dependency ratio and so will be the region hit hardest by these measures.

Nor has the Northern Ireland Executive even done what it might have done on the supply side. Instead of throwing £80m at the problem of disadvantage through the Social Investment Fund, it could have done something socially intelligent, like re-establish the old Action for Community Employment (ACE) programme.

People who are out of work for a long time do become demoralised and detached from the labour market - a phenomenon economists call a 'hysteresis effect'.

And the ACE scheme, at least, offered individuals who were long-term unemployed placements with voluntary organisations, which they could find socially useful and which could benefit the organisations for which they worked. There are individuals now in elevated professional jobs in the voluntary sector who first came through in this way.

So the upshot of this unsavoury affair will be, once more, to demonstrate that, as a house divided, Stormont cannot stand for the best interests of the citizens of the region - particularly its most disadvantaged - and that politics cannot meaningfully work to address the bread-and-butter issues so often invoked, but so rarely effectively acted upon.

There is, though one decision the Executive has taken which touches on the future of those struggling to survive in Northern Ireland's tight labour market.

For purely party-political reasons, in its wisdom it has decided to abolish the one department - for employment and learning - which supervises active-labour market programmes, however under-resourced and ineffectual, to those without work.

It recalls the acid comment by the former North Belfast MLA Fred Cobain that Stormont is "a middle-class parliament for middle-class people".

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