One for the weans

The Diamond Jubilee is fast approaching and there is a competition for kids aged between 6-14 to design the logo for the festivities.  With the Olympics, Diamond Jubilee and 100th anniversary of the Ulster Covenant 2012 is shaping up to be quite a party year.

Behaviour Modification

With candidate selections underway for the Assembly election I am proud to announce the opening of the Ulster franchise of the Canadian Behaviour Modification School for Candidates.

£450m pennies dropping?

Yesterday Melancthon over on the Centre Right section of Conservativehome admitted:

"...it appears that when Labour said our Eurosceptic promises were all hot air, they were right; that when Heseltine said that in government every Conservative Prime Minister is Europhile, he was right; that when UKIP said Conservatives were not to be trusted on Europe, they were right; that when I and others said that the Conservative Party had changed, and that Cameron and Hague were genuinely convicted Eurosceptics who understood what must be done and would not let us down, we were wrong."

This was before David Cameron tried to present an additional contribution of £450m to Europe as a victory on the basis they'd asked for twice that.  He'd previously called for a freeze but had quietly ditched that. 

UK fiscal policy is that the time for stimulus spending by government is over and that cuts are the policy for the next four years.  He has now agreed that the EU budget is an exception to that rule.  This retreat will also do little to curtail the European Commission plans for further growth in the budget during the next major funding round.

In an interesting coincidence this amount is about £50m more than was cut from the NI capital budget for the same period. This has been defended on the basis that there was no more money available and such cuts had to be made in the national interests etc.  Yet within 9 days of the Spending Review being released Cameron's decision has shown both statements to be false.

The Odd Couple

Before Tom Elliott appointed John McCallister as his deputy leader of the UUP Assembly group he took the time to have a tete a tete with the TUV.  However, while the TUV appears upbeat about the meeting:

"There seems to be a wide number of issues that we could find common ground on, chief among them being the changes to how the First Minister is appointed..."

The UUP Leader's placed a different emphasis on the meeting and its conclusions:

"We talked around a number of issues. At this stage it is very hard to come to any conclusions but we had a fairly frank meeting."

Recovering

I seem to be over the worst of it but backlog of work to clear so no blogging today.

Ill

Ill so no blogging today.

Note

Earlier this year the Coalition introduced cuts within this financial year.  The devolved regions were given the options of implementing or delaying them to the next financial year.  Each region chose a different  path.  One chose to make the cuts within this year.  One chose to spread it over this and the next financial year.  One chose to delay the cuts until next year.  The region that chose to cut within this financial year is on course to deliver them.  It was Northern Ireland that successfully implemented the cuts this year despite the difficulties of the system.

Gardiner v McNarry?

According to Sammy Gardiner MLA, the UUP position is:

"Health has been protected in England and Wales. The Ulster Unionist Party welcome this announcement and stresses that the same principle must be the case in Northern Ireland."

According to David McNarry earlier this week (still not on the UUP website) described the UUP position as more nuanced:

"Narrow departmental priorities cannot be allowed to usurp Northern Ireland plc’s priorities...All research suggests that front-line health services are at the head of the public’s list of public service delivery which should be protected."

Which is it ring fence the lot or protect front-line services?

Localism

How sharing and savings can happen between councils without the abolition of a council.

Accents

As local accents go they aren't half bad:



Historical background information here.

Quote of the day

"£10 million a year is to be saved by reducing the cost of metal used for coinage by the Royal Mint."

Particularism

The Assembly Public Attitude survey has been getting some attention.  (What are the odds that is going to be one of the things to be cut in the not too distant future?)  However, does it really dsiplay a particular crisis of local confidence or an example of our normality?

The 4 billion explained

The real terms cuts in revenue are as follows:
2011-12 £237.9m
2012-13 £447.4m
2013-14 £647.2m
2014-15 £863.7m
Total £2,196.2 m

The real terms cuts in capital are as follows:
2011-12 £342.7m
2012-13 £415.9m
2013-14 £527.3m
2014-15 £538.2m
Total £1,824.1m

Combined total £4,020.3m

At their work?

How are more ministers not on the Nolan show?  Perhaps they are working with their officials to deal with news they received less than 24 hours ago? 

Hornets Nest

While we are all distracted by the big numbers and the consequences it will undoubtedly have for our individual and collective standard of living in the next few years one of our Executive Ministers seems to be playing a largely unnoticed but ultimately dangerous game.  Alex Attwood seems to be dallying with the idea of breaching parity. 

In the Assembly earlier this week he stated:

"My officials are currently conducting an equality impact assessment on to the principle of parity in Northern Ireland. I am not just looking at the individual changes to child benefit or housing benefit, or any of the other proposals that are coming down the tracks, but am beginning to scope the much more fundamental issue of the principle of parity, and whether the principle of parity, as it currently operates, does or does not have equality implications. That is some blue sky thinking and the broader context in which we should consider those matters."

This morning he was talking about how the Osborne announcements of £7bn in welfare cuts would involve £200m taken from benefit claimants here.  However, he went on to imply that the Executive budget process was a means to preventing this.  This fundamentally misrepresents our budget process.  Government expenditure falls under two categories the block grant called Departmental Expenditure Limits (DEL) and benefits which are Annual Managed Exepnditure (AME). 

The Executive has made one foray in the region of benefits with its one off winter fuel payment.  However, the one-off and small nature of it meant it was permitted and not seen as destructive to the principle of parity.  What Attwood seems to be proposing is well beyond. This would involve a rejection of the principle of parity.  This is the financial equivalent of punching a hornets nest.

It may be mighty tempting to a nationalist minister to destroy Craig's negotiating success with the Treasury in the 1930's.  It might be mighty tempting to a SDLP minister to pick such a fight to up their profile with a nationalist and leftward posturing and increase their relevance to working class republican areas.  It might be a good issue to base an Executive resignation on. 

However, if this path is the one Attwood and the SDLP plan to follow it would only make our budgetary problems worse.

Planet Paterson

According to the Stephen Nolan Show the Northern Ireland Secretary of State has questioned what planet our local politicians are living on.  Simple it's a place called Planet Paterson, This was a planet were the capital spending was presented as safe until 2018.  This proved to be a lie and the Planet Osborne we had believed we were on was the correct one.  Trying to blame others for believeing your own lies is a real low.

Barnett - Updated

If I picked Osborne up right Northern Ireland will recieve a cash increase in the first year to £9.5 billion, by a quick reckoning this is a below inflation rise but higher than the flat cash prediction.  The other three years I don't know.

I picked him up wrong, the block grant will rise to £9.5bn in the second half of the CSR not next year.  The grant will increase from £9.3bn this year to £9.4bn for the first two years.  Treasury figures say this represents a 6.9% cut over the CSR period.

UPDATE On the capital side the Treasury figures predict a 37% cut over the CSR period for Northern Ireland from £1.3bn this year to £0.9bn in the first two years of the CSR and to £0.8bn in the final two years.  This brings back into focus Paterson's promises.

UPDATE 2 Sammy Wilson has raised the capital issues and Paterson's comments.  Osborne's defence is his capital cuts are less than Labour but sidesteps the SoS's comments.

UPDATE 3 The Treasury figures and DFP figures are different.  This is based on whether or not you include this year's Coalition cuts in your calculations or not.  Treasury don't and DFP does.

PMS

It sounds looks like the proposal the Northern Ireland Executive developed a number of months ago to compensate the PMS Savers has been accepted by the Treasury.

Milliband blows it

Ed Milliband will be extremely glad that Osborne's announcements will be dominating the news agenda.  Astonishingly bad performance in PMQ's.

Quote of the day

"Michael Gove was heckled about tuiton fees a few mins ago - he said 'Vince Cable is in charge of universities!'"

Quote of the day

This slugger comment about the UUP raised a smile:

"Its like a whole party of Raymond Kennedys."

Meanwhile Raymond has done the decent thing.

The dog's breakfast

Perhaps the Ulster fry has not been completed because the UUP were busy making the dog's breakfast.  Yesterday, they released a brief document on the budget crisis.  Unlike the wall to wall coverage of Sinn Fein's proposals, it receives skant media attention.  Whether they realise it or not this is probably doing them a favour as the less attention brought to the document the better for them.  However, the fact it is not on their website maybe shows they do realise it. So despite it being called "You heard it here first" not from their website you don't. (In the absence of this it can be downloaded here.)

On first reading I thought it could be so bad that it would be deserving of a cult status - so monumentally weak that its direness is worthy of appreciation. However, it even fails to achieve that.  The document is by and large incoherent noise and babble with some economic cliche bingo thrown in.  It barely has a single actual proposal.  

The sole thing it does do  is isolate the  UUP Health Minister Michael McGimpsey with no backing for ring-fencing.  It rejects:

"Narrow departmental priorities cannot be allowed to usurp Northern Ireland plc’s priorities..."

Then offers a sentence on health that is near non-sensical:

"All research suggests that front-line health services are at the head of the public’s list of public service delivery which should be protected."

If Sinn Fein's proposals were economically illiterate then the UUP document is the equivalent of cave paintings. I had suggested the Sinn Fein proposals should be placed on the fridge for the UUP I have an alternative suggestion.  One of the most memorable quotes from my time in the UUP was John Taylor during a UUP Executive refering to a Maginnis/McGimpsey drafted negotiation document as "toilet paper". This follows in that tradition.

Arse in the seat

Tom Elliott was elected as the UUP leader on 22nd September 2010.  Yesterday evening was 18th October, a unknown collection (in terms of size and importance) of UUP members decided to gather together to plot against Elliott's leadership. The man has barely got his arse in the seat.  In the four weeks he has been leader he has not made any big strides in any particular direction if there are any grounds for complaint it is more the low profile he has adopted.  Yet this has led some to complain that:

"They are increasingly disenchanted with the direction in which the leadership of the party is moving."

The fact that they have chosen a notional name "The 2010 group" that will be out of date in a few weeks probably indicates we aren't dealing with the most inventive group of people.  Neither does their outline strategy which reads like a re-tread of UCUNF. 

"...the possibility of realising a new bridgehead in politics the goal of which would be to appeal to a wider political and business community...One source said, ” we’re open to reaching out to other parties here and in London.”

The use of language would also give a strong indication of who is involved in leaking it to Mallie. The justification for this plotting is the claim:

"...there is an impatience among many of these figures from within the business community at what they see as backward looking politics gripping the Ulster Unionist Party."

If anyone thinks the UUP is a serious topic of boardroom discussion in Northern Ireland then they have little connection to the real world.

No soda and potato bread?

The eggs are taken care of and so are the sausages where is the rest of the Ulster Fry? (Assuming it can still be called that without being accused of being a closet nationalist).

Privatisation

The Adam Smith Institute has highlighted the potential income from a new privatisation programme in the UK (pdf file).  It claims there is £90 billion in potential income from such a programme.  A figure not to be sniffed at in these chastened times.  It includes on its list the ideas of selling ports and water companies.  It estimates that NI Water is worth £500m (but provides no estimate for the sale of ports here).

Previously, privatisation would have been seen as a non-starter because of Sinn Fein's opposition to the principle.  However, their proposals for the de facto privatisation of the Housing Executive and assets sales may have made this percieved wisdom outdated. Another practical impediment is getting an agreement with Treasury over who receives the receipts for such sales. Plus you have to accept that any sales in the next few years will produce returns on the lower end of the scale and that it will take a couple of years to provide any returns.

The Sinn Fein option of borrowing against sales in the future has been turned down by Treasury before and carries the future risk of what happens if the sale doesn't realise what you expected - how is that hole filled?  There is some suspicion that privatisation/asset sales will be the means of Paterson 'keeping' the capital spend pledge but we should get clarity on that this Wednesday.

The Scottish experience

Following the commencement of the debate about the future of our education system it is relevant to look at the attempt to move the system on in Scotland.  It highlights the difficulty of the half-way house of sharing campuses.  They have faced Church opposition as the process developed.  Also experiences of a shared campus seem to question if they are genuinely shared at all:

Lauren Morris, 18, from Midlothian, attended St David's Roman Catholic School when it formed Scotland's first shared campus with a non-denominational secondary, Dalkeith High, in 2004. Morris believes the strict segregation of the two schools by teachers prevented any kind of integration between the pupils.

She says: "We shared a dinner hall and some of us had friends at Dalkeith High, but we weren't even allowed to go over and say hello to them or we'd get into trouble. I think teachers used the excuse that we'd fight to separate us, but they should have helped us all integrate and get along.

"The pupils wanted to integrate but the teachers wouldn't listen. It got to the point where you would sneak across the dinner hall to the other side just to talk to your Dalkeith High pals. Even in the playground, we'd take off our school jumpers and go across to their side of the playground. I wasn't scared of the teachers, I just wanted to talk to my friends.

"The teachers used to have walkie-talkies and if they saw a pupil in a different side of the playground they'd radio each other and take that pupil back to their own side.

"One time there was a Dalkeith pupil in front of me as we were walking along the corridor and a teacher stopped him and said where are you going?' He said he was going to his class, and this teacher said get back to your own side, you're not one of us, get back to your own school'. She'd never say you're not one of our pupils', it was always you're not one of us'.

"It was quite confusing for me because I was Protestant at a Catholic school and had been taught that being a Catholic meant you treat everyone as one. Even though you could tell no-one really cared if you were Catholic or Protestant, they'd still call us Fenians', and folk from our school would be shouting Proddies'."

There have also been other practical challenges:

"Look at the case of Broomhouse Primary school and St Josephs RC school, ultra-modern buildings on the same campus but with different entrances and the sole joint facility shared on a regular basis being the dining room. The children don't even play together at break...Added to this unhappy scenario is another serious cause for conflict. The Broomhouse school is larger than St Joseph's but now has a much smaller school roll...Also, St Joseph's is seen as offering a first-class education and so its school roll has swollen...St Joseph's has a simple solution - swap buildings. But this proposal has been met with indignation by Broomhouse parents. The Broomhouse Parents Council has suggested St Joseph's uses two surplus classrooms, but this has been turned down for being too far away from St Joseph's to feel part of the school. The corridors and classrooms would have to be blessed by a priest, iconography would need to be installed and the Catholic children would run a gauntlet of insults when walking through the non-denominational school."

In the same area the situation is comparable at secondary level:

"It will be little better when these children move on to secondary education. Most will either go to Forrester High School or St Augustine's RC High School, two schools in brand new buildings, and, like the primary schools, sharing a campus. Like their primary feeder schools, they share only one facility, but here it is a swimming pool."

A New Young Consumer

An odd moment (for me anyway) in Waterstones yesterday. (Well two I actually had 4 books in my hand to purchase at one stage but somehow managed to put three of them down.)  While I was prowling about upstairs the youngest was being wheeled about downstairs who decided to pick a book off the shelf (it must have appealed as what had been the fav book until now had been cast aside and took a few minutes looking to locate again).

We progressed to the till and when we went to take the book off the wean to pay for it. This was refused.  The first assumption was a tug of war was about to ensue but no it was willingly handed over directly to the shop assistant and patience displayed until it was returned. At 19 months, and before the first proper words have been spoken, being a consumer had been sussed out.  I can't say I'm entirely comfortable with it working out in that order even if book buying has been successfully passed on.

Vote Dem or the puppies get it

Who's afraid of the big bad church?

Martin McGuinness apparently.  Following Peter Robinson's speech on Friday (the main point of which has been missed in the kerfuffle - the proposal of a long-term strategy to transform our school system), the Deputy First Minister who has repeatedly called for leadership, bravery (insert your peace process cliche) over the past decade or so is fearful of 'taking on' certain interest groups:

"If Peter thinks taking on the Catholic Church, the Catholic bishops and indeed the Protestant churches for that matter and other interest groups is a sensible route to go, I think that is a big mistake,"

Quote of the day

"What Lennon needed was a sympathetic housemaster telling him to pull his socks up. Instead, he got Yoko Ono.”

Sounds good - UPDATE

It appears that Owen Paterson has announced a reversal on the position of the capital cuts and now apparently we can cash the capital spending cheque agreed as part of the St Andrews Agreeement package.  Caution makes me want to see the detail, you always do when the Treasury is involved.  However, this does appear to be genuinely good news.  Capital cuts are the easiest but not the most strategic.  It will help us address the infrastructural underinvestment that dogs our economic development as well as help the construction sector through the tough years ahead.

However, two challenges remain.  If it has been secured then we must ensure it gets spent.  Furthermore, this does not solve the revenue spending problems.

UPDATE It doesn't bode too well on the details when it appears that the figures the NIO released are wrong. Some claim it increased the spend by £800 million more than had been spent.

One for the fridge

I've been re-reading Sinn Fein's economic proposals to get us through the budget crisis again.  The crash and burn of Sinn Fein on this topic in the Republic of Ireland should be appreciated so they have at least tried.  Therefore, like a child's drawing we should be kind in our treatment of it.  Let us congratulate them on their effort, stick it to the metaphorical fridge, send them happily on their way while the real conversations get going.

Principles and Practicalities

Sinn Fein has produced proposals for dealing with the cuts (pdf file).  Once you wade past the All-Ireland guff, in terms of principles there are a number of very interesting shifts that probably provide more basis for advancement than the individual ideas.  They have accepted the principle of cutting down on government (assembly costs and quangos but not departments).  They have accepted in principle a pay freeze (but limited it to higher earners).  They have accepted in principle asset sales.  They are also seem to imply an acceptance of cuts coming (if trying to dissipate it).

In terms of practicalities of their proposals, additional tax powers being an answer is dubious.  If the powers are to be used to "generate income" then they will have to rise (significantly) undermining their ability to then "stimulate development".

In terms of savings the RPA claims don't stack up.  Curbing consultants in government is already underway.  In terms of revenues the phone mast tax would most likely be passed on in increased costs to consumers and businesses or if it succeeded in getting companies to share masts then it would achieve less revenue than predicted. (UPDATE Chekov highlights another issue about this). The plastic bag tax may have some possibilites.  However, by my back of envelope calculations, it'd raise only £5-6 million a year so it represents loose change.  As for the environmental issues, shops have been making some headway on reducing their use without a tax involved.  They specifically rule out water charges or removing any rate reliefs which would include the property value cap at £400,000.

A number of the proposals are essentially means of the Executive borrowing money itself but Treasury rules will almost certainly block this (unless of course the body is privatised).  They have an interesting suggestion how asset realisation could release cash now but avoids selling at the bottom of the market. However any relaxation of the rules is unlikely considering that central policy is to reduce the national debt not increase it by rebranding it as belonging to different parts of the nation.  The expectation of generosity from the four main banks is heartwarming but I wouldn't be relying on getting £400m out of them any time soon.  You'd be lucky to get a cup of coffee out of them.

There are two proposals as regards European money.  The Regional Innovation Strategy set a target of 50m euros from the 7th framework over the 07-13 period.  So a target of 100m euros in the next couple of years is extremely ambitious.   As for the JEREMIE and JESSICA programmes this largely falls under the domain of DSD with the rumour that it hasn't been pulling its weight as regards trying to access these (so perhaps a little bit of intra-nationalist politics at play there).

As to the Green New Deal being an answer that all depends on your belief or otherwise in the underlying premise and the value for money represented by the public subvention involved.

Overall has it really found £1.9 billion of the potentially £2bn hole? Nope, not even close but it still represents a step towards the harsh realities we will face after 20th October.

PS I don't know how many times they used the phrase all-Ireland (they annoyingly disabled the word search function on the document). After counting 14 references I got fed up and stopped counting.

The RPA Panacea

Sinn Fein have pulled the tired old rabbit of RPA out of the hat as part of their answer to the financial squeeze. It is at least progress that they are accepting there is a problem rather than the denial that continues to the party faithful.  Regrettably RPA doesn't come even close to providing us with a solution.

It is estimated that in the next four years that our budget will be cut by approximately £1.5-2 billion.  So cash in the next four years is the priority.  There are five options as regards RPA with Option 5 producing the greatest level of savings - the £400m that is oft mntion but  £438,682,338 to be exact.  However, these savings are spread over 25 years.  The economic appraisal estimates that it would produce an annual saving of £41m. However, the savings come with one-off implementation costs of £126.6 m.  This means real savings don't come in the early years, a problem they are wrestling with at a nation level.  We'd also have to find the £126.6m from somewhere, this would require even deeper cuts now, not less. 

Also Option 5 includes setting up a strategic waste authority and a business services organisation.  This produces £280m of the savings.  Sinn Fein opposed these elements at the Executive.  The £438m in savings can't be reached without them.  So either SF is preparing to reverse its position or it is misrepresenting how much would be saved.  There is also a need to be honest about RPA. It is not simply a book movement of cash but will involve the pain of job losses.

PS As for ESA a number of amendments to the legislation and it could pass.  However, the standard answer for why this has not occurred applies, Catriona Ruane.

PPS This also does not mean RPA is a bad idea but simply that it is not the solution our immediate budget problems.

Undecided

Another ad from Americae, this time for embattled republican Senatorial candidate Christine O'Donnell.  She has not had her troubles to find as regards her campaign with the republican establishment as unhappy as the Democrats are about her.

As regards the ad, I get the concept - address a negative stereotypes upfront (the witch story and judgementalism) and try to redefine by playing to the strength, in this case being an outsider (and even just ordinary citizen).  However, I'm just not sure if she manages to pull it off.

Sweepstake

"Sinn Fein will unveil details tomorrow on how £1b savings can be made here. They will also argue £800m can be found for development."

How many times will the phrase 'All-Ireland' will be used?

Quote of the day

"One backbencher even managed to make ghost noises all the way through Cameron’s response to a question about Claire Rayner’s last words."

Our parliamentary democracy at its best.

1-0 down

Keep out the Italians but concede to the Faroe Islands.  Bang head off desk moment. UPDATE 1-1 come on we need the three points. UPDATE Draw, standard NI cliche do well against the better teams mess up against the also rans.

Plans B and C

Following the debacle that was the half-way house of UCUNF, there is an ongoing discussion between the Conservative and Ulster Unionist Parties about what its future relationship should be.  Unsurprisingly for a partnership that has been dysfunctional from the beginning, the respective Plan B's for the relationship are heading in entirely different directions.

The Conservatives wish the relationship to move towards full-scale merger.  As Ian Parsley points out, this was always the direction the Conservatives wanted the relationship to move towards.  It would also tackle the problems over selection etc that the Tories believe contributed to the poor performance.  However, there are two obvious issues with that. Who would opt to be the Ulster equivalent of Annabel Goldie and Scottish Tories?  The swiftness with which party resources were cut here after the election does cast further doubt on what level of commitment the Tories genuinely have.

Meanwhile, the Ulster Unionist preference appears to be long-fingering merger and instead of the half-way house they'd prefer a single foot in the Tory camp with a return to the old relationship of taking the Tory whip (presuming they can manage to get someone elected).  Yet this option retains many of the risks of a link with even less of the benefits. 

Three Thousand Versts points to the Conservatives working quietly on a Plan C.  However, creating a party from near scratch that can find credible candidates and run good campaigns is no easy task.  The Tory operation has had difficulty grasping that the political culture of Northern Ireland has distinctive elements.  This means a carbon copy of approaches used elesewhere do not provide the same results.  Nationally, Tory membership has been falling for years and to try to recruit and expand here while going through the largest budget retrenchment in generations is an immense task.  For example, how well will pensioners (and their families) react if the NIO leaks that PMS savers will receive only a % of their money proves to be true.   Also in this Owen Patterson may be more of a hindrance than a help, he has a whiff of colonial attitudes about him that the average Unionist voter can spot and doesn't like.

Considering all this, the problems at the UUP Executive may have been a welcome distraction for Tom Elliott.  However, it also gives him his first challenge to act on his demand for discipline and it isn't as if one of the participants doesn't have form.

Inflation

The introduction of water charges has become the answer easiest to some people's lips in terms of the Northern Ireland's budget issues.  However, it is not surprising that 64% of the population opposes their rapid introduction.  Beyond the fear for the future driving this view there is hard economic reality that inflation is hammering household budgets.  For the 10th month in a row inflation is above the government target of 2% with it stuck at 3.1%.  With many having salaries cuts or frozen then this is a significant decline in disposable income.

Quote of the day

"...she pulls out two sets of lingerie from a bag: a bright red cape, bra and matching knickers along with some devil's horns and a tail on the one hand, and a bride's veil, a garter, and a fluffy white bra and tanga on the other. "I was given these by a woman who owns a lingerie shop in Copiapo," she tells me. "I wasn't sure at first whether to wear them or not, but then I mentioned it to Claudio, and he seemed really keen on the idea, so I will."

I'm shocked and stunned that a man trapped down a Chilean mine for months would be so keen on such a suggestion.

Who'll get the 2.25 million jobs?

Fraser Nelson continues his focus on the ability of the British Labour Market to a) create jobs but b) for that demand to be met by foreign workers.  This dysfunction he predicts is a long-term danger for Cameron and the Coalition.  Its economic vision is based upon a significant expansion of the private sector providing more than two million jobs.  However, who gets the jobs will impact upon the feel good factor voters will feel?  

Nelson expects Labour's Ed Balls to focus on the issue to maxmise Coalition discomfort and pins his hopes on the impact of welfare reform to deal with it.  However, the desire for foreign labour isn't solely driven in the private sector by how much the welfare system instills or inhibits a desire to work.  There are also issues of work readiness and work ethic.  Even if the welfare reforms lead to more seeking to become active participants it doesn't necessarily follow they can compete within it.  This is were we need to look at what are called Intermediate Labour Markets to ensure people can.

Tell me why I don't like Mondays

This came to mind on reading the latest depressing data from the Ulster Bank PMI survey about the state of the local economy.  Private business sector business activity is down for the 10th month in a row with construction, retail and services all suffering while even more worryingly private sector employment is down for the 31st month in a row.  The conclusion is that:

"...the local economy is in a much weaker state than any other UK region"

This places a highly significant question mark over the ability of the private sector to absorb any reduction in the public sector.  Beyond the general economic difficulties and reliance on the public sector, the Northern Ireland economy has two further problems that differentiate it from other parts of the UK.  First, the differential impact of the significant decline of the Irish economy.  Second, the issue of the private sector's access to credit.  The greater presence of Irish banks in our financial sector, who are taking an even bigger pasting than the UK banks, is interfering in our credit flow.  While some attention is being given to the Treasury paper on growing the private sector, it is probably worth the effort to ensure the Banking reform paper also addresses this particular circumstance of Northern Ireland. 

Lifting from Obama?

The core reasons why I didn't like Cameron's Conference speech was he was trying to be someone else (namely Blair) and he used a number of devices what seemed to me to be from the culture of American speech-writing.  An inauthentic voice comes through in a speech.  The Mail of Sunday has confirmed the latter, arguing the Tory activist bit was lifted from a 2008 Obama speech.  Although the device is commonly used for example it is a regular feature of the State of the Union address.

Cuts Plan B

Whilst chatting to a friend last night he reminded me of Michael Portillo's comment that the cuts would prove much harder in reality to deliver than the Tories seemed to imagine after the election.  The Financial Times (registration required) this morning made a similar point:

"Confronted with the difficulties of quickly cutting spending – including financial penalties for breaking contracts and redundancy costs – ministers have been forced to consider delaying some of the big savings until later in this parliament."

This means Treasury officials are developing a Plan B for the cuts programme:

"The Treasury is working on plans to “reprofile” spending cuts next April, spreading the pain of deficit reduction more evenly over the next few years, senior Whitehall officials have told the Financial Times."

The same amount gets cut but less now more later. The danger of such a step is twofold. First is market reaction.  Will it be interpreted as a loss of political will thus leading to a more neagtive market perspective on the future of the British economy?  A Goldman Sachs analyst argues how it is explained to the markets will be key:

"If people were clear about the reasons for any delay [to spending cuts] rather than suspecting a political wobble ... I don’t think [investors] would change their mind about the risk premium on gilts,"

Although the wobbling over child benefit earlier this week will increase suspicions.  Second, in the short-term, the Labour Party could try to do a partial victory lap.  They could argue it is a de facto adoption of what they planned to do in the next couple of years at least. However, if they do do this it limits their ability to object to try and ride any anti-cuts sentiment.

It may also mean that the appeal for a change in approach from the devolved institutions may not fall entirely on deaf ears.

Cameron's Conference speech

In the immortal words of Bart Simpson

"I didn't think it was physically possible, but this both sucks and blows. "

He needed to pull out an impressive one and he failed to do it.

Oh dear - Updated

It's well seen Alex Kane has left the UUP press office, I doubt if this would have seen the light of day in his time even on a bad news day like today.  Denial mixed with a blame game over a unhelpful narrative rarely works.

UPDATE Meanwhile up on the hill the UUP garden is rosy with an MLA briefing of their unhappiness over a vice chairmanship.

Wobble Wobble

The backlash over the child benefits announcement has the Conservatives wobbling all over the place and sidetracking their conference.  Cameron was sent out to defend but he unwisely added some dissipation of saying other reforms would help those affected.  The single/dual income issue makes it a sticky wicket especially on the issue of fairness but anything further muddies the water.  This has been followed up with a leak to the BBC that the marriage allowance measures will be introduced in 2015. 

Presentationally this is a mess.  This now means the government position can be boiled down to we'll take something off you in 2013 and give it back to you in 2015 by a different route. It seems to be another example of how the core problems with strategic communication that dogged their election camapign have continued in government.  To wobble so quickly over measures that are 3 years away also does not smack of firm government.

Jens Henriksson's essay on the Swedish cuts programme stresses:

"Never say that it won't hurt. Never say that it is peanuts...This will help ordinary people to plan ahead and to limit shocks."

Wobbling on cuts comes close to an implicit breach of that.  He also highlights the pointlessness of dissipating measures.  They introduced a small tax cut.  The result was:

"...when the government came out with a bonus, they just became puzzled."

Quote of the day

Why Ed reminds women of every bad ex-boyfriend.

Scrabbling around for rationality

Eamonn Mallie seems to think that blowing up a bank and hotel has something to do with marking the anniversary of a civil rights march in 1968.  Just as likely to be marking the anniversary of an event a year later - the first showing of Monty Python's Flying Circus.  Or perhaps the anniversary of Dr No being released in 1962.

Free Beer

The US electoral cycle continues to provide us all with entertainment from Dale Paterson's all out assault while Basil Marceaux provided a media masterclass.  Now we have the candidate with a name in the tradition of the bands that have called themselves 'Free Beer'.  The Republican candidate for Alabama State Treasurer is called Young Boozer and unlike the others is odds on to win.

To help you through your day...

...a picture that warms the heart.

Mixed bag

George Osborne gave a speech on welfare reform yesterday with one good idea and one bad idea wrapped in a mistake.  The idea of capping the welfare levels is an interesting one that has a basis in the principle of fairness.  However, you do wonder if it is a means of exporting the unemployed from nice Tory areas of London etc.  The cut to child benefit is the bad idea.  It undermines the principle of universality which the Tories themselves made the case for during the election. 

The mistake was presentational.  Should it have been the Chancellor making such a speech?  Does it not make the context all about money rather than reform to our welfare system?  Would it not have been wiser coming from Iain Duncan Smith?  He has spent years building up his personal and party's credibility on the issue, would it not have been time for him to spend some of that capital rather than a Chancellor with none.

Scary Biscuits

At the time of the election it was claimed too much was made of David Cameron's Newsnight interview (7 minutes 35 seconds in) comments about cuts in Northern Ireland and the North-East of England.  However, the news that the Tory Chancellor George Osborne intends to tear up the capital investment programme agreed as part of the St Andrews Agreement is sufficiently grim that it now makes the attacks look positively tame. 

The cuts programme has been a consistent theme of this blog, almost to the point of obsession.  However, this sort of cut takes it from the realm of painful to debilitating. First and foremost cutting capital is the easy option but it is not strategic - a pound on capital provides a greater long-term return than a pound on revenue spending.  Plus a deferred capital cost has a nasty habit of becoming even more expense the longer it is delayed.  Second, there is a legacy of under-investment in our infrastructure.  Capital budgets were the usual victim when extra security resources were needed.  Third, the construction sector is being kept alive by what public capital projects are out there and proposed.

The original proposals for capital cuts could have been just about managed.  If an asset sales programme were agreed then a significant part of the hole could have been filled (provided the mandatory coalition government would have signed up to such a programme.)  Deeper capital cuts simply can't be.

Owen Patterson didn't do a very good job of trying to blame Labour and trying to slide away from those parts of the St Andrews Agreement. This also sets a precedent that he will have difficulty living with as Secretary of State.  These are also the party that Ulster Unionists were queuing up to be photographed with, told Northern Ireland voters to trust and back their joint manifesto and tried to run interference over Cameron's comments.

Ministerial Choices

In an exclusive interview for Farm Week, Tom Elliott has held out the prospect of the UUP taking the Agriculture Ministry after the Assembly election. 

"The suckler and beef farmer from County Fermanagh even held out the prospect of an Ulster Unionist Agriculture Minister..."

The nature of the ministerial appointment system means only one choice can be guaranteed - the very first one and that falls to the largest party.  After that choices are shaped by the decisions of others.  Basil had prioritised education as the UUP's preferred first choice of ministry (assuming it was still available) is Tom going to make Agriculture the UUP's first choice (assuming it is still available)?

Critcal and Slugger

My Critical Reation essay has been picked up by slugger.  The debate is here.

Eleven

Hat Tip W.