Mind the gap: why NI pay lags behind rest of the UK
If a catch-up of average earnings between Northern Ireland and other UK regions or the Republic of Ireland was a critical test of our collective achievements, then we are failing. Our real standards of living, adjusting for the overall lower cost of living, compare favourably with other places but, in monetary terms, there is a conspicuous continuing gap.
The evidence on changes in average earnings is, unhappily, that Northern Ireland still compares unfavourably with changes across the UK.
After making allowance for changes in the cost of living, in the most recent year to April average real earnings here fell by 1%. In the same year average earnings in the UK fell by 0.4%.
In a league table of the earnings levels of full-time employees across the regions of the UK, Northern Ireland was in 10th place of the 12 regions, with earnings around 9% less than the average.
There is a near consistent picture of Northern Ireland making little progress in closing the income gap. Much of the comparative earnings data could attract the simple description of being much the same as in recent years.
The official statistics stop short of an explanation of the outcome.
Are people here paid less than people elsewhere doing the same job, or are more people here in less well-paid jobs because we have a high proportion of occupations that are less skilled and need fewer qualifications?
In an intuitive response, the earnings gap for Northern Ireland is less explained by lower pay for comparable jobs and is more likely attributable to the structure of the economy, which relies on fewer people bringing skills to the labour market.
This year’s earnings statistics show some serious changes and new features.
First, real average earnings are still well below the highest levels reached in 2009. Year by year, the trend from 2009 to 2014 was for real earnings to edge downward. After a partial recovery in 2015, they have barely changed. The adjusted value of earnings in 2017 is 3% lower than in 2009.
Second, whilst there has been a fall in real earnings, some evidence points to the spread between high and low earners having narrowed, if only marginally. In the 20 years from 1997 to 2017, the gap between the top earners (in the top 10% of earners) and low earners (in the lowest 10% of earners) narrowed from a multiple of 3.6 in 1997 to a multiple of 3.1 in 2017.
This change has been partially pushed by the influence of the national minimum wage, which comes close to being a proxy for the lowest-paid 10%.
Third, in a striking feature of the analysis of changes in average earnings, each year since 2009 the earnings of full-time female employees has moved to be higher than for males. The trend over the last five years, incrementally and slowly, has been for this difference in favour of females to widen.
It should also be noted that, although part-time earnings are lower (per hour), the difference for females shows a similar advantage. The changing comparison for female and male earnings is believed to be a consequence of the overall changing pattern of employment, with jobs in higher-paid occupations that are more likely to attract female employees becoming a bigger part of the labour force.
The information on the levels and distribution of average earnings needs to be considered in the context that, while incomes have tended to lag, employment levels have remained higher than might have been expected.
Is Northern Ireland keeping employment up as a consequence of seeing earnings fall behind? Is that a useful and necessary trade-off ?
The 2016 English case of Dreamvar (UK) Ltd v Mishcon de Reya illustrates the importance of knowing your client and exactly who you are acting for.
This case related to a property in London which was being sold quickly. It was not occupied and there was no mortgage over the property.
A fraudster, claiming to be Mr Haeems (who was the real owner) produced a forged transfer document and provided this to the purchaser, a company called Dreamvar Limited.
As the seller wanted to sell the property quickly, and the buyer wanted to complete quickly, the transaction completed quickly. The purchase price was £1.1m.
However, when the purchaser’s solicitor went to register their client’s title at the Land Registry, a discrepancy was spotted between the property address and the address on the fraudster’s ID.
No link could be established between the fraudster’s address and the property address.
The real Mr Haeems was contacted and he disclaimed all knowledge of the transaction.
By the time the fraud was spotted, it was too late and the money had been released to accounts in China.
Dreamvar asserted various causes of action against both the buyer’s and seller’s solicitor and the buyer’s solicitor claimed a contribution from the seller’s solicitor in the event they were found liable.
A claim was made against the seller’s solicitor that they had warranted or undertaken that the seller was genuine but the court held no warranty was given to that effect.
In respect of the claim made against the buyer’s solicitor, they had received assurances that the seller’s solicitor had verified the seller’s identity.
The judge was satisfied that the buyer’s solicitors had taken care and it was reasonable of them not to think this was an identity fraud.
The judge accepted the firms involved had acted honestly and innocently in carrying out their respective roles but further went on to rule that the buyer’s solicitor’s firm was a City of London firm who had insurance to cover the loss suffered in full, and was in a better position than the buyer to face the consequences.
The ‘only practical remedy’ therefore was for the whole loss of £1.1m to be carried by the buyer’s solicitors.
The outcome seems particularly harsh on the buyer’s solicitor who seemingly did nothing wrong but had to bear the consequences of a fraudster, represented by the seller’s firm.
This case highlights the onus and importance of solicitors ensuring they know the identity of their client in a matter, and also ensuring the solicitor on the other
side of a transaction is aware of the identity of their client.
Moreover, clients should exercise caution when dealing with a seller and ensure they know who they are dealing with, particularly if it is a high value transaction.
Michael Duffy is a property solicitor at Worthingtons Solicitors, Belfast and deals with transactions in both Northern Ireland and in England and Wales. He can be contacted at firstname.lastname@example.org or on 028 9043 4015
Northern Ireland needs to catch up when it comes to pay
Clients should exercise caution and know exactly who they are doing business with, particularly in house buying