Mind the gap: why NI pay lags be­hind rest of the UK

Belfast Telegraph - Business Telegraph - - Analysis & Company Report - with John Simp­son @bel­tel_busi­ness

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 michael@wor­thing­ton­slaw.co.uk 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

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