Facts essential in financial inclusion
Northern Ireland is a symbol of industry and innovation and I was struck by the endeavour of the people I met on my visit to Belfast last month.
During this visit I had the pleasure of meeting with the Consumer Council, and a range of financial service providers, to discuss with them the issues that people in Northern Ireland face when it comes to accessing the help and financial services they need.
I hope that in doing so, the conversation about financial inclusion and capability — and what is needed to support the people there — has been opened up.
Financial inclusion is about having access to essential financial services like bank accounts, debit and credit cards.
It’s vital that our financial services industry is accessible to everyone who needs it, regardless of background or circumstance, if we want to build an economy that works for everyone.
And it’s an issue that’s very close to my heart, which is why I am working with the Treasury, and jointly chairing the Financial Inclusion Policy Forum.
The forum brings together industry leaders in finance, consumer groups, and the regulators to ensure that individuals — re- gardless of their background or income — have access to useful and affordable financial products and services.
Following the forum’s first meeting on March 19 we have set up a sub-group which is currently looking at access to affordable credit and driving forward the work in this area, which will be a key focus for the next forum meeting in October.
While the government is strongly committed to tackling financial exclusion, it also believes financial education is key in helping people increase their financial capability and build up their financial resilience.
Work to improve financial capability is currently led by the Money Advice Service (MAS), which will soon be merged into the Single Financial Guidance Body.
This will build on MAS’ good work and help people to make more sense of their finances in these increasingly complex times.
Currently the Money Advice Service, the Pensions Advisory Service and Pension Wise help people get free and impartial debt advice as well as information and guidance on issues relating to finances and their pensions. These services help hundreds of thousands of people every year.
By bringing these services under one roof, the process of getting the help you need with your pressing money questions will be easier, meaning that people will get the help and guidance they need, when they need it.
Education is key in helping people increase their financial capability and financial resilience
Any trade union or business negotiator will tell you that there are five things you need to be certain of when you are negotiating (say) a pay increase and restructuring or even (say) extricating your country from the EU.
You need to know what you want. What you want has to be achievable. You have to have a thought-out strategy to achieve it. You have to bring your people with you.
Finally, the understanding that you don’t have to like the people you are negotiating with, but they have to know what will ultimately settle the issue. On each of these five areas the Tories have failed miserably.
This Brexit debacle and the suspension of Stormont should be sparking a debate in how we organise our affairs here. Last week the Nevin Economic Research Institute (NERI) published key research — Bad Jobs and Productivity: the Flexibility Paradox. The paper charts the mantra known as the Washington Consensus that emerged in the 1980s and 1990s with its apostle Margaret Thatcher pursing an insatiable drive for deregulation and a one-sided flexibility from workers.
It promoted a move away from what has been traditionally viewed as standard, permanent full-time employment, which is secure (in as much as anything can be), to a position whereby labour costs were more flexible and lower and employment contracts were incredibly loose.
Its supporters argued that this approach is a key driver of economic growth and productivity. The NERI paper clearly debunks this myth, and finds that deregulation could actually be a drag on our productivity.
The research makes the point that there are a number of factors required for any economy and society to prosper and the data around NI clearly shows that we are not. Many commentators will say unemployment is very low and yes it is. But let’s look at the quality of the jobs as opposed to the quantity. The data shows that:
l 1 in 3 workers in Northern Ireland today deem their job to be insecure;
l 4 in 10 are in non-standard contracts of employment;
l 1 in 5 workers earn below the real living wage;
l 4 in 10 earn below the real living wage wholesale and retail, our largest employment sector;
l 7 in 10 earn below this wage in our accommodation and hospitality sector.
Productivity in Northern Ireland is weak and continues to lag consistently behind the rest of the UK and the EU average. Therefore, it is clear that things are not working.
It has been said that one should never waste a good crisis and merely bemoaning our difficult and challenging circumstances is not good enough. That is why the ICTU in Northern Ireland which represents 24 trade unions that organise over 200,000 workers is running the Better Work Better Lives campaign.
We are engaging with workers, politicians and other representative organisations right across the social and economic spectrum. Along with a range of policy options that we feel can improve our economy and society, we are seeking support from all for a new institutional forum of social dialogue here in Northern Ireland.
Such a forum could have the capacity and potential to bring key social partners and representative bodies together in a structured way to work with a future devolved government on key initiatives.
Done well, this should make Northern Ireland an innovative and great place to do business, with improved productivity and where workers have better pay and more secure conditions of employment with the opportunity to invest in their skills.
It is not nor can it be an either/ or, but must be both. Such a forum could bring together key voices of workers, employers and the community and voluntary pillar to share ideas to seek to improve the economy and society we live in. This proposal is not radical or indeed novel but entirely logical and sensible.
It is important that we restore devolution whereby our politicians again share power, but this time not just horizontally, but vertically as well.