Private Sector: Wage Levels

Oral Answers to Questions — Finance and Personnel – in the Northern Ireland Assembly at 2:30 pm on 20 April 2015.

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Photo of Maeve McLaughlin Maeve McLaughlin Sinn Féin 2:30, 20 April 2015

T3. Ms Maeve McLaughlin asked the Minister of Finance and Personnel whether he agrees that, with the economy slowly moving towards recovery, now is the time to urge the private sector to raise wage levels to reward workers who, in essence, have kept businesses moving forward in very difficult times. (AQT 2363/11-15)

Photo of Simon Hamilton Simon Hamilton DUP

Yes, I do. I say that quite clearly knowing that, whilst the economy is growing and the latest figures in Northern Ireland suggest a year-on-year increase of 1·2% between quarter 3 of 2013 and quarter 3 of 2014, that the claimant count has fallen for 27 consecutive months and that unemployment is down at 6%, which we should welcome, there are still many businesses in Northern Ireland that are struggling. What I also know — and I am sure that many Members will know it from contact with businesses in their areas — is that, during the recession, although some businesses shed staff and, in extreme circumstances, some had to close unfortunately, others kept themselves going through cutting wages. We talk about pay freezes and pay restraints in the public sector. We sometimes forget that, in the private sector, pay cuts were the order of the day in many cases. As companies get back to strength, the economy grows and companies benefit from a growing economy here in Northern Ireland and those in our neighbouring countries and around the world, that should then be reflected in increasing wages and pay packets for our workers.

Photo of Maeve McLaughlin Maeve McLaughlin Sinn Féin

Go raibh maith agat. I thank the Minister and welcome that clarification. If the Minister is saying that he can see clearly that higher wage levels would feed into boosting the economy, could he outline how he, the House or the Executive could promote that line of action?

Photo of Simon Hamilton Simon Hamilton DUP

I go back to the earlier question. It is not my job to tell businesses how to do their job. They are in a far better position than I am or, indeed, anybody in the House is to know how their business operates, the market that they are operating in and the circumstances that affect their business. Whilst it is maybe easy for me, standing in my position, to look at the totality of the economy and say that things are good, that this sector is up, that sector is up and, indeed, even the construction sector, which had been doing very badly, is showing signs of growth and recovery, neither I nor any part of government can dictate to firms and businesses that their staff's wages should go up. As the economy grows, however, it is incumbent on our businesses, as their business improves, that they pass on those benefits to their staff who, in many cases, absorbed significant pay cuts during the recession, stuck with those firms and stayed loyal to them so that they could retain the skills and experience that they brought. If those businesses are doing well, and the markets in which they are operating are improving, any sensible business should increase its staff's wages. That, obviously, helps the economy in a broad sense, and it also reduces the benefits bill, as those in-work benefits, which are sometimes forgotten about in a debate on welfare reform, would naturally reduce as people get paid more.