Israeli Prime Minister Binyamin Netanyahu nominates US president Trump for the Nobel Peace Prize
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Irish Times
an hour ago
- Irish Times
The roots of the British malaise lie in a sick economy
The UK suffers from three failures: failing politics; a failing state; and a failing economy. Of these, the last is much the most important. I am not arguing that these failures are significant by global standards: UK politics is still relatively decent and democratic; the state is relatively competent and effective; and, not least, the British still enjoy a relatively high standard of living. The problem is that the economy does not provide a rising standard of living or the expected quality of public services at politically acceptable levels of taxation. The state is also unable to ameliorate the painful trade-offs this reality has imposed. Finally, the politicians cannot confront the choices they face, as we have seen with Keir Starmer, most recently over welfare reform, but also over the questions of tax, spending and economic reform raised in the 2024 general election. READ MORE Numbers tell the story. According to the from the National Institute of Economic and Social Research, real disposable income per head rose by just 14 per cent between the third quarters of 2007 and 2024: it had risen 48 per cent between the third quarters of 1990 and 2007. According to the International Monetary Fund (IMF), the trend growth of gross domestic product (GDP) per head in the UK had been 2.5 per cent a year from 1990 to 2007: then, between 2008 and 2025, it was just 0.7 per cent. Keir Starmer is not a charlatan. But he has not been prepared to take on the burden of leadership that current conditions require. This reduction of 1.8 percentage points in the growth rate was the largest in the group of seven high-income countries (plus Spain). In the second period, only Italy has grown considerably more slowly than the UK. As a result, UK GDP per head in 2025 is forecast to be 33 per cent lower than it would have been if the 1990-2007 trend growth had continued. This is the biggest shortfall among all these countries. All of this is rooted in the most important collapse of all, that in productivity growth. According to the Organisat ion for Economic Co-operation and Development (OECD), real output per hour rose by a miserable 6 per cent in the UK between 2007 and 2023. This was the same as in France and again, above Italy. But in the US the rise was 22 per cent. In the euro zone as a whole it was 10 per cent. The UK's stagnant productivity is a big worry. When economies cease to grow, everything becomes zero-sum: more for one group of people means less for others. How the wealthy are buying up land to avoid inheritance tax Listen | 22:03 The problem is even greater if demographic change increases the number of beneficiaries of fiscal transfers relative to that of productive taxpayers. The overwhelming questions in politics become how to contain the discontent when much of the population has stagnant real incomes, how to manage the public finances, especially during shocks, and how to get the economy growing again. These are tough questions. This is partly because the most important of all, namely, what to do to raise economic growth, is so hard to answer. Nobody expected such a large and widespread fall in trend growth in high-income countries as has happened since 2007. Even the US has suffered a significant decline in growth of GDP per head in the post-2007 period. But the decline in the UK's growth rate is quite exceptional. More fundamentally, while economists have some ideas about the sources of economic growth, these amount to much less than precise knowledge. This is partly because both the nature and impact of technological progress is so hard to foresee. Today, for example, some think artificial intelligence will transform productivity for the better. Others most definitely are sceptical. Indubitably, a serious government would be devoting vast intellectual resources to the question of how to raise the growth rate. None has, including this one. The charlatans pretend that something simple – Brexit or huge unfunded tax cuts – will deliver. A starting point, in my view, must be recognition that the Thatcher experiment failed: it did not transform the underlying performance of the economy for the better. This must now be admitted. Too much of the post-Thatcher performance was unsustainable. This was, in good part, because it was the fruit of a global credit bubble, in which the UK was a leading actor. My hope is to devote future columns to how a new growth strategy might work. But, before that, it is crucial to recognise the political responses we have been seeing since 2010. By and large, these have fallen into two categories: charlatanism and timidity. The charlatans pretend that something simple – Brexit or huge unfunded tax cuts – will deliver. The timid have been relatively responsible. But they have been unwilling to admit the scale of the economic and political challenges they confront and then make hard choices. Keir Starmer is not a charlatan. But he has not been prepared to take on the burden of leadership that current conditions require. I sympathise. But his timidity will not work. – Copyright The Financial Times Limited 2025
Irish Times
2 hours ago
- Irish Times
Siptu spent just €15,000 from €1.3m political donations fund, accounts show
Ireland's largest trade union spent just €15,000 from a €1.3 million political donations fund, according to accounts for 2024. The record of Siptu's spend on political donations for last year was recently lodged with the Register of Friendly Societies, which is the central holder of statutory information for trade unions and certain other bodies. There were European and local elections in June 2024, as well as a general election in November. Siptu's annual returns cover only the two held in June, as the latter came too late for payments to be processed that year. The union's political fund, to which almost 130,000 of its members contribute, increased in value by almost €100,000 over the course of the year despite the various elections. READ MORE Siptu tends to only back candidates with strong links to the union, usually via actual membership. Just one candidate running in the Europeans – People Before Profit's Cian Prendiville from Limerick – was financially backed, with a donation worth €950. For the local elections, donations of €595 went to 22 candidates, 15 of whom ran for the Labour Party. The remaining seven included contenders running for Sinn Féin, the Workers' Party, the Social Democrats and the Green Party. It is understood that just a handful of general election candidates, including Labour's Marie Sherlock and Duncan Smith, would have received support, and this again would have involved modest amounts. The union says the fund is also available to be used for campaigns it runs. However, there were no other outgoings in 2024. The documents show that the union's membership declined by about 5,000 in each of the past two years and stood at 193,508 at the end of last year. The membership tally is understood to include a range of member categories, including those who have retired but maintain their membership without paying full subscription rates. Siptu says a rise in subscriptions is a better indication of active members. This increased last year, from €32.2 million to €32.5 million. However, the higher amount is almost the same as the figure for 2014 when the all-categories membership figure was 210,670. In 2019 subscription fees totalled €33.8 million, and there were 211,855 members. Covid presented big challenges. The union's industrial contingency, or strike fund, contained €19.2 million by the end of 2024, while there is almost €10 million set aside for the modernisation of Siptu's headquarters at Liberty Hall in Dublin. Overall, the accounts record net assets of about €53 million across a range of funds and an operating surplus of €1.17 million for the year. [ Siptu renews push for recognition at several large plants in pharma and medical device sectors Opens in new window ] Staff costs accounted for €23.9 million, of which a third (just short of €8 million) was contributions to the union's defined benefit scheme. In a 2022 review, this scheme was found to have a €20 million deficit and therefore was in need of additional payments. Over the course of 2024, Siptu employed an average of 250 staff, down from 267 in 2023. The organisation's four most senior personnel together cost €610,000, the accounts indicate.
Irish Times
2 hours ago
- Irish Times
Ireland's competitiveness on downward trend just as major challenges move into focus
Ireland's competitiveness is on a downward trend, and there remains a 'critical need' to address key infrastructure deficits, at a time when the country's economic outlook 'firmly tilted to the downside', according the findings of a major report. The report, Ireland's Competitiveness Challenge 2025, was drafted by the National Competitiveness and Productivity Council , which advises the Government on key issues facing the economy. While Ireland is ranked as the most competitive country in the euro area and the seventh most competitive economy in the world, it has fallen from second place just two years ago. The decline was largely due to a drop in 'business efficiency' from third place to 11th. READ MORE A key issue highlighted by the report is shortcomings in Ireland's critical infrastructure, such as access to water and electricity. 'There remains a critical need to enhance the delivery of our economic infrastructure to address growing deficits,' the report notes. [ Ireland slips two places in 2024 global competitiveness league Opens in new window ] 'Significant infrastructural demand arising from strong population growth, in combination with an insufficient supply response has resulted in growing deficits across housing, energy, water and transport.' The report says planning delays 'continue to hamper our ability to meet targets', and that the Government should consider the introduction of mandatory timelines in relation to licensing, including for environmental licenses. The council says productivity in the construction sector remains 'unacceptably low' in a period of 'critical need for increased output', and that there is a need to 'better understand' the drivers of this. How the wealthy are buying up land to avoid inheritance tax Listen | 22:03 The report also deals with personal injury claims, which it says are emerging as a 'major cost driver' for businesses in Ireland through their 'significant influence' on insurance premiums and risk assessments. Legal costs in litigation are 'disproportionately high', it says, calling for a re-examination of the methodology used to benchmark the level of awards in advance of the next review of the personal injuries awards guidelines. Indeed, the report deals extensively with the cost of doing business, which it says 'continues to present significant competitiveness challenges despite overall economic resilience'. [ Banking, housing remain challenges to Ireland's competitiveness, NCPC report says Opens in new window ] It notes that labour costs in Ireland 'have risen sharply' in recent years and are projected to continue increasing due to wage growth and public policy moves to improve working conditions. The report also refers to the new 'enhanced reporting requirements', which require employers to provide detailed reporting on expenses paid to employees or directors without the deduction of tax, as a 'new source of increased labour-related cost', and calls for them to be reviewed. 'For employers submitting relevant returns outside of standard payroll filings, this represents a new administrative burden,' it says. 'There is a concern about the proportionality of requiring all employers to provide such information.' Some 11,170 company liquidations occurred last year, with the number of insolvent liquidations up threefold to 1,917. Meanwhile, the number of solvent liquidations was higher than in any of the previous 10 years. Some 320 new companies in the hospitality sector and 276 new companies in the retail sector were incorporated in the first five months of this year. Both numbers were down by almost half on last year. The council believes all of the issues outlined in the report are harming Ireland's competitiveness at a time when it is already under pressure from 'uncontrollable' geopolitical factors such as US President Donald Trump's aggressive trade policies. Indeed, the report notes the concentration of trade with partners in the United States 'has been jeopardised' in recent months, and calls on the Government to help Irish firms to diversify export markets and supply chains. It says the risks to Ireland's economic outlook 'remain firmly tilted to the downside', while efforts to incentivise reshoring by US multinationals and the repatriation of intellectual property out of Ireland could have 'major and lasting implications' for Ireland.
