Official Report: Minutes of Evidence

The Deputy Chairperson (Mr Buchanan): I welcome Mr Seamus McAleavey, who is chief executive of the Northern Ireland Council for Voluntary Action (NICVA), Mr Matthew Dass of Oxford Economics and Mr Eoin Rooney from NICVA. We will give you 10 minutes or so to make your presentation, after which we will open it up for questions.

Mr Seamus McAleavey (Northern Ireland Council for Voluntary Action): Thank you for the invitation to come along today, Deputy Chairperson. We will take a few moments to give you some background to the report and its findings. The report, which was commissioned by NICVA, investigates the economic aspects and likely impact of the living wage and its implementation if it were to be implemented in Northern Ireland. NICVA has been carrying out a range of economic analyses and has commissioned a number of reports, as members will know. We have our own unit, the Centre for Economic Empowerment, which Eoin heads up.

NICVA considers the living wage to be desirable. There is broad political consensus on that; I know that the Prime Minister, David Cameron, has indicated his support for it. There is a general view that it is desirable, but we wanted to look at the likely outcomes. Again, from our point of view, just because something is desirable does not mean that it can necessarily be achieved. We wanted to look at the evidence for or against to see how it fell.

From that point of view, we commissioned Oxford Economics. I will pass you over to Matthew, who will talk to the report, after which I will take a moment with Eoin to look at some of the policy options that might come out of this.

Mr Matthew Dass (Oxford Economics): Good morning, everyone. Thanks very much for this opportunity to talk about the report. As Seamus said, last year, NICVA commissioned Oxford Economics to look at the living wage in Northern Ireland. The question that we specifically set out to ask is a kind of hypothesis, which was this: what would happen if the living wage had been introduced as a wage floor or minimum wage in Northern Ireland in 2012? The living wage at that time was £7·20 an hour. I apologise for the poor quality of the handout I have passed around — it was all that my printer allowed me to do last night — but it describes the four key quantitative findings of the report that we were able to come up with. Had the living wage been introduced in 2012 as a minimum wage, our analysis indicated that wages in Northern Ireland would have increased by £221 million; consumer spending would have been boosted by £132 million; gross domestic product (GDP) would have increased by £84 million; and, consequently, there would have been additional employment of 2,500.

With the time remaining, I will give you a bit more background on those figures. The first thing we had to do in calculating the wage increase was to look at the number of people in Northern Ireland who earned below the living wage in 2012. Using labour market data, we were able to estimate that about 173,000 employees in Northern Ireland earned below the living wage, which is about 23% of the workforce. Had all those employees received a wage increase so that they earned at least £7·20 an hour, the wage increase, on aggregate, would have been £121 million.

The next question we had to ask ourselves was this: how would that be paid for? In our research, we were able to identify five channels through which businesses and organisations could pay for a wage increase. These are not in any ranked order as such. One option is that businesses could reduce their employment and use the savings from that employment reduction to pay for the new increase. They could reduce other labour costs, such as training or non-wage benefits. They could reduce the hours or perhaps reduce the wages of higher-paid individuals to pay for the increase for the lower paid. They could reduce profits, which would ultimately have a knock-on effect on the owners' returns. They could pass the wage increase on to consumers in the form of higher prices. Finally, businesses could experience an increase in productivity as a result of increasing wages at the bottom end of their labour force. What I really mean by that is that, very simply, because people are getting paid more, they work harder and produce more output. With that final channel, it is important to note that, if the living wage were implemented and paid for through productivity improvements, it would have no negative economic consequences throughout the Northern Ireland economy, because it has effectively paid for itself through people producing more and raising the overall supply of the economy.

When we looked at our literature and the evidence for each of the channels, we decided that the best assumption that we could make was that the living wage would be paid entirely by productivity improvements. That is not to say that that channel is exclusive of all the other channels. It is not, but, based on the evidence, we found that the strongest evidence was for productivity improvements. We made that simplified assumption, but we recognise that it is a best-case scenario. Indeed, we have a sensitivity analysis in the report.

Assuming that there is no cost to the Northern Ireland economy, the £221 million in wages goes into the Northern Ireland economy. We needed to take account of tax increases, benefit reductions and savings, but, once we did that, we were able to estimate that consumer spending would have increased by £132 million, which would have rippled through the economy and increased Northern Ireland's GDP by £84 million, including the wider multiplier effects. That increase in GDP would have ultimately created additional jobs, which we calculated would be 2,500.

The summary conclusion of the report is that, had the living wage been implemented in 2012, it would have created a net positive gain for the Northern Ireland economy, albeit that gain would have been relatively modest. That is my conclusion.

Mr McAleavey: Thank you, Matt. Eoin will talk about some of the possible policy options coming from the report.

Mr Eoin Rooney (Northern Ireland Council for Voluntary Action): NICVA, like many people, has a strong moral and ethical investment in the idea that all workers should be paid the living wage. We commissioned the research to find out whether a situation in which everyone was paid at least the living wage was economically desirable. The report and others suggest that that is the case. If that is accepted, the question arises of how to get there and how to achieve a situation in which everyone is paid the living wage. That discussion is at a very early stage, but a number of levers could be used as part of an overall strategy to promote the living wage. One is the use of public procurement, particularly the greater use of social clauses, to advance the living wage. There are various options on the use of financial incentives. The tax system, for example, could reward living-wage employers. Minimum wage legislation is another option. There has been debate about the regionalisation of minimum wage levels, which I am happy to come back to.

Matt highlighted the option of productivity improvement in the hope that that would feed through to higher wages, although, as he pointed out, the opposite can also be the case. Another option is to encourage voluntary arrangements. There are many options, including the use of business improvement districts, whereby employers collectively agree to pay their staff at least a living wage. There are encouraging forms of collective bargaining on pay levels, which could be greater workplace bargaining or, on a sectoral basis, more encouragement of minimum pay levels.

Mr McAleavey: Thank you very much, Chair. We are happy to take questions.

The Chairperson (Mr Swann): Thanks, Seamus. Apologies for not being here for the start of your presentation.

Matt, you say that there are five strands for a company or employer to make up the difference in finances: reducing the wage bill removes money from the Northern Ireland economy; reducing labour costs, hours and non-wage benefits cuts the amount of money in the Northern Ireland economy; if a firm reduces its profits, that removes money from the Northern Ireland economy; and passing on the cost of a higher pay bill to consumers is also removing money from the Northern Ireland economy. I am not opposed to the practicality of the living wage, but, from those five strands, I cannot see where the increase of £84 million comes from, because I cannot see how the living wage creates new money.

Mr Dass: Intuitively, that is the first question that strikes you when you think about the issue. It is important to note that, when we talk about this analysis, we are talking about the overall macroeconomy and not individual businesses. There will be winners and losers across the board.

We think that there will be a boost, or more GDP will be created, in Northern Ireland because of an improvement in productivity. If businesses do not go down the first four channels but pay for the increase through productivity, they ultimately produce more in the economy. Standard economic theory is that, if you raise your aggregate supply level in the economy and have the demand to meet it, you have effectively created more output.

Let us take a simple example. A manufacturer increases the wages of his workers, and, for various reasons, they increase their productivity, perhaps through a lower turnover rate so that, as employees grow in experience, they become more productive, as is generally accepted. Perhaps because workers are being paid more, they feel that they need to work harder. Ultimately, they produce more output, which is sold and comes back to the business in the form of greater profits. That kind of mechanism creates increased GDP in the Northern Ireland economy.

The Chairperson (Mr Swann): Is it the productivity strand that would produce the £84 million rather than the other four strands?

Mr Dass: Yes; that is an important point. The model has been developed on a simplified assumption that productivity pays for everything. We did not just come up with that assumption. Take, for example, reductions in employment. In UK studies into the effects of the minimum wage, there is very little evidence to suggest that any major unemployment has been created through that. It is building the assumptions to form something that is acceptable but simple. If you tried to trace all the effects of these challenges to the economy, it would be an extremely large piece of research.

The Chairperson (Mr Swann): I am sorry to labour this, but figure 2.8 of the report shows the proportion of employees earning below the living minimum wage by industry. If I take your strand 5 — production through manufacturing — the eight main employers paying below the minimum wage are service industries. I am trying to get my head around that. The headline figure is that it would put £84 million into the economy. I cannot see that in the report, Matt.

Mr Dass: Figure 2.9 shows the absolute figure increases; figure 2.8 shows proportions, which do not reflect the numbers of people who have received increases. I completely understand that if, for example, it is a service, it may not have the ability to increase productivity. However, let us take the example of hairdressers: if they simply work harder because they are being paid more, they could see more customers and make additional profits. It is possible for us.

The Chairperson (Mr Swann): In figure 2.9, the wholesale and retail trade is the biggest sector, and accommodation and food service activities, and human health and social work activities are also in the bottom three. How do you increase productivity in those areas? I am concerned that, if you go down the other four channels, people will be taken out of the workforce in those areas.

Mr Dass: As I said, the report is based on the macroeconomy, and we have based our assumptions on published literature. If you ask those specific questions about the wholesale and retail trade, and we look at a specific business in Northern Ireland, perhaps a retailer, if its staff are paid more, they will work harder. They will also be more experienced in how the business works because the turnover rate will be lower, and they will ultimately produce more. That is the general point of higher productivity. If people are working more efficiently in individual businesses, unless we assume that all businesses work at 100% efficiency, they will produce more, sell more and make additional profits. That is not to say that firms would not go down a different channel, would not choose to make employees redundant or would not think that they could drive productivity gains.

The report is meant to provide an economic discussion about the different consequences of the living wage, and we have presented our scenario as the best-case scenario and what we would ultimately all love to happen. There is a sensitivity scenario, and we have modelled unemployment coming through the economy. We are trying to provide a sense of what you are saying, which is that the firms at the top end would perhaps create unemployment.

Mr Rooney: In addition to that, there is a very clear need for further research on the implications that impact on specific sectors. The report looks at only the macro impacts.

Mr Ramsey: Good morning. You are very welcome. In recent years, unfortunately, people have found themselves on benefits. There was an earlier discussion about people who are economically inactive, and an increasing number of people across Northern Ireland find themselves caught in poverty traps. The terminology the "working poor" is so relevant in our communities, and all of us who are on the campaign trail hear that on the doorsteps. It is those families.

The SDLP has been aware of that for some time, and we articulated it through making Belfast City Council the first council in Northern Ireland to be a living wage council. We see the merits of that. I take your point, and it is important that people get a living wage. Not only would it increase productivity but it would increase morale and motivation in the workforce. In turn, it would give a sense of value not just to the employees but to their families, and their spending power in their communities would help retail and service industries across Northern Ireland.

One imagines that a number of councils are looking at achieving a living wage or believe that it is "desirable", to use your terminology.

What about Departments? My constituency is highly dependent on public-sector jobs, social security jobs and pension credit jobs. Many of those people are hugely dependent on family tax credits. Contrary to what people believe, public sector workers are not high earners. They are the working poor, as well. Is there anything that we can do to encourage or stimulate Departments to come up to the mark to ensure that they bring forward a living wage economy?

Mr McAleavey: On your first point, it is interesting to note that the Prime Minister, David Cameron, has supported the notion of the living wage. One of the things that we would say is that a significant amount of money is being paid in tax credits — some of it has now obviously been squeezed under the welfare reforms — which, at the end of the day is a subsidy to employers because it is about people in work. The transfer of that would also transfer some of the dignity that goes with people working and earning a living age that is fit to keep them and their families. Now that the Prime Minister has said something about it, it is important that the Government begins to look at rebalancing those transfers. That is transferring a huge amount of money out of the public purse and maybe they could look very clearly at how they could rebalance that from within the payments that they make. I recognise what you said and large numbers of public sector workers are paid below the living wage.

Mr Rooney: To date, the making work pay argument has largely been interpreted as penalising people who are out of work. This is potentially a way of making work pay by rewarding people for being in work. It is an interesting potential policy that could go alongside welfare reform.

A starting point for Departments would be to make sure that they pay all their staff a living wage. I do not see any reason why Departments could not become accredited living wage employers and demonstrate publicly that they support the living wage. There is also a question about the extent to which the living wage can be encouraged through public procurement. That is quite a complex area, and there is a bit of debate about it, but it certainly could be looked at.

Mr McAleavey: On that point, social care has been mentioned, and voluntary organisations and private-sector bodies quite often deliver that on behalf of government. There is an issue to look at there. One of the things that government would not want to do is to effectively privatise the problem by going for the absolute cheapest cost. That cheapest cost can sometimes be found in people having to pay very low wages that are much below the living wage. There are issues to look at around procurement.

Mr Ramsey: Chair, like you, I would be keen to get more detail, and maybe the Assembly research team could look at the implications across the spectrum. I see that there is a member of the team here. Maybe we could get a bit more work done that may help you as well, Seamus.

Mr McAleavey: That would be helpful. We have dipped our toe in the water here, but we realise that there is a need for much more detailed research. We have done that on a number of things. Your looking at it with regards to what a strategy might be would be very helpful.

Mr Hilditch: Like others around the table, I share NICVA's view that a living wage is desirable. I welcome the debate and the toe in the water. It is time to have a look at it.

I heard some commentary from the Federation of Small Businesses, which indicated that 20% uplift would be simply unsustainable. Was there any input from the private sector in the compilation of the report?

Mr Dass: No. Its involvement was debated at the scoping stage of the report, but I suppose that it was viewed as too problematic to decide which businesses we were going to talk to, and, if we were to discuss how they would pay, we would have had to look at their financial statements and try to sense-check what they were saying. The decision was ultimately taken to look at the published data and the research that was already available.

Mr Rooney: We were keen to hear the views of small businesses in particular. We invited the Federation of Small Businesses (FSB) to give a response at the launch of the research.

Mr Hilditch: In another piece of research that I looked at in relation to today's presentation, nobody really put a figure on the jobs lost. Again, it appears in some commentaries that they are saying that 1,200 or 1,300 jobs would be lost compared with what I saw, which was that 2,400 jobs would be created. Can you comment on the job losses?

Mr Dass: That is an important point. As I said, productivity improvement is very much the best case scenario. Now, if firms decided to make some employees unemployed, there would, of course, be a cost to the Northern Ireland economy. However, without getting too technical, when we looked at past research into the elasticity of this occurrence — for every £1 increase in the wage floor, how many people are you going to make unemployed — we did not find a one-for-one comparison, by any means; it was always relatively small.

We modelled elasticity of unemployment, if you like, as a sensitivity scenario, and that is in the executive summary of the report. We found that had this occurred — if some firms had chosen to go down the channel of unemployment — about 1,200 jobs would have been lost in the Northern Ireland economy. However, because of the additional spend in the Northern Ireland economy, the net increase would have still been 1,200 jobs. That is simply because we are producing more, people's wages have gone up, they are spending more in the shops and so forth, and more jobs can be sustained.

Mr Hilditch: I do not want to get into the whole situation that the Chairperson highlighted, but are we in danger of creating an impression that some of our workforce is not working to a desirable capacity? From my involvement with manufacturers, I know that there are a lot of agency workers. Some people are putting a great effort into trying to secure jobs. I am not totally convinced about this increased productivity.

Mr Dass: I certainly would not claim that someone needs to improve their outputs.

I will take myself as an example so that I cannot possibly get into trouble. When I first started work, I was not very good, but as time has progressed I have learned and I have produced more. Clearly, I have not changed career, but were I to go into a different line of work entirely, I would be back at the start again.

If there is an incentive there for someone to maintain their job and continue so that they gain more experience, they are ultimately going to become more productive. We found evidence that raising minimum-wage floors reduces worker turnover. So that could be one example where it is not necessarily a case of new people not working hard enough, rather, over time, because of the economic incentives, you will increase productivity. Also, if you give a wage increase, many people would, off the back of that, feel an urge to work harder. I am not saying that they are not working hard enough, but they may try to go even further. There is certainly evidence of that in the literature.

Mr Hilditch: OK. As I said, I welcome the debate and the toe in the water. It is a big debate to be had.

Mr McAleavey: Just on the issue of productivity, obviously one of the key points in the economic strategy for Northern Ireland is about trying to close the productivity gap between ourselves and England. That has been very elusive for a long time. The Minister and Invest NI have concentrated on trying to bring higher-productivity jobs, which are higher waged, into Northern Ireland, recognising that that is one of the few ways that we have of trying to close that gap. If we stay way down in the low pay league, we will never be able to do that. That is one of the conundrums that we face on the issue.

Ms Lo: Thank you very much for your presentation. I presume that you are talking about this being a voluntary scheme. It will be up to organisations that can afford to do so to adopt the living wage. That is one question. The other thing is that there is an argument that, if you are to have a blanket implementation, it could be counterproductive. In Northern Ireland, the majority of our businesses are SMEs, and, as has been said, if they increase the minimum wage to a living wage, they may have to make others redundant. What is your argument?

Mr McAleavey: The idea of the living wage being desirable and voluntary has been the position up to this point. I think that the Prime Minister's point was that the organisations or companies that can pay it should pay it. When we commissioned the research, we asked Oxford Economics to look at what the impact would be if the living wage were universal in Northern Ireland. That is not saying that that is achievable; all that is outside the Assembly's powers. It was to have a look at what the impact might be and, as I said, to raise the level of debate in that regard. Sometimes, people think in the debate that, if it is unaffordable, we should just forget about it, whereas we are looking at how you might cause change. I remember the debate about the minimum wage: many people said that it was unaffordable and undesirable and that we would lose large numbers of jobs. That did not happen. It is about trying to look at it from that perspective. We are not saying that you should simply pass a law to make the living wage mandatory. You would have to look very carefully. There are some areas that could do it, but there are others that would have great difficulty.

Mr Rooney: I agree: an immediate and short-term rise in the minimum wage to the living-wage level would be very dangerous. However, there is a need to discuss ways in which a move towards the living wage could be encouraged and incentivised. There are many policy options and avenues that are very much worth exploring.

Ms Lo: Some may even say that we should be thinking about not the minimum wage or living wage but improving the skill levels of people in Northern Ireland; that, rather than going for the bottom rung, we should be promoting that. What is your view?

Mr McAleavey: NICVA's position has been that improving skill levels is absolutely critical. We agree with the ETI Minister: we need a target in terms of foreign direct investment and jobs of a higher quality. Therefore, we need to constantly increase skill levels. That is the way of the world; it is the competitive market that Northern Ireland is in. That is absolutely critical.

I had this conversation with Arlene Foster when she became Minister at the start of the economic downturn: we cannot just leave a large number of people who have low skills or no skills and say, "Sorry, we're not going to focus on you". We have to think about employment there as well. I certainly believe that if we can increase the skills level and the quality of work that comes into Northern Ireland, it will also help to lift up the employment prospects of people who are lower skilled or less skilled. I certainly agree that we need to focus very strongly on skills and continuous improvement.

Mr Rooney: That is a vital part of the solution, but there is no guarantee that productivity improvements translate into higher wage levels. In fact, one of the reasons why there has been interest in the living wage is that, having previously grown in tandem, productivity increases and wage levels have been decoupled over the last number of decades. It is absolutely vital to promote skills, but if you look at somewhere like GB, where productivity rates are much higher, you will see there are still very high levels of minimum wage, so it is only part of the solution.

Ms McGahan: Thank you for your presentation. This is a very important debate, and I welcome your report. I support the concept of the living wage. I am a member of a regeneration partnership in Dungannon. I am also a board member of Dungannon Enterprise Centre. We have regular conversations about how we grow the economy, which, obviously, is supporting and growing local businesses. I do not necessarily agree that if you increase the wage, it would increase profits. If I were to have that conversation with retailers, they would go down my throat. They would say that what we need to do is increase the footfall coming into local towns, which would involve wider strategies looking at tourism, initiatives, promotions and so on, and at what would make us different from the neighbouring town of Cookstown or Omagh. That is a regular conversation that we have.

Another issue, for example, is that Land and Property Services has identified something like 1,000 vacant properties within the district. If you had people living in those properties, they would be coming into the town to create footfall, increasing profits and thereby maybe increasing wages. I think there is a much bigger picture. I encourage you to send that report to enterprise centres, which are always having those conversations. I will certainly bring the report to my own enterprise centre and to the regeneration partnership to start that debate. I know that it has started in councils as well. I encourage you to have those engagements, because I think it is a very important area of work. Like Pat, I get lobbied by domiciliary care workers and classroom assistants about an increase in wages, and I would support that.

Mr Dass: I will make just one or two minor points. On a general point on the gross value added (GVA) uplift in the Northern Ireland economy and the wage bill, in context — I think I forgot to mention this at the start — the increase in the wage bill would actually be less than 1% of Northern Ireland's entire wage bill, and the increase in GDP overall would be less than 1% as well. It is important to note that it is a relatively modest increase, so I would not foresee mountains of profits going into your retailers because of the living-wage minimum in the 2012 scenario.

I think the footfall aspect is linked as well, because, as you increase people's wages, their disposable income increases and, assuming they consume the same proportions, retailers will experience an uplift in trade. In a sense, the productivity scenario is about raising the supply of the economy. More wages in the economy will ultimately increase demand as well, so it could create that increased footfall. That is just a minor point that I wanted to highlight.

Mr F McCann: Much has been said already, but thanks for the presentation. If anything, hopefully this is the real start of the debate about where we can bring it to. David Cameron may have said that he is interested in or concerned about the living wage, but there is a big difference between being concerned about it and putting it into legislation for people. You mentioned something about the minimum wage. The prediction at the time was that it would cost hundreds of thousands of jobs right across the board, but that never materialised. No doubt the same debate and argument goes on. Even when we talked about minor changes to employment law there were predictions from employers that it would cost thousands of jobs and cost a fortune to the local economy. There is that, and there is the right thing to do, which is to pay people a decent wage. Belfast City Council took that step. It is hard to believe that, in a council of that size, there were still people earning below the living wage. At a cost of £56,000 a year, hopefully that has been put right. People need to follow that example.

It is about where you take the debate from here and how you influence that debate, because once it goes out there, you will have people lining up to say that it is going to cost jobs and that the cost of it is prohibitive. As Anna said, we have a responsibility to ensure that if people want to skill themselves up, they can, but remember that there is a whole range of people below that who work hard on a daily basis, who are skilled in the jobs that they do and may not want to go into that. We also have a responsibility to those besides the people who have a skilled wage. I wish you well in it.

Mr McAleavey: Those are important points, Fra. Obviously, we could all agree that the living wage is desirable and then do absolutely nothing about trying to make it a reality. That would be the easy thing to do. We recognise that, for someone starting a small business, it is very difficult for the first few years. Cash flow is incredibly difficult, and lots of them go under simply because, while they might be good, they are not able to manage the entry into the market and all of that. So, you would look at that in great detail with regard to this debate. Even if you could, you would not just decree that everyone has to pay the living wage. There are lots of things that you could do on size and scale of organisations and exemptions for start-up businesses. There are lots of things that you could do to move this along, make the living wage much more the norm and increase the number of employers who pay it. You would not go blanket to begin with, because you would recognise all the difficulties that exist.

Mr F McCann: Just more on that point: Eoin mentioned the whole question of the working poor and the working poor's dependency on benefits to bring them up to a level of wage at which they can survive. In the debate around welfare reform, that is a whole section that was lost somewhere down the line. People watched 'Benefits Street' and were clued-in to all of that, and that distorted the whole argument. It is about trying to create a fair and equal society where people do not have to be classed as the working poor and can earn a decent wage to provide for their families. That is my soapbox one over for today.

The Chairperson (Mr Swann): You are on the record, Fra.

Ms Sugden: Aged 15, I worked as a waitress — not in a cocktail bar — and was paid £3 an hour. I worked hard every Saturday and Sunday night, and that was ridiculous. I imagine that that still happens. We had the Commissioner for Older People in here talking about ageism. Well, this is age discrimination at the other end of the scale.

I very much subscribe to the living wage. However, when I speak with local businesses about it, they always say to me, "We need to take care of our bottom line. How do we do that?" They are grappling with a whole lot of other factors and hurdles to ensure that they can keep surviving. In the constituency that I represent, it is quite difficult for small businesses to survive, let alone increase wages. Some people would suggest that they are lucky to even have a job. I do not subscribe to that view, as I think that more can be done. However, how do we support those businesses? It is very easy to say but, for some of them who are looking to see if they can meet their overheads and keep on the staff that they have, it is not an option to look at increasing wages.

Mr McAleavey: As I say, that is why I think that there is a lot more that needs to be done on this issue and on looking at a strategy for the development of the living wage. Obviously, in trying to do something that we think is desirable and good, the last thing that you want to do is harm. The last thing that you want to do is put people out of business and lose jobs. I would definitely like to see the productivity gains, but I would not find it desirable to make those at the expense of the numbers of people who are in employment. Therefore, being careful about how we consider and advance this policy becomes very important. That is why, at this point, the whole discussion around the living wage is about it being voluntary and focused on those who can afford to pay it.

Ms Sugden: Someone once said to me, "If you pay peanuts, you get monkeys". I am not sure if I entirely subscribe to that, because I think that there is more to it. However, particularly in labour-intensive jobs, people's aim is really to earn money to be able to survive. Sometimes we almost forget what the aim of the business is. Whilst I was a great worker — I will give myself that compliment — I was 10 a penny. They were just looking at their bottom line, and it was easy to do that. That is what we do across all jobs and sectors: we look at the bottom line. That type of job is the easiest to chop, but that is another discussion for another day.

The Chairperson (Mr Swann): Seamus, thank you.

Mr McAleavey: Thank you very much, Chair.

The Chairperson (Mr Swann): Seamus, before you go, the last time that we met, although that was informally, you were going to meet the Minister with regard to European social fund (ESF). I do not want to put you on the spot, but have you an update or any more joy to —

Mr McAleavey: Yes, we had a very useful meeting with the Minister on ESF. On account of the talks process and all of that, we did not get the meeting until the first week of January. That was near the closing date for applications, so not much could be done there. However, we have some movement on some of the concerns that we raised with the Minister on the qualification levels of tutors and things like that. I know that members have kindly raised some of those questions with him as well. The Minister has also agreed to monitor what he could not change in the process, to see if there are any adverse consequences from the issues that we raised and to make adjustments as the programme goes on. We had a very useful meeting with the Minister on the foot of that.

Mr F McCann: Chair, just on that —

The Chairperson (Mr Swann): I was not going to open it up, Fra.

Mr F McCann: You opened the door. Along with that, there have been many dire predictions about the impact that it will have on employment in many of the groups that will be affected. One of the things that Social Development has been saying is that one job loss could cost a programme. Have you been able to work out the impact that it will have on employment and the knock-on effect that that will have on communities if there is no change to the thing?

Mr McAleavey: I cannot answer your question fully, Fra. A competitive process is now in place, and, clearly, there will be winners and losers. There is a general view that, in our sector in particular, it will be squeezed. Therefore, we are likely to lose jobs and lose projects. Some of them will not win, and some of them might not be viable afterwards. It will definitely have an impact; there is no doubt about that.

The Chairperson (Mr Swann): Seamus, thank you very much.