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Competing for Bermuda

Premier Paula Cox raised a few eyebrows when she suggested that after Government had reduced spending in this year's Budget, that now the private sector, and more specifically, members of the Business Bermuda trade organization, should do the same by reducing their fees.

Ms Cox was referring to a subject that has received a great deal of debate in recent weeks, which is Bermuda's lack of competitiveness. Few would dispute that this is the case, and the Island runs a real risk of pricing itself out of the international business market just as it has tourism. Bermuda is an expensive place to do business, and as competition between financial sectors becomes fiercer, the Island's costs are a real factor in whether a business operates from here or from, for example, Dublin or Switzerland.

And it must also be said that anyone who consults a lawyer or, for example, receives the bill for a company audit, will know that professional fees in Bermuda are not cheap and on Friday, that was the group that Ms Cox was talking to. The return argument will be that professional firms bills are not simply the pay of the lawyer or auditor, but all of the support services and overheads that go with that. And Government can take some responsibility for the rise in costs. As “know your customer” and regulatory demands have increased, so have costs for these kinds of service firms.

Finally, you get what you pay for. Not all lawyers are outrageously expensive, and the same goes for accounting firms, so the consumer must choose what they will take.

Finally service companies, like the rest of Bermuda have been reducing costs, and in some cases, jobs, as they grapple with the reduction in business. But Ms Cox is not wrong to say that they should look at their fees and see if they can reduce them in order to make Bermuda more competitive. Legal, accounting and the other costs that are applied to local and international companies can be a deterrent to economic activity; as such, they deserve to be reviewed. Having said that, it is important that all sectors share equally in making Bermuda more competitive. It is worrying that the Bermuda Industrial Union continues to engage in threatening behaviour in protecting the interests of its members.

First, it threatened to widen the industrial action in the case of the bus driver who was too sick to drive, but well enough to do his part-time job. Then it threatened a “general meeting”, a none too subtle threat of an Island-wide work stoppage, over the redundancies of non-unionised staff at Renaissance Aviation who had refused a pay reduction and been made redundant.

It would be wrong to make a judgment on the merits of either case without full knowledge of all the facts. But there are also mechanisms for resolving these disputes in a fair and impartial way, and the added assurance of a labour government to ensure that the process is indeed fair.

But the BIU persists in using muscle and threats instead. So far it has gotten its way (and it must be acknowledged in the Renaissance action that no industrial action was ever taken). This will inevitably embolden the union and its members into thinking that the threat of action is all that is necessary to make an employer give in or compromise.

At some point this will not happen, and the union will find itself committed to a path that is in no one's best interests. And industrial action will do more damage to Bermuda's ability to compete than the bills of any accounting or law firm.

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Published March 07, 2011 at 1:00 am (Updated March 07, 2011 at 8:27 am)

Competing for Bermuda

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