The economic impact of an all-island economy – a draft report for consultation

The economic impact of an all-island economy

 

This report considers the potential economic impact of Irish reunification, with particular consideration given to the likely effects of Brexit.  The potential impact of Brexit could be devastating to the Northern Ireland economy and serious consideration needs to be given to what political strategies could mitigate the damage.  This report concludes that there is a significant positive potential economic benefit from Irish reunification, particularly for the citizens of Northern Ireland.  The report includes a ten point plan for how Irish reunification might be achieved.

 

 

 

 

 

 

 

 

 

 

 

 

Author:

Paul Gosling is a financial journalist and economic commentator based in Northern Ireland

www.paulgosling.net

Ten Point Plan

 

  1. The UK government agrees to continue its subsidy to Northern Ireland (currently operating through the Barnett formula) but on an annually reducing basis so that the UK subsidy is removed entirely by 2050. The subsidy would be replaced by higher tax revenues as Northern Ireland benefits from the economic impact of reunification and the Republic’s economic policies. Eventually, it would be replaced (if necessary) by a subsidy from the Irish government.  Sovereignty might also transfer on a gradual basis.  Stormont might continue to operate as a devolved assembly, but of Ireland rather than of the UK.  There could also be a graduated move towards a truly all-island economy, with both sterling and the euro accepted by businesses during the transition process.

 

  1. Increased spending on capital projects is required to bring infrastructure up to modern European standards. The infrastructure deficit that was carried forward from the period of direct rule needs to be addressed, which means that the UK government has an obligation to help meet the cost of correcting the infrastructure deficit. A UK government investment of £10bn would assist significantly with this, towards the cost of roads, health reform, education facilities and water and sewage systems. A bridge or tunnel connection with Scotland could provide reassurance to unionists that economic, social and political connections with Great Britain could actually be strengthened through new arrangements.

 

  1. A reduction in the number of civil servants in Northern Ireland to the same level as the Republic would assist in making Northern Ireland financially self-sufficient. All redundancy, pension and restructuring costs would be paid for by UK. This restructuring would assist in boosting Northern Ireland productivity.

 

  1. The European Union would be asked to assist in the reunification of Ireland, which would address the problems caused by the Irish border post-Brexit. A new 32 county administration should be empowered to borrow cheaply to invest in the economy and all-island infrastructure. The European Investment Bank would play a key role in this.  

 

  1. A political agreement on a new all island basis, inside the EU, would attract increased EU funding through Interreg, including financial assistance in restructuring Northern Ireland’s infrastructure to improve its competitive position and integrated all-island economy.

 

  1. IDA Ireland would promote all of the island on the world stage. This would produce benefits for all. Given its track record in attracting FDI worldwide it should prove to be a major player in turning the Northern Ireland economy into a world class competitor with the added benefit for the Republic that the two agencies would no longer be in competition  but would be working together to produce economic growth.

 

  1. Improved direct links between education and industry in Northern Ireland as per the Republic would lead to a more competitive market-oriented economy, over time producing improvements in living and working environments. While Northern Ireland needs to learn from the Republic with regards to elements of its education and skills system, the Republic needs to learn from Northern Ireland in terms of the cost and efficiency of its health system. Neither system is adequate at present.  The Bengoa reforms need to be implemented in Northern Ireland as at present it has too many general hospitals, without sufficient specialist expertise.

 

  1. A harmonised corporation tax would make all the island more attractive to foreign direct investment and lead to domestic companies throughout the island being more competitive, thus leading to economic growth for all.

 

  1. As part of the post-Brexit response from the European Union, a special case should be presented to the European Union for assistance with the cost and social pressures involved with Irish reunification. This might be structured in ways that learn from the Marshall Plan and the experience of German reunification.

10. A single and integrated Ireland would create economies of scale and a more competitive economy. A single Ireland would be a world leader in the fields of research and development (eg Trinity College,             UCD and Queen’s, all in the same country), higher education, pharmaceuticals and new technologies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary

 

  1. Since partition, the economic strength of the north and the south have gone into reverse. In 1920, 80% of Irish industrial output was in and around Belfast, with Belfast the largest city in the island of Ireland.  The economy of the Republic is now four times larger than that of Northern Ireland, with industrial output ten times larger than that of Northern Ireland.
  2. Average full time income per head in the Republic in 2016 was £40,403, compared to £25,999 in Northern Ireland. In other words, a worker in the Republic is typically paid half as much again as someone working in Northern Ireland.
  3. Since the Good Friday Agreement, increased investment has flown to the Republic, rather than to Northern Ireland. Some £312bn of US investment has gone into the Republic since the GFA.
  4. GVA – gross value added – per capita in the Republic in 2014 was €38,100, compared to €22,000 in Northern Ireland, just 57% of that in the south.
  5. The Republic is much more globally and export focused than is Northern Ireland. As of 2015, exports accounted for 39.5% of Irish economic output, twice the level of Northern Ireland.
  6. The Republic is Northern Ireland’s main export market, accounting for 31% of international exports – a market likely to contract significantly following Brexit.
  7. The economic performance gap between the Republic and Northern Ireland is widening. According to the latest Economic Eye study from accountancy firm EY, economic growth last year in the Republic was 4.9% and in Northern Ireland it was 1.4%.
  8. The Republic is expected to increase its employment level, while Northern Ireland is predicted to lose jobs. EY predicts that the Republic will generate an additional 91,000 jobs by 2020 compared to 2016, whereas Northern Ireland will lose 3,500 jobs.
  9. Northern Ireland suffered significantly as the UK moved its focus from manufacturing to being a service economy. Devolution arrangements since partition have been insufficient for Northern Ireland to create its own economic policies that are truly independent of London’s and have been insufficient for the north to generate the level of jobs growth required.  That policy weakness was exacerbated by the Troubles, which discouraged foreign direct investment.
  10. Northern Ireland compensated for the loss of manufacturing and private sector investment by relying on the public sector for employment, with a big growth in public sector employment between the mid 1960s to the late 1980s.
  11. The Republic generated substantial economic growth through its use of a low corporation tax base, a strongly skilled labour market and business friendly policy, attracting large levels of foreign direct investment. Northern Ireland was unable to compete, generating investment instead in low cost support services, while profit centres went to the lower tax jurisdiction of the Republic.
  12. The Republic has benefited from a very effective IDA Ireland, which has been more successful than Invest NI  in attracting foreign direct investment, with the assistance of a more helpful business operating environment in the Republic.
  13. The Republic has been clever in its targeting of growth sectors, particularly those that prosper in a globalised economy. RoI has an open economy, from which it is easy to trade internationally.  Dublin’s International Financial Services Centre has been a major success.
  14. The Republic continues to benefit from membership of the European Union, with investors from countries outside the EU using Ireland as a bridgehead into the EU. Ireland is currently benefiting from Brexit relocations from London.
  15. There is a greater focus on skills and qualifications in the Republic than in Northern Ireland. While 45% of young people in the Republic complete their education with a degree or higher, this is true of only about 31% in Northern Ireland. More than a third of Northern Ireland school leavers who go on to university do so in Great Britain, most of whom do not return to work in Northern Ireland. While 26% of Northern Ireland’s adult working age population are graduates, the figure is over 35% in Dublin and Cork.  Both the Republic and Northern Ireland suffer from a problem of too many adults lacking basic skills.
  16. Ireland’s health system is widely criticised as inefficient and costly. If Irish reunification takes place, any merged health care system should be based on a reformed NHS.
  17. There are around 403,000 public servants in the Republic of Ireland, 8.4% of the population. There are around 205,700 public servants in Northern Ireland, 11.4% of the population.  More than 50,000 jobs would go if the public sector in the north were reduced in size to that of the Republic.  This could save more than £1.7bn a year in pay costs and national insurance contributions.
  18. The possible retention of Stormont as a devolved assembly might limit to a small extent the level of job cuts.
  19. Experience in Great Britain suggests that the economy can generate more private sector jobs than are lost in the public sector, but that many of the new jobs are less well paid and insecure.
  20. Northern Ireland is less economically productive than is the Republic. PwC calculates that the Republic is 60% more productive than the north and that the UK is 15% more productive than Northern Ireland.  A review by Ulster University concluded that Great Britain is 25% more productive than Northern Ireland.  The productivity gap between GB and Northern Ireland is widening.
  21. Factors causing weak Northern Ireland productivity include lack of private and public sector investment, an inadequate skills base, lack of R&D and innovation, a weak culture of entrepreneurship and an insufficiently competitive economy. The small size of Northern Ireland may influence these factors, for example by reducing the level of internal market competition.
  22. Poor infrastructure is a key factor in the productivity weakness. Symptoms include long commuting times, delays in taking goods to market and slow broadband speeds in rural areas.
  23. The CBI and Ibec have called for substantial infrastructure investment to support the all-island economy.
  24. Northern Ireland’s Investment Strategy plans for a capital spend on infrastructure projects of £8.2bn for the five year period 2015/16 to 2020/21, including road projects (including Belfast to Derry, Derry to Dublin, Belfast’s York Street interchange, Belfast to Larne and Greenisland); healthcare, schools; water and waste water; and housing.  This investment is insufficient to address Northern Ireland’s existing infrastructure deficit.
  25. Brexit will severely damage Northern Ireland’s economy, whatever type of trading relationships replace membership of the European Union.
  26. Leaked analysis conducted by officials in the Treasury concludes that Northern Ireland will be one of the UK regions most negatively affected by Brexit. According to reports, it concluded that without a deal with the EU, Northern Ireland’s economy will contract by 12%; with a hard Brexit deal, it will contract by 8%; and with a soft Brexit deal it will contract by 2.5%.  This economic damage would be either eliminated or mitigated by Irish reunification and the retained membership of the European Union.
  27. A European Parliament report predicts a likely 3% reduction in Northern Ireland’s GDP through withdrawal.
  28. Common Agricultural Policy (CAP) payments provided 60% of cash income to Northern Ireland’s farms in 2014-15. Northern Ireland’s farmers receive 9% of the UK’s total allocation of EU pillar payments.
  29. The economic cost to Northern Ireland of Brexit is likely to be severe. The 2.5% hit to the economy would be an annual reduction of £930m a year in economic activity; a 3% hit to the economy would be an annual £1.1bn loss of activity; an 8% hit would cost the economy £3bn; and a 12% hit would make the economy £4.5bn smaller.  That is equivalent to £2,500 per person.
  30. If jobs were reduced pro rata to the fall in economic activity, then 67,000 jobs in Northern Ireland would be lost under the 8% contraction assumption and more than 100,000 jobs would go under the 12% scenario.
  31. Northern Ireland’s agri-food sector is particularly at risk from Brexit. There are more than 29,000 farmers in Northern Ireland, with 87% of Northern Ireland’s total farming incomes coming from the EU’s Single Farm Payment.
  32. Brexit provides a further threat to the agri-food sector in depriving it of access to an EU-wide labour market, on which many producers are dependent.
  33. There has been a significant increase in cross-border commercial operations in recent years, as agricultural and food producing organisations achieve economies of scale through cross-border mergers. Dairy production, in part as a result of this, can cross the border repeatedly during the production process.  It is as yet unclear how these activities, and these business structures, will be affected by Brexit and a UK/EU border.
  34. The most comprehensive analysis of the potential economic benefits of Irish reunification was led by Karl Huebner. It concluded that using its assumptions (which predate the Brexit vote), unification could benefit people across the island of Ireland by €1,497 per year in the year of implementation, rising to €2,810 per person per year within seven years of implementation.  Most of the financial benefits would be felt in the north.
  35. There are different ways to calculate the level of subsidy Northern Ireland receives from the UK government. In 2013-14, total government revenues in Northern Ireland amounted to £14.9bn, with expenditure of £24.1bn.  Some £4bn of this was on ‘non-identifiable’ items – Northern Ireland’s share of general UK government expenditure.  Many of the non-identifiable items – such as international relations – would not continue as costs to Northern Ireland after reunification.  If these costs are ignored the deficit of revenue against expenditure for Northern Ireland is £5.2bn.
  36. If the UK government agreed to gradually reduce its subsidy of Northern Ireland, it is reasonable to believe that the adoption of the Republic’s economic policies could increase tax revenues to a sufficient level that reunification could be achieved on a revenue neutral basis for the Republic and for taxpayers in Northern Ireland.
  37. A Ten Point Plan for how to achieve Irish reunification is included as a conclusion to this report.

 


 

A tale of two economies

 

David McWilliams gained respect as the best known Irish economist to predict the global economic crash of 2007 and who warned that Irish property prices had become a bubble.  He might now be the economist who reads it correctly about the financial benefit of Irish reunification.  McWilliams examined the issue in some detail – and very few economists have done so – after Ireland’s foreign affairs minister Simon Coveney said he would like to see a united Ireland in his lifetime.

 

McWilliams presented various economic facts that illustrate that since partition, the economies of the Republic and Northern Ireland have increasingly diverged.[1]  The northern economy that was strong in 1922, is now weak.  The southern economy that was weak in 1922, is now strong.   “The union with Britain has been an economic calamity for Northern Ireland,” said McWilliams. “All the people have suffered, Catholic and Protestant, unionist and nationalist.”

 

Key statistics illustrate the difference.  McWilliams explained:  “In 1920, 80 per cent of the industrial output of the entire island came from the three counties around Belfast. Belfast was the biggest city in Ireland in 1911, larger than Dublin, and was home to Ireland’s innovation and technology.  At partition the North was industrial and rich, the South agricultural and poor….

 

“The Republic’s economy is [now] four times larger, generated by a work force that is only two and a half times bigger. The Republic’s industrial output is today 10 times that of the North. Exports from the Republic are 17 times greater than those from Northern Ireland, and average income per head in the Republic, at €39,873, dwarfs the €23,700 across the Border…. Dublin is three times bigger than Belfast, far more cosmopolitan and home to hundreds of international companies.”

 

McWilliams also pointed out – in an article published in the Belfast Telegraph – that while a peace dividend was expected for Northern Ireland, it was actually delivered for the Republic.  “Since the Good Friday Agreement, American corporations alone have invested close to $400 bn (£312bn) in the Republic,” he explained. “This is equivalent to 56 years of the British Government’s annual subvention to keep Northern Ireland afloat!….  At the moment, the Republic’s budget deficit is 1% of GDP. If Northern Ireland had to pay for itself in the morning, the budget deficit would be about 22% of GDP!”[2]

 

Economies are often compared on the basis of GDP per person.  In the case of the Republic, GDP per head is a flawed measure owing to the movement of capital and the transfer of asset ownership by multinationals domiciled in Ireland for tax reasons.[3]  GVA (gross value added) is regarded by many economists as a more relevant measure.[4]

 

In 2014 – before the latest Irish economic acceleration – GVA per capita in the Republic was €38,100[5].  By comparison in Northern Ireland it was £18,682[6], the third lowest of any UK region.[7]  Using current exchange rates that equates to less than €22,000, or about 57% of the figure in the Republic.  Average full time income per head in the Republic in 2016 was £40,403 (€45,611[8]), compared to £25,999[9] in Northern Ireland.  In other words, a worker in the Republic is typically paid half as much again as someone working in Northern Ireland.

 

Just as the Republic is a much more successful economy than is Northern Ireland’s, so too it is much more globally focused.  Based on statistics from the International Monetary Fund’s World Economic Outlook Database, Ireland’s total Gross Domestic Product amounted to $324.3bn as of November 2016. Therefore, exports accounted for 39.5% of total Irish economic output.[10]  For Northern Ireland, exports accounted for 20% of output (as measured by GVA), which is above the UK level of 17%. The Republic of Ireland is NI’s largest export destination (31% by value), with the EU as a whole (excluding GB) responsible for 55% (by value) of NI’s exports.[11]  Northern Ireland’s export levels are likely to be significantly diminished by Brexit, whatever form it takes.

 

And the economic gap is getting wider

 

EY’s latest Economic Eye study (winter 2017[12]) found that while economic growth in the Republic last year was an estimated 4.9%, in Northern Ireland it was a mere 1.4%.  Worse still, EY’s previous Economic Eye[13] predicted that while the Republic will generate an additional 91,000 jobs by 2020 compared to 2016, the north will lose 3,500 jobs.

 

According to EY, factors behind the strong Irish performance include being well positioned to benefit from global economic growth – which Northern Ireland may not be.  Mike McKerr, EY Ireland’s managing partner, commented: “The RoI economy is generating significant momentum suggesting some resilience to Brexit, though it differs across sectors and locations. The retail and consumer sector appears to face a profoundly challenging time in Northern Ireland.”

 

EY’s Winter 2017 Economic Eye reported: “The headline data suggests an increasing divergence in economic fortunes across the island. The Republic of Ireland sits atop the European growth charts, while Northern Ireland is closer to the bottom.”

 

How the difference is explained 

There are a variety of reasons for the difference in economic performance since partition.  Clearly, the Troubles was one factor.  This damaged the economy of Northern Ireland and of border counties in the Republic, particularly Donegal.  The Good Friday Agreement failed to deliver the ‘peace dividend’ at the levels expected.

A more fundamental economic reason over the longer-term for the difference in performance relates to the different sectoral focus of the two economies.  At partition, Northern Ireland was dependent on heavy engineering, such as shipbuilding, and on shirt making.  These industries have been badly affected by globalisation and Northern Ireland has been only partially successful in stimulating replacement industrial sectors.

The UK economy has refocused away from manufacturing to the service economy.  This has tended to increase inequality and the wealth divide in the UK.  London has prospered, while regions that have traditionally been more dependent on manufacturing have suffered.[14]  The ‘Great Recession’ has increased regional disparities, with London recovering more strongly and more quickly than have other regions.[15]

The restrictive nature of devolution for Northern Ireland limited the regional assembly’s capacity to develop its own industrial strategy that reflected its distinctive needs – recovering from the collapse of the shipbuilding and linen sectors – and the challenge of geographical marginalisation.  “The inability of the new Northern administration to deviate in any significant way at all from UK-wide policy simply reflected the extremely limited scope for local autonomy that was provided for in the 1920 Government of Ireland Act under which its local parliament (Stormont) operated.”[16]  Northern Ireland’s economic decline resulted from the lack of international investment because of the Troubles and the “serious crisis” in economic policy in the north.[17]  Northern Ireland “tracked” the manufacturing decline of the UK as a whole, but without generating a new private services sector to compensate.[18]

Northern Ireland has compensated by becoming increasingly reliant on the public sector for employment, with a big growth in public sector employment between the mid 1960s to the late 1980s.[19]  With Northern Ireland having a higher corporation tax rate than the south, inward investment has tended towards low cost support services, rather than profit centres.  Multinationals have tended to prefer to locate profit centres in the Republic, where they can pay a significantly lower rate of corporation tax – and avail of arrangements that can mean they pay an even lower effective rate of tax.

The Republic has benefited from IDA Ireland (formerly known as the Industrial Development Agency), which has been assisted by the low rate of corporation tax to be much more effective than the north’s Invest NI in attracting foreign direct investment (FDI).  But multinationals have been attracted to Ireland not just because of the tax rate: other factors include a highly skilled and motivated labour market; a welcoming culture for migrant workers and managers; the English language (an important advantage with regards to attracting US investment destined for the EU); and substantial investment in infrastructure (particularly in the big cities).

The Republic has also been clever in its targeting of growth sectors, particularly those that prosper in a globalised economy.  RoI has an open economy, from which it is easy to trade internationally.  As a committed member of the European Union, the Republic is recognised by investors from countries outside the EU – particular the United States, but also other countries such as Israel – as an excellent bridgehead into the EU.  Dublin’s International Financial Services Centre has been a major success, attracting banks, accountancy firms and fund managers, and acting as the major global base for various niche activities, such as aircraft leasing.

Current factors affecting RoI growth include:

  • Brexit relocations from London
  • FDI from US continuing into RoI, despite US tax cuts
  • Effectiveness of IDA
  • Lower CT rate
  • Stronger skills base
  • Ability to attract global talent, both Irish returners and others, because of strength of economy, nature of existing FDI, increasingly socially liberal society.
  • Focus on key sectors, eg IT, pharma, activities with profit centres within RoI
  • The financial services sector likes Ireland – English is spoken, the CT rate is low, the effective tax rate is even lower, Dublin’s International Financial Services Centre has created a cluster of mutually-supporting firms.
  • RoI is more integrated into the global economy than is NI, so is better positioned to benefit from growth in the global economy
  • Political stability in RoI, vs instability in NI

 

There are a number of variations in terms of public policy between the two jurisdictions.  The Republic of Ireland’s corporation tax rate is 12.5%, while the effective rate (that which is paid) can be even less.  Northern Ireland is subject to the UK rate, which is currently 19%.

 

There is a greater focus on skills and qualifications in the Republic than in Northern Ireland.  While 45% of young people in the Republic complete their education with a degree or higher, this is true of only about 31% in Northern Ireland.[20]  More than a third of Northern Ireland school leavers who go on to university do so in Great Britain, most of whom do not return to work in Northern Ireland.[21]  While 26% of Northern Ireland’s adult working age population are graduates, the figure is over 35% in Dublin and Cork.[22] Both the Republic and Northern Ireland suffer from a problem of too many adults being without basic skills.

 

Ireland’s health system, however, is widely criticised as inefficient and costly.[23]  While Northern Ireland’s NHS is in severe crisis and in urgent need of reform, it is a more productive and less expensive system than the Republic’s.  Any merged system would need to be based on the NHS, but reformed.

 

There are around 403,000 public servants in the Republic of Ireland,[24] 8.4% of the population.  There are around 205,700 public servants in Northern Ireland,[25] 11.4% of the population.  More than 50,000 jobs would go if the public sector in the north were reduced in size to that of the Republic.  However, the possible retention of Stormont as a devolved assembly might limit to a small extent the level of job cuts.  Average weekly public sector pay in Northern Ireland is £623[26]: this suggests the potential annual cost savings of a loss of 50,000 public sector jobs in Northern Ireland is around £1.6bn per annum in wages, plus £145m in national insurance contributions.  In addition, workplace accommodation costs would be saved.  However, the loss of these jobs would potentially create additional welfare benefits costs and loss of spending in the wider economy, unless equivalent jobs could be created in the private sector.  In recent years across the UK, the loss of public sector jobs has been less than the creation of new jobs in the private sector – but these have typically been at lower rates of pay and a high proportion of them have been self-employed or otherwise insecure.  While the direct cost savings to public sector bodies would potentially be in excess of £1.7bn a year, the net benefit to public expenditure would be significantly less than this.  It should also be recognised that the capacity of the public sector in Northern Ireland to reduce assumes not only greater efficiency, but also that the security situation is normalised, with no increase in politically-motivated violence after Irish reunification.

 

How RoI created its vibrant economy

 

The European Commission explained:

“As a small open economy Ireland’s financial fortunes are dependent on international trade and influenced by global markets.  That means it’s important for the country to build overseas partnerships and being part of the European Union enables us to do just that in solidarity with other nations.

“Before joining the EU in 1973, Ireland’s largely agricultural based economy was choked by its dependence on the UK market.  At that time, industrial trade and international co-operation were becoming the norm and EU membership helped Ireland move towards a modern, free market economy.

“The EU’s Single Market environment, together with decisions to introduce low corporate taxes and develop an Industrial Development Agency (IDA Ireland) to promote Ireland abroad, eventually enabled the new Irish economy to flourish.

“One of the difficulties with small open economies like Ireland’s is that they can be vulnerable to global factors and Ireland’s strongest period of economic growth, from the mid ‘90s to the mid ‘00s, was followed by a spectacular crash sparked off by a worldwide financial meltdown.

“After several difficult years, Ireland’s economy is now growing again and the European Union has introduced several new, powerful measures to better protect the economies of Ireland and all Member States in the future.”[27]

Productivity

 

According to PwC, the Republic of Ireland is around 60% more productive than is Northern Ireland, while the UK average is 15% above the level of Northern Ireland. [28]

 

Productivity across the UK has been a challenge in recent years, holding back recovery after the Great Recession.  But productivity is a significantly greater challenge in Northern Ireland than in Great Britain.  “Whilst productivity has slowed at national [UK] level and the UK has lost some ground relative to competitor nations, the gap between NI and the UK average has been persistent and widening for many years despite being the target of a number of economic strategies.”[29]  “GVA per head in NI is only 75 per cent of the GB average. This means that there is a 25 per cent productivity gap between the GB and NI.”[30]

 

There are a number of factors that dictate the level of economic productivity, most (or perhaps all) come down to policy decisions, including investment.  The UK’s ‘productivity handbook’ named five factors as being critical in determining productivity growth.  These are investment, innovation, skills, enterprise and competition.[31]

 

In terms of private sector investment, this has lagged because Northern Ireland has been insufficiently attractive to international investment, while also not producing enough high margin indigenous businesses.  In part, this is a circular argument – investment is not attracted to locations that have the reputation and reality of suffering from low productivity.  Moreover, footloose capital is typically attracted to a low tax jurisdiction, other factors being equal.

 

The lack of public sector investment is arguably at least equally relevant in the case of Northern Ireland.  It has a significant infrastructure deficit, for example in terms of roads, rail and digital connectivity (see below).  This damages productivity as it takes longer to get goods to market, for executives to travel to meetings and for commuters to get to work.  The lack of fast broadband speeds in rural areas of Northern Ireland is a major impediment.

 

The absence of innovation is itself the result of a combination of factors: the lack of foreign direct investment; the limited tax incentives to locate state-of-the-art private sector R&D facilities in Northern Ireland; the small size of the university sector (the number of Northern Ireland school leavers going on to university elsewhere would be sufficient to populate an additional university in Northern Ireland[32]); and the absence of a more competitive commercial environment (see below).

Northern Ireland lacks skills at all levels: it has too few graduates; it has a shortage of technical vocational skills; and it has too many people without basic skills.  “The skills deficit in NI is sizeable and enduring and the most worrying statistic is for those with no level 1 National Vocational Qualifications. NVQ stratifies a range of qualifications ranging from GCSEs to trade apprenticeships and University degrees. In 2015, 16 per cent of 16 to 64 year olds did not have a level 1 NVQ. To have less than a level 1 NVQ means less than 5 GCSEs at A-C grade.”[33]

 

With a sub-par economy, people with the best skills tended to be attracted elsewhere, leaving behind those with inadequate skills – for whom other places are no more welcoming.  In effect, the market works in ways that leave the least skilled people in Northern Ireland, without offering sufficient incentives to retain or attract those with the highest skills.  With private sector pay lagging behind that of the public sector, more than half of graduates in Northern Ireland are attracted to work in the public sector.[34]

 

The issue of enterprise is a regular bug-bear for Northern Ireland.  Too few new businesses are created in Northern Ireland and too few of those that are set-up survive.  Northern Ireland has the weakest entrepreneurial environment of the UK’s four nations and the lowest rate of new business start-ups.  “The distribution of TEA [Total early-stage Entrepreneurial Activity – the intention to start a business] rates in 2015 was similar across the home nations: England at 7.2%, Wales at 6.8%, Scotland at 6.7% and Northern Ireland at 5.4%”.[35]  “Northern Ireland is the one UK region where businesses births and deaths (registration and deregistration) were almost equal, at roughly 9% of registered businesses in 2014; the UK business birth rate in 2013 was 14.1% and the death rate was 9.7%. Since 2009, Northern Ireland has been persistently below the rest of the UK in terms of the net change in the number of business registrations, with an annual decline in the total number of businesses registered.”[36]

 

One of the major challenges for the Northern Ireland economy is the lack of progression from small to large.  If more small firms could become large, then Northern Ireland would have a bigger and more competitive economy.  Instead, the indigenous economy is dominated by small firms.  “Small and medium-sized companies and self-employed people, together, provide 75% of employment, 75% of turnover and 81% of GVA in NI’s private sector. Furthermore, SMEs actually employ more people than NI’s large companies and the public sector combined.”[37]

 

It can be argued that these problems relate to a significant extent to the small size of Northern Ireland, with a population of just 1.8 million people and a land border to the south and a sea border to the east.  There are cost barriers to competing with Great Britain and trade barriers – some regulations and differences in tax regimes – with the Republic of Ireland.  Becoming a more integrated part of a larger all-island economy should generate a more competitive environment, strengthening productivity in the process.

 

This report assumes that policy-based causes of weak productivity would be addressed and corrected post-reunification.  This would lead to a gradual levelling-out of economic performance between the Republic and Northern Ireland.

 

Northern Ireland’s infrastructure deficit

Northern Ireland’s infrastructure is inadequate and is a key factor in its weak productivity.  Evidence for this is clear: long commuting times in Belfast, limited motorway and rail connectivity, poor road connections in the North West and large parts of the rural areas without fast broadband speeds.

 

In summer 2016, a joint report from the CBI and Ibec argued for improved infrastructure to support the all-island economy.  It called for:

 

  • A major upgrade of the island’s road network:The road network will remain the most important means of connecting key urban centres.
  • A proposal mapping the completed Network: So that 85% of the island’s population live within 10km of their nearest inter-urban route.
  • Planning for this Network to start now:So contracting and construction can get underway at the end of this decade.
  • The immediate priorities to include: completing routes already in development such as A5 and A6 upgrades to Derry/Londonderry and the entire north west and the M1/A1 Sprucefield bypass to better link Dublin and Belfast and major upgrades to the N20 from Cork to Limerick; the capacity of the M50; the N15 linking Letterkenny to Sligo and the A5 route extension to Letterkenny.
  • New funding streams for this vital investment: The cost to upgrade the transport network is affordable, but the funding sources need to be agreed and sources other than public investment are needed.
  • All possible financing options are explored:including off-balance sheet financing from strategic investment funds, EIB loans and European Commission funding via the Juncker plan.

 

“If delivered, Ibec and the CBI believe this network will make it easier to:

“Move around and across the island: 
The ease of movement for people will be significantly improved especially where there are no motorways now.
Do business: The network will make it easier for companies to transport, market and sell goods and services on reliable predictable all-island basis.
Connect with the rest of the world: by linking the entire island into a network that connects with all the island’s international ports and airports.
Promote technology/innovation: Driving adaption and use of new fuels and other possibilities such as driverless and electric vehicles for goods and people.
Improve competitiveness: From new infrastructure delivering reduced costs, and more predictable journey times.
Support Tourism/SportThe Network will strengthen the island’s credentials as an ideal location to hold a major sporting tournament.
Embed peace and prosperity: World class infrastructure helps to bring economic opportunities and prosperity to every region, locality and community.”[38]

 

Northern Ireland’s Investment Strategy plans for a capital spend on infrastructure projects of £8.2bn for the five year period 2015/16 to 2020/21.  Priorities include £1.2bn for road projects (including the A6, Belfast to Derry, and A5 Derry to Dublin connections, Belfast’s York Street interchange, the Belfast to Larne road and the A2 at Greenisland); £1.9bn for healthcare buildings (hospitals, primary care, etc); £1.2bn on schools; £1bn on water and waste water; and £855m on housing.[39]

 

However, this investment is insufficient to address Northern Ireland’s existing infrastructure deficit.

 

The potential impact of Brexit on NI

 

This report has already established that Northern Ireland’s economy is weaker than the Republic’s and that the performance gap is increasing.  Those realities are correct without taking into account the impact of Brexit.  Most respected commentators and economists believe that Brexit will be seriously damaging to the economy of Northern Ireland, whatever form Brexit takes and whatever type of trading relationships replace membership of the European Union.

 

Leaked analysis conducted by officials in the Treasury concludes that Northern Ireland will be one of the UK regions most negatively affected by Brexit.  The analysis has not been published by the Treasury.  According to Sky News[40], the analysis concluded that without a deal with the EU, Northern Ireland’s economy will contract by 12%; with a hard Brexit deal, it will contract by 8%; and with a soft Brexit deal it will contract by 2.5%.  This economic damage would be either eliminated or mitigated by Irish reunification and the retained membership of the European Union.

 

According to the European Parliament: “Northern Ireland is the part of the UK most distinctly affected by Brexit.”[41] It points out: “Growth in exports to EU countries from Northern Ireland has considerably outpaced that to non-EU countries in recent years and amounted to £3.63bn in 2014, compared to £2.53bn of non-EU exports….  The importance of Northern Ireland’s current tariff-free and quota-free trade relationship with the Irish Republic is apparent, with 34% of Northern Ireland’s EU exports heading there (21% of the region’s total exports).  This makes Ireland the largest market for Northern Irish exports. More broadly, the majority of Northern Ireland’s exports (57%) head to the EU.  Common Agricultural Policy (CAP) payments provided 60% of cash income to Northern Ireland’s farms in 2014-15. Northern Ireland’s farmers receive one of the highest payments-per-hectare annual awards in the EU and nine per cent of the UK’s total allocation of EU pillar payments.   Northern Ireland’s EU trade dependence has been such that a 3% reduction in the region’s GDP has been calculated as the likely outcome of withdrawal.”[42]

 

The most recent figures of GVA for Northern Ireland were for 2016, at £37.2bn.[43]  Given the current state of negotiations, it would be optimistic to believe that a ‘soft Brexit’ deal will be negotiated.  If it did, the likely economic impact would be a reduction in economic output of a ‘mere’ £930m a year, based on the lowest Treasury assessment, or £1.1bn, based on the projections from the European Parliament’s report.  The economic impact of a ‘hard Brexit’ that hits output by 8% would be £3bn (£1,600 per person) and a no deal situation would contract the economy by 12%, which would be £4.5bn (nearly £2,500 per person).  If we assume (as a rough guide) a reduction in employment pro rata for the reduction in size of the economy, that would mean a potential 67,000 job losses under the 8% contraction scenario, or more than 100,000 jobs losses under the 12% scenario.  (There were 837,000 people employed in Northern Ireland as at November 2016.[44])

 

The Agri-food sector

 

The agri-food sector is particularly important for the Northern Ireland economy – and especially put at risk by Brexit.  There are more than 29,000 farmers in Northern Ireland, who receive more in EU Common Agriculture Policy payments than from market prices.[45]  “Currently, 87% of Northern Ireland’s total farming incomes comes from the Single Farm Payment”, says the UFU.[46]  Total income from farming in 2016 was £244m.[47]

 

Brexit represents a threat on three levels to the farming sector.  Firstly, there is the potential loss of labour, with many food producers reliant on workers from elsewhere in the EU, with a shortage of local labour willing to do this work.  Secondly, there has been a significant increase in cross-border commercial operations in recent years, as agricultural and food producing organisations achieve economies of scale through cross-border mergers, such as Lacpatrick and Fane Valley.  Dairy production, in part as a result of this, can cross the border repeatedly during the production process.  The same is true of many other food products.  Thirdly, there are fears that the replacement of the Common Agricultural Policy is likely to lead to a loss of support to farmers generally[48] and to Northern Ireland farms in particular[49].

 

Brexit is a potential disaster for Northern Ireland’s farmers and food producers.

 

The Huebner analysis: ‘Modelling Irish Unification’

 

The Huebner report has made an important contribution to the analysis of the potential economic benefits of Irish reunification.  It was widely criticised at the time of publication, primarily because although it was written by independent and respected academics, it was commissioned in the United States by supporters of Irish republicanism.  However, this does not in itself undermine the conclusions, given the authors’ credibility.

 

It concluded that using its assumptions (which predate the Brexit vote), unification could benefit people across the island of Ireland by €1,497 per year in the year of implementation, rising to €2,810 per person per year within seven years of implementation.  Most of the financial benefits would be felt in the north.[50]

 

The report’s reasoning included:

  1. Tax harmonisation at RoI levels will be beneficial to the north.  Lowering corporation tax levels to those of the Republic is likely to generate higher levels of foreign direct investment. (However, a working NI Assembly could choose to do that without reunification).
  2. Diminished trade barriers will increase trade. (Clearly this is correct in terms of trade between NI and RoI and will be even more true post-Brexit.)
  3. Adoption of the euro in the north, because the pound was over-valued at the time of the report’s publication. (Given sterling’s devaluation means that the pound is no longer obviously over-valued against the euro, this point is out of date.  Sterling is now competitive with the euro.)
  4. Productivity improvements. (It is reasonable to assume that if NI adopts the industrial strategy of the south then it will – over time – move towards the productivity levels of the south.  But this could take decades.  27 years after German reunification, productivity remains lower in the east than in the west and wages remain lower.  Achieving economic benefits from unification is a slow process.)
  5. Political union will lead to rationalisation of the public sector in the north.
  6. Fiscal transfers will become the responsibility of the Republic, not the UK.

 

One key finding of the report is how important borders are, in terms of disrupting trade. It explains: “Numerous studies done in a variety of settings (the US and Canada, among Canadian provinces) demonstrate that ‘borders matter’ to a much greater degree than most observers would expect.” The return of a hard border on the island will obviously be detrimental. The most aggressive unification scenario in the report estimates a boost in all-island GDP of €35.6bn over eight years with the north benefiting significantly more than the south.

 

(The report concludes: “The model… suggests unification will raise GDP in NI by 2.1 to 2.6 billion Euro in the year the policy is implemented, depending on the extent to which NI government expenditure is cut and the amount of FDI attracted by the new tax regime. These gains could accumulate to as much as 25.3 billion Euro in the first eight years following unification. GDP in the ROI could rise by 30 million to 152 million Euro in the year of policy implementation, again subject to the same assumptions. Across the first 8 years of unification, GDP gains in the ROI could rise from 10.3 billion Euro to 18.5 billion Euro. In total, Irish unification could boost all-island GDP in the first eight years by as much as 35.6 billion Euro.”)

 

As the authors of the report point out, in the case of German unification the smaller partner – East Germany – benefited the most.  However, it should be noted that the benefits spread slowly – reunified Germany is still far from being an equal society, or having equivalent economic output.  It should be noted that west and east Germany remain different places in terms of economic performance, social relations and political outlook.[51]  Reintegration of divided countries is not easy.

 

Could the Republic afford Northern Ireland?

 

It is commonly said that Northern Ireland is subsidised to the tune of around £10bn a year by the UK government.  But that depends on how the figure is calculated.  There is one calculation that takes into account Northern Ireland’s share of total UK government expenditure – the armed services and central government administration in London, for example, which are collectively termed the ‘non-identifiable’ items – and a very different figure if only the direct costs of Northern Ireland are taken into account.

 

NERI – the Nevin Economic Research Institute – explains: “In summary, the DFP [former Northern Ireland Department of Finance and Personnel] report estimates a total government revenue of £14.9 billion in 2013-14 compared to a total of £24.1 billion in public spending. However, when ‘non-identifiable’ spending is excluded total spending came to £20.1 billion. So, depending on which measure of spending is used, the ‘net fiscal deficit’, in 2013-14 was £9.2 billion or £5.2 billion.”

 

Upon Irish reunification, there would be no need for much of the non-identifiable items to be incurred by the Irish government.  Instead, central (‘non-identified’) costs such as the armed services would remain British overheads.  Whether the Irish Defence Force would need to increase in cost and size as a result of reunification is not pre-determined.  While a £9.2bn additional cost would be significant for the Irish government, a £5.2bn cost would be less significant.  Moreover, a political agreement could result in the UK government’s £5.2bn subsidy being phased out over a period of time.  During that period, it would be hoped that tax revenues in Northern Ireland should increase, removing the need for much of that £5.2bn subsidy.

 

The £5.2bn equates to around €5.9bn at current exchange rates.  Total Irish government expenditure in year 2016 was €55.3bn, with revenue expenditure of €51.3bn.  In short, if the Irish tax system had to cover a subsidy of €5.9bn, this would be a significant burden on taxpayers.  If a phased arrangement could be agreed, it is not unreasonable to expect that additional tax revenues could cover the amount through Northern Ireland developing a stronger economic system.  Moreover, the Huebner analysis suggests that the Republic’s economy would itself expand through reunification – though not to such an extent that it would generate sufficient tax revenues to cover this additional cost.

 

Conclusions

 

If Irish reunification is to be achieved, it has to be achieved by consensus.  That means that the unionist population needs to be persuaded that reunification is in their collective best interests.  At the heart of this would be the recognition that a genuine all-island economy would produce significant economic benefits for Northern Ireland, with more jobs and higher incomes generated.  Social and political concerns would need to be addressed and satisfied.  Unionists would need to be convinced that their chosen identity would be respected and their relationships with Britain would be protected.

 

Ten Point Plan

 

  1. The UK government agrees to continue its subsidy to Northern Ireland (currently operating through the Barnett formula) but on an annually reducing basis so that the UK subsidy is removed entirely by 2050. The subsidy would be replaced by higher tax revenues as Northern Ireland benefits from the economic impact of reunification and the Republic’s economic policies. Eventually, it would be replaced (if necessary) by a subsidy from the Irish government.  Sovereignty might also transfer on a gradual basis.  Stormont might continue to operate as a devolved assembly, but of Ireland rather than of the UK.  There could also be a graduated move towards a truly all-island economy, with both sterling and the euro accepted by businesses during the transition process.

 

  1. Increased spending on capital projects is required to bring infrastructure up to modern European standards. The infrastructure deficit that was carried forward from the period of direct rule needs to be addressed, which means that the UK government has an obligation to help meet the cost of correcting the infrastructure deficit. A UK government investment of £10bn would assist significantly with this, towards the cost of roads, health reform, education facilities and water and sewage systems. A bridge or tunnel connection with Scotland could provide reassurance to unionists that economic, social and political connections with Great Britain could actually be strengthened through new arrangements.

 

  1. A reduction in the number of civil servants in Northern Ireland to the same level as the Republic would assist in making Northern Ireland financially self-sufficient. All redundancy, pension and restructuring costs would be paid for by UK. This restructuring would assist in boosting Northern Ireland productivity.

 

  1. The European Union would be asked to assist in the reunification of Ireland, which would address the problems caused by the Irish border post-Brexit. A new 32 county administration should be empowered to borrow cheaply to invest in the economy and all-island infrastructure. The European Investment Bank would play a key role in this.  

 

  1. A political agreement on a new all island basis, inside the EU, would attract increased EU funding through Interreg, including financial assistance in restructuring Northern Ireland’s infrastructure to improve its competitive position and integrated all-island economy.

 

  1. IDA Ireland would promote all of the island on the world stage. This would produce benefits for all. Given its track record in attracting FDI worldwide it should prove to be a major player in turning the Northern Ireland economy into a world class competitor with the added benefit for the Republic that the two agencies would no longer be in competition  but would be working together to produce economic growth.

 

  1. Improved direct links between education and industry in Northern Ireland as per the Republic would lead to a more competitive market-oriented economy, over time producing improvements in living and working environments. While Northern Ireland needs to learn from the Republic with regards to elements of its education and skills system, the Republic needs to learn from Northern Ireland in terms of the cost and efficiency of its health system. Neither system is adequate at present.  The Bengoa reforms need to be implemented in Northern Ireland as at present it has too many general hospitals, without sufficient specialist expertise.

 

  1. A harmonised corporation tax would make all the island more attractive to foreign direct investment and lead to domestic companies throughout the island being more competitive, thus leading to economic growth for all.

 

  1. As part of the post-Brexit response from the European Union, a special case should be presented to the European Union for assistance with the cost and social pressures involved with Irish reunification. This might be structured in ways that learn from the Marshall Plan and the experience of German reunification.

 

  1. A single and integrated Ireland would create economies of scale and a more competitive economy. A single Ireland would be a world leader in the fields of research and development (eg Trinity College, UCD and Queen’s, all in the same country), higher education, pharmaceuticals and new technologies.


 

Post script:

Kevin Meagher, author, A United Ireland: why unification is inevitable and how it will come about

 

“Bluntly, Northern Ireland, with a population of just 1.8 million people, is of no strategic economic importance to Britain, representing just two per cent of the UK’s GDP. Northern Ireland’s best bet, economically, is to join with the South and align its economy to benefit from the Republic’s strong record of attracting foreign direct investment.”, p. 297

 

 

 

 

[1] https://www.irishtimes.com/opinion/northern-ireland-and-the-tripadvisor-index-of-economic-vibrancy-1.3311077

[2] https://www.belfasttelegraph.co.uk/opinion/news-analysis/demographics-are-shifting-towards-a-united-ireland-we-must-have-a-plan-35865222.html

[3] https://aib.ie/content/dam/aib/investorrelations/docs/economic-research/irish-economy/irish-economic-updates/irish-economy-update-august-2016.pdf

[4] https://www.quora.com/What-is-the-difference-between-GDP-and-GVA-and-why-GVA-is-more-relevant

[5] http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/saveselections.asp

[6] https://www.ons.gov.uk/economy/grossvalueaddedgva/bulletins/regionalgrossvalueaddedincomeapproach/december2015#regional-nuts1-gva-estimates

[7] https://www.nisra.gov.uk/statistics/economic-output-statistics/gross-value-added

[8] http://www.cso.ie/en/releasesandpublications/er/elca/earningsandlabourcostsannualdata2016/

[9] www.nisra.gov.uk/sites/nisra.gov.uk/files/publications/4xu-NI-ASHE-Bulletin-2017.PDF

[10] https://www.ucc.ie/en/media/academic/economics/documents/research/wp00-3.pdf

[11] http://www.assemblyresearchmatters.org/2017/06/14/goods-northern-ireland-export-much-worth-go/]

[12] http://www.ey.com/ie/en/issues/business-environment/ey-economic-eye-2017

[13] http://www.ey.com/ie/en/issues/business-environment/financial-markets-and-economy/economic-eye

[14] https://academic.oup.com/joeg/article-abstract/13/6/889/924921?redirectedFrom=fulltext

[15] http://blogs.lse.ac.uk/politicsandpolicy/britains-spatially-unbalanced-economy/

[16] https://www.britac.ac.uk/pubs/proc/files/98p035.pdf

[17] ibid

[18] ibid

[19] ibid

[20] U4D, https://www.londonderrychamber.co.uk/…/1403886149–U4D—need-to-increase-graduates

[21] U4D, ibid.

[22] U4D, ibid.

[23] http://www.publicpolicy.ie/expenditure-and-outputs-in-the-irish-health-system-a-cross-country-comparison/

[24] https://en.wikipedia.org/wiki/Public_service_of_the_Republic_of_Ireland

[25] https://www.nisra.gov.uk/sites/nisra.gov.uk/files/publications/34ED_20173%20Publication%20Documentv4.pdf

[26] https://www.nisra.gov.uk/statistics/labour-market-and-social-welfare/annual-survey-hours-and-earnings

[27] https://ec.europa.eu/ireland/news/key-eu-policy-areas/economy_en

[28] https://www.pwc.co.uk/who-we-are/regional-sites/northern-ireland/press-releases/northern-ireland-productivity-amongst-lowest-in-the-developed-world.html

[29] https://www.ulster.ac.uk/__data/assets/pdf_file/0008/118385/Understanding_productivity_in_Northern_Ireland_27_September_2016.pdf

[30] https://www.nerinstitute.net/download/pdf/industrial_policy_wp_2016_061216.pdf

[31] file:///C:/Users/Paul/Downloads/productivityhandbookchapter3_tcm77-187890.pdf

[32] file:///C:/Users/Paul/Downloads/1403886149–U4D—need-to-increase-graduate-numbers%20(3).pdf

[33] https://www.nerinstitute.net/download/pdf/industrial_policy_wp_2016_061216.pdf

[34] http://eprints.lincoln.ac.uk/7652/1/u4dreportlow-res.pdf

[35] https://www.enterpriseresearch.ac.uk/wp-content/uploads/2016/05/GEM-UK-2015-final-report.pdf

[36] https://www.fsb.org.uk/docs/default-source/Publications/the-contribution-of-small-businesses-to-northern-ireland.pdf?sfvrsn=1

[37] https://www.fsb.org.uk/docs/default-source/Publications/the-contribution-of-small-businesses-to-northern-ireland.pdf?sfvrsn=1

[38] http://www.ibec.ie/IBEC/Press/PressPublicationsdoclib3.nsf/vPages/Newsroom~ibec-cbi-set-out-ambitious-plan-for-all-island-economy-24-07-2016?OpenDocument?OpenDocument

[39] http://isni.gov.uk/PDFs/Investment%20Strategy.pdf

[40] https://news.sky.com/story/hit-to-northern-ireland-and-north-east-england-gdp-revealed-in-new-brexit-impact-papers-leak-11240254

[41] http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/583116/IPOL_BRI(2017)583116_EN.pdf

[42] http://www.europarl.europa.eu/unitedkingdom/en/ukevents/brexitstudies.html

The report cites Aidan Stennett (2016) ‘The EU referendum and potential implications for Northern Ireland’, Northern Ireland Assembly Research and Information Service Research Paper, NIAR 32-16, p.8.

[43] https://www.ons.gov.uk/economy/grossvalueaddedgva/bulletins/regionalgrossvalueaddedbalanceduk/1998to2016#wales-was-the-fastest-growing-country-in-the-uk-in-2016

[44] https://www.nisra.gov.uk/sites/nisra.gov.uk/files/publications/RY6v9-labour-market-report-january-2018.PDF

[45] https://www.ufuni.org/farming

[46] ibid

[47] ibid

[48] https://www.ft.com/content/cd9323b8-ad0e-11e7-beba-5521c713abf4

[49] http://www.irishnews.com/paywall/tsb/irishnews/irishnews/irishnews//business/2018/01/16/news/ni-agriculture-subsidies-to-fall-after-brexit-warns-report-1232572/content.html

[50] http://prcg.com/modeling-irish-unification/report.pdf

[51] http://www.euronews.com/2018/02/05/how-fall-of-the-berlin-wall-paved-way-for-germany-s-populists

4 thoughts on “The economic impact of an all-island economy – a draft report for consultation”

  1. Excellent. By 1700 the eastern Ulster counties were attracting significant migration from.thr north of England. Partition a disaster for Catholic protestant and dissenter. United would have the scale of Sweden.

  2. Superb article Paul – thank you very much for this very professional analysis.

    There is no question that the Re-Unification of Ireland is the way forward and is in the best interests of all of the people of Ireland.
    Unionist fears of a Re-United Ireland – real and imagined – have to be allayed by Nationalist Ireland and, as you correctly point out, Unionists need to be reassured that they are secure in a Re-United Ireland and their British identity is preserved.

    Upwards and onwards !

  3. Yes lots of good points . Motorway from Belfast to Dublin. Motorway from Belfast to Derry . No mention of income tax. Example 0 to €25000 0% tax £25000 to €50000 25% tax €50000 to €80000 45% tax €80000 + 60% tax . No mention of Penison €250 per week and Penison starts at 70 years old . These are very important to the working man and women. Keep up the good work as I think it’s going to happen in next 4 years. And nothing to do with SF.

  4. 1> NHS would have to continue in North as would all Social Payment Benefits for at least 15yrs.

    2> North at least, if not whole island should join the British Commonwealth as such theatrics are import to Unionism but might also have economic benefits.

    3>North must be guaranteed a workable autonomy, perhaps even allowing its own Foreign Policy for a decade.
    This autonomy should be guaranteed in a new Constitution & may only be rescinded by a weighted majority in the 6 counties.

    4> A new All-Island arrangement as outlined by you with the above points must be COMFORTABLE & SECURE for all.

    5> Generosity must be inherent in a new north.

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