A nation divided we stand but united we would fall
Northern Ireland, after 36 years of murder and mayhem courtesy of Messrs Adams and McGuinness, is the poorest region of the UK, and quite unable to support itself without a hefty annual subvention from the long-suffering British taxpayer. It generates far less in tax revenues to the United Kingdom Exchequer than is spent there.
Government figures show sharply higher expenditure per head in Northern Ireland on social and housing benefits than is incurred elsewhere, and rather poor tax proceeds in the form of income taxes, expenditure taxes and social insurance.
Roughly 30 per cent of the workforce in Northern Ireland is on the Government payroll, far higher than in England, Scotland or Wales. Or in the Republic, for that matter.
This is a further severe burden on the British taxpayer, in addition to the housing and welfare costs.
And of course there is a continuing, if finally now declining, burden for security costs through the PSNI, army and intelligence budgets. The net result is that if the fourth green field were to join our blessed republic, the taxpayers on the UK mainland could break out the Champagne.
The total net annual subvention from the Great British Taxpayer seems to be of the order of £6bn to £7bn, or roughly ?10bn in round numbers. Precise and up-to-date figures have not been calculated for some reason, possibly embarrassment, but this seems to be about the order of magnitude. Pretty decent Champagne could be afforded on this kind of budget.
Gerry Adams pronounced the reunification project alive and well in the wake of the Provisional IRA's "dump arms" decision. But the economics of Irish reunification is a topic on which the Provos maintain a deafening silence.
If the dreaded Brits were ever to pull out, it is inconceivable that they would continue to pick up the tab for Northern Ireland, which leaves just two options: the Republic's taxpayers stump up, or there would have to be a major purge of public finances in the North. This would include wholesale redundancies from the public sector there, and a sharp cutback in the extraordinary level of reliance on State-provided housing and income support.
Since we may take it that the Provos do not favour a public spending purge, they must, by a process of elimination, favour a sharp increase in taxation in the Republic.
The trouble is, taxes are not quite as low in the Republic as Government apologists would like us all to think. While there are no home ownership taxes (rates) and there is a low rate of Corporation Tax, VAT is higher than in most EU countries, alcohol taxes are well above the European average and we are one of the few countries to have a super-tax (additional to VAT) on new cars.
THE overall burden of taxes, as a percentage of national income, fell during the Nineties as the politicians ceaselessly remind us. But the ratio has begun to creep back up again these last few years, and total tax revenue for 2005 will reach about ?37bn to ?38bn in the current year. It is to this sizeable total that the cost of Mr Adams's territorial ambitions must be added.
The two biggest items of tax revenue in the Republic are VAT and Income Tax. Both are expected to yield about ?11bn this year. Thus if either of them were to be doubled, there would be enough to finance Northern Ireland, with a little to spare. But doubling Income Tax, or a standard VAT rate of 42%, is hardly a vote-winner in the Republic, hence the reticence of the Provos on this crucial issue.
There is no point in shrugging the issue away on the grounds that it does not have to be addressed soon, since the UK subvention to Northern Ireland will grow if left to its own devices. The only painless solution, for those who wish to persist in the Irish-unity-by-consent fantasy, would be a sustained burst of economic expansion in the North, with consequent reductions in social welfare costs and a boost to tax revenues.
The North could then take its place along with the other three green fields without having to graze them bare. But the expansion burst required is enormous, and there is simply no sign of it happening. First Trust Bank (the Northern Ireland end of AIB) predicts something of a slowdown in their most recent set of forecasts, and generally are rather downbeat about Northern Ireland's economic prospects.
For over three decades, Northern Ireland has suffered a notably weaker economic performance than the Republic, and has also failed to match other UK regions. It is important to understand that private investment has been the great economic weakness for a generation.
The difficulty in attracting overseas industry has been a principal consequence of the terrorist campaigns, but domestic investment, for example in the tourism sector, has been discouraged too.
Who wants to invest in a hotel or restaurant for the insurance money? Had the signing of the Belfast Agreement led to genuine reconciliation and a functioning devolved government, domestic investment might have picked up by now.
But there has been no reconciliation, and there is realistically no sign of it either, given the absence of remorse or repentance on the part of the main terrorist groups, particularly the Provisional IRA.
The Provos went out of their way to justify the 36-year campaign of violence, even as they announced its end. The political blockages remain, and it is difficult to see rapid economic development in the North in the absence of some political sincerity about peace and reconciliation.
In the meantime, taxpayers in the Republic can expect a sustained assault on the eardrums from the United Ireland brigade in the run-up to the next general election. Just ask them how they propose to pay for it.
- Colm McCarthy
