A United Ireland. Opening up the discussion.

[Milltown Row2]

How was the reunification of East Germany into West Germany at the time? Did it present issues and are there lessons to be learnt

The thing there was they were all Germans. Poverty and investment post Socialist collapse, were the major issues there which, the way things are going, the divide between North and South could be heading that way.

So there was resentment and mistrust? Along with job issues, should we get to that point it will be a bigger basket case than it currently is,  hopefully the south with all their millions will be able to share that with the paupers in the north..

[yellowcard]

I think what we are seeing is a managed decline of the 6 counties whether through choice or necessity, similar to Thatchers government policy regarding the city of Liverpool in the 1980s. I don't see that improving anytime soon. The UK economy is tanking and this place is not a priority and the DUP had every chance to try and make it work but they have shown that its their own party before union or anything else.

NI has ready access to buoyant demand only an hour away and has access to to whole EU market. Public provision may not increase but there should be some opportunities for the private sector to enjoy modest success. For instance, if you could make modular houses in Derry or Tyrone and put them on a lorry then they would find a use for them in the 26 counties.

Are there 10% of Unionists or those from a Unionist background who would vote for a UI ?

Ive never seen this reflected in any poll

Yes, and definitely more than 10%. However, they won't stand up and shout about it for fear of hate and ridicule. Many protestants are completely fed up with their politicians and the way that they're treated by the British. They didn't vote for Brexit and are very happy to travel on an Irish passport.

Vocal unionists and their politicians think these silent people will come out and vote for the status quo, but those politicians are in for a big shock. Just look at how independant Lady Harman was the north Down Westminster MP, and then the seat went to Alliance. It's anyone but the DUP and UU.

Now some of the unionists that might have been open to discussion have moved into the Alliance camp, but thee are still the type of anti Brexit unionists who can be talked to.

I wouldn't disagree with that in terms of the private sector, it's the public expenditure side of things that are being cut in real terms. Without the £15b or so annual subvention this place is still an economic basket case no matter what benefits the dual market access for goods will bring. I don't see any form of UK government be they Tory or Labour reversing those cuts whilst they have ever increasing levels of government debt.   

[keep her low this half]

I think what we are seeing is a managed decline of the 6 counties whether through choice or necessity, similar to Thatchers government policy regarding the city of Liverpool in the 1980s. I don't see that improving anytime soon. The UK economy is tanking and this place is not a priority and the DUP had every chance to try and make it work but they have shown that its their own party before union or anything else.

NI has ready access to buoyant demand only an hour away and has access to to whole EU market. Public provision may not increase but there should be some opportunities for the private sector to enjoy modest success. For instance, if you could make modular houses in Derry or Tyrone and put them on a lorry then they would find a use for them in the 26 counties.

Are there 10% of Unionists or those from a Unionist background who would vote for a UI ?

Ive never seen this reflected in any poll

Yes, and definitely more than 10%. However, they won't stand up and shout about it for fear of hate and ridicule. Many protestants are completely fed up with their politicians and the way that they're treated by the British. They didn't vote for Brexit and are very happy to travel on an Irish passport.

Vocal unionists and their politicians think these silent people will come out and vote for the status quo, but those politicians are in for a big shock. Just look at how independant Lady Harman was the north Down Westminster MP, and then the seat went to Alliance. It's anyone but the DUP and UU.

Now some of the unionists that might have been open to discussion have moved into the Alliance camp, but thee are still the type of anti Brexit unionists who can be talked to.

I wouldn't disagree with that in terms of the private sector, it's the public expenditure side of things that are being cut in real terms. Without the £15b or so annual subvention this place is still an economic basket case no matter what benefits the dual market access for goods will bring. I don't see any form of UK government be they Tory or Labour reversing those cuts whilst they have ever increasing levels of government debt.

This is a very important point, the UK is in serious difficulties post Brexit but the governmnent and the media don't want to admit it. Have a listen to Chris Patten last week on Question time about his opinion on the state of the UK economy. Costs will have to be cut and NI is ripe for the chop, no votes to lose over here.

[clonadmad]

The UK government subvention to Northern Ireland, generally estimated at £10 billion (€11.6 billion), has raised doubts about the viability of a united Ireland based on the capacity of the Republic to absorb a subsidy of this size. Analysing the basis by which the subvention is calculated demonstrates that it includes significant costs which would not be carried over to a united Ireland and other costs that would be part of post-referendum negotiations between the Irish and UK governments.


The subvention is the public-sector deficit for Northern Ireland, and it has three components: public expenditure in Northern Ireland, taxation raised in Northern Ireland and an allocation to Northern Ireland of the costs of central UK government expenditure. The most significant element of public expenditure is the cost of pensions, which adds £3.5 billion to the subvention, including both public occupational pensions that are not covered by a separate pension fund, and means-tested pensions.


In the event of referendums being passed to create a united Ireland, this will be one of the biggest issues to be negotiated between the Irish and British governments.

The UK pays pensions to people who have worked in the UK but now live elsewhere, including in Ireland. It would be consistent with current practice for the UK to pay pension liability that had been built up, based on individuals' tax and social insurance contributions or caring responsibilities, during Northern Ireland's membership of the UK. This would also be similar to the pension arrangements in the UK's withdrawal

Such an agreement would leave the Irish Government with responsibility for all pension liabilities built up from the date of the creation of the new Irish state. While the UK could renege on this commitment, it is a very unlikely outcome, and the most probable diplomatic agreement is one which sees the UK meeting such its pension liabilities.

UK national debt
The subvention also includes a £1.6 billion allocation to the UK national debt. This is a legal liability of the UK state, and a future united Ireland would have no legal responsibility for this debt. If an Irish government agreed to make some voluntary contribution to UK debt, as part of a larger deal, they would be entitled to claim a share of UK assets proportionate to Northern Ireland's size, offsetting the debt contribution. In practice, and following the precedent when the Irish Free State was created, it is more likely that a simple standstill agreement would be reached, where Ireland waives any claim to UK assets outside of Northern Ireland and in return takes on no debt.

The allocation of central UK defence expenditure adds £1.14 billion per annum to the subvention, including a per-capita contribution to the Trident nuclear weapons programme and the military costs in Iraq and Afghanistan. Almost none of this allocation relates to expenditure in Northern Ireland and would not transfer to a united Ireland. To put this figure in context, Ireland's current defence budget is €1 billion, so even allowing for an increase in a future Irish defence budget of about €200 million this would still represent a saving of more than £900 million per annum.

An additional £765 million per annum is allocated as Northern Ireland's contribution to 'outside UK expenditure' including the large UK Foreign Office. Again, little of this would automatically transfer to a united Ireland, reducing the subvention by at least £500 million.

The subvention underestimates tax revenues for Northern Ireland, as corporation tax, capital gains and VAT are paid by companies from their head-office address regardless of where that profit was earned, exaggerating the tax earned in London. Previous studies have estimated that this underestimation of tax revenue actually earned in Northern Ireland adds £500 million to the size of subvention.

The economic debate on unity needs to move on to the more important questions of the policy decisions necessary to support sustainable economic growth

A further lack of precision in the UK published accounts is the net impact of 'accounting adjustments' due to depreciation, which increases the subvention by £873 million. The accounts also include 'unidentified' UK central government expenditure of £450 million per annum. It is impossible from the published data to estimate how much of this expenditure would transfer to a united Ireland, but it will not be the full published amount.

Taking the latest UK published figure for the subvention of £9.4 billion, and excluding UK pension liabilities, debt repayments, 80 per cent of defence expenditure, 65 per cent of 'out of UK expenditure' and £500 million in underestimated tax, but erring on the side of caution, and not making any reduction for "accounting adjustments" or other "unidentified expenditure", leaves a remaining subvention figure of €2.8 billion.

Growth
A subvention of this size would require once-off economic growth and tax revenue growth in a future united Ireland of about 5 per cent to absorb this deficit without disruption. Existing economic models of an all-island economy predict a positive impact on economic growth within a range sufficient to cover this deficit. In the context of a united Ireland if "Northern Ireland's" economy improved so that it simply reflected average Irish economic performance, no subvention would be required.

A subvention of €2.8 billion does not present a significant barrier to Irish unity and the economic debate on unity needs to move on to the more important questions of the policy decisions necessary to support sustainable economic growth to maximise the benefits of a larger and integrated all-island economy and to support improved public services in health, welfare, education and infrastructure. These will be the real issues that will shape the costs and benefits of a united Ireland and they will be central in the future referenda debates. Compared with those decisions the subvention is irrelevant.

[trueblue1234]

That's an excellent piece. Where was this from? Going on the assumptions that the figures are correct, this is the sort of thing that should be pushed more in the media by nationalists. Too often there are half truths and misinformation out there that don't get challenged.

[Aaron Boone]

Drive into Dublin from the Port Tunnel and its multinationals everywhere. Serious operators like JP Morgan or Indeed each employing at least hundreds.

These companies could easily be in Belfast once everything is uniformed.

[dec]

That's an excellent piece. Where was this from? Going on the assumptions that the figures are correct, this is the sort of thing that should be pushed more in the media by nationalists. Too often there are half truths and misinformation out there that don't get challenged.

https://www.irishtimes.com/opinion/uk-subvention-to-north-irrelevant-to-debate-on-irish-unity-1.4587773

[Eamonnca1]

David McWilliams: The economies of North and South are slowly integrating
As both jurisdictions integrate further, the economic distinctions between Northern Ireland and the Republic may have almost disappeared by the time a Border poll is called


David McWilliams
Sat Jun 10 2023 - 05:00

On summer evenings throughout the North you can hear the bands practising, beating out marching tunes from Orange Halls, looking backwards rather than planning for the future. And the future is arriving quickly in Northern Ireland, not just in a post-dated demographic cheque revealing a substantial nationalist majority under the age of 25, but in the quiet success of what might be termed the island economy. Whether the loyal brotherhood like it or not, the economies of the North and its much larger cousin, the South, are integrating slowing but surely. This will continue because it makes commercial sense.

For economists, the division of Ireland created something close to an economic laboratory. The same people, more or less, on the same island, with the same natural endowments are cleaved apart by a border. One part begins much richer than the other and is tied to one of the richest countries in the world. The other heads off on its own, without capital or any real plan other than not liking its neighbour. The outcome is the economic equivalent of the nature versus nurture debate.

In the case of this island, it seems that nurture has trumped nature. The poorer part has ended up much richer, which means that policy matters, jurisdiction matters, as do legal, educational and tax systems. But something else matters too, something more nebulous. Call it the mood of the nation or the purpose of the endeavour.

The purpose of 21st-century Ireland is prosperity. We can argue over what prosperity means and in particular the success otherwise of its just distribution, but there is little doubt that prosperity for the many is the socioeconomic goal of the Irish State. This is the purpose of the endeavour, the point of the exercise.

The point of Northern Ireland is not prosperity. Right now, among unionist politicians, the central strategy seems to centre on the immiseration of the people in order to inflate the likely future cost of any united Ireland, so as to scare off lukewarm nationalists of "middle Ireland". How else can you interpret the oft-heard expression "The South can't afford us" other than "We" are going to remain impoverished as a negotiating strategy? It doesn't matter what sort of poverty we endure as long as it's red, white and blue poverty. It's worthy of Flann O'Brien.

However, this tactic is not working because the story of the past 25 years since the signing of the Belfast Agreement has been the quiet, modest but obvious success of the integration of the island economy. Commerce always finds a way. Thirty thousand people cross the Border every day to go to work. Since Brexit, and through the Covid years, cross-Border trading has increased. In 2021, Ireland exported €3.7 billion to Northern Ireland and imported €4 billion, a significant increase from 2020, when exports stood at about €2.5 billion. Imports from Northern Ireland to the Republic also increased, Central Statistics Office (CSO) data shows.

Overall, exports to Northern Ireland as a proportion of all Irish exports to the UK increased from 16 per cent to 23 per cent in the past two years. Similarly, the share of UK imports coming from Northern Ireland has shot up. Politics might be trying to create borders, but trade is doing its own thing.

The orientation of trade in Northern Ireland has been transformed by Brexit. The Republic is Northern Ireland's single largest export market, accounting for 40 per cent of total exports outside exports to Britain. Before Brexit, Northern Ireland exports to Britain were 3.7 times greater than exports to the Republic; now that figure is only 2.5 times greater. Trade between both parts of the island is flourishing. The value of exports from Northern Ireland to the Republic increased by 23 per cent between 2020 and 2021, according to the Northern Ireland Statistics and Research Agency (NISRA); a much larger increase than the change in total exports.

Brexit is not a wedge between both parts of the island. Rather, it has proved to be a bridge – precisely what the protocol is designed to do. Northern Ireland has the best of both worlds, one foot in the EU and one in the UK.

But there is a long way to go.

With improved infrastructure, specifically improved train and road access to the North, it is highly likely that commercial and financial ties will solidify

The Troubles are estimated to have reduced Northern Ireland's GDP by up to 10 per cent. However, in the quarter century since the Belfast Agreement, a real divergence emerged between the North and South. Economic indicators make it abundantly clear that the peace dividend went to the South.

From 1998 to 2021, the Northern Ireland economy expanded by about 38 per cent in real terms, considerably less than the Republic. Even taking the GNI (gross national income) measure, which strips out the distorting effects of multinationals on the economy, the Irish economy has grown by about 83 per cent in real terms, more than double the rate of the North.

Central to this economic underperformance of the North relative to the Republic is its poor productivity performance. Productivity is the key to driving improvements in living standards, and Northern Ireland has the worst productivity (measured in terms of output per hours worked) of any UK region, about 17 per cent below the UK average as a whole. (The UK itself is among the worst performing economies in the OECD.) In contrast, productivity per worker is about 40 per cent higher in the Republic relative to the North. Wages can't rise when productivity is so low, which explains why wages are so much lower in the North, running on average about 64 per cent of those in Ireland.

But here is the opportunity. The Republic has too much demand and not enough supply; the North has too much supply and not enough demand. Integrate further and gains accrue to both jurisdictions.

Take commercial rents, which are far lower in the North. Prime rents in Belfast are £23 (€26.73) per sq ft as opposed to €65 in Dublin. Surely this gap can be bridged as companies move? The average monthly rent in the North is £773 (about €900), as opposed to the average rent in the Republic, which stands at €1,750 – almost double that in Northern Ireland. The average cost of a home in Northern Ireland is £197,800 (€229,902); it is €308,497 in the South.

As both jurisdictions integrate further, companies and talent will locate where there is best value. With improved infrastructure, specifically improved train and road access to the North, it is highly likely that commercial and financial ties will solidify. So much so that the economic distinctions between North and South may have almost disappeared by the time a Border poll is called.

[clonadmad]

That's an excellent piece. Where was this from? Going on the assumptions that the figures are correct, this is the sort of thing that should be pushed more in the media by nationalists. Too often there are half truths and misinformation out there that don't get challenged.

Professor Doyle's article is based on peer-reviewed research published in the special issue of ISIA on ARINS: Analysing and Researching Ireland, North and South.

[JPGJOHNNYG]

The subvention has always been based on dodgy accounts and guesses. Ridiculous that the government doesn't actually seem to know the real figure. Great article. I wonder if it factors in the tax revenues from UK wide business like Tesco's etc whose profits from NI will be declared though across the water.

[Jell 0 Biafra]

Wouldn't there also be additional increased costs for the south, not covered in the subvention?  Like policing, education, particularly in loyalist areas? 

[clonadmad]

The subvention has always been based on dodgy accounts and guesses. Ridiculous that the government doesn't actually seem to know the real figure. Great article. I wonder if it factors in the tax revenues from UK wide business like Tesco's etc whose profits from NI will be declared though across the water.

It does


"The subvention underestimates tax revenues for Northern Ireland, as corporation tax, capital gains and VAT are paid by companies from their head-office address regardless of where that profit was earned, exaggerating the tax earned in London. Previous studies have estimated that this underestimation of tax revenue actually earned in Northern Ireland adds £500 million to the size of subvention."

[clonadmad]

Wouldn't there also be additional increased costs for the south, not covered in the subvention?  Like policing, education, particularly in loyalist areas?

"so even allowing for an increase in a future Irish defence budget of about €200 million this would still represent a saving of more than £900 million per annum."

[Rossfan]

Why the awful low productivity in the 6?
Why does a Monaghan worker produce a lot more than an Arnagh or Tyrone one?
Or is it down to exceptionally high productivity in the East and South East?

[clonadmad]

Why the awful low productivity in the 6?
Why does a Monaghan worker produce a lot more than an Arnagh or Tyrone one?
Or is it down to exceptionally high productivity in the East and South East?

An individual worker in Intel in Kildare or Eli Lilly in Kinsale would have a massively greater productivity than a bin man in Carrickfergus

It's the value of the work that they produce is what counts

The more highly skilled and better educated workforce you have the higher the productivity

"productivity is a measure of economic performance that compares the amount of output with the amount of labor used to produce that output."