Belfast Telegraph

Saturday 22 November 2014

All you need is, er, lots of State cash

Barry White, Belfast Telegraph

Before the Assembly and Executive get down to the job of making Northern Ireland a better place - that's what they're there for, isn't it? - it would be useful for them to consider a few facts.

We all know, or are about to find out, that the Executive is short of cash to finance all the things its 11 departments would like to do. The wailing and gnashing will start shortly, when the long-awaited Programme for Government is finally agreed, with Peter Robinson acting as Chancellor.

Then, and only then, will we get to see how all our wishes and desires for more attention to be paid to pet projects like Irish language or Ulster-Scots dialect actually cost. If we want a sports stadium, and if it has to be in the back of beyond, what will we have to give up, and where, to make it happen?

The fact is that whether it is a legacy of the Troubles or not, we have an economy that is world class, in terms of what no self-respecting country or region should want. We're not just dependent on the British exchequer, whose subvention has topped the £10bn mark for the first time, but most of us wouldn't survive without it.

The Times had an interesting table last Thursday, in the wake of the great Labour smash-and-grab raid on Tory policies. Headed 'state spending as a proportion of national or regional income, 2007 estimates', it had Northern Ireland far and away the winner - or loser - with 70.5%.

That means that £7 out of every £10 in the tills of every shop or supermarket originated from the taxes or borrowings of the UK government, meaning the British people. Wales was next, with 64.3%, the North-East with 64.3% and Scotland was fourth with 55.6%.

In the UK as a whole, the percentage was 44.1%, the same as Germany, which represents a rise of one-fifth under new Labour, and that's lower than France, 53.2%, Sweden, 52.4%, Denmark 50.1% and Italy 50%. But it's way ahead of Spain 38.5%, Japan 38.4%, USA 34.9% and Ireland 34.1%.

So what parts of England are the most successful, and which help to pay for the rest? The combined figure for England is 41%, but the east of England comes in at 38.3%, the South East at 33.5% and London at 31.4%.

You could easily conclude, like the Times, that the less reliance there is on government intervention, the better regions and nations perform. Wherever the best salaries and security are to be found in publicly-funded employment, and the state picks up the tab, the rest of the economy will struggle to compete.

If the figures are right, the comparison between Northern Ireland and the Republic is staggering - 70% compared to 34%, as bad as the differential in corporation tax paid by successful companies, 30% here and 12.5% in the South. No wonder all the economists, and politicians, are adamant that the only way to achieve the 'step-change' in our prospects was to find a way of closing this gap - though I suppose such a move could be seen as more government intervention.

Somehow or other, we have to devote far more of our effort not only to devising incentives to businesses big and small, but to cut the public sector down to a size more appropriate to a small region. The trouble with devolution is that although it means politicians taking on more responsibility, it also encourages them to spend, spend, spend on unnecessary administration and projects that make them feel more important.

The Review of Public Administration, dating back to the Trimble era, was to have cut out much of the bureaucracy that has been built up over the years, but it is making little progress. Peter Hain would have pressed on, regardless, and reduced the number of health and education bodies, as well as councils, to a precious, necessary few.

Now we hear that Health Minister Michael McGimpsey is having second thoughts about a single health authority, as was due to take over next April. Who will be next to review the review, and avoid the unpopularity of sending out the redundancy notices that the Assembly's target of 3% efficiency savings requires?

Someone has to decide that an Assembly of 108 members, of whom nearly half qualify for extra payments, 11 departments (which become a round dozen when justice and policing is added) and 26 councils represent far too much government even for a divided Northern Ireland. We can't afford to duplicate everything, like Belfast's leisure centres, so that politicians get elected.

It's up to the Executive - which has issued just two statements, on flooding and foot and mouth, in six months - to reach difficult conclusions, soon. Otherwise, an unsympathetic Labour chancellor, and a distracted, embattled Prime Minister are likely to tell us to keep within our budget and tackle that 70% dependency - and the record 27% of the working population that is " economically inactive".

Re BBC references to partition offers, during World War II, Winston Churchill's vain appeal to Eamonn De Valera after Pearl Harbour, in December 1941, is well known: "Now is your chance. Now or never. A nation once again. Am very ready to meet you any time."

The previous PM, Neville Chamberlain, made the same plea, to get access to west coast ports. In May 1940, an envoy asked: "If the partition were solved today would you be our active ally?" to which Dev replied: " I feel convinced that that would be the consequence."

The War Cabinet decided that if he gave access to British forces the UK would make a declaration in principle in favour of a united Ireland without consulting Craigavon. It was finally rejected that July. Churchill wrote that after the fall of France, all transatlantic shipping had to come north, where Northern Ireland stood a "faithful sentinel".

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Latest News

Latest Sport

Latest Showbiz