Belfast Telegraph

Dr Esmond Birnie: The uncosted spending plans of Northern Ireland parties

Ballot boxes at an election count (David Jones/PA)
Ballot boxes at an election count (David Jones/PA)

By Dr Esmond Birnie

Quite rightly there has been a lot of emphasis in this election regarding the extent to which the spending plans of the two largest GB parties do not add up.

As to the manifesto commitments of the five largest Northern Ireland parties - the DUP, Sinn Fein, SDLP, UUP and Alliance - it is clear there are a lot of spending commitments, and almost none of these are costed. Also, there are many commitments to cut taxes.

It is extremely rare for a Northern Ireland party to suggest either a cut in public spending or an increase in taxation.

All five parties come up with some genuinely good ideas. Sometimes also their plans may unfortunately be "too clever by half" - sophisticated but not likely to survive contact with various realities including HM Treasury.

Mostly, the parties accept this is "not a normal election", but is any election "normal"?

They tend to argue it is dominated by Brexit.

The DUP manifesto was longest at about 50 pages, followed by Alliance (about 40), SDLP (29), UUP (about 20) and Sinn Fein (about 15).

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Sinn Fein is the outlier in terms of how little detail they give about specific policies.

All five parties are united on extending the "transitional" welfare package beyond March 2020 - but what about how far the previous package was underspent and don't we have a big problem of high economic inactivity which requires change in our welfare system? Three parties aim to reach Northern Ireland carbon zero by 2030, or 2035.

Sinn Fein would probably agree with that too.

The DUP, however, implies that Northern Ireland should have some flexibility to achieve less than a 100% reduction by 2050, so, reducing by, say, 80%.

The challenge of a quick, deep cut is that it implies a sudden ramp up in public expenditure demands, large costs on businesses and probably unavoidably higher transport and heating costs for low income households.

Largely, there is silence on the new tax Northern Ireland "should" have - domestic water charges. The SDLP explicitly rule this out.

There is no obvious answer in these documents as to how a NIW request for £2.5bn of investment could be funded. Apart from water charges, SDLP and Alliance are enthusiastic about green taxing, implying these will be very "progressive" - but will only the rich pay?

There is (rightly) criticism of the Apprenticeship Levy although (curiously) the DUP want to put in place a new training levy.

Lower VAT for tourism is popular, as is abolition of Air Passenger Duty (APD).

Can we really be sure that demand would be sufficiently responsive to lower price to make such changes worthwhile?

The only major spending cut I can find relates to GB - not Northern Ireland - which is to axe the HS2 rail line from London to the North of England, where the projected cost has escalated from £30bn to £50bn to £80bn-plus. Ironically, the DUP propose this notwithstanding their desire for a feasibility study of a bridge to Scotland and power cable to Iceland.

Also, a lot of support for keeping existing levels (as per CAP) or spending to support agriculture. Is this another cop-out, a locking into past policies which haven't worked that well?

Only one party, it seems - the SDLP - mentions cutting Corporation Tax. That was once almost the economic policy of the five parties- but has that boat sailed in a world where the UK rate is down to 19% and the US down to about 20%?

The five parties have all put in their list to Santa Claus. Alas, much may be unaffordable.

  • Dr Esmond Birnie is senior economist with Ulster University

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