Costs of Irish unification.

Jawgap

FrancieBrady wrote: »

Two sovereign governments on the same page during a transition period working to make the handover as successful as possible.

We agree that NI has to sort itself and we agree that it can be done.
The subvention figure is probably (I am guessing like everyone else) around the 5bn mark when all centralised funding is subtracted.
During that period also tackling the PS and encouraging all sorts of business, tourist initiatives and attracting investment.
Streamlining all the overlap.

Negotiating with the EU a support structure and grace periods to allow for stability after a UI happens.

Lots and lots of work and challenge but all perfectly doable.

as successful as possible.......is meaningless phrase, maybe as successful as possible is a subvention marginally less than the current €10 billion.

The subvention is 10, not 5 - it's based on the fiscal deficit.......

Fiscal deficit is the difference between the government's expenditures and its revenues (excluding the money it's borrowed). A country's fiscal deficit is usually communicated as a percentage of its gross domestic product (GDP).

It's simple.....the difference between the tax take in NI and the cost of running the place is the subvention.

The tax take in NI is about stg£14.5 billion......the cost of running it is about stg£24 billion. That's not a guess, not a notion, it's the figures from the NI's Department of Finance (www.finance-ni.gov.uk).

FrancieBrady

Jawgap wrote: »

as successful as possible.......is meaningless phrase, maybe as successful as possible is a subvention marginally less than the current €10 billion.

The subvention is 10, not 5 - it's based on the fiscal deficit.......



It's simple.....the difference between the tax take in NI and the cost of running the place is the subvention.

The tax take in NI is about stg£14.5 billion......the cost of running it is about stg£24 billion. That's not a guess, not a notion, it's the figures from the NI's Department of Finance (www.finance-ni.gov.uk).

If you are just going to refuse to accept that those figures are contested then there is little point in a discussion on the subject.
Here is another paragraph from the Brexit-and-the-Future-of-Ireland Oireachtas report:

Northern Ireland’s Deficit
United States Congressman Brendan Boyle specifically commissioned a report for the
Committee on the Implementation of the Good Friday Agreement from the United
States House of Representatives Congressional Research Office regarding the deficit
in Northern Ireland. The finding of the United States Congressional Research Office
highlights the difficulty in getting the accurate figure in relation to the often quoted
subvention for the British Treasurer to make up the difference in the Northern Ireland
economy income and expenditure.
The British Treasury has stated the deficit for the Northern Ireland economy is £9.1
billion. This is compared to the deficit of £5.1 billion as highlighted by Congressman
Boyle’s report which removes the allocation of billions of pounds sterling of global
British military spending, UK debt repayment, and other Non-Identifiable Expenditure
allocated to Northern Ireland’s expenditure.
Congressman Boyle’s office also highlighted that as well as no accurate figure for
expenditure in Northern Ireland, there is also no accurate figure for income raised
in Northern Ireland. There is no entirely accurate figure for a wide range of taxes
collected in Northern Ireland including Corporations Tax. There are figures apportioned
to Northern Ireland based on formulas of HM Revenue. Northern Ireland’s share of
Corporations Tax is taken to be its share of profits of all public and private
corporations in the UK. The Capital Gains tax figure is apportioned to Northern Ireland
according to Northern Ireland’s share of UK GAV (NI Net Fiscal Balance Report 2015).
The need for accurate and reliable data on which to base a response to Brexit
becomes obvious.

Jawgap

FrancieBrady wrote: »

If you are just going to refuse to accept that those figures are contested then there is little point in a discussion on the subject.
Here is another paragraph from the Brexit-and-the-Future-of-Ireland Oireachtas report:

Ah that's grand. I thought it was going to be serious money, but it's only stg£5 billion.

But yes, you're right......the figures are contested. On the one side there's Ulster University, the ESRI, NERI, Dan O'Brien, David McWilliams, Stormont's Research Information Service, NI's Department of Finance, the ONS etc saying it's stg£10 billion or so.......

EDIT: and this guy......(the FT's economic editor)

https://twitter.com/chrisgiles_/status/879328653510836224


......on the other it's the one term Cingressman from Philly (although it seems he's also an alumnus of a school I went to, so he can't be that bad )

FrancieBrady

Jawgap wrote: »

Ah that's grand. I thought it was going to be serious money, but it's only stg£5 billion.

But yes, you're right......the figures are contested. On the one side there's Ulster University, the ESRI, NERI, Dan O'Brien, David McWilliams, Stormont's Research Information Service, NI's Department of Finance, the ONS etc saying it's stg£10 billion or so.......

EDIT: and this guy......(the FT's economic editor)

https://twitter.com/chrisgiles_/status/879328653510836224


......on the other it's the one term Cingressman from Philly (although it seems he's also an alumnus of a school I went to, so he can't be that bad )

Yes it may well be 10bn now but with the stroke of a pen it will be 5bn in a UI scenario because we will not be paying for British Defence Forces worldwide spend or Uk debt expenditure etc.

Jawgap

FrancieBrady wrote: »

Yes it may well be 10bn now but with the stroke of a pen it will be 5bn in a UI scenario because we will not be paying for British Defence Forces worldwide spend or Uk debt expenditure etc.

Once again......the subvention isn't notional......it's to address the difference between what's raised and what's spent......

To quote the NI Executive's own budget (for 2015/16)

The taxes generated within Northern Ireland are considerably less than the level of funding received from HM Treasury. This shortfall is known as the fiscal deficit and in 2011-12 it was estimated to be £9.6 billion.

Of course maybe the budget is wrong and the people who compile it are wrong.

Carlos Orange

FrancieBrady wrote: »

Yes it may well be 10bn now but with the stroke of a pen it will be 5bn in a UI scenario because we will not be paying for British Defence Forces worldwide spend or Uk debt expenditure etc.

Servicing the UK debt and the British millitary cost about 2.7 billion per year. Where is the other 2.3 billion pound coming from?

FrancieBrady

psinno wrote: »

Servicing the UK debt and the British millitary cost about 2.7 billion per year. Where is the other 2.3 billion pound coming from?

What the report to the Oireachtas above refers to as Unidentifiable Expenditure presumably.

Peregrinus

psinno wrote: »

Servicing the UK debt and the British millitary cost about 2.7 billion per year. Where is the other 2.3 billion pound coming from?

Francie's figures (or, in fairness, the figures Francie is relaying) may be open to challenge, but the basic point is good; the calculation of the fiscal transfer that NI receives every year does involve attributing to NI a proportionate share of significant expenditure not particularly linked to NI, but judged to be for the benefit of the UK as a whole. Not just defence expenditure but also, e.g., the cost of the UK's diplomatic service around the world, the cost of servicing UK public debt; even some major infrastructure projects undertaken in GB. If NI were to separate from the UK these are not, in fact, costs which would follow NI into its brave new world.

The suggestion that, recalculated to take account of this, the fiscal transfer would fall from 10bn to 5bn looks optimistic to me but, honestly, I don't know. I haven't seen any calculation of the fiscal transfer done on the basis that no part of "UK-wide" expenditure which would be undertaken whether or not NI was in the UK is attributed to NI. My guess is that the revised figure would be significantly lower than 10bn, but my guess is also that it still be very large.

The other point to bear in mind that, whatever the amount of the fiscal transfer to NI, it isn't actually a transfer paid for by taxpayers in England, Wales and Scotland. If you do a similar exercise for each country in the UK (balancing tax receipts against expenditure attributed to that country) you'll find that all four (or three-and-a-half) countries in the UK benefit from a "fiscal transfer". English taxpayers aren't paying for the fiscal transfer to NI because they are not even paying enough tax to cover fiscal expenditure in England.

How is this miracle achieved, I hear you ask? In a way that's very familiar to us in RoI; by borrowing. The UK is running a budget deficit.

And here's the thing; if NI were to be united with the Republic, then the Republic's population would grow sharply; its GDP would grow sharply; its tax base would grow sharply. We would, suddenly, have become a bigger country with a bigger tax base and a correspondingly bigger borrowing capacity. If we wished to borrow more to maintain spending in NI, we could. And it's not such an outlandish idea; it's exactly what the UK has been doing.

It doesn't follow that it would necessarily be a good idea. The cost-benefit calculation for us would be quite different than it is for the UK. The amount of borrowing required would be much more significant to us that in would be to the UK. But an enhanced borrowing capacity would certainly be among the tools available to us to manage the situation.

Jawgap

Peregrinus wrote: »

......

How is this miracle achieved, I hear you ask? In a way that's very familiar to us in RoI; by borrowing. The UK is running a budget deficit.

And here's the thing; if NI were to be united with the Republic, then the Republic's population would grow sharply; its GDP would grow sharply; its tax base would grow sharply. We would, suddenly, have become a bigger country with a bigger tax base and a correspondingly bigger borrowing capacity. If we wished to borrow more to maintain spending in NI, we could. And it's not such an outlandish idea; it's exactly what the UK has been doing.

It doesn't follow that it would necessarily be a good idea. The cost-benefit calculation for us would be quite different than it is for the UK. The amount of borrowing required would be much more significant to us that in would be to the UK. But an enhanced borrowing capacity would certainly be among the tools available to us to manage the situation.

That's not the total picture.

Yes, we could borrow, and yes our GDP and tax base would expand, but so too would our liabilities. Is there any analysis that shows that NI is anything other than a liability? And consequently our cost of borrowing would increase would it not?

Second, debt has to be repaid. It's simply deferred taxation, and given the productivity deficit in NI what are the chances we could earn our way out of the debt incurred? We can't inflate our way out.

Third, all that assumes a benign environment, and a willingness towards reform/change in NI (not exactly something that had been demonstrated). The DUP have just got a big payout to support the Tories.......we have a tradition of buying off independents and minorities to acquiesce to the formation of governments, what chance then similar packages on the same or a larger scale won't be sought regularly to keep a lid on things?

Rome ultimately collapsed because of the payment of greater and greater amounts of tribute to keep bolshy people its borders sweet - there's a lesson there

Peregrinus

Yes. I'm not suggesting that we could simply borrow the 10bn (or whatever the correct figure is) and all would be well. I'm just pointing out that borrowing is among the suite of tools available for addressing this issue, and by virtue of reunification our borrowing capacity would be enhanced. Just because you can borrow doesn't mean that you should. But it does mean that you can, and therefore it's among the range of measures that you could take to manage this problem.

Other measures might include migrating NI tax and national insurance rates to RoI tax and USC rates. This would be painful for middle-income earners in NI, and for shoppers; on the other hand it would give them the Corporation Tax rates they have been clamouring for. I've no idea, obviously, how far it would go towards reducing the fiscal deficit; you'd have to model that.

The bottom line, though, is that you're right. As matters stand, NI comes nowhere near to paying its way, and only enjoys the standard of living that it does because of transfers from Westminster. And, even if we can't accurately model what transfer from Dublin would be required to maintain NI standards of living in the changed circumstances of Irish reunification, it would certainly be painfully large, and probably unfeasibly large.

The thing is, though, this is an unstable situation for NI. Sooner or later, a UK government will want to "normalise" the NI economy and, in the long term, the political and social health of NI requires this. Brexit, for the reasons mentioned earlier, will tend to bring that day a little closer, especially if it's a hard Brexit. When weighing up the pros and cons of a united Ireland, the appropriate comparision for NI is not between their economic situation in a united Ireland versus the subventions the got from the UK in the past; it's between their economic situation in a united Ireland and the subventions the UK is willing and able to give them in the future.

Jawgap

Peregrinus wrote: »

Yes. I'm not suggesting that we could simply borrow the 10bn (or whatever the correct figure is) and all would be well. I'm just pointing out that borrowing is among the suite of tools available for addressing this issue, and by virtue of reunification our borrowing capacity would be enhanced. Just because you can borrow doesn't mean that you should. But it does mean that you can, and therefore it's among the range of measures that you could take to manage this problem.

Other measures might include migrating NI tax and national insurance rates to RoI tax and USC rates. This would be painful for middle-income earners in NI, and for shoppers; on the other hand it would give them the Corporation Tax rates they have been clamouring for. I've no idea, obviously, how far it would go towards reducing the fiscal deficit; you'd have to model that.

The bottom line, though, is that you're right. As matters stand, NI comes nowhere near to paying its way, and only enjoys the standard of living that it does because of transfers from Westminster. And, even if we can't accurately model what transfer from Dublin would be required to maintain NI standards of living in the changed circumstances of Irish reunification, it would certainly be painfully large, and probably unfeasibly large.

The thing is, though, this is an unstable situation for NI. Sooner or later, a UK government will want to "normalise" the NI economy and, in the long term, the political and social health of NI requires this. Brexit, for the reasons mentioned earlier, will tend to bring that day a little closer, especially if it's a hard Brexit. When weighing up the pros and cons of a united Ireland, the appropriate comparision for NI is not between their economic situation in a united Ireland versus the subventions the got from the UK in the past; it's between their economic situation in a united Ireland and the subventions the UK is willing and able to give them in the future.

I think one of the analyses I posted up earlier showed that the Republic's households have a much reduced tax burden compared to NI's. So migrating them to our tax rates would probably be welcome on their part - us migrating to their tax rates, not so much!!!

Normalisation is also something I posted a link to earlier - a lot of the commentators in NI, not associated or affiliated to any party, regard it as something of a given that at some point HM Treasury is going to call a halt to the profligacy and, yes, Brexit increases the probability of that event occuring sooner rather than later.

There's also a line in the conspiracy theories that suggests the current situation suits the parties in NI because it will be London rather than Stormont forcing the economy to take its medicine - with such an abdication leaving the indigenous parties with clean hands.

Borrowing is always an option - but it comes at a price and we can always borrow as long as we offer a reasonable return. The problem would be that the risks NI brings adds to the cost of borrowing - the days of people paying us to take their money would be well and truly over!!

FrancieBrady

Peregrinus wrote: »

Francie's figures (or, in fairness, the figures Francie is relaying) may be open to challenge, but the basic point is good; the calculation of the fiscal transfer that NI receives every year does involve attributing to NI a proportionate share of significant expenditure not particularly linked to NI, but judged to be for the benefit of the UK as a whole. Not just defence expenditure but also, e.g., the cost of the UK's diplomatic service around the world, the cost of servicing UK public debt; even some major infrastructure projects undertaken in GB. If NI were to separate from the UK these are not, in fact, costs which would follow NI into its brave new world.

The suggestion that, recalculated to take account of this, the fiscal transfer would fall from 10bn to 5bn looks optimistic to me but, honestly, I don't know. I haven't seen any calculation of the fiscal transfer done on the basis that no part of "UK-wide" expenditure which would be undertaken whether or not NI was in the UK is attributed to NI. My guess is that the revised figure would be significantly lower than 10bn, but my guess is also that it still be very large.

The other point to bear in mind that, whatever the amount of the fiscal transfer to NI, it isn't actually a transfer paid for by taxpayers in England, Wales and Scotland. If you do a similar exercise for each country in the UK (balancing tax receipts against expenditure attributed to that country) you'll find that all four (or three-and-a-half) countries in the UK benefit from a "fiscal transfer". English taxpayers aren't paying for the fiscal transfer to NI because they are not even paying enough tax to cover fiscal expenditure in England.

How is this miracle achieved, I hear you ask? In a way that's very familiar to us in RoI; by borrowing. The UK is running a budget deficit.

And here's the thing; if NI were to be united with the Republic, then the Republic's population would grow sharply; its GDP would grow sharply; its tax base would grow sharply. We would, suddenly, have become a bigger country with a bigger tax base and a correspondingly bigger borrowing capacity. If we wished to borrow more to maintain spending in NI, we could. And it's not such an outlandish idea; it's exactly what the UK has been doing.

It doesn't follow that it would necessarily be a good idea. The cost-benefit calculation for us would be quite different than it is for the UK. The amount of borrowing required would be much more significant to us that in would be to the UK. But an enhanced borrowing capacity would certainly be among the tools available to us to manage the situation.

Not asking if you support a UI, but do you think that the idea that a workable handover can be arrived at after a period of transition is as outlandish as has been suggested?

Peregrinus

FrancieBrady wrote: »

Not asking if you support a UI, but do you think that the idea that a workable handover can be arrived at after a period of transition is as outlandish as has been suggested?

It's completely impossible. Until it becomes possible, and then it's suprisingly possible.

After all, the reunification of Germany looked like a never-never thing, until suddenly political conditions changed, and then it was a real and immediate thing.

I think the arguments for the unification of Ireland (and indeed the arguments for the partition of Ireland) are not primarily economic, either way, and people will not change position on this because they are overwhelmed by economic logic. People will eagerly embrace economic arguments which confirm what they want to believe; the opposite, not so much.

If (a) a majority in the Republic, (b) a (solid) majority in NI and (c) the UK government wanted reunification to happen, they'd make it happen. The economic challenge would be considerable, but not insurmountable.

At the moment, the UK government is willing to throw a lot of money at NI which keeps NI's standard of living as high, or a bit higher, than the standard of living in the Republic, although the Republic is much the more productive economy. As long as the UK government is willing to do this, that gives unionism an economic edge which will tend to confirm Unionists in their unionism. Even if the Irish government were to say, in effect, "we'll match this", I think a Unionist would point out that the commitment of a UK government to keep paying such an amount indefinitely is probably a better security than a similar commitment from an RoI government.

The picture would change if a UK government said "we're not prepared to keep doing this" - or, alternatively, if it said "we will keep doing this, even if the constitutional status of NI is altered" (e.g. some kind of joint sovereignty, creative, confederal arrangement).

I see Brexit as tending to bring such a development a bit closer - and not just because it will tend to impoverish NI, increasing the subvention needed, while also impoverishing GB, thus reducing the capacity to bear the subvention uncomplainingly. I also see Brexit as something which accelerates the process of the reconfiguring of British identity.

The weakness in the Unionist position is that, while they consider themselves British (and are perfectly entitled to do so) this doesn't mean much unless the British (and in particular the English) also consider them to be British. The tension in Britain is between Remainers whose concept of Britishness is expansive, and includes a European identity, and Leavers, whose concept of Britishness is conceived of in contrast with or in opposition to Europeanness and other European identities. And this Northern Ireland which, if we're honest, is British-and-Irish, sits a little awkwardly with a concept of Britishness in which to be British is not to be part of any other nation.

I've always felt that the canny Unionist would be an enthusiastic remainer, and I think developments in the past few weeks have borne me out. May was prepared to put an economic border beween NI and GB in order to try to realise her Brexiter fantasies, because her Brexiter fantasies arise from a concept of Britishness in which NI is not quite as British as, well, Britain. The DUP have used their parliamentary position to try and stymie that, but its unclear whether they have won more than a short-term reprieve. The UK still has a set of commitments (no hard border between NI and RoI; no hard border between NI and GB) which are inconsistent with its stated objectives (control of borders; control of trading relationships; regulatory autonomy; a trade deal with the EU). Something still has to give and we know which of those positions, given her druthers, May would sacrifice. And I think that points to the fact that, in the Brexiter identity, Irish Unionists are British only in a limited, qualified way. That's not a concept of Britishness which which Irish Unionists should ever wish to see prevail.

Jawgap

As long as the support NI needs is in the billions, I don't think a UI is a prospect.

Aspirationally, emotionally and sentimentally we're wedded to the idea and always will be, but as soon as campaigning starts and the arguments start about figures positions will harden.

Unless the economies are on converging trajectories (which essentially means NI becoming a lot more productive) no one can guarantee that taxes won't rise significantly in the Republic and services won't be drastically cut in NI to cover their deficit.

At it's most optimistic, and even if one rejects the work of economists in QUB, UU, the ESRI, NERI etc and works off the basis that NI needs stg£5 billion - that's not exactly chump change - it's 33% of the health budget - and even if you halve it, it's still serious money, not just in year #1 but in every year thereafter for a very long time.

So the questions become, not just what are we willing to forego to vote NI into the Republic, what are our kids willing to forego? Did we really endure two lost decades in the last 40 years just to send it all up the road?

.....and that's even before you get to discussing the social and political aspects of any unification process.

FrancieBrady

At the moment, the UK government is willing to throw a lot of money at NI which keeps NI's standard of living as high, or a bit higher, than the standard of living in the Republic, although the Republic is much the more productive economy. As long as the UK government is willing to do this, that gives unionism an economic edge which will tend to confirm Unionists in their unionism. Even if the Irish government were to say, in effect, "we'll match this", I think a Unionist would point out that the commitment of a UK government to keep paying such an amount indefinitely is probably a better security than a similar commitment from an RoI government.

I agree with this, and I think it will be around such issues/feelings etc that the tipping point will occur, one way or the other. Indeed, with Brexit on the horizon I think the calmer Nationalist/Unionist is asking themselves these questions already. The overtly politically active ones on both sides are trenchantly sticking to already decided positions on the above for now anyhow.

What some refer to as 'romanticism' actually applies to both identities.
How much the romantic unionist idea 'that the rest of the UK will safeguard their position' v the romantic nationalist notion 'that unification can deliver for them, something they feel is missing'.
Bound up in all of that will be considerations of economic security, cultural identity/ freedom to express it and respect for it.
Only the most naive unionist can believe that there is undying commitment to them extant in Westminster and beyond, it just does not exist anymore while the nationalist is witnessing a growing vocal support for their position coming from Dublin.

The landscape is changing from, as you put it, 'the impossible' to the 'possible' imo, quicker than even I thought it could happen.

murphaph

Jawgap wrote: »

Aspirationally, emotionally and sentimentally we're wedded to the idea and always will be, but as soon as campaigning starts and the arguments start about figures positions will harden.

Yeah I mean the census still reports that we consider ourselves an overwhelmingly Catholic country BUT we have introduced divorce and gay marriage by referendum. We are set to make access to abortion more liberal too. We aspire to be Catholic but vote for very un-Catholic things, it would seem.

The whole united Ireland thing could conceivably be very similar...we like the idea but vote against it in practice.

FrancieBrady

murphaph wrote: »

Yeah I mean the census still reports that we consider ourselves an overwhelmingly Catholic country BUT we have introduced divorce and gay marriage by referendum. We are set to make access to abortion more liberal too. We aspire to be Catholic but vote for very un-Catholic things, it would seem.

The whole united Ireland thing could conceivably be very similar...we like the idea but vote against it in practice.

You cannot leave the Catholic church technically. So that analogy might be a bit off.
The reality is, we are not as Catholic as some might like to think.

murphaph

FrancieBrady wrote: »

You cannot leave the Catholic church technically. So that analogy might be a bit off.
The reality is, we are not as Catholic as some might like to think.

You can leave it of course. You just stop going and say tick "no religion" on the census form-done!

In Germany you pay church tax if you declare a religion when getting your tax number. Many foreigners aren't aware of this and stick down Catholic, Lutheran or whatever and then realise they are being taxed for this, despite never going to church.

You have to then formally leave the church you've declared if you want to stop funding them through your taxes. Of course, this being Germany, you then have no right to use a church to get married, buried etc.

The analogy is spot on Francie, even if it's not what you want to hear. The public says Ireland is a catholic country but when presented with the ballot box does the exact opposite to what the church wants.

Likewise, ask most people on the census form if there should be a UI and they'll say yes but ask them in a polling station armed with the full facts and......

Jawgap

murphaph wrote: »

Yeah I mean the census still reports that we consider ourselves an overwhelmingly Catholic country BUT we have introduced divorce and gay marriage by referendum. We are set to make access to abortion more liberal too. We aspire to be Catholic but vote for very un-Catholic things, it would seem.

The whole united Ireland thing could conceivably be very similar...we like the idea but vote against it in practice.

Indeed. Bit like the Scots - they liked the idea of independence, but when it came down to ticking the box the practical implications of what it might mean to people's lifestyles going forward crowded out the sentimentality.

As soon as the discussion turns to taxes and potential increases, services and potential cuts, the re-denomination of debt and pensions etc and the lack of definition going forward, the idea will suddenly come up and reality will hit.

I'm guessing a lot will be for unification but not many will be for equalisation

FrancieBrady

Jawgap wrote: »

Indeed. Bit like the Scots - they liked the idea of independence, but when it came down to ticking the box the practical implications of what it might mean to people's lifestyles going forward crowded out the sentimentality.

As soon as the discussion turns to taxes and potential increases, services and potential cuts, the re-denomination of debt and pensions etc and the lack of definition going forward, the idea will suddenly come up and reality will hit.

I'm guessing a lot will be for unification but not many will be for equalisation

Difference with the Scots is you won't get the last minute stampede to EdinburghBelfast to plead for the Union nor will you get the scaremongering over finance, which, as Perigrinus pointed out, is not as scary as some have been declaiming here.

murphaph

FrancieBrady wrote: »

Difference with the Scots is you won't get the last minute stampede to EdinburghBelfast to plead for the Union nor will you get the scaremongering over finance, which, as Perigrinus pointed out, is not as scary as some have been declaiming here.

I hope there is no scaremongering. I hope the exact figures are all laid out so people can vote on a concrete proposal, properly costed.

FrancieBrady

murphaph wrote: »

I hope there is no scaremongering. I hope the exact figures are all laid out so people can vote on a concrete proposal, properly costed.

Are we in agreement that it is not anything like 10bn?

Red_Wake

FrancieBrady wrote: »

Jawgap wrote: »

Indeed. Bit like the Scots - they liked the idea of independence, but when it came down to ticking the box the practical implications of what it might mean to people's lifestyles going forward crowded out the sentimentality.

As soon as the discussion turns to taxes and potential increases, services and potential cuts, the re-denomination of debt and pensions etc and the lack of definition going forward, the idea will suddenly come up and reality will hit.

I'm guessing a lot will be for unification but not many will be for equalisation

Difference with the Scots is you won't get the last minute stampede to EdinburghBelfast to plead for the Union nor will you get the scaremongering over finance, which, as Perigrinus pointed out, is not as scary as some have been declaiming here.

You're posting in a 76 page long thread about the financial implications of a UI, and you think that if there was a serious possibility of a UI in the near future it wouldn't be an important topic of debate?

Pull the other one Francie.

FrancieBrady

Red_Wake wrote: »

You're posting in a 76 page long thread about the financial implications of a UI, and you think that if there was a serious possibility of a UI in the near future it wouldn't be an important topic of debate?

Pull the other one Francie.

I am saying that the finances are of course, critically important, but after pages of some few holding fast to the scariest total they could muster, we have seen that it isn't necessarily that high at all. In fact, what other estimates there are halve the figure.

The 9bn 10bn 12bn figures trumpeted here will very quickly be blown out of the water in a serious debate, is the point I was making.

Snickers Man

mickmac76 wrote: »

While browsing the Brexit thread I came across a post that mentioned some people are against Irish unification because of the costs involved. I have to say that I never considered that point of view.

So if say Brexit goes ahead as planned and the six counties held a referendum and decided to join the South what exactly would it cost the rest of us.

Like that's going to happen :rolleyes:

Jawgap

FrancieBrady wrote: »

Difference with the Scots is you won't get the last minute stampede to EdinburghBelfast to plead for the Union nor will you get the scaremongering over finance, which, as Perigrinus pointed out, is not as scary as some have been declaiming here.

Of course there will be.

First thing people are going to start focusing on is tax and how much it might cost.......and a recycled report from a one-term US Congressman quoting a questionably funded report (the KLR one) isn't going to cut it when the ESRI, various universities and certain annoying but widely listened to economic commentators start pointing out the deficit and start throwing figures around suffixed with the word "billions."

Recent performances and the boom aside, we've historically never run surpluses in this country.....and even in those years where we did generate a surplus, there have only been two since the foundation of the Republic when the surplus approached even the conservative estimate of the NI deficit that you offered.....



.....so where's money coming from to pay - let's be ultra generous and say it's half of the conservative figure - €2.5 billion to keep NI going - bearing in mind that's a per annum figure, not a fixed one-off cost.

murphaph

FrancieBrady wrote: »

Are we in agreement that it is not anything like 10bn?

Nope. I understand the current subvention is not exactly what it costs to run NI (on top of the taxation generated in NI) but I believe the figure is closer to that than half, which would still be very expensive.

For example...we know the north raises X amount in VAT, stamp duty, excise duty etc. These are all taxes on consumption more or less. Now, because the north's economy is full of essentially fake public sector jobs, cutting these jobs would also result in a downstream fall in tax revenues.

As I also pointed out several times, there are many costs which would presumably rise in the event of a UI. Social welfare rates being the obvious ones but also the health service is likely to become significantly more expensive assuming staff move to HSE rates of pay!

Clearly the subvention alone doesn't tell the whole story. It equally definitely does not mean that the cost is something south of the subvention amount for the reasons outlined above.

So we definitely need the real likely cost of a UI be clearly laid out for all to see.

FrancieBrady

Jawgap wrote: »

Of course there will be.

First thing people are going to start focusing on is tax and how much it might cost.......and a recycled report from a one-term US Congressman quoting a questionably funded report (the KLR one) isn't going to cut it when the ESRI, various universities and certain annoying but widely listened to economic commentators start pointing out the deficit and start throwing figures around suffixed with the word "billions."

Recent performances and the boom aside, we've historically never run surpluses in this country.....and even in those years where we did generate a surplus, there have only been two since the foundation of the Republic when the surplus approached even the conservative estimate of the NI deficit that you offered.....



.....so where's money coming from to pay - let's be ultra generous and say it's half of the conservative figure - €2.5 billion to keep NI going - bearing in mind that's a per annum figure, not a fixed one-off cost.

It's a per anum figure that is likely to fall dramatically during a transition period, as two governments on the same page, work to position the two jurisdictions into the best possible health for a handover.
It won't be an overnight handover and the adress on the bills changed to The Dáil.

One off graphs, even three or 4, does not show what 'might' happen.

You yourself, say that the north is being badly run, and that it can be fixed.
Let's debate that with the relevant experts and come up with a plan.

Jawgap

FrancieBrady wrote: »

It's a per anum figure that is likely to fall dramatically during a transition period, as two governments on the same page, work to position the two jurisdictions into the best possible health for a handover.
It won't be an overnight handover and the adress on the bills changed to The Dáil.

One off graphs, even three or 4, does not show what 'might' happen.

You yourself, say that the north is being badly run, and that it can be fixed.
Let's debate that with the relevant experts and come up with a plan.

Says who? And you say "likely" - how likely? 50% chance? 5%? 0.5%?

The budget estimates for the Republic for the year ahead are enclosed herewith:

http://www.per.gov.ie/en/budget-2017-expenditure-estimates-2017/

......maybe you'd be good enough to point out where the 'fiscal space' exists that shows we can take on an extra €2.5 billion requirement even in the short term, without borrowing?

....and again I'm sure NI can be fixed, but as we have found out fixing an economy is not a cost-neutral or academic exercise - so why should the Republic shoulder the cost of any fixing?

Again, I return to analogy I drew earlier, and assiduously ignored by yourself......if someone sold you a crashed car and promised to fix it once you had taken responsibility for it, would you trust them to do so?

FrancieBrady

Jawgap wrote: »

Says who? And you say "likely" - how likely? 50% chance? 5%? 0.5%?

The budget estimates for the Republic for the year ahead are enclosed herewith:

http://www.per.gov.ie/en/budget-2017-expenditure-estimates-2017/

......maybe you'd be good enough to point out where the 'fiscal space' exists that shows we can take on an extra €2.5 billion requirement even in the short term, without borrowing?

....and again I'm sure NI can be fixed, but as we have found out fixing an economy is not a cost-neutral or academic exercise - so why should the Republic shoulder the cost of any fixing?

Again, I return to analogy I drew earlier, and assiduously ignored by yourself......if someone sold you a crashed car and promised to fix it once you had taken responsibility for it, would you trust them to do so?

Your analogy is nonsense because it is not what I am saying.

If you agree that it can be fixed then it is 'likely' that it can be done by two willing governments during a transition period. Why wouldn't they, neither wants a failure for different reasons, too obvious to not foresee.

You keep erecting roadblocks, even though your primary(10bn, who is gonna pay that) one is looking a bit like that 'crashed' car.

Maybe we should just end our speculation and see if anyone can look at the costs of Unification from a more realistic point of view and with some positivity, even if it is notional.
In other words, just stop with the constant shouting down.