Costs of Irish unification.

Jawgap · 02-01-2018 12:09PM

FrancieBrady wrote: »

Economies can be fixed Jawgap. Nobody said anything about repeating the last 7 years of anything. Please take your foot off the scare pedal.

An open transparent debate on this with the experts (which aren't random people on the internet plucking random figures of google for selective purposes) will tell us the scale of the problems and I am confident there is enough expertise and will to solve them.

As to the routine collapse of political governance in northern Ireland. That problem would be resolved practically overnight come a UI. A win for everybody but those who want to cling to power and deny equal rights for their own bigoted suprematist reasons.

Instead of talking about me, why not post articles that rebut the ones I posted?

Instead of accusing me of scaremongering, or plucking things at random, why not post something from other experts.

I posted from ARIS, QUB and the ESRI and linked to their articles. Really, if linking to a non-partisan research blog, an NI academic and a noted member of the Republic's "independent source of evidence for policy" is scaremongering then I must be very scary.

The deficit in NI exists, its serious and if pointing that out is scaremongering then so what? Labeling people isn't going to make that inconvenient fact disappear.

You can add David McWilliams to your list......

What would happen if the North were asked to pay for itself tomorrow?

.......the Northern economy is incapable of supporting itself. If Northern Ireland were asked to pay for itself tomorrow, its budget deficit would be close to 20 per cent of GDP simply to keep the lights on. It has become a type of concubine economy, living off the largesse of Westminster and the home counties.

The total size of the Republic’s economy is now four times that of the North, even though the labour force is not even two-and-a-half times bigger.

In terms of income per head, the Republic is now almost twice as rich per person as the North. The average income per head in the Republic is €39,873, while it languishes at €23,700 up north.
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Think about that figure of the North having to borrow 20 per cent of GDP every year just to maintain today’s living standards. If the North were asked to pay for itself tomorrow, living standards would plummet. In contrast, the Republic should have a balanced budget by 2018.

You may agree with McWilliams you may disagree with him, personally I don't like him, but for anyone contemplating campaigning for a UI he's a problem because he's read and listened to.

blanch152 · 02-01-2018 12:14PM

FrancieBrady wrote: »

Imagine if somebody had said to FG,
'we are going to take measures to fix the economy by doing X, Y, Z, but at no point will there need to be kneejerk, socially disruptive measures because we have time here.
We will take increasing amounts of the subvention already paid and we will invest it in areas that will need to be bolstered and functioning properly when we hand over to you,(What your 'economic expert pointed out was the failure) because we need a UI to be a success, the last thing we need is a political and social failure in northern Ireland again'?

Britain, in other words, gets the finger out, fixes the problems that everyone knows exists and it doesn't cost them anymore than the subvention that already is being lost?
We have already seen that FG are capable of 'fixing' economies, so i am sure they will have loads of advise and expertise to offer.

That would be the investment attraction for the British - that one day there would be no need for a subvention at all. What is not attractive about that?

If the subvention is diverted into "investment", then something else will need to be cut. You still don't get that the €9 billion is only the start, there is the additional cost of harmonisation which I have mentioned, which could run to another €5 or €6 billion, now you have added in the requirement to "invest it in areas that will need to be bolstered and functioning properly when we hand over to you."

The bill for the magic money tax pool tree gets bigger and bigger.

Later this month, the Irish government will publish a capital investment plan for the next 10 years. It would be useful if those in favour of unity would tell us at that time which projects they would shelve to allow for the investment in unity.

FrancieBrady · 02-01-2018 12:14PM

Jawgap wrote: »

Instead of talking about me, why not post articles that rebut the ones I posted?

Instead of accusing me of scaremongering, or plucking things at random, why not post something from other experts.

I posted from ARIS, QUB and the ESRI and linked to their articles. Really, if linking to a non-partisan research blog, an NI academic and a noted member of the Republic's "independent source of evidence for policy" is scaremongering then I must be very scary.

The deficit in NI exists, its serious and if pointing that out is scaremongering then so what? Labeling people isn't going to make that inconvenient fact disappear.

You can add David McWilliams to your list......

What would happen if the North were asked to pay for itself tomorrow?

You may agree with McWilliams you may disagree with him, personally I don't like him, but for anyone contemplating campaigning for a UI he's a problem because he's read and listened to.

McWilliams has nailed what you are doing on the head. 'What if NI had to pay for itself tomorrow'

A UI won't happen the day after a referendum.

I have no interest in quoting article or graphs in a scaremongering contest with random interneters. That is just silly and a complete waste of time.

I can point to loads of economies that have been turned around though.

blanch152 · 02-01-2018 12:15PM

FrancieBrady wrote: »

McWilliams has nailed what you are doing on the head. 'What if NI had to pay for itself tomorrow'

A UI won't happen the day after a referendum.

I have no interest in quoting article or graphs in a scaremongering contest with random interneters. That is just silly and a complete waste of time.

I can point to loads of economies that have been turned around though.

You cannot point to a successful reunification that hasn't resulted in austerity. What makes our one worse is that there is also a €9 billion black hole to be filled.

Charles Babbage · 02-01-2018 12:21PM

If people such as McWilliams became interested in this issue then perhaps some proper data could be produced. It isn't just a question of the total, but on exactly what things is there more expenditure, in exactly which sectors is there less revenue.

Unfortunately, the sheer economic illiteracy of SF and the sheer prejudice of the many shoneen commentators means that actual facts play little role in the discussion.

02-01-2018 12:21PM

This may be a silly question but why does anybody think that the voters of Bristol, Norwich, London etc would want to invest any money in sorting out the Northern economy when they would be pulling out anyway.

It would be "good luck to you in Ireland over there".

They'd probably be glad to have it off their hands.

Why would it worry British voters if a united Ireland is a success or not? They dont care about it now really, they have their own problems.

FrancieBrady · 02-01-2018 12:25PM

blanch152 wrote: »

You cannot point to a successful reunification that hasn't resulted in austerity. What makes our one worse is that there is also a €9 billion black hole to be filled.

Where did I say there would not be austerity and some pain? Did I not mention that, in the last few posts? Please read them and stop projecting on to them.

Here is the latest 'expert' touted in this debate on it.

At the moment, the Republic’s budget deficit is 1% of GDP. If the North has to pay for itself in the morning, the budget deficit would be about 22% of GDP!

We can’t ignore this because we have a dog in this fight. Our dog, whether we like it or not, is the Hound of Ulster. In time, demographics will deliver the North to the South and we will need to have a plan. The Unionist population in a United Ireland will be no more than 14%, that’s considerably smaller than our immigrant population at the moment. The issue won’t be one of psychical absorption but of economic direction.

Whether it’s a “hard”, “soft” or “Mickey Mouse” Brexit serves to focus our mind on the future of this island.

Here in Newcastle, as the pipe band belts out its tunes, wouldn’t it be nice for once, to think about the future not the past.

We need to start planning based on the whole picture and the future, not obsessing about figures plucked out and wheeled around the room for those only interested in scaring people. 9bn, 10bn 1bn 12bn. :rolleyes:

Jawgap · 02-01-2018 12:25PM

FrancieBrady wrote: »

McWilliams has nailed what you are doing on the head. 'What if NI had to pay for itself tomorrow'

A UI won't happen the day after a referendum.

I have no interest in quoting article or graphs in a scaremongering contest with random interneters. That is just silly and a complete waste of time.

I can point to loads of economies that have been turned around though.

Point being someone will have to pay......NI can't pay, in a UI Whitehall won't have to pay leaving the mugs in the Republic to pay.

And loads of economies get turned around......how many get turned around from a 20-30% deficit position without significant economic pain being inflicted?

Dan O'Brien (someone I'd have more time for) is also, it seems, a bit of a scaremongerer......

Northern Ireland may be normalising, but big risks remain

Stormont's weakness is compounded by the large fiscal transfers it requires from Her Majesty's Treasury. Officially, Northern Ireland's net fiscal deficit in 2013-14 was £9.3bn, or around €12bn, depending on the exchange rate. That is equivalent to an eye-popping 25pc of estimated GDP.

Put another way, if Northern Ireland were an independent state, its yearly deficit would be more than eight times the EU ceiling on such imbalances - making Greece look like a model of fiscal rectitude in comparison.

Although there is a debate about the exact fiscal imbalance, nobody disputes the extent of the transfers from across the water in giving Northerners a much higher standard of living than they would have if they relied only on revenues raised in their own economy.

Jawgap · 02-01-2018 12:32PM

Charles Babbage wrote: »

If people such as McWilliams became interested in this issue then perhaps some proper data could be produced. It isn't just a question of the total, but on exactly what things is there more expenditure, in exactly which sectors is there less revenue.

Unfortunately, the sheer economic illiteracy of SF and the sheer prejudice of the many shoneen commentators means that actual facts play little role in the discussion.

ONS has truckloads of data, and there's plenty of analyses - business and academic - online.

NI runs a deficit - the "best" case is that the deficit is about 20% / stg£6 billion.....the worst case is that it's closer to 30% and stg£12 billion.

No one has stuck up any data showing a narrower deficit - even the ridiculous KLC report/model admits the presence of a significant deficit.

FrancieBrady · 02-01-2018 12:41PM

Jawgap wrote: »

ONS has truckloads of data, and there's plenty of analyses - business and academic - online.

NI runs a deficit - the "best" case is that the deficit is about 20% / stg£6 billion.....the worst case is that it's closer to 30% and stg£12 billion.

No one has stuck up any data showing a narrower deficit - even the ridiculous KLC report/model admits the presence of a significant deficit.

Would you agree with the 'Irish economic expert' quoted earlier that there is no particular endemic reason for NI to be run at a deficit? That it is because of bad management and eye off the ball by Britain that it is in a mess?

It is my opinion that the economic status of the north is because partition has been such a dramatic failure, economically and socially.

Carlos Orange · 02-01-2018 12:46PM

FrancieBrady wrote: »

Would you agree with the 'Irish economic expert' quoted earlier that there is no particular endemic reason for NI to be run at a deficit? That it is because of bad management and eye off the ball by Britain that it is in a mess?

It is my opinion that the economic status of the north is because partition has been such a dramatic failure, economically and socially.

I think it has run a deficit since the 30s.

FrancieBrady · 02-01-2018 12:49PM

psinno wrote: »

I think it has run a deficit since the 30s.

When did partition happen?

Charles Babbage · 02-01-2018 12:54PM

Jawgap wrote: »

ONS has truckloads of data, and there's plenty of analyses - business and academic - online.

NI runs a deficit - the "best" case is that the deficit is about 20% / stg£6 billion.....the worst case is that it's closer to 30% and stg£12 billion.

Somebody needs to crunch this data to clearly explain the origin of this deficit. If this has happened in a thorough way then I haven't seen it.

Unfortunately, it doesn't really suit many of the parties involved to have such an analysis. It might show excessive public expenditure in NI which might not suit SF and the partitionists are driven by prejudice not data.

Jawgap · 02-01-2018 12:58PM

FrancieBrady wrote: »

Would you agree with the 'Irish economic expert' quoted earlier that there is no particular endemic reason for NI to be run at a deficit? That it is because of bad management and eye off the ball by Britain that it is in a mess?

It is my opinion that the economic status of the north is because partition has been such a dramatic failure, economically and socially.

To quote John Simpson.....

In NI we don't 'do' austerity, even when it is in the name of greater efficiency, or doing more with the same amount of funding. Year by year, NI has made a case to have some easing of the overall budget pressure.

So I'd say that's a problem. And unless politicians are going to find some way to introduce reforms that don't involve a degree of pain, then the place is always going to be run at a deficit.

And yes, people can spout on about partition but if they keep voting tribally then they can hardly be surprised if nothing changes.

FrancieBrady · 02-01-2018 01:11PM

Jawgap wrote: »

To quote John Simpson.....

So I'd say that's a problem. And unless politicians are going to find some way to introduce reforms that don't involve a degree of pain, then the place is always going to be run at a deficit.

And yes, people can spout on about partition but if they keep voting tribally then they can hardly be surprised if nothing changes.

Even if the 'tribal' vote is as a result of partition?

Maybe if people gave up the ghost and admitted it was a tragic mistake and set about rectifying it, all our futures would be brighter.

Politicians make reforms all the time - responsible ones. It is long since time that we in the south started to take responsibility. That is why Leo is getting such kudos at the moment.

Jawgap · 02-01-2018 01:12PM

Charles Babbage wrote: »

Somebody needs to crunch this data to clearly explain the origin of this deficit. If this has happened in a thorough way then I haven't seen it.

Unfortunately, it doesn't really suit many of the parties involved to have such an analysis. It might show excessive public expenditure in NI which might not suit SF and the partitionists are driven by prejudice not data.

The origin of the deficit is of interest but not of relevance. Regardless of its origins, it still has to be funded. Either the impossible happens and NI funds it.....or in a UI the Republic funds it.

.....and funds the increased debt servicing charges an expanded deficit incurs.....and funds the share of the UK's debt that will come with NI.

Essentially - as things stand - us voting for a UI is a vote to make ourselves poorer.

Jawgap · 02-01-2018 01:15PM

FrancieBrady wrote: »

Even if the 'tribal' vote is as a result of partition?

Maybe if people gave up the ghost and admitted it was a tragic mistake and set about rectifying it, all our futures would be brighter.

Politicians make reforms all the time - responsible ones. It is long since time that we in the south started to take responsibility. That is why Leo is getting such kudos at the moment.

It was a tragic mistake......not our mistake, so I'm not sure why we should pay for it.

If anything, we've paid and worked for our current prosperity, why squander it on NI? Let them sort themselves out first and when we're on converging tracks we can discuss re-unification.

FrancieBrady · 02-01-2018 01:21PM

Jawgap wrote: »

It was a tragic mistake......not our mistake, so I'm not sure why we should pay for it.

If anything, we've paid and worked for our current prosperity, why squander it on NI? Let them sort themselves out first and when we're on converging tracks we can discuss re-unification.

No, we didn't, not without the help of massive 'investments' (that somebody paid for) from the EU.

Why did they invest? (I'll let you answer that yourself from your uniquely pessimistic viewpoint and create a 'why should they' case)

Jawgap · 02-01-2018 01:33PM

FrancieBrady wrote: »

No, we didn't, not without the help of massive 'investments' (that somebody paid for) from the EU.

Why did they invest? (I'll let you answer that yourself from your uniquely pessimistic viewpoint and create a 'why should they' case)

They invested because we're members and that's how the EU works......NI is part of the UK, let them invest there.

And we've put the money to good use. In the next FF (from 2020) we'll likely be net contributors. It's taken a while but we've got there. NI has not, in a similar fashion, worked to reduce its reliance on an external funder.

FrancieBrady · 02-01-2018 01:39PM

Jawgap wrote: »

They invested because we're members and that's how the EU works......NI is part of the UK, let them invest there.

And we've put the money to good use. In the next FF (from 2020) we'll likely be net contributors. It's taken a while but we've got there. NI has not, in a similar fashion, worked to reduce its reliance on an external funder.

But you will agree (you can hardly backtrack after that glowing report on us) that 'investment' can work?

And I think that is how the majority of Irish people will see a UI - an 'investment' that will pay off later. Just like the other member states in the EU saw us.

Heck, with us in the EU together (the south and the north) they may even 'invest' again to make it a success.

Jawgap · 02-01-2018 01:47PM

FrancieBrady wrote: »

But you will agree (you can hardly backtrack after that glowing report on us) that 'investment' can work?

And I think that is how the majority of Irish people will see a UI - an 'investment' that will pay off later. Just like the other member states in the EU saw us.

Heck, with us in the EU together (the south and the north) they may even 'invest' again to make it a success.

Yes, of course it can work.

Now, how will this investment in NI be funded?? Debt, after all, is simply deferred taxation.

Plus NI's deficit relates to day-to-day spending. The EU, EIBetc may chip in a bit for infrastructure projects etc but they won't pay for pensions, and the non-capital aspects of education and health. Nor will investors fund debt servicing.

FrancieBrady · 02-01-2018 01:52PM

Jawgap wrote: »

Yes, of course it can work.

Now, how will this investment in NI be funded?? Debt, after all, is simply deferred taxation.

Plus NI's deficit relates to day-to-day spending. The EU, EIBetc may chip in a bit for infrastructure projects etc but they won't pay for pensions, and the non-capital aspects of education and health. Nor will investors fund debt servicing.

That will all be thrashed out when we have exact figures by two governments committed to making it work for their own (some might say - selfish) reasons.

Not my sphere of expertise to work out budgets for an entire country although there does seem to be some random people on the internet capable of it.

Sam Russell · 02-01-2018 02:08PM

Jawgap wrote: »

The origin of the deficit is of interest but not of relevance. Regardless of its origins, it still has to be funded. Either the impossible happens and NI funds it.....or in a UI the Republic funds it.

.....and funds the increased debt servicing charges an expanded deficit incurs.....and funds the share of the UK's debt that will come with NI.

Essentially - as things stand - us voting for a UI is a vote to make ourselves poorer.

If a UI comes about as a result of a border poll under the GFA, then no UK debt comes with it. Under the terms, as I understand it, the UI will not carry debt from the UK. There is no provision for it.

Also, I would expect that the UK will be happy to continue the current level of subvention for a limited period of 5 to 10 years, in the hope of getting rid of it in the longer term.

Now Scotland is another case altogether.

Carlos Orange · 02-01-2018 02:09PM

FrancieBrady wrote: »

When did partition happen?

The 20s.

Sam Russell · 02-01-2018 02:12PM

psinno wrote: »

The 20s.

Actually, 1920 under the Government of Ireland Act 1920.

murphaph · 02-01-2018 02:16PM

FrancieBrady wrote: »

FG allegedly turned a broken southern economy around in 7 years, what if that was the time period for a transition to a UI and TWO governments worked to turn around the northern Irish economy...before a hand over?

The fundamentals of the Irish economy were not broken. We had a strong export led sector to work with. We experienced a housing bubble which crashed, but the factories and software engineers kept on exporting their wares.

NI is fundamentally economically broken and has been for generations. It just has the appearance of being similar economically to the south because the absolutely massive cracks in the economic fundamentals are papered over with by shedloads of London money but it comes nowhere near washing its face. It has a private sector, but it's tiny. The private sector ultimately pays for everything the public sector provides.

To add to this, most of Ireland's counties also rely on social transfers from urban Ireland. That's just the way it is. Donegal relies the most per capita on social transfers from other parts of Ireland. West of the Bann would be simply more Donegals to support. Belfast has a lot of people but employment is heavily based on public sector jobs that service GB. This was consciously done by successive British governments to give Catholics something to do and hopefully reduce the pool available to IRA recruiters. It was cheaper to make up jobs than spend more on security. Those jobs would be superfluous in a UI and would go. There would be a lot more idle hands again.

The UK would absolutely have to fund NI for many years to come or it would be a total and utter non-starter financially.

Carlos Orange · 02-01-2018 02:23PM

FrancieBrady wrote: »

No, we didn't, not without the help of massive 'investments' (that somebody paid for) from the EU.

Why did they invest? (I'll let you answer that yourself from your uniquely pessimistic viewpoint and create a 'why should they' case)

EU investment in Poland from 2007 to 2013 is about equal to what Britain invests in Northern Ireland each year. I don't see the EU investing 6 times as much into Northern Ireland for a population about 20 times smaller.

blanch152 · 02-01-2018 02:30PM

FrancieBrady wrote: »

It is my opinion that the economic status of the north is because partition has been such a dramatic failure, economically and socially.

That is debatable. Up until the 1960s, the economy in the North of Ireland outperformed the economy in the South. Partition seemed to have been a good thing for the North, despite the decline in the linen and shipbuilding industries. What changed?

Two things - the change in economic focus in the South to look outwards rather than inwards and the IRA campaign in the North.

One served to increase economic growth in the South, the other managed to collapse the economy of the North. International investment shunned the North of Ireland and flowed into the South.

Lines on a map don't change economics. Just as partition didn't cause an economic collapse in Northern Ireland, neither will unification magic away the fiscal deficit in the North.

murphaph · 02-01-2018 02:34PM

FrancieBrady wrote: »

Would you agree with the 'Irish economic expert' quoted earlier that there is no particular endemic reason for NI to be run at a deficit? That it is because of bad management and eye off the ball by Britain that it is in a mess?

It is my opinion that the economic status of the north is because partition has been such a dramatic failure, economically and socially.

Donegal, Mayo, Sligo, Leitrim, Cavan, Kerry etc. all run at deficits. Derry, Fermanagh, Tyrone and Armagh would almost certainly run at deficits too. It would all be on the Belfast area to bring something, anything to the table. A UI in reality would just add more counties that require social transfers from most of Leinster and Cork.

Are all those southern counties being mismanaged too?

blanch152 · 02-01-2018 02:37PM

murphaph wrote: »

Donegal, Mayo, Sligo, Leitrim, Cavan, Kerry etc. all run at deficits. Derry, Fermanagh, Tyrone and Armagh would almost certainly run at deficits too. It would all be on the Belfast area to bring something, anything to the table. A UI in reality would just add more counties that require social transfers from most of Leinster and Cork.

Are all those southern counties being mismanaged too?

West Belfast, having elected an abstentionist MP for decades, is the most deprived part of the UK. Nobody in Westminister to speak up for it. Absolutely crazy.

Given that situation, expecting Belfast to bring anything to the party is hopeful.

When you consider that the Belfast economy now consists mainly of tourism and southern shoppers, the risk of unification is greater than the benefit.

Costs of Irish unification.

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