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Irish Unity makes Economic as well as Political sense

7 December, 2010

Former Editor and Opinion writer of the Belfast Telegraph, Ed Curran recently posed the question - Could the Republic of Ireland actually afford unity - Now or ever?

I believe that it is generally accepted that a new start is needed in Ireland if we are to change our politics, our economy and our whole society for the better. We can’t do that without examining a fundamental issue – the way we govern ourselves on the island of Ireland. At present, Ireland has two states, North and South, and three governments in Dublin, Belfast and London. We have duplication in public services and two sets of currencies, tax systems, social services, laws and regulations.

There is now widespread support across the whole political and economic spectrum for integrated economic structures for the island. All the people who share this island would benefit from the creation of a vibrant, dynamic all-Ireland economy based upon:

· A single currency
· Democratic control over Irish monetary and fiscal policies
· An equitable and progressive tax regime, including a common VAT regime, a harmonised income tax and corporation tax
· A fully integrated energy, transport and ICT infrastructure to support the growth of island-wide prosperity, based on the principles of environmental sustainability, universal access and quality service
· All-Ireland regulation of public and private sector business to ensure protection of the economic interests of the people of Ireland
· All-Ireland enterprise agencies and economic planning to build a competitive and sustainable economy.

Ed Curran bases his analysis of the cost of Irish Unity on a portrayal that the North is totally dependent on a hand-out of £10bn from the British Government. However that analysis is flawed because it ignores the flow of billions in tax contributions paid by citizens in the North of Ireland through a myriad of taxes. Everyone contributes, - the employed, the unemployed, single parents and even pensioners through VAT and stealth taxes all of which are collected by the Exchequer.

The British Government routinely fails to provide easy access to ‘regional’ data on income and spending. However, an analysis of the expenditure by ‘regions’ along with a series of estimates of the revenues from the regions carried out by ‘Oxford Economics’ does succeed in shining some light on the actual subvention by the British Exchequer. The main findings of the study by Oxford Economics demonstrate that total identifiable expenditure’ for the ‘North’ was £14.1bn in 2004/05. (The study period available) This is relevant data, as ‘non-identifiable spending’ is mainly comprised of two components- debt interest payments and defence spending, neither of which would be accrued in a United Ireland.

The ‘residence-based’ revenues from the North in the same period were £10.7bn indicating a deficit of £3.4bn. Clearly the oft quoted quantum of subvention would merit much closer attention and discussion. Even this figure is probably a distortion of the actual deficit that would have to be addressed in the economy of a United Ireland because the elimination of duplication of administration and service delivery would account for a significant proportion of that differential.

In addition to those savings there are significant sources of potential wealth creation as well as huge untapped resources that would be available for development in a single island economy. A proactive job creation strategy in alternative energy, ICT and Green Technology aimed at full employment- which British economic mismanagement could never achieve here - would see tax revenues climb rapidly and welfare payments plummet. Bringing people back into work and paying taxes on their incomes and through their spending would eliminate any deficit.

Another inhibitor to economic growth is the fact that the North is not free to negotiate on its own behalf with the major trading blocs and currently depends on British Government agencies to do so. The result of this ‘gatekeeper’ function is that Britain can lock the North into a perpetual state of economic underdevelopment and dependence. These deficiencies would be eliminated in the context of a unitary state marketed globally as a single economy.

The Good Friday Agreement provides a peaceful, democratic mechanism for bringing about reunification. Unity is not an issue of the past. It is a live issue of the present and the direction in which we are all ultimately heading. How best and how soon to reach that goal is the question we need to address.

The fact is that Irish Unity makes sense.

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