November 20, 2020
Sinn Féin publish ‘Economic Benefits of a United Ireland’ discussion paper – Pearse Doherty TD

Sinn Féin have today published a discussion paper entitled ‘The Economic Benefits of a United Ireland’.

Speaking this morning, Sinn Féin spokesperson on Finance Pearse Doherty TD said:

“The discussion about the constitutional future of our island is live and is gaining momentum.

“This debate has been turbocharged by Britain’s decision to leave the European Union in 2016; a decision that has exposed the democratic deficit at the heart of the Union. Despite the majority of the electorate in the north choosing to remain in the EU, they have been dragged out against their will. 

“That is a decision that will have long-term consequences for the northern economy, for workers, for businesses and for living standards. Despite what Boris Johnson or his acolytes in the Conservative Party claim, none of these consequences will be positive.

“But this is only the latest example of a state of affairs that is not working.

“When we trace the economic history of this island, partition should be recognised as a failed experiment.

“Before partition, the North East was the industrial engine of the island, accounting for 80 percent of industrial output. The centre of the Irish economy was in Belfast.

“Today, southern exports of goods and services dwarf those of the north.

“If we compare economies in terms of economic output on a per capita basis, the north stands at £26,000 while the south stands at €40,000.

“If we broaden our gaze to compare the south with Britain, we observe a similar trajectory.

“Since 1970, the south of Ireland has seen a rapid improvement in living standards; from 70 percent of the EU average to a standard of living now well above the European average. In comparison, the British economy has seen the standard of living, relative to other European countries, stagnate since 1970.

“The reasons for this are well known; an industrial policy which abandoned high value manufacturing in its regions to pursue a financial services model concentrated in London with a low-value services sector everywhere else.

“This has been coupled with a lost decade of austerity following the Great Financial Crash.

“In his memoirs published only this week, former President Barack Obama gives is own view when he recalled the economic policy of the British government under David Cameron: ‘Cameron hewed closely to free-market orthodoxy, having promised voters that his platform of deficit reduction and cuts to government services would usher in a new era of British competitiveness. Instead, predictably, the British economy would fall deeper into a recession.’

“The British government’s policy choices have underserved regions outside of London. They have certainly underserved the north.

“The London government retains control over economic policy in the north.

“Despite the devolution of certain powers; control of fiscal policy, tax and spending, the ability to borrow in order to invest, ultimately remain the preserve of the British Exchequer.

“The north can do better; the north deserves better.

“There is an alternative to the Union; an alternative to Brexit.

“Irish unification is a guaranteed path back to the European Union; it gives the north a chance to steer its own course; to enjoy the dynamism of an all-island economy.

“Of course, whenever discussion of Irish Unity begins, the question of the subvention is often raised – this is the difference between the revenue raised and expenditure attributed to the north.

“So difficult has it become to make the case for the Union, that this has become the strongest argument in favour of it.

“It goes something like this: ‘The subvention is so large that the South could never afford the North, and the North could never survive without Britain’.

“Those who make that argument are essentially arguing that the northern economy has become so weak and so badly served by the Union, that it can no longer survive without fiscal transfers.

“This is not a strong argument.

“Instead, it exposes how weak the northern economy has been served by Britain.

“Surely we should aspire to more than that.

“The subvention is real, but before we consider it, or what unification would “cost” the south as a result; it is important to understand what it is made up of – what items would remain in a United Ireland and what items would not.

“The subvention figure is given as being between £9 and £10 billion, once we subtract revenue raised in the north to expenditure attributed to the north.

“If we consider both sides of the ledger it is likely that revenue raised in the north is underestimated in the north by as much as £500 million. This point was well made by John Fitzgerald, former head of macroeconomics at the ESRI, in a paper published last year. 

“Turning to expenditure, there are items of spending attributed to the north which would remain in a United Ireland. These include items such as Social Protection, Health, Education, and so on, but there are other items that would not.

“Each year, the north makes contributions of more than £1 billion to fund the British military. Whatever one’s political hue, the north in a United Ireland would no longer fund the British military any more than you would expect the Germans to fund the French.

“Some may argue that this item of expenditure would simply be replaced by northern contributions to the Irish Defence Forces, but the annual budget of the defence forces is significantly smaller than that of the British military, which is one of the most expensive in the world.

“Other such spending items which the north contributes annually would no longer remain in a United Ireland.

“When we consider the subvention, what it is made of, what would remain in the event of a United Ireland and what would not; we are left with a deficit of between £3 and £6 billion, equivalent to only 1.3 and 3 percent of the southern economy, as a proportion of Modified Gross National Income.

“Of course, many of these issues will be subject to negotiations between the British and Irish governments.

“The purpose of this document is not to pre-empt, predict or predetermine the outcome of those negotiations. Nor is it to focus on the narrow issue of the subvention.

“Irish unity and the opportunities it presents are much greater than the question of deficits.

“A decade of austerity alerted us all to the economic foolishness of an obsessive focus on deficits at the expense of everything else.

“The health of an economy, the standard of living of its citizens; is driven by investment, research, innovation, good public services and access to the global economy.

“On all of these, not only is the Union stuttering, it is moving backwards.

“Brexit Britain is a Britain that looks increasingly isolated; a Britain that is looking inwards.

“As we emerge from Covid-19, we face the spectre of another round of Tory austerity.

“The north deserves better, and a United Ireland offers so much more.

“Irish unity would allow for coordinated investment and development; something the Border region has been missing for a century.

“Irish unity would utilise economies of scale; allowing one economy to develop rather than having two economies compete.

“The current trajectory of the all-island economy attests to these opportunities.

“The total value of cross-border trade now stands at more than €7 billion every year.

“As is now well known in light of much debate Brexit’s impact on cross-border supply chains; a greater number of businesses now trade from North to South than to anywhere else, including to Britain.

“This is not to minimise the importance of Britain as a trading partner.

“Given our geography and economic ties, that will always be the case, but it underlines the growing importance of the all-island economy.

“With partition, that potential will never be fully unlocked, with Border counties, towns and economies suffering as a result.

“A phenomenon of the past several years is the movement of northern exports and trade away from the British market towards other markets.

“In 2018, sales between the north and Britain fell by 9 percent; while in the same year, the north’s total exports to other markets exceeded exports to Britain.

“Again, this is not to minimise the importance of Britain as a trading neighbour; but to highlight the growing importance of the all-island economy and the evolution of trading relationships.

“The greatest threat to trade, north and south, is of course Britain’s damaging decision to leave the European Union. That is the Great Disruptor.

“Irish unity would secure our place as an open, outward-looking, progressive island at the heart of Europe.

“Of course, Irish reunification is not without precedent.

“This year Germany celebrated 30 years of reunification and though not a model, German reunification is an example that national unity would not be an Irish project alone, but a European project.

“The role of the EU would be even more central in the event of Irish unity.

“That is the vista before us – one of opportunity.

“It could not come soon enough.

“With the twin threats of Brexit and Covid-19, there has never been a better time to take stock, talk to one another, and consider our future together and of our future generations.

“I hope this discussion document can contribute to that discussion.”

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