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Boom to Bust?

Business is booming in the North as the population returns to the 1960s attitude of 'spend, spend, spend.' But as political columnist Dr John Coulter reports, the North's economic miracle could go bust if the Assembly flops.


Dr John Coulter • 23 February 2007

The North is going boom – only this time, its not to the sound of terrorist bombs, but a bustling economy.

And if the Paisley camp and republicans can agree a power-sharing Executive by the 26 March deadline, it will be a further case of 'let the good times roll!' across the North.

Since the signing of the 1998 Good Friday Agreement and the establishing of the cross-border bodies, the North has been able to take full advantage of the economically rampant Southern Celtic Tiger.

From the founding of the Northern state in the 1920s, the Unionist-dominated government at Stormont largely survived with substantial cash injections from the Westminster Parliament.

Cash subsidies to prop up the North increased after 1972 and the fall of the original Stormont Parliament and the imposition of Direct Rule from London.

The present total cost for running the North is £9 billion – a figure revealed to Stormont MLAs in November 1998 by the then Northern minister Paul Murphy.

He told them: “ … the Northern Ireland budget the Assembly will eventually deal with which combined comes to some £9 billion …”

While Unionists organisations, such as the UDA, Ulster Vanguard and the Ulster Clubs, would all politically play with the notion of an 'independent Ulster' along the lines of Ian Smith's Rhodesia in the 1960s, economically, such a move was a 'non-starter' for the North.

However, since the republican and loyalist paramilitary ceasefires of 1994, the North has witnessed a steady and prosperous increase in its standard of living – a fact copper fastened by the explosion in house prices.

Maghaberry village in Co Antrim is a prime example of the property boom. As one of the commuter satellite locations for both greater Lisburn and Belfast, its close proximity to the M1 and the International Airport has seen home prices rocker.

In 1995, a year after the ceasefires, a new four-bedroom detached house fetched £52,000. This year, the same new build home costs an average of £300,000.

The North's economic expansion has been made possible by a twin-track approach – marketing the North globally to attract overseas investment, and developing an all-island partnership between Northern and Southern-based companies.

While the standard of living has considerably increased, two major questions are still being posed – could the North ever become prosperous enough to pay its own way, and will the North always be heavily dependent on the Union?

The answer is 'yes' to the first, 'no' to the second – especially with the threat of a break-up of the United Kingdom should the Scottish nationalists gain power in the Scottish Parliament following May's expected elections.

The 'yes/no' answers will also become an economic reality provided a power-sharing, fully legislative Executive can be established at Stormont.

This crucial factor has been heavily emphasised by CBI Northern Ireland, the business organisation which represents Northern employers.

Its Northern chairman Declan Billington, said: “It is only business that creates the jobs and the wealth. But it can only do this if we have the commitment and support of our politicians.”

The CBI also issued an election document, A Mandate for Prosperity, which clearly stressed the re-establishment of a Northern Assembly was at the heart of continued economic growth.

However, the North's booming economy could go bust if the Assembly flops and joint authority with Dublin is implemented by the British Government.

The power-sharing Executive is the one barrier against hard-hitting home rates and water charges being dumped on the Northern population.

And while the South is planning to pump millions of pounds into the North as part of a peace dividend, those costs could soar if Britain decides to halve the £9 billion bill with Dublin for running the North under joint authority.

The prosperous Celtic Tiger may currently be able to afford millions to develop North-South partnerships, but a £4.5 billion price tab to run the North may be a lump sum too far for the Republic's economy.

Britain will make the North pay heavily if its politicians fail to agree an Executive – and the South will be expected to foot the bill for this failure, too.

It would be realistic to think if Direct Rule is replaced by joint authority, then the Labour Government will be expecting the Southern taxpayers to help 'cough up' to run the North.

So what will citizens of the 26 counties be expected to pay for in return for joint authority of the remaining six counties?

While there is a boom in property, jobs and investment, there’s also the struggling Northern health service, bogged down with never-ending waiting lists and being steadily strangled with mountains of red tape.

What about the pensions for all the retired RUC officers and former Ulster Defence Regiment soldiers – especially given the legion of allegations of collusions with loyalist death squads which these two organisations have faced?

Southern taxpayers will also find cash for the millions of pounds in dole and other benefits being paid to supposedly jobless loyalist paramilitary members and supporters.

In spite of three substantial acts of Provo decommissioning of terrorist weapons, with the exception of a token gesture by the fringe Loyalist Volunteer Force, none of the other Protestant death squads have either decommissioned or disbanded.

Indeed, many loyalist gangs are believed to be still heavily involved in criminality – so the South will have to pay its cut in combating the Northern loyalist crime lords.

Under joint authority, the costs of Dublin involvement in the North will rocket substantially compared to the meagre amount needed two decades ago to run the Maryfield Secretariat near Stormont following the signing of the November ’85 Anglo-Irish Agreement.

Southern involvement in Northern affairs then was merely to give a voice to Northern nationalists and republicans – not the proposed running of the North itself under joint authority.

And not included in the £4.5 billion joint running costs in the bill for any damage in the South caused by loyalist terror gangs protesting about the imposition of joint authority.

The Ahern administration will try to calm Southern taxpayers’ fears of the bill expected by joint authority by stating there is no firm evidence British premier Tony Blair would ask Dublin to share Northern costs.

However, if Blair is replaced as Prime Minister by the money-minded Chancellor Gordon Brown, the tough-talking Scot will surely demand his financial pounds of flesh from Dublin in return for any joint role in running the North.



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