Monthly Archives: July 2018

Speaking on Newstalk on balanced budget in Northern Ireland in reunification scenario

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Speaking on RTE drivetime on Research showing Northern Ireland Balanced Budget in reunification

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Department accused of wanting to delay report on the cost of a united Ireland until ‘after Brexit’

https://www.thejournal.ie/united-ireland-costings-4144760-Jul2018/

The new research shows that Northern Ireland would have a near balanced budget in a unification situation.

Image: Shutterstock/Alexander Lukatskiy

THE DEPARTMENT OF Foreign Affairs has been accused of wanting to delay the publication of research on the cost of a united Ireland until “after Brexit”.

Fianna Fáil Senator Mark Daly stated he was concerned that when a draft of the research was discussed by the members of the Good Friday Agreement Implementation Committee that a member of the committee said department officials he had spoken to said that they did not want the research released until “after Brexit”.

An IMF senior economist during German Reunification, Gunther Thumann, carried out the research, along with Daly, for the Oireachtas Committee. It shows that Northern Ireland would have a near balanced budget in a unification situation.

‘Unacceptable interference’ 

Speaking about calls to delay the report publication, Daly said with Brexit negotiations at a difficult point, and the stalemate in Stormont, he believes officials wanted the report pushed back.

This is unacceptable interference by the Department of Foreign Affairs in the work of the Dáil and Seanad. Last year, I compiled the first ever report by a Dáil or Seanad committee on the issues surrounding the peaceful unity of Ireland, for the Joint Oireachtas Committee on the Implementation of the Good Friday Agreement.
This report entitled Brexit & the Future of Ireland Uniting Ireland & its People in Peace & Prosperity was adopted unanimously by the committee. One of the key recommendations is to ascertain the true level of the income and expenditure for Northern Ireland, a key concern of many on this island, both North and South.

The latest research into the costings is a follow-through on one of the commitments of last year’s report, which was adopted unanimously by the committee, added Daly.

The fact that officials in the Department of Foreign Affairs do not what this information released and the motivation behind it need to be answered.

When contacted by TheJournal.ie, there was no denial from the department, with a spokesperson stating it would not be commenting at present.

Prior to the publication of the 2017 report, Dr Kurt Hubner of the University of British Columbia, who came before the Joint Committee, constructed economic models of scenarios of Irish unification, one of which showed a benefit of €36.5 billion in the first 8 years of unification.

Sinn Féin has also argued it would be beneficial to Ireland and has published a report to dispel what it calls the “unaffordability myth” that it might cost £24.1 billion – the figure some commentators claim is spent by Britain on the North.

Pensions and the public service 

In the Thumann research, which has not been published, but has been circulated to Oireachtas members, he argues in his research that pensions would initially be the responsibility of the British Government as the pension liability was accrued while Northern Ireland was part of the United Kingdom.

The economist also investigated a report entitled, Northern Ireland Budgetary Issues, which was produced by the United States Congressional Research Service.

It breaks down Northern Ireland’s expenditure into identifiable expenditure, non-identifiable expenditure and accounting adjustment.

The non-identifiable expenditure of £2.9 billion cited in that report, includes Northern Ireland’s share of UK Defence Expenditure, UK Debt Interest, International service, UK contribution to the EU, British Royal family etc.

These would not be a liability of a new agreed Ireland, argues the economist.

In his research, Thumann explains that not all the accounting adjustments figure attributed by Westminster to Northern Ireland of £1.1 billion would be applicable in a reunification scenario either.

Thumann also also reports about the convergence of the public service numbers between the north and the south.

There are around 403,000 public servants in the Republic of Ireland, 8.4% of the population, while there are around 205,700 public servants in Northern Ireland, 11.4% of the population.

Combining the group of public servants would bring a saving of £1.7 billion per annum in the current budget expenditure of Northern Ireland.

While these adjustments are of a mainly statistical nature the report states it show that the £9.2 billion Northern Ireland deficit figure is not a meaningful measure of the Northern Ireland fiscal situation under unification.

While a lot of research is necessary to come up with a meaningful measure for the Northern Ireland fiscal balance under a unification scenario, the research shows the pension adjustment could reduce Northern Ireland’s fiscal balance under a reunification scenario to close to a balanced budget.

“Taking the above adjustments and savings into account the cumulative figure is £8.5 billion. With the reported deficit for Northern Ireland is at £9.2 billion therefore the current income and expenditure figure for Northern Ireland, the report concludes comes near a balanced budget in a reunification scenario. This is of course, before taking into account the likely potential for growth in Northern Ireland following unification as happened in East Germany following its reunification,” said the senator.

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Northern Ireland’s Income and Expenditure in a reunification scenario

The first ever report to look at the issues, policies and planning required for the peaceful unity of Ireland and her people by a committee of the Dáil or Seanad was written by Senator Mark Daly and adopted unanimously in 2017 by the Joint Oireachtas Committee on the Implementation of the Good Friday Agreement. This report was entitled ‘Brexit & the Future of Ireland Uniting Ireland & its People in Peace & Prosperity’.

One of the key recommendations of that report was to ascertain the true level of the income and expenditure for Northern Ireland.

There are few economists in the world with first-hand knowledge and experience of Re-unification. Gunther Thumann is one such individual; he worked as a senior economist at the German desk of the International Monetary Fund at the time of German reunification. This provided him with the analytical understanding of the complex economic developments as they happened. In the second half of the 1990s, he had several opportunities to talk privately with Chancellor Helmut Kohl about his assessment of the politics of German Re-Unification.

On the 14th of June 2018 Senator Mark Daly proposed to a meeting of the Joint Committee on the implementation of the Good Friday Agreement that he and Gunther Thumann compile a report on the true income and expenditure of Northern Ireland in a reunification situation. They have compiled this research which also analyses Ireland’s place in the world in various global indexes and its performance since independence.

The research in full is available Research on Northern Ireland Income and Expenditure

 

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Ireland’s Brexit dividend Momentum is gathering on both sides of the border for the reunification of the island.

https://www.politico.eu/article/united-ireland-after-brexit-reunification-vote/

Ireland’s Brexit dividend

Momentum is gathering on both sides of the border for the reunification of the island.

Illustration by Peter Strain for POLITICO

BELFAST — The history of Ireland could one day be divided into two eras: before the Brexit referendum, and after it.

Until Britain voted to leave the European Union, the idea that Northern Ireland would one day perform a Brexit of its own and leave the United Kingdom to join the rest of the island in a single united Ireland seemed at best a distant possibility.

Then came June 23, 2016.

“It was like night and day, it was like someone flicked on a light switch,” recalled David McCann, a lecturer in politics at Ulster University and deputy editor of the Slugger O’Toole political commentary website.

Today, a vote on reunification is looking increasingly probable — some would say inevitable. Support for unification is rising on both sides of the border, and politicians and activists are scrambling to prepare for an eventuality they say suddenly seems more imminent.

“Brexit and the changing demographics of Northern Ireland is going to see the end of it” — Mark Daly, a senator with the Irish opposition Fianna Fáil party

“The referendum is coming,” said Mark Daly, a senator with the Irish opposition Fianna Fáil party who has been studying the practicalities of holding a vote on the issue. “The history of Irish reunification is still to be written. But it is going to be written in the next 10 years.”

The island of Ireland will not stay divided much longer, he added: “Brexit and the changing demographics of Northern Ireland is going to see the end of it.”

Border troubles

Northern Ireland was literally designed to remain part of the U.K. The border was drawn in the 1920s to carve out six of nine counties of the ancient Irish province of Ulster, which between them contained a comfortable majority of people who wanted to stay British as the rest of the island broke away to form a self-governing state.

The requirement to create a unionist majority is part of the reason why the establishment of a hard border after Brexit would be such a logistical challenge. Rather than cutting west to east across the island, the 300-mile border curves around to exclude inconveniently nationalist Donegal on the northwest coast, creating a winding division that is longer than the entire length of the island north to south.

During the 30-year conflict that ended in 1998 with the Good Friday Agreement, locals had to queue to be searched by armed soldiers in order to visit the shops, go to work or to church across the border.

The creation of the European Union’s single market in 1993 eliminated the need for economic checks. Peace in Northern Ireland — between mostly Catholic nationalists who wanted an all-island Ireland and largely Protestant unionists who favored remaining part of Britain — brought down the military watchtowers and reopened the roads.

Joint membership of the U.K. and the Republic of Ireland in the EU was key to keeping Northern Ireland’s Irish-identifying population happy. It underpinned the peace agreement, which allowed citizens of Northern Ireland to choose British or Irish nationality, or both. The border disappeared — the only clue are the subtly different road signs — leaving those who oppose its existence largely free to ignore it.

Brexit flips that all on its head. A hard Brexit, with the U.K. outside the single market and the customs union, would cut through parishes, farms and backyards, raising economic barriers that haven’t existed for decades. Checks on goods and people would disrupt the lives of the tens of thousands of people who cross the border daily for work, study, to do their shopping, or even cross their own property.

The extent to which Brexit upset Northern Ireland’s political order can be seen in the result of two elections for the region’s governing assembly. In a vote held in May 2016, just before the  Brexit referendum, the combined support for Sinn Féin and the Social Democratic and Labour Party — the region’s two largest nationalist parties — was at its lowest in 18 years.

“Obviously Brexit revealed a very disunited kingdom” — Graham Walker, professor at Queen’s University Belfast

Soon after the Brexit vote, the assembly collapsed in acrimony. The election that followed revealed a galvanized electorate: Sinn Féin swept to its best-ever result. And for the first time in the history of the province, unionist parties lost their majority in the assembly.

“For those who would argue in favor of the union, it’s making it more difficult for those arguments to be convincing,” said Graham Walker, a professor who works on Northern Ireland and Scotland at Queen’s University Belfast. “Obviously Brexit revealed a very disunited kingdom.”

East German precedent

Brexit shifted the debate in the Republic of Ireland too.  Although there is broad support for unification south of the border, there was zero urgency about the issue before the British vote.

An aspiration toward peaceful unification is in the Irish constitution, and on principle all parties support it, but only Sinn Féin treated it as a live political issue. After the Brexit referendum, however, the border and Northern Ireland suddenly became vital issues of national concern.

This quickly translated into policy realities: In April 2017, then-Prime Minister Enda Kenny succeeded in securing the so-called East German precedent in the EU’s Brexit negotiation agreement. This spelled out that were Northern Ireland ever to vote to unify with Ireland, it would automatically be part of the EU without any need for an accession process.

It was a major boost to the pro-unification side in any future referendum, and it also re-normalized the concept. A united Ireland didn’t seem so fantastical when it was on the front page of the Financial Times.

The issue of a united Ireland then became an issue in the Fine Gael leadership election to replace Kenny. Leo Varadkar’s ultimately unsuccessful rival, Simon Coveney, called his policy proposition “Uniting Ireland.” He became deputy prime minister and foreign minister. It was a stark shift for a party that has always been seen as, on the spectrum of Irish political parties, perhaps the most comfortable with partition.

Varadkar has since vowed to stand up for northern nationalists, promising they would “never again be left behind by an Irish government” in a landmark speech in December. According to the Irish Independent, Fine Gael has been polling focus groups on whether the government should “move towards a United Ireland, if this made sense following a Brexit deal.”

Generational shifts

A path to Irish unification is provided for in the Good Friday Agreement, which states that the decision to hold a vote on the issue rests with the secretary of state for Northern Ireland, a minister in the British government in London, “if at any time it appears likely to him” that a majority favors a united Ireland.

The wording was designed to allow both sides to read into it what they wanted. For Irish nationalists, it created the possibility of eventual reunification. For unionists the requirement of a popular demand for rejoining Ireland was something they considered so unlikely as to be a confirmation of the region’s place in the U.K.

“A lot of educated, outward-looking, liberal-minded unionists would tend to favor remaining in the European Union” — Dan O’Brien, economist

Particularly with the Tories in power in Westminster (or the “Conservative and Unionist” party to give them their full name), and reliant on the support of the Northern Irish Democratic Unionist Party for their majority, the idea of the secretary of state initiating a referendum may look remote to unionists.

But even before the Brexit vote, the island of Ireland has been undergoing several slow but powerful generational shifts. The first is demographic. Among Northern Ireland’s oldest residents, Protestants outnumber Catholics by two to one, reflecting how things were when the province was first drawn on the map. Among those of working age and younger, however, there is a Catholic majority.

The 2011 census showed a Protestant population of 48 percent versus a Catholic population of 45 percent, and some have predicted a Catholic majority in Northern Ireland by as soon as 2021. (Religion does not map perfectly onto political beliefs in Northern Ireland, but it is a good predictor, and the two communities use “Catholic” and “Protestant” as shorthand for each other.)

The second shift is cultural. Once, Northern Ireland was the more progressive of the two polities; its residents had access to divorce and contraception — both unavailable in an Ireland under the tight grip of the Catholic Church. Now, it is Northern Ireland that looks like a conservative outlier, after the Republic of Ireland voted to legalize gay marriage and abortion by large popular mandates. (Both remain illegal north of the border).

“A lot of educated, outward-looking, liberal-minded unionists would tend to favor remaining in the European Union,” said Dan O’Brien, chief economist of the Institute of International and European Affairs. “There are a chunk of unionists reconsidering [their options] in the context of Brexit.”

Similarly, Northern Ireland was once the wealthiest and most industrialized part of the island. Today, its GDP per capita is less than half that of the south and east, according to Eurostat. The United Kingdom once looked like the economically sensible option, compared to the reckless romance of nationalism; with Brexit, now it is British politicians putting ideology above prudence.

“Nationalism always had a big deficit around economic issues. Now with Brexit, a lot of business people — and that’s one thing that has shocked me with the people I deal with — now query whether remaining in the U.K. is the sensible option,” said McCann, the lecturer at Ulster University.

Policy vacuum

Polls differ wildly on the level of overall support for unification in Northern Ireland. Two June polls showed support for staying in the U.K. with a narrow lead over backing for a united Ireland: A LucidTalk poll had it at 45 percent to 42 percent; a survey by Lord Ashcroft polls put it at 49 percent to 44 percent. But a Queen’s University Belfast survey showed support for unification at half that.

Yet the surveys are consistent in showing that Brexit, particularly a hard Brexit, eats into support in Northern Ireland remaining part of the U.K. In particular, it demolishes support among Catholics — who voted against Brexit by an estimated 85 percent and whose acquiescence to the status quo had until now secured Northern Ireland’s place in the U.K.

A majority of people in Northern Ireland now expect a referendum to occur within the next 10 years, according to the Lord Ashcroft poll. “I didn’t think there would ever be a border poll in my lifetime before Brexit, but I genuinely think now there will be,” said Jolene, a 29-year-old Belfast social work student, who said she would vote for a united Ireland. “I think it’s changed conversations in that people are now talking openly about a border poll,” she added. “I do think it will be inevitable.”

“You only have a referendum at the end of a long, long process where you debate all the issues” — Mark Daly

Among those who agree with her is Mark Daly, the Irish senator. A member of the Irish parliament’s Joint Committee on the Implementation of the Good Friday Agreement, Daly spent 10 months after the Brexit referendum gathering all available material on the practical steps to a referendum and unification: the economic implications, impediments, uncertainties, and how it could be achieved in law.

The result was “Brexit and the future of Ireland: uniting Ireland and its people in peace and prosperity” a weighty report of over 1,000 pages that is Ireland’s first parliamentary report on unification — a direct result of Brexit.

Daly’s quest revealed a vacuum of concrete policy on how a referendum could occur. There is no consensus on what a united Ireland would look like: whether the capital would be Dublin, whether the Northern Ireland assembly would continue as a regional parliament, what would be its flag and its anthem.

Even the criteria for holding a vote remain vague. How is the U.K.’s secretary of state for Northern Ireland to determine that a majority for unification “appears likely”? Is “a majority” 50 percent plus one, as had been widely assumed, or something more, as some politicians now argue? How can the two health care and tax systems be reconciled? How can the large financial subsidy Northern Ireland receives from London be replaced?

Daly fears that the British, Irish and Northern Irish administrations have all neglected to make a policy on any eventual unification, and could be caught unprepared if events take a sudden shift. “Policy neglect seldom goes unpunished,” he said.

“The lesson of Brexit is this: You do not have a referendum and then tell everybody what the future looks like. You only have a referendum at the end of a long, long process where you debate all the issues.”

Off a cliff

Daly has an unlikely ally on the other side of the border. Growing up on the streets of unionist north Belfast, Raymond McCord was known as a fighter. He has been a crusader ever since the death of his son, Raymond Jr, who was brutally beaten to death in 1997 at the age of 22 by loyalist paramilitaries from his own community.

McCord expects he would vote against a united Ireland in any referendum, because he hasn’t heard any convincing case about why he would be better off in the republic. “It’s just like Brexit,” McCord said. “‘Let’s vote for a united Ireland.’ But we don’t know what kind of united Ireland we’d have. The health service, housing, schooling, education. All these things need to be explained before any sort of poll could be done.”

McCord, a former welder and bouncer, describes himself as a working-class unionist. But he’s a strong believer in cross-community cooperation and believes that spelling out the conditions needed for a border poll will reduce acrimony in Northern Irish politics by stopping the main parties from using the issue to rile up their electorates.

His current battle is to force the British and Irish governments to clearly spell out the path to a united Ireland. He has begun judicial review proceedings in both Belfast and Dublin, arguing that the lack of clarity from both governments goes against the Good Friday Agreement.

“We’ve got to prepare, and we’ve got to prepare now. Events take over, and politicians forget this” — Mark Daly

“You can’t have a border poll called on the whim of a secretary of state who doesn’t live here,” he said. “It doesn’t affect them and they don’t really care.”

Whether a referendum could come quickly may be decided in the next few months, and it may be decided in Brussels.

If Britain reaches a deal with the EU that replicates Northern Ireland’s current status as part of the bloc, it would likely quell talk of a border poll. It would make the status quo look once again like the less risky option.

But if Britain and the EU fail to come to a deal the opposite could occur. Any moves to erect a border would inflame the issue, and an economic downturn could puncture the arguments of those who insist staying in the United Kingdom is in Northern Ireland’s best interests.

“If it goes off a cliff, if the Brexiteers get their way and they just run out the door, and there’ll be no customs union and no single market, and the border comes back, the reunification argument could accelerate,” said Daly. “It mightn’t be within eight years, it might be in five, it might be in three.”

“We’ve got to prepare, and we’ve got to prepare now,” he added. “Events take over, and politicians forget this.”

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