He highlights a noteworthy piece by Alan Ruddock which asks some searching questions about the way forward.
Unless the British government is prepared to give the province fiscal independence, allowing it to set corporation tax at the Irish rate of 12.5% compared with the prevailing British rate of 30%, then Northern Ireland’s business sector starts at an unhealthy competitive disadvantage, while its ability to attract foreign investors is severely curtailed.
According to a report compiled last year by Goodbody Stockbrokers, a Dublin firm, a competitive tax rate could elicit a 20-fold increase in foreign direct investment. Yet the prospect remains as fantastical as local demands for a derogation by which Northern Ireland would join the euro while the rest of the UK remains wedded to sterling.
It will not happen, because it would spark demands from the Scottish and Welsh assemblies for similar autonomy, as well as provoking revolt in the English regions. The province is stuck with Britain’s fiscal and monetary regime, and needs to chart a recovery plan that accepts reality rather than pandering to pipedreams.(Management Today)
To my mind, both these articles highlight the shifting terms of the debate about the north’s future.
The Republic’s economy has been booming for years, but it seems to me that its only in the past year that the political implications seem to have hit home. The admission from a non-nationalist that Northern Ireland is ‘stuck with’ rather than benefitting from ‘Britain’s fiscal and monetary regime’ is one example. The key moment was of course, Peter Hain’s call for ‘an all-island economy’.
The subsidy from England to Northern Ireland, and indeed Scotland and Wales is no longer seen as the natural outworkings of a unitary state, but as a symptom of political failure. In the latter two countries especially, there is a growing recognition that the success of the devolved parliaments requires them to take more economic responsibility.
The leaders at Stormont, Holyrood, and Cardiff all face a similar choice between democracy or dependency. In Irish terms, the situation is inherently favourable to nationalism. This is not primarily because the north needs to embrace the south’s economy, although it does. It is because, fundamentally, the choice facing the north is the choice for self-determination which is at the root of the nationalist ethos.
The Republic is the only one of the Celtic nations which can currently stand comparison with the south-east of England for economic dynamism. It is also the only Celtic nation which is independent of Westminster. That is no coincidence.