The economics of the nationalist tide

Over at OurKingdom, Anthony Barnett pick up on the significance of the Labour-Plaid Cymru deal in Wales.

The Anglo-British political class in London should be sounding the
alarm, nationalists are now in government in all three of the ‘other
countries’ of Britain. More important, they have the initiative.
Salmond is getting on fine with the Queen and is flying off to talk
with Ian Paisley in Belfast who is nationalist enough without taking
into account his coalition partners Sinn Fein. (OurKingdom)

The Times today highlights an OECD report that perhaps explains some of the economic realities that have made this situation possible:

Britain emerges as having a much wider range of recent economic performance
between regions than almost all its main competitors, while the divergence
in regional living standards is wider than in any OECD member bar Turkey.

Between 1998 and 2003, economic growth around the UK spanned a huge range,
between minus 1.2 per cent and 9.6 per cent , widening the gap between the
country’s poorest and most prosperous areas. Gauged by GDP per head, the
nation’s richest area, the western part of inner London, was five times
better off than the national average. Yet, at the same time, GDP per head in
the poorest area, Anglesey, was barely more than half the national average. (The Times)

Interestingly, Times writer Gary Duncan’s prescription for the UK regions looks pretty much like the emerging consensus in Northern Ireland:

Government action can play a role in trying to narrow Britain’s own national
rift. But it is hard not to conclude that it should largely be limited to
perhaps three things. First, measures that boost skills and education and so
enhance regional productivity and competitiveness. Secondly, investments in
infrastructure, and especially in transport, that can help to link up
regional economies so that they can achieve the critical mass they need to
thrive. And thirdly, the time may have arrived when ministers must also
seriously contemplate significant corporate tax incentives to draw economic
activity away from England’s overheated and overcrowded South East.

The Stormont executive has been at the forefront of pushing for a regional corporation tax rate, with the support of the Irish Government. The Republic is also involved in  significant investment in the North’s transport infrastructure through the National Development Plan, which includes provision for funding projects in the area of education, skills, science and innovation.



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