Professor John FitzGerald:

I thank the Chairman. We thank the committee for the invitation to attend. We are not taking a position on the desirability or feasibility of a united Ireland. What we are doing is summarising some of the key points from research published in three papers in academic journals that we have already sent to the members.

On the results of the research, the productivity of the Northern Ireland economy is the lowest in these islands, and as a result of this low productivity, Northern Ireland needs a substantial subvention from outside to maintain its current standard of living. There are a number of factors underlying the low level of productivity, including the low educational attainment of the population, which is the lowest of any UK region or Ireland, the failure to invest in adequate productive infrastructure, and, of course, the legacy effect of the Troubles.

There are two factors behind the low educational attainment. The educational system has always selected the pupils into different schools at a young age based on academic achievement.

This severely disadvantages pupils from a disadvantaged background, but is a key factor in Northern Ireland having the highest proportion of early school leavers on these islands.

A high proportion of students in Northern Ireland who graduate from university emigrate and never return, which contributes to the very low share of the population with third level qualifications. As we have discovered in the past in Ireland, addressing such a deficit in educational attainment, if tackled urgently, takes more than a generation. Thus, even if urgent action is taken to address the causes of the low human capital in Northern Ireland, the problem of low productivity will remain acute for at least the next 25 years. We began on this journey very intensively in the 1980s and the process matured around 2000.

As a result of its low productivity, Northern Ireland is dependent on a transfer from London of around 20% of GDP to maintain its standard of living. Northern Ireland is treated quite generously within the UK context so the public expenditure per head is 120% of the UK average, whereas the figure for the north-east of England, the next poorest region, is 106%.

Northern Ireland is at risk from rising English nationalism. Brexit and the possible fracturing of the UK could see a redirection of resources to poorer British regions, which would be a major concern.

A note we have supplied updates our previous estimates of a subvention to Northern Ireland from the UK central government and estimates what subvention would be needed in the context of a united Ireland to maintain Northern Ireland's current level of services. If this transfer had to come from central government in Dublin, it would be a very substantial long-term burden on the standard of living of those in Ireland.

This is a very partial examination of the economics of a united Ireland focusing purely on direct fiscal issues, assuming the underlying systems are unchanged. A full analysis would need to specify to what extent social welfare rates might be harmonised and how health and social housing would be delivered. A wider consideration would, inter alia, examine the impact on Northern Ireland of losing access to the British market and gaining improved access to the Irish and EU markets. It would also examine the impact on Ireland of shouldering the considerable burden of the ongoing transfer needed to maintain living standards in Northern Ireland.

In conclusion, if Northern Ireland effectively addresses its productivity gap, it would provide for a much more secure future within the UK, if that is what the population desires, and greatly reduce the economic cost of a united Ireland, if that was the long-term option chosen. Thus, addressing the root causes of Northern Ireland's economic problems would benefit the population of Northern Ireland, whatever their particular preferences, and would also have long-term benefits for everyone on this island through increased trade.