Oireachtas Joint and Select Committees

Tuesday, 8 December 2020

Joint Oireachtas Committee on the Implementation of the Good Friday Agreement

The Northern Ireland Economy: Discussion

Professor John FitzGerald:

I gave the committee a paper yesterday in which I updated the figures in detail. On non-identifiable spending, €2.4 billion is depreciation but it is also included under revenue. That can be written off as irrelevant. The rest of the non-identifiable expenditure is what we are examining.

The contribution to defence is about €1.1 billion. The contribution to defence of a united Ireland would be about €200 million, a substantially lower figure. The contribution to the EU budget in 2018 was €217 million. That figure would be significantly higher, at €470 million, in a united Ireland. The figure I have for pensions is somewhat lower.

I have a figure which is probably closer to the €2.4 billion than €3.4 billion. The Deputy can probably clarify that with the relevant Minister in the North. Leaving that aside, it could well be that in the negotiations for a united Ireland the UK would accept continuing liability for the €2.5 billion or €3.5 billion in pensions. However, using the experience of the deal done in 1921 when Ireland left or the deal which was to have been done if Scotland left in 2014, in the Scottish case, they would have had to pay the continuing debt interest but offset against that would be the pensions. The Deputy could count one or other of those but not both as being something that would not be payable in a united Ireland. Assuming that the UK would continue to pay the pensions, I have provided the committee with different estimates of what the contribution would be in the event of a united Ireland. The base case would be €8.2 billion. If the pensions are excluded, it would be approximately €6 billion. If social welfare payments and pay rates in the public sector were to be rerated to match those the Republic, the budgetary contribution would rise to €11.5 billion in a united Ireland.

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