Dr. Alan Barrett:

I will make a first key point so we all understand what is going on. When we talk about a decline in productivity in Northern Ireland, it does not mean that everybody working in Northern Ireland is getting less and less productive. What has really happened since the Good Friday Agreement, the late 1990s and 2000, is that Northern Ireland has done a good job in adding extra jobs to its economy. The problem has been that those have typically been lower productivity jobs. If a country has an average level of productivity and adds subsequent workers with lower and lower productivity levels, the average will come down. I will again give great credit to Dr. McGuinness in this regard. One of the discussions we have had in the institute over the years is around the question of a peace dividend. Dr. McGuinness argues there was no peace dividend, while other people say there must have been a peace dividend and that it does not make sense for there not to have been. The reconciliation of those two positions is as follows. Northern Ireland's economy did grow and added jobs and everything like that. However, the Northern Ireland economy did not converge on living standards in the Republic or Britain.

It maintained its relative position. A great success in the Republic over the years has been converging towards European norms. That was the policy objective for quite a while. Northern Ireland has certainly grown over this period, but the key problem is that they have been lower productivity jobs. I will hand over to Dr. McGuinness for the Senator's next question. The question becomes one of whether the Executive can do something. In theory, it can. Its budgetary situation is now becoming constrained and difficult.