Oireachtas Joint and Select Committees

Thursday, 13 July 2023

Joint Oireachtas Committee on the Implementation of the Good Friday Agreement

Finance and Economics: Discussion

Professor John Doyle:

The Deputy is right about the north-west region or west-north-west region in the Republic of Ireland. The economic statistics there are not strong. They are radically different from Munster. Partition certainly has some impact on that. It would be almost impossible to say there is not some impact there. Clarifying what that is for the southern side of the Border might be complex. Mr. Hetherington was right when he commented earlier that the comparator of Invest Northern Ireland and the IDA is not fair in some respects. That is why I said earlier that I do not think it is fair to talk about the Invest Northern Ireland staff offering. I am not saying there is not a need for reform on some issues there.

For me, the issue around potential constitutional change is that, at the moment, we might compare Northern Ireland to Sunderland or perhaps Wales and it does not do too badly. However, that is not a great comparison and that is the problem. We are setting a very low benchmark and congratulating ourselves if we almost hit it. In the context of constitutional change, thinking through what that would be, why would the South not be the relevant comparator if it is offering the same tax, public policy and education model? It is not so much that it is a fair comparison today because I do not think there is a simple fix today. Too many moving parts would need to change but if we are inheriting what would inevitably be some sort of economic deficit on day one after constitutional change, we would be asking the population to vote for something where the political system is saying it has a plan to get from a deficit to something where we can cope. We can borrow for a while but we cannot borrow forever so what is the solution?

There is no obvious reason Northern Ireland would not be just as attractive as an FDI base if it were offering the same policy bundle and with the same conditions in the education system. There is a transition there, and how long that would be would depend on how many people could be attracted back versus changing the system itself.

That is the opportunity. It is a question of fixing what we can in the short term in Northern Ireland by having those comparisons. My experience suggests that the Civil Service is very nervous with even Scottish comparisons. My experience of dealing with excellent Northern Irish civil servants is that as long as the SNP is in power, a policy comparison with Scotland is almost as controversial as a policy comparison with the Republic of Ireland. England is the only safe bet because nobody will critique that comparison even though it is often not a good policy choice to be considering. Those are the issues.

In respect of the labour force, a larger and stronger population helps. The National Training Fund may not be on the agenda of the meeting but employers have got away with murder in describing a tax as their money. What would happen if I were to write to the Minister, Deputy Donohoe, to state I only want my taxes to be spent on the health system this year or I would like my taxes back if I go to college? In some ways, we have allowed employers to get away with the assumption that it was a special tax that the State should kindly give back to them. Perhaps a robust dialogue should be had with employers. We should listen to where they think the money should be best spent but it is ultimately the State's money. I know we do a slight Erasmus thing now in higher education, which is welcome. The Erasmus scheme works for the EU. It funds the initiative heavily because it knows that moving people across borders, mostly at a young age, has a considerable impact in terms of life opportunities, giving those people different perspectives and opening them up to different ways of thinking about things. We could imagine a North-South Erasmus scheme for apprentices and for the higher education and school system. That would be a worthy investment of funds whereby we are not just picking up the tab for the Conservative Party Government in London but are doing something with added value and difference. That would be a thing.

To come back to the key point around FDI, we need to fix education and infrastructure. Ultimately, we need a political offering that can persuade people to get over the line. I was in the room when Intel was persuaded to invest heavily in Leixlip. It had done its homework on graduates and had been persuaded by that. The Minister was in the room, which was fundamental to it happening. Intel wanted to know if there would be a problem if it needed to widen the roads outside the plant. They were country roads in those days. A civil servant could not have said there would be no problem because it was a matter for the county council. A civil servant could not answer that question. However, a Minister could answer the question and offer a guarantee there would be no problem in a way the chief executive of Intel was willing to believe. That is not possible in Northern Ireland. It is not possible that someone in a room could answer that question honestly and deliver on it 18 months later. It is challenging to see a short-term solution for those softer issues around FDI. Those issues would disappear in the context of constitutional change. It is not just wishful thinking that the benchmark could be changed. To be fair to Northern Ireland at the moment, the benchmarks are different, as Mr. Hetherington said. However, in the context of the question of potential constitutional change, why would the benchmark not be Cork? Insofar as we can imagine the future, the question is what we can do to put a fair comparison out there.

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