Professor John Doyle:

I would need a crystal ball rather than a degree to know about the future surplus. It would certainly be high risk to assume this surplus would be maintained in the long run. Broadly speaking, that is the consensus among both the political class and the economists in the South. Perhaps in a few more years we might have more confidence it has settled into a space, but it would be high risk.

The debate, therefore, tends to be around how much of it do we put in to create a sovereign wealth fund, do we put some of it in for the inevitable rainy days in the future or, at the very least, do we invest in capital projects which would release future benefits and bring tax revenue in the future? The nature of economies is that they wiggle up and down so it would be unlikely that surplus would maintain itself at that level into the future. There are some ways in which we are attracted by the idea of a sovereign wealth fund and the reality is Ireland’s debt rating now is so low that we could actually make more money investing that surplus money than by paying off debt early. In some ways, it does not make sense to pay debt off early given the rates that we are able to borrow at. It would make more sense to invest it in something which would give us a solid return. It is, therefore, there to dip into in the future.

My colleague, Professor Brendan O’Leary from the University of Pennsylvania, was in Dublin during the week making an appeal for a certain percentage of it to be put into a sovereign wealth fund explicitly for the transition costs of a united Ireland. If it does not happen in 25 years, then we spend it on something else, but we direct in this way in the meantime.

It was not that we would put in all the money. It was almost like a symbolic gesture: we know there are going to be transition costs and we will put some of this money into an investment fund each year as long as the surplus lasts. Certainly, some sort of sovereign wealth fund or capital investment makes more sense than assuming it would be there every year for current expenditure. In that regard, a transition fund might make sense.

On apprenticeships, I agree that it is the one area where neither North nor South have we managed to resolve the issue of chronic shortages. Part of this is that the nature of the industry has moved so much, effectively, to bogus self-employment. If a specialist contractor is effectively working on his own, what sort of apprenticeship training can he give to a young person? He is making his money out of doing one thing. Members of my own family are making a good living out of putting up stainless steel and glass constructions in airports, schools and hospitals, and that is how they make their money. It is no training for a young person who, four years later, only knows one thing, so they tend not to take on apprentices. There is so much of that across the sector and we have not fixed it either North or South.

I disagree slightly with some of the points on further education, FE. One of the successes with further education in the South has been not to follow the German example of dividing kids at age 16, and even Germany now recognises that was a historic mistake. Kids do not know what they are going to do at 19, much less 16, and we want to keep them on the same pathway for as long as possible. One of the reasons FE has managed to improve its status among young people is that 93% of people get as far as the leaving certificate. I am not saying there is an identical opportunity for kids from poorer schools and more affluent schools, but at least they are all doing the same qualification, with the opportunity through access programmes to get university places. The FE sector is mostly offering post-A level qualifications and is not competing with schools and doing different things. That has given it better status and has allowed people to go from FE to higher education, and some progress has been announced on that this week. This has made FE much more attractive and, therefore, if we were thinking about whether to bring FE back to age 16 in Northern Ireland to solve our skills shortages, I do not think it will work. We have to solve the problem of getting kids to stay and do their A levels, and then make FE an attractive proposition for them. It is getting them to age 18 in the school system where Northern Ireland has a big problem on a European scale, and it is very different to what is happening in the South at the moment. For me, that is also the solution to FE.