Dr. Tom McDonnell:

Absolutely. Regardingper capitapublic spending relative to all other countries in western Europe, we did much analysis on this, looking at the high-income western European economies – all EU economies up to 2019. Ireland and the United Kingdom stand apart from everyone else in terms of their low level ofper capitapublic spending and their level of per capitaGovernment revenue. It is Government revenue rather than taxes per se. It is on the social security contribution side where Ireland and the UK particularly stand out insofar as they are very low. It is not taxes per se; it is Government revenue. Much of this in the Republic would be employer PRSI, which basically accounts for the entirety of the gap with western Europe by itself. In the UK, it is a reasonably similar story, although not as simple as that. Ireland also stands out in terms of its very low level of taxes on capital stocks, which is a broad term that includes everything from property taxes to land taxes and things such as that. That is where we are.

The narrative mentioned earlier about nurses and teachers, or teachers specifically in this case, is that it is a fiscal policy decision. Because the UK engaged in a process of severe, wrong-headed austerity post 2010 and 2011, that has constrained the scope for public spending increases. Because the emphasis was on keeping taxes low, by and large, relative to other western European economies, that means the scope for public spending is constrained - because of the bond markets and so forth, as we all saw. They are low.

We are certainly a long way from that Scandinavian model that was mentioned. That has implications with regard to replacement incomes for workers who lose their jobs and what is feasible and possible in terms of capital and current spending across the board. The evidence suggests that the most competitive economies in the world are broadly the Scandinavian economies and the social democratic economies of northern Europe, which also happen to have the highest tax rates in the world. It is not simply the case of taxes versus economic competitiveness. It is much more complicated than that but it means the choices are available to us, if we were to choose to go down that direction. Those teacher salaries do not have to be that low in Northern Ireland, is another way to put it. It is a policy choice.