Professor Seamus McGuinness:

We do not believe it represents a plausible scenario that would transpire. It is important to state the paper the Deputy is referring to is a paper on subvention, but large elements of that paper are not related to subvention. Subvention, we must remember, is the difference between the cost of running Northern Ireland and the tax receipts taken in. A large component – €10 billion of the €20 billion, for example – relates to a decision related to recalibrating social welfare rates and public sector pay in Northern Ireland to match those in the Republic of Ireland. That is not a subvention issue; that is a policy decision that would be taken after reunification. It is important when talking about the subvention cost to separate the subvention issues and the other elements of the analysis, such as that in question or the assumption that Northern Ireland would pay a share of the Republic of Ireland's defence cost. Those are not part of the subvention bill. It is important to state that.

From our perspective, the set-up scenario is not one that could reasonably transpire. For the €20 billion to arise, there would have to be a border poll on a Friday and reunification on a Monday, with the Irish Government saying immediately that it would pay all the pensions bill, continue to pay Northern Ireland's share of the debt, immediately recalibrate public sector pay and immediately recalibrate the social welfare bill, at a cost of €10 billion to the Irish Exchequer. That is just not a realistic outcome. It emphasises the importance of planning properly for reunification. You need to decide what the subvention costs are, identify what is driving them and then have a plausible plan for the period after reunification, recognising that there will be a transition period that will allow for some policy adjustment whereby you can implement policies that are aimed at tackling the low productivity that drives the subvention. The ultimate point is that where operational responsibility for Northern Ireland is transferred to the Republic of Ireland in a scenario whereby that is ratified in a border poll, then subvention becomes less of an issue. That is what planning should really be targeted towards. To summarise, given the context of how we believe a responsible Irish Government would plan for constitutional change, we do not believe the figures in the report represent a realistic scenario that could feasibly occur.