Professor John FitzGerald:

A study was done by Professor Iulia Siedschlag of the ESRI for the Department of Enterprise, Trade and Investment in Northern Ireland on FDI. It was a study of all EU regions and a hugely important factor in deciding whether FDI went somewhere was the proportion of people with third level educations. I am agnostic on the issue but in a united Ireland, what would happen to the supply of graduates in Northern Ireland? Would people from a predominantly Protestant background who are Northern Ireland graduates in Great Britain be more likely to come back to Northern Ireland? Would people from Northern Ireland leave Northern Ireland? That is what happened on independence in 1922.

For various reasons, I was looking at the Royal Irish Constabulary in 1912 and 1913. There was substantial outflow from Belfast, which was losing policemen hand over fist because of the prospect of home rule. People were taking jobs elsewhere in the Commonwealth. How will a united Ireland affect perceptions in the Protestant community or among people from Protestant backgrounds in Northern Ireland? How will they behave? Will they come back from Britain or will they be less likely to do so? The number of graduates and the availability of skilled labour in Northern Ireland will determine whether it gets FDI.

In the 1970s in the Republic, the IDA wanted to spread FDI like butter and it failed to do so. By the 1990s, it was encouraging FDI to go where the graduates wanted to live. It was the supply of graduates that made the decision. It was not a decision of the firms. They went to Dublin, Cork and Galway. Why Galway? One of the studies we did for the Department of Finance stated that Galway has two prominent theatre groups. The Department of Finance had a canary. It thought we were going to suggest it should subsidise theatre groups across the island. However, Galway was the only place, other than Dublin, that was culturally attractive. Irish people returning from abroad would relocate there even if they were not from Galway and foreigners were keen on it. There is a cultural factor to where graduates want to live.

I was asked in 2000 to speak to the Tasmanian Prime Minister about the Irish success story. I said all the usual stuff about education, the EU and so on. The first question he asked was what role Irish music had in our success story. That stumped me, but it was a very good question. Why did Irish people come back and why did so many skilled foreigners say they would not go to Bremen or Birmingham but would go to Dublin instead? The cultural attractiveness of Dublin was one answer. The bulk of the workforce of Google and other companies are not Irish but they could attract people from all over Europe. That is why they were successful. The success of Northern Ireland, whether in the United Kingdom or in a united Ireland, will depend on making it an exciting place. People who live there find it an exciting place. We are, however, going to have to go out and sell it.

Ireland is probably the richest county after Luxembourg in the EU. Getting the people of Romania, Italy and Poland to stump up money for a united Ireland is not going to happen. The EU budgetary contribution from Northern Ireland up to 2018 was approximately €270 million. In a united Ireland, it would be €470 million because Britain had a rebate. In terms of the actual EU contributions, a united Ireland would be more expensive for Northern Ireland than remaining in the UK. Far more important is the uses and sources table for the Northern Ireland economy. It is totally integrated into the United Kingdom economy. We have seen that in the context of the protocol. There were real problems for Northern Ireland with stuff coming from the UK. In a united Ireland, all those links whereby goods from Northern Ireland go into the UK and goods from the UK are part of what is made in Northern Ireland will be broken. In the long run, Northern Ireland will be more fully integrated. For goods, it is already part of the Single Market and it will be a part of the Single Market for services under a united Ireland. It would eventually gain in that regard. However, there would be an enormous instantaneous loss when it left the UK because so much of its economy is linked to Great Britain. We have done a test on this with Brexit and the supply chain issues. A bit too much fuss was made about the obstacles to bringing stuff into Northern Ireland. However, those issues were trivial compared with what would happen if Northern Ireland were to become a part of the EU. The EU issue is complex. It will be severely negative to begin with because of those links. It will cost more. We on this part of the island see how advantageous it is in the long run. However, it is not a straightforward issue.