Mr. Paul Mac Flynn:

On the fiscal commission, it did recommend income tax as being the most appropriate for devolution now. Regarding the point the Deputy made about the impact of not having fiscal devolution in terms of the Executive and the economy of Northern Ireland, it is one that may not have got as much comment at the time but I think it is the most important point. To a certain extent, we have a Northern Ireland Executive that is responsible for a huge amount of government spending. Much of this is tied to money used for economic development. For a normal government, what we would have in this situation would be a virtuous cycle, where it would spend money on industrial development and would make the investments, growth would occur in the economy, productivity would increase and, therefore, tax revenues would increase. These funds would then flow back into the government. This would give the right incentive structure for a government to carry out these policies.

The lack of this kind of feedback loop into the Executive has led to some very bad decision-making, particularly on the industrial development front. A report was recently undertaken into Invest Northern Ireland and its performance over the last number of years. I encourage everybody to read this report because it paints a very bleak picture of what impact government interventions on economic development have had in Northern Ireland. Research coming from Queen's University is examining management practices and it goes into further detail on this matter. To my mind, the benefit of fiscal devolution lies in making the state of the economy in Northern Ireland directly impact on the Executive itself. I say this because too often announcements from Invest Northern Ireland and other organisations refer to locations where X number of jobs have been created, but there is never talk about where jobs have been lost or about the overall change. The debate about economic development has been quite immature and it is this way because of the powers available to the Executive in this regard. To my mind, this would be the biggest prize from fiscal devolution.

Turning to the labour market, and in the context of the report in question, one of the very annoying things, if you are an economist, derives from the Northern Ireland Statistics and Research Agency being a part of the broader UK statistical structure and reporting labour market statistics slightly differently from how these are produced by the Central Statistics Office down here. Sometimes, the difference can be very minor, but, equally, at times they are big enough to effect a change in the comparative performance between the two labour markets. The statistic I like to highlight is economic inactivity. We talk about it the other way around down here. We talk about labour force participation, namely, those who are actively out in work or looking for work.

For years, we have talked about this economic inactivity as being the biggest drag on Northern Ireland, and it is. It is something we should talk about. When we compare the situation in Northern Ireland with other UK regions, it is terrible. When we look at and adjust the figures in the Republic of Ireland, however, so they are comparable to the statistical approach used in Northern Ireland, the Republic, up until just before the pandemic, had very similar, almost exactly similar, rates of economic inactivity, but this was never given the same kind of prominence down here. It is, though, one area where the two labour markets are actually much more like each other and extremely different from other UK regions. We have separate conversations about this issue, but it is one area where we need to bring the conversations together.