Dáil debates

Thursday, 26 November 2015

Ceisteanna - Questions - Priority Questions

Economic Policy

9:30 am

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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2. To ask the Minister for Jobs, Enterprise and Innovation if he has read the report "Modelling Irish Unification" by KLC Vancouver, British Columbia, Canada; and if he agrees with the projected potential growth boost to the Irish economy of €35 billion of gross domestic product that could be provided by the realisation of an all-island economy. [41848/15]

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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It is not like me to complain and the Ceann Comhairle knows that I have been a very co-operative Deputy over the past five years but I just want to draw attention to the method of dealing with Parliamentary Questions to the Minister for Jobs, Enterprise and Innovation. In 2012, as the spokesperson on enterprise in the second largest Opposition party, I was afforded the opportunity to ask 31 questions relating to enterprise. So far this year, I have only been afforded the opportunity to ask seven. Obviously, this has reduced my ability to hold the Minister to account on this issue. Could the Ceann Comhairle take the fact that there has been a fall in the number of questions I have been given the opportunity to ask from 31 in 2012 to seven in total this year into consideration? It has had a significant effect on my ability to hold the Government to account on enterprise.

The Government promised-----

9:40 am

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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This is a matter that should be discussed between the Whips.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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I understand the Whip has already raised it at the Committee on Procedure and Privileges. I wanted to raise the issue here but will leave it at that.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I thank the Deputy.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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A significant body of work has been carried out by Professor Hübner. This work has stated that there is an opportunity with regard to economic integration in the North for €35 billion in extra GDP to be created over eight years if the two economies were to integrate properly. My question simply asks if the Minister has read the report and, if so, if he will carry out the actions in the report.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I welcome the publication of this interesting report which gives considerable food for thought by undertaking some economic analysis of issues arising in the event of the unification of Ireland.

It is very difficult to say whether the conclusions of the report in relation to the potential growth boost to the Irish economy would be borne out in practice. I note that the report’s conclusions are based on an economic model and on significant assumptions in that regard. The economies of the Republic and Northern Ireland have developed in very different directions in the past 90 years. There is a significant range of different legal, administrative, regulatory, and financial systems in place and Northern Ireland is an integral part of the much larger United Kingdom economy.

Regardless of the political structures in place on the island, there is an overwhelming economic case to be made for more economic engagement. I emphasise that this Government is fully committed to the Good Friday Agreement, to the principle of consent and to the institutions that were established at that time. The need to address economic business development matters on the whole island was recognised and resulted in the establishment of InterTrade Ireland, the cross-Border trade and development body. At that time there was very limited interaction between business North and South, relatively low levels of trade between both jurisdictions and untapped potential for better engagement. To combat this disadvantage and to seek to drive enhanced levels of business activity, InterTrade Ireland has, in the intervening years, operated a range of programmes and initiatives to develop economic linkages between businesses on both sides of the Border. This work has represented a modest but positive start to the process of developing an “all island” economy, regardless of political structures.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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The model measures a number of outcomes and steps that would be taken with regard to harmonisation of tax. We see some of that harmonisation in the adoption of common currency, convergence in productivity across the island and the eradication of parallel government structures. It states that €35 billion would be created if the economy in the South were to integrate with the Northern economy, that is, €1,497 per person in the first year of that integration, and €5,650,000 of extra GDP per person, man, woman and child on the island of Ireland in the eight years. That is a massive amount. It states that the two economies are interlinked and interdependent but it also states that there is a massive economic gap and that hundreds of thousands of people, right through the island and especially along the Border corridor, are falling through that economic gap every year. As Deputy Dara Calleary said, the Minister does not answer questions. The simple question is whether the Minister has read the document.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I have read the document in considerable part and, as I said in the reply, it is based on a number of assumptions. It is up to people to read it and evaluate them. They are assuming an immediate devaluation in Northern Ireland which would mean a reduction in the average value of wages within the Northern Ireland economy. There are issues around that. It assumes the immediate harmonisation of taxes, North and South. It assumes that the Republic of Ireland would take up a considerable part of the deficit within the Northern Irish economy that is currently supported by the UK and a whole lot of other assumptions about the way in which the economies would converge and how this would evolve. As an economic exercise, it is a very valuable contribution to the discussion. It shows the opportunity for significant gains but it does not call for action by me, as the Deputy suggested. It is an evaluation, it is an economic modelling exercise and it is a very valuable contribution.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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It is startling that the Minister said it does not call for actions. If €35 billion could be gained following economic integration, then €35 billion is the cost of doing nothing and standing over a policy inaction or inertia with regard to not getting involved. The Minister of State at the Department of Arts, Heritage and the Gaeltacht, Deputy Jimmy Deenihan, appeared on a BBC programme a couple of weeks ago and was asked a very important question about the costing of an all-Ireland economy and, gormlessly, he answered by saying he did not know. The report stated that there is a dearth of research on this issue across the world. That the report was commissioned and carried out in the US says something shocking with regard to this issue. Blissful ignorance is not an opportunity for the Government or the people of Ireland to do nothing. Will the Minister carry out research on best case scenarios and take elements of the report - without full unification which would take political decisions - that could be implemented purely under the Good Friday Agreement and do a cost-benefit analysis of those?

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Certainly I am in favour of lower trade barriers. The work of InterTrade Ireland is to do just that, to reduce trade barriers; both North and South, as export economies, favour the reduction of trade barriers in every way possible. Obviously, the more immediate concern of the Government would be with the possibility of the reverse happening, that there would be an increase in trade barriers between North and South should the British people take certain decisions. There are issues here that are worthy of keeping under consideration. What I said was that this report does not call for specific action from me but it is a worthy contribution. The Deputy is right. As I said to Deputy Dara Calleary, I welcome the move in Northern Ireland to adopt a lower rate of corporate tax. I think that will be good for the all-island economy. I welcome any efforts to reduce trade barriers. I welcome and support actively through my budget InterTrade Ireland which supports North-South activity but some of the wider issues, such as whether Northern Ireland would adopt the euro, are clearly not for me to consider. There are other issues. It is a worthwhile debate and it is a worthwhile report. It is worthy of consideration, and I read it on foot of the Deputy's recommendation.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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In large part.