Peter Robinson: Sinn Fein finance minister’s fiscal policy is to hold out his hand for more UK cash

Having once served as Finance Minister I know that the belief that you can spin words, but figures are facts, is an illusion.

By Peter Robinson
Friday, 29th October 2021, 2:29 am
Updated Saturday, 30th October 2021, 8:36 am
Peter Robinson is a former DUP leader and first minister of Northern Ireland. He writes a column for the News Letter every other Friday
Peter Robinson is a former DUP leader and first minister of Northern Ireland. He writes a column for the News Letter every other Friday

Every Chancellor will present his financial statement in the best light and in the most positive manner. This budget should be treated in that context.

Given that many of the Chancellor’s comparisons were with 2018/19 rather than the last financial year because we are told “it is the most recent year for which data is available” we can expect that the differentials will be greater.

Yet even taking this into account it is hard to argue against the view that this was a very helpful and generous budget for Northern Ireland.

For Sinn Fein it is anathema to thank ‘the Brits’ but needless to say, Conor Murphy was not asked how he would raise the money he wants

I only wish there had been a £1.6 billion budget increase while I had been in that post, I might have wanted more – what minister would not – but it is a huge additional contribution from the Exchequer toward Northern Ireland’s spending.

The extent of our need for support, as part of the United Kingdom family, can be seen in that England had a public sector deficit of 0.3% of GDP in 2018/19, compared to 7.7% in Scotland, 17.9% in Wales and 19.0% in Northern Ireland.

Without a redistribution of the UK’s resources to benefit Northern Ireland we would have a much lower standard of living.

The much lower level of revenue raised in Northern Ireland compared to the UK average means that our membership of the Union provides more than £5,000 in subsidy for every man, woman and child living here — every year.

That is a startling figure that the EU has never and would never contribute to our funding, and one that the Republic could never provide.

In social policy terms there will be many who would have different priorities and undoubtedly, we all might desire to see higher levels of social benefits, especially if someone else is paying for them. However, it would be extremely harsh and frankly dim-witted to look this gift horse in the mouth, yet not surprisingly our finance minister did just that and seems happier flogging the poor creature even though it makes him appear appallingly ungracious and barmy.

I realise that for Sinn Fein it is anathema to praise or thank “the Brits” for anything and it is probably a cause for expulsion from the ranks and banishment from republican circles — but really! Needless to say, there was an absence of tough questioning of Mr Murphy about how he would raise the additional cash to provide the level of services he claims to want.

Holding his hand out for more appears to be his only fiscal policy.

He demands a greater level of public spending for Northern Ireland but ignores the fact that the government is spending £15,182 per capita here, which is more than anywhere else in the UK.

As the Institute for Government paper asserts, “the levels of deficit for Scotland, Wales and Northern Ireland implied by the current distribution of public money across the UK would not be sustainable if any of these nations were to leave the union … each of the UK’s three smaller nations would have a far higher level of public spending than revenues if they attempted to continue with current domestic policies after secession. The gap would be so large that it could not be sustained – at least, in Northern Ireland’s case, not without substantial ongoing transfers from the rest of Ireland.”

The salient figure for people to address is that while redistribution within the UK to Northern Ireland - taking account of spending after revenue has been subtracted - equates to 0.4% of the GB economy whereas it would account for 5.0% of the Irish economy. The Republic’s economy is not sufficiently large or robust and could not afford to finance subsidies on this scale. Only two outcomes are possible for Northern Ireland, stay within the UK or prepare for drastic reductions to public spending and have a much lower standard of living in a united Ireland.

The Institute having outlined the “running cost” of Northern Ireland then addressed the share of the UK’s accrued debt that Ireland would have to service as was the issue in the Scottish referendum. Nobody now could guess what amount this might be, but it would need to be serviced in addition to the public spending deficit which I have outlined.

No amount of fancy manipulation of the figures can remove these stubborn facts. I have seen spurious claims that suggest that spending on UK-wide issues like defence could be wiped out. Such nonsense. Defence spend in a united Ireland would escalate from its present level and I am not talking about the public order issues that might arise as a consequence of constitutional change.

These paragraphs deal only with the benefit of our fiscal union as part of the UK but for most of us our place within the Kingdom is about much more than that.

In the months ahead we shall take time to consider those other benefits.

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