‘Boris has basically admitted it: the Scotland / Northern Ireland bridge is dead’
Turning to the serious business of Wednesday’s conference speech by Prime Minister Boris Johnson what should we make of his economics?
Let’s deal with that question at two levels – the general (although with big implications for Northern Ireland) and a point specific to Northern Ireland.
First, the general point. The Prime Minister (and to some extent this had been anticipated in this week’s comments from Chancellor Sunak) set out a goal for the UK economy to become a high-wage, high-skills, high-productivity economy (indeed, a low tax one too).
Given the huge growth in public borrowing during 2020-21 – up from £50 billion to £350 billion annually – it seems very unlikely that recently-announced tax increases (for example Corporation Tax, the non-indexing of Income Tax thresholds and, most recently, the health and social care levy) will be reversed any time soon. It may be realistic to anticipate further increases in due course.
The point that the UK needs to change from being low-wage, low-productivity, to high-wage, high-productivity, has been made many times before (such as in chancellor Osborne’s national productivity plan in 2015).
It is a noble and necessary objective, but it is much easier to state than to achieve.
It is not clear the Prime Minister has articulated a strategy to take us from where we are to where he want to get to.
And, all this is of particular relevance to Northern Ireland because over most of the last century Northern Ireland has been the UK region which, on average, has had the lowest level of labour productivity.
Hitherto the Northern Ireland problem of low productivity has proved intractable, so much so that in the latest
draft of the Executive’s Programme for Government there was no target about
raising productivity. Is this an admission of defeat?
And, specific to Northern Ireland (but part of the levellin- up and strengthening “Union
connectivity” agendas) the Prime Minister referred to improving the A75 road linking Cairnryan and Stranraer via Dumfries to Gretna and then Carlisle.
Tacitly, the Prime Minister is admitting one of his other flagship infrastructure projects – the fixed link between Scotland and Northern Ireland – has gone, given post-Covid-19 stringencies.
One expert civil engineer’s opinion was that a bridge from Portpatrick to Larne might cost £30 billion (if indeed in technological terms it was at all feasible).
It is rather unlikely that a bridge (or perhaps even a tunnel) would have passed a rigorous cost-benefit appraisal for projects.
It is much more likely that the benefits of upgrading the A75 (especially if all, or most of, the 100 miles could be dualled) would provide benefits (principally fewer accidents and fatalities, faster journey time,
reduced freight costs and perhaps some agglomeration advantages between Northern Ireland and south-west Scotland) would exceed the costs.
Not that dualling that hitherto rather twisty road will be cheap, though; it could cost anywhere between £500 million and £2 billion.
> Esmond Birnie is a former UUP MLA and ex-PwC chief economist for Northern Ireland and Scotland. Today he is senior economist at Ulster University’s Business School