Jeff Peel's Diary

Northern Ireland is in the Red. Image via Wikipedia

Last year the Treasury published a consultation document seeking ideas as to how Northern Ireland’s economy should be rebalanced.

The document pulled no punches in defining the endemic problems of Northern Ireland’s economy and its massive over-dependence on the British public purse. It stopped short at pointing fingers at some of the underlying causes of this dependency culture – such as a stunted Party-political system and successive British governments that preferred to throw money at a problem rather than deal with the systemic disease. The troubles were part of the reason for the creation of a Potemkin economy – but not the whole reason.

However, the document at least details, in its ghastliness, just how sick our economy really is:

• Productivity remains low, with productivity per filled job being 85.3 per cent of the UK average, lower than all other regions other than Wales
• Low productivity is largely due to under-representation of high productivity sectors in Northern Ireland
• Levels of venture capital funding are lower in Northern Ireland than in all other UK regions – and the few VC firms that are ‘active’ are largely dependent on state funding
• Over the past five years business expenditure on R&D in Northern Ireland has averaged 0.69 per cent of GVA compared to 1.23 per cent for the UK as a whole. In addition, business expenditure on R&D in Northern Ireland is heavily focused on a small number of companies, with just 10 companies accounting for some 57 per cent of all business R&D investment in 2009.
• Over 30 per cent of all Northern Ireland jobs are in the public sector compared to a UK average of around 21 per cent
• Northern Ireland’s economic inactivity rate remains high at 28.4 per cent compared to the UK average of 23.3 per cent, and is the highest rate in all of the 12 UK regions.

The long and short of all of this is that Northern Ireland’s fiscal deficit is vast: equating to over £5,000 per person – which is some three times larger than the UK average.

And nothing, substantial, seems to be being done to address this. Yes, the consultation resulted in lots of submissions, but radical action needs to be taken to address the endemic problem.

In terms of addressing the problem the Executive at Stormont is not fit for purpose – nor are the Departments responsible for economic development. The political parties all define their effectiveness based on how much cash they can wrestle from the Treasury – thereby perpetuating the economics of hand-out.  And there are no strong lobby groups arguing the case for the following:

• Active reduction of the size of the State’s involvement in the economy
• Intolerance for absurd State-funded hand-outs to people and groups who don’t deserve them
• Reduction in ludicrous and crippling local taxes – especially taxes on business and commerce
• Accountability of political Parties based on hard, tangible economic related outcomes

So I’m proposing creating such a Think-Tank, Lobby Group – whatever you think it should be called.

If you would like to get involved in this initiative please contact me by completing the little form below. I’d be keen to hear from you if you’d like to join a steering committee, write some blog posts, undertake some research or just lend your support.