Hard to see southern voters agreeing to pay €1,500 to €5,000 each for unity
There was fierce excitement altogether among the Fine Gael faithful last weekend when party leader, Minister for Finance and Tánaiste Simon Harris used his ardfheis speech at UCC’s Mardyke Arena to nail his colours firmly to the centre-right mast. The report of the party’s Commission on Renewal (summary: “what are we even for?”) and a scrap at the national executive over whether the ardfheis should even debate the question of whether the party was centre-right had primed the activists for a clear statement of where Fine Gael stood. Harris’s televised address delivered in spades, hitting a succession of reliable centre-right applause lines from the start: support the people who get up early in the morning, a crackdown on dole lifers, party of law and order, tough rules on illegal immigration, restraint on public spending, etc, etc. Never mind that much of this stuff is under the purview of Fianna Fáil ministers, or that he already has a programme for government. If he sticks with this approach, it will be a departure for Harris, who has previously been adaptable and pragmatic, able to shift his essentially centrist political compass depending on the issue and the circumstances. Scoff away if you like at the opportunism of this, but it is not out of tune with voters who want the comforts of a centre-left big state, financed by the taxes of a centre-right small state. Because of the corporation tax boom, that has proved sustainable for successive governments. It might not last forever, but neither Irish voters nor the politicians they elect have previously demonstrated a deep concern about planning for the long term. We’re a live-in-the-moment sort of bunch. I would be lying if I said there weren’t doubts among at least some delegates. The mood in the Mardyke was less “I can’t wait for him to do this” and more “let’s see if he does this”. Minister and TD Eoin Hayes in sharp exchange over Simon Harris’s ‘dog-whistling’ social welfare comments But one thing is for sure: if the weekend’s other great theme for Fine Gael (and also recent Harris enthusiasm) – a future united Ireland – is to become a reality, the more stringent approach to increasing public spending advertised by Harris will certainly be required, and then some. In fact, the study by economist Stephen Kinsella on the economics of potential Irish unity was probably the most important document of the weekend, bar none. Over the course of 50-odd pages, Kinsella sets out in some detail the potential costs of various models and scenarios for Irish unity. Obviously, there are certain variables that hugely influence the total bill. These include the vexed questions of who pays for future pensions, and what Northern Ireland’s share of the UK national debt would be. Pro-unity advocates assume that the UK government will continue to pay pensions for the North in a united Ireland and that the North will be able to leave behind its share of the national debt, not because this is the most likely outcome but because that suits their argument that the costs of unity will be easily manageable. Fine Gael should have followed Brian Cowen’s cheesy wisdom about unity This shows why proper research and clear thinking is required on the entire unity question. It may be assumed that all these costs will be subject to negotiation between the Irish and British governments, if we ever get to that. But the assumption that the British will happily pay everything into the future – especially on pensions, which are paid on a current expenditure basis, and not out of accrued savings – is not one based on analysis or established fact, it is based on wishful thinking. Kinsella’s report is dense, but worth a read. His conclusions on the numbers are stark, with estimates of the potential costs of unity ranging from merely substantial to completely eye-watering. The potential costs, he says, range from €3 billion to €25 billion in year one. I think we can agree that southern voters are unlikely to vote for unity if it is the second scenario. I have my doubts if they would vote for the first one either, but others may have a different view. Kinsella also describes how the costs of integrating the Northern economy (such as it is) by equalising pay, welfare and other elements across the unified country can be understood as costing southern taxpayers while benefiting households in the North. The biggest beneficiaries, he says, will be public service workers, pensioners and those on welfare in the North. Harris’s comments on welfare dependency might hold more weight had dole not just been increased Even in the most optimistic scenario, households in the South would be paying significant amounts to improve the position for people in the North. In one scenario, the first year costs range from €1,500 for each taxpayer in the South to almost €5,000. And remember, the costs are recurring. Again, it is hard to see southern voters signing up for this. Considering all this, and the fact that some scenarios see unification being simply unaffordable (as opposed to affordable but politically unpalatable), Kinsella reaches one extremely important conclusion: “A plan for reunification has to start as a plan for faster growth in Northern Ireland.” That means Northern Ireland has to work better, politically and economically, than it does at the moment. The DUP has consistently accused Sinn Féin of not wanting Northern Ireland to work so that people there, fed up with living in a “failed state”, will become more open to unity. But would the South be prepared to bear the costs of a “failed state”? Kinsella’s research and the inevitable political conclusions from it suggest that making Northern Ireland work and grow economically will be a necessary precursor to unity. This means that in order to end the existence of Northern Ireland, Sinn Féin may need to make a success of the entity whose name it cannot utter. History is full of such ironies.