Brian Feeney has some interesting thoughts today on the paralysis of the Stormont Assembly, and particularly on Nigel Dodds' rejection of an all-island investment body:
Faced with a range of experienced financiers and economists the said
Mr Dodds drew on his own vast expertise as a unionist nay-sayer and
said, you've guessed it, "No". Northern Ireland's "interests would not
be best served by a merger of INI and IDA. The reality is that we are
competitors. The priority is to make the most of our assets and
Could he make a list of them? Is this the same Nigel Dodds who
was up in the north-west last month with Micheal Martin agreeing a
joint INI-IDA cross-border project for technology in Derry and
Letterkenny funded by the EU Interreg programme?
One of the many sad aspects of Mr Dodds's predictably
narrow-minded summary dismissal of Dr Gillespie's suggestions is that
no-one else on the executive got a chance to say a word. It's too much
to expect the executive to discuss the issue. (Irish News, via Nuzhound)
Mark Devenport brings us news that the devolved administrations are not happy with Alistair Darling's spending settlement:
Alex Salmond met Ian Paisley at Westminster this afternoon. He
claims NI and Wales are just as upset as he is about the Comprehensive
Spending Review and they intend to work together to try to get a better
FURTHER UPDATE: This evening the Finance Department confirmed that
Peter Robinson had discussed the spending review with his Scottish
counterpart and they hope to meet the Treasury soon, either separately
or together. (Devenport Diaries)
Today's Irish Times carries a very significant article by the chairman of Ulster Bank, Dr Alan Gillespie, calling for the creation of a new all-Ireland investment agency.
Dr Gillespie expresses strong support for an all-island corporation tax rate, but suggests that the UK Treasury's Varney review will probably only offer marginal concessions, so that a plan B is necessary.
I believe that to market Northern Ireland effectively we should align the inward investment marketing activities of Invest NI (INI) with the Republic of Ireland's IDA. We should promote an all-island economy through a single, joined-up effective agency with the IDA and INI no longer competitors but merged and fully collaborative. (Irish Times)
There are a number of sensitivities around this proposal as the Irish Times own commentary points out:
Colm Heatley has a useful round-up of the outlook at Stormont in the next few months. In particular, he has a scoop on the Varney review:
Sir David Varney, the man appointed by British prime
minister Gordon Brown to head an economic review into the North, will
next month make his findings public. What Varney says will go a long
way to shaping the work and the nature of the Assembly.
question for Varney, at least in the eyes of politicians and
businesspeople in the North, is the rate of corporation tax. Varney has
already ruled out a 12.5 per cent rate, which would have brought the
North in line with the Republic, but sources close to him say he is
poised to recommend a ‘halfway house’ option.
According to the
sources, Varney is considering an option which would allow businesses
registered in the Republic to move some of their operations to the
North and have corporation tax levied at the 12.5 per cent rate.
money would go into the Republic’s coffers, while income tax paid by
the company’s employees would go to the British exchequer. (Sunday Business Post)
Pat Kane of Scottish Futures has a very interesting post over at OurKingdom on Wendy Alexander's first press conference as Scottish Labour leader elect.
The old Labour slogan of “Scottish solutions for Scottish problems”
became “Scottish solutions for Scottish aspirations”, explicitly
recognising how the optimistic, democratic-nationalist agenda of the
SNP has tapped into a desire for positive politics, and how Labour
failed when it tried to portray independence as a potential
plagues-of-locusts disaster. More interestingly, in subsequent
discussions Alexander pronounced herself “relaxed” about the
repatriation of broadcasting and media to Scotland, an increase in
fiscal autonomy for the Parliament, and other increased powers picked
out by chapter two of the SNP Government’s White Paper on Independence. Or at least, relaxed about the “national conversation” around these issues taking place. (OurKingdom)
The Scotsman has a particularly intriguing account of Alexander's position on the financial issue:
The Institute for Public Policy Research has released details of a forthcoming study which shows that the North-South divide has grown during 10 years of Labour government:
ippr north’s report cites Government figures that measure the gap
between regions. These figures show that since 1997, the North East,
the North West, Yorkshire and Humberside and the Midlands have all
moved further away from the national average, on the Government’s
favoured measure of output per head (known to economists as ‘Gross
Value Added’). Over the same period, London has out paced the rest of
The figures in the release also appear to show that the positions of Scotland, Wales, and Northern Ireland have deteriorated slightly as well.
Not everyone in the North thinks a regional corporation tax rate is the way forward in any case. Peter Bunting of the Irish Congress of Trade Unions has delivered a strong critique of the campaign for a cut. He makes a formidable argument, but let me try and point to some weaknesses.
There are fewer than ten PLCs in NI, ten firms account for over 50% of NI exports and the region has the second-lowest level of business formation in the UK. Most private sector economic activity is carried out by companies that pay the reduced corporation rate of 19%. Only 4% of NI companies pay the full 30%, although this sector dominates the Industrial Task Force, which commissioned the ‘independent study’ that found, among other claims that 180,000 new jobs “could” be created by 2030 and that growth “could” be doubled. (ICTU)
Surely this is precisely the point. Part of Northern Ireland's problem is that it is failing to attract precisely the kind of companies that would pay the full rate of corporation tax.
Over at OurKingdom, Anthony Barnett pick up on the significance of the Labour-Plaid Cymru deal in Wales.
The Anglo-British political class in London should be sounding the
alarm, nationalists are now in government in all three of the ‘other
countries’ of Britain. More important, they have the initiative.
Salmond is getting on fine with the Queen and is flying off to talk
with Ian Paisley in Belfast who is nationalist enough without taking
into account his coalition partners Sinn Fein. (OurKingdom)
The Times today highlights an OECD report that perhaps explains some of the economic realities that have made this situation possible:
Britain emerges as having a much wider range of recent economic performance
between regions than almost all its main competitors, while the divergence
in regional living standards is wider than in any OECD member bar Turkey.
Between 1998 and 2003, economic growth around the UK spanned a huge range,
between minus 1.2 per cent and 9.6 per cent , widening the gap between the
country’s poorest and most prosperous areas. Gauged by GDP per head, the
nation’s richest area, the western part of inner London, was five times
better off than the national average. Yet, at the same time, GDP per head in
the poorest area, Anglesey, was barely more than half the national average. (The Times)