Friday, November 03, 2006
A rather hollow package
The proposed peace package seems to be have left many underwhlemed. The local CBI Chairman, Declan Billington, has described it as a nuisance payment. Meanwhile, Newton Emerson thinks it is all a con, any “increases” will be less that the asset stripping Gordon Brown wants to do. The parties aren’t exactly dancing in the street either. UPDATE One Welsh Academic thinks we should get real.
Fair Deal @ 10:51 AM
Both Newt Emerson and Declan Billington are correct with the latter edging it in that Newt’s understandable skepticism smacks of too much ‘ungratefulness’ ?
Essentially Gordon’s package does nothing except to throw more public sector funds at an economy which is already drowning in the same .
A litle arsenic can be a tonic . . Stuffing more arsenic down the throat of the already over dosed patient could be just what the patient needs :(
Gordons lifebuoy will help . It will keep the patient afloat but not any closer to a full rescue . It seems the would be rescuer does not expect the patient to float for very much longer .
Posted by on Nov 03, 2006 @ 01:12 PMI never understood this idea that the Brit. govt. were going to throw more extra public money at the money pit that is the 6 counties. From the numbers talked about, it would appear that the Brit. concept of the ‘peace dividend’ is merely to continue to pay the bloated subvention year on year for the next 10 years, nothing more, while (hopefully) the economy sorts itself out...and integrates into an all-Ireland economy. It would appear that there is little extra money available for the necessary infrastructural changes that would be needed to compete with the 26 counties nor is there a willingness to lower tax rates. It would appear, therefore, that any money for major infrastructural projects (Aughnacloy-Derry motorway, improved Research/Development etc.) will come from the Southern govt., with the Brit. govt. picking up the (hefty) bill for the day-to-day running of the statelet in the meantime (paying the salaries/costs of the inflated number of civil servants and benefits recipients...)
The very idea of pumping more public funds at this moment in time into an unreformed and inflexible six county economy would be foolish. There is, in fact, a case to be made that instead of extra money the 6 county economy could do with a cut in direct govt. funding, to wean the population off the easy life of guaranteed public sector jobs and ludicrous benefits payments…
A harsh dose of financial reality is perhaps what is needed to sharpen political minds (particularly on the Unionist side...)Posted by on Nov 03, 2006 @ 01:46 PMSeabhac...look at all the lovely council housing around..thats the money pit....
Posted by on Nov 03, 2006 @ 02:03 PMInvest NI...over heavy government departments…
What it would be most interesting to see is how NI comes out as a region ahead of other areas of the UK which have the same category status in terms of social, economic issues etc when it comes to funding.
Greenflag, Gordon may not want to give it much money but the fact is they will continue to subsidise to it a high level though not as as high as before whilst it remains in the UK. It’s only fair that NI is treated in parity with similar regions of the UK in terms of focussed funding.
I find it particularly rich of unionists who talk about feeling like second class UK citizens going off with the begging bowl so often. The NI economy could stand relatively ok on its own two feet if it was forced to but the attitude is far too much about always running to others for support from politicians here of all hues and far too often its people as well.
Posted by on Nov 03, 2006 @ 02:18 PMIf he wants to do something he should show a resolve to improving the local economy. Drop corporation tax and couple this with business rate breaks in disadvantaged areas. Also we need someone to light a fire under the likes of he Planning Service etc. What this place needs is a clear sign that we are serious about improving the economy and there is government commitment behind that aim. Forget all the quango waffle and social economy funding we have had years of it and what has any of it achieved?
We now need to decommission quango land and I bet that is more difficult than getting the PIRA, UDA etc to move. The pen is welded by sharper brains than the sword and there is considerable self interest in maintaining the status quo.
Posted by on Nov 03, 2006 @ 02:25 PMYokel
‘but the attitude is far too much about always running to others for support from politicians here of all hues and far too often its people as well.’
This attitude is inherent in ‘unionism’ and always has been . You can’t blame a dog for barking . or expect a horse to moo :)
Posted by on Nov 03, 2006 @ 02:30 PMCrataegus ,
‘Drop corporation tax and couple this with business rate breaks in disadvantaged areas.’
Gordon has to look at the consequences for his tax take from Scotland , Wales and poorer regions of England if he dropped corporation tax rates for NI. Anyway it’s not allowed under Eu rules .
‘there is considerable self interest in maintaining the status quo. ‘
True even if the staus quo is an economic mess at least the taxpayers of England are paying for it . Might be different when NI taxpayers get to pay their fair share ?
Posted by on Nov 03, 2006 @ 02:35 PMSS - You may have a point but it isn’t evident in SF engagement on similar issues within your “26 counties” (officially known as the “Republic of Ireland” and it’s high time northern ‘republicans’ started to call it by its proper name! Ever wonder why SF bounce against a ceiling in independent Ireland?).
Failure to vary corporation tax will present a serious challenge - but not one that either side seems keen to engage with at the moment. SF & DUP may yet be shown to lack the required backbone - but as Pete is constantly telling us - the clock is still ticking. It hasn’t ticked out yet.
Your proposal SS is to withdraw finance to service the aim of a UI. Your veneer of an economic argument is just that - a shallow attempt to use events for your own political purposes. In independent Ireland SF’s position is the opposite where they appear opposed to the low corporation tax.
It’s a pity the media don’t focus on SF’s all Ireland party credentials by comparing its approach north and south of the border. But - since it’s too much work for them to read the Assembly’s Hansard reports it would be way too much to expect that they read the Oireachtas reports too.
If you stick to criminal justice the likes of Dodds appear to be presenting SF with the ‘out’ they need. I for one won’t be crediting ‘republican’ partitionist economic hypocrisy as anything more than a convenient political hostage for ‘republicans’ to spout to those daft enough to listen.
Posted by on Nov 03, 2006 @ 02:38 PMRubicon
“Your proposal SS is to withdraw finance to service the aim of a UI.”
I believe the Brit. govt. is doing this itself…
they appear to be trying to tell Unionists...’It’s the economy, stupid’! That is, they are introducing no extra money and are more than happy to allow the creation of an all-Ireland economy. They are happy to allow this all-Ireland economy to take shape (going by the often repeated and enthusiastic comments of Hain, etc. on this very topic) even though the idea of one country usurping part of the economy of another would normally be considered a gross intrusion into the national sovereignty of the country affected. It is quite clear that the Brit. govt. do not now see the six counties as integral to their state. This must be worrying for Unionists. How else to explain the enthusiasm to effectively cede sovereignty in the case of the economy? And once the economies are part of a single all-Ireland economy the game is up...there is a de-facto UI whether Unionists like it or not…
The economy is the country, if you like. You cannot create an all-Ireland economy without eventually having to harmomise taxes, currency, etc. North and South...for Unionists it doesn’t look good in the long term…
This is not me saying this...it is the Brit. govt. talking about all-island economies.“In independent Ireland SF’s position is the opposite where they appear opposed to the low corporation tax.”
I do not speak for SF, but I believe that they wish to raise corporation tax to 17-17.5%, from the 12.5% rate at the moment, which is still much less than the 30% rate in the UK. A rate of 17% would also still allow the 26 counties, sorry the ‘republic’ or Ireland, to compete with Eastern European countries while gaining extra money for social provision.
Posted by on Nov 03, 2006 @ 03:08 PMGreenflag is onto something about the EU not allowing the reduction in corporation tax. La Hain himself quoted that as the main reason it couldn’t happen in an interview the other day on Radio Ulster. According to the tanned one EU rules forbid differing rates of corporation tax within the one state. The reason for this could be to do with the distribution of EU structural funds and convergence (i’m guessing).
Rubicon could it be that they are appealing to two very different constituencies North & South. In the North SF have the working class Nationalist vote virtually sewn up. The only way they can grow their vote is to attract middle class Nationalists. In the South their strategy appears to be focussed on attracting votes from working class housing estates and those excluded from the Celtic Tiger. It seems they’re cutting their cloth to match with different stances on corporation tax rates North & South to appeal to different types of voter.Posted by on Nov 03, 2006 @ 03:25 PMGreenflag you perhaps slightly confuse political unionism with many people who consider themselves unionists.
Most that I know are pretty effin sick of the begging bowl approach. Some of those people are in business, some are just regular labouring joes and others are I suppose in between.
None of them would be upset if the government said no more money beyond anywhere else in the UK because they know NI has got lucky.
A well trained dog knows when to bark..
Posted by on Nov 03, 2006 @ 04:46 PMBog Warrior,
“Greenflag is onto something about the EU not allowing the reduction in corporation tax. La Hain himself quoted that as the main reason it couldn’t happen in an interview the other day on Radio Ulster. According to the tanned one EU rules forbid differing rates of corporation tax within the one state.”Indeed, this is not and never has been on the table. I simply don’t understand why Gregory Campbell ever thought it could be. Could it be he doesn’t know what he is talking about?
The only time this could have happened was during the GFA negotiations when the goodwill was there from Europe and Ireland was still wheeling and dealing on its own corporate tax rates.
It could have been packaged with a single Industrial Development Authority to get Foreign Direct Investment for the island of Ireland.
Ulster Unionists left triumphant that they had prevented this particularly hideous Northsouthery spectre from materialising and eight years later their successors, the Democratic Unionists are travelling to London and Dublin on bended knee begging for a level playing field for foreign investment.
If I was a unionist and in business I wouldn’t know whether to laugh or cry.
Posted by on Nov 03, 2006 @ 05:08 PMOn the face of it, liquidizing assets to be used on infrastructure improvements is not all that bad of and idea, surly NI could use some of that. However, this type of cash injection is not going to capitalize the NI economy, it will merely be a quick renovation of the factory with little to no cash put to increasing sustainable revenues. Eventually the capital projects will end and we are back to were we started.
The real concern is calling it a “peace dividend”, surely it is money that NI had coming to it anyway. Secondly calling it a “peace dividend” is an indication of which people are going to be involved with the spending decisions, which will lead to massive inefficiencies and misappropriations.
It seems Gordys’ strategy is to sell the house, give all the money to the kids to distract them for 10 years or so, they will be so busy partying and wasting the money, Gordys’ life will be easy and by the time all the money is gone, the kids will be someone else’s problem.
Posted by on Nov 03, 2006 @ 05:33 PMYokel .
‘None of them would be upset if the government said no more money beyond anywhere else in the UK because they know NI has got lucky. ‘
Their elected political representatives have a poor way of showing it . I can just hear the silence from them with regards to the upcoming increases in water charges etc etc .
The whole Unionist be it DUP or UUP approach to economic opportunity reminds me of the bright lad who went to interview for his first job and being asked by what starting slary he was looking for
‘Im thinking of somewhere in the range of 75,000 pounds a year or so depending on the other benefits ‘ says the bould Sammy .
‘W-e-l-l ‘says the interviewer .
‘ What would you say to 6 weeks paid holidays plus all official bank holidays , full private health and dental insurance , a retirement fund where the company will contribute 30% of your gross salary every year and a company car - a Porsche - all expenses paid by the company ‘?
Sammy gasps and says ‘ Wow -are you kidding ?’
‘Yes ‘, replies the interviewer.
‘But you started it ‘!
Posted by on Nov 03, 2006 @ 05:39 PMYokel ,
‘Most that I know are pretty effin sick of the begging bowl approach. ‘
I’m sure but their elected representatives are’nt . My apologies if you are confused but my point was that unionism i.e political unionism by virtue of it’s history in Ireland has very little choice other than to hold out the bowl .
When the Conservatives took away the Unionist Stormont ‘unionism ‘ lost whatever self respect and ‘independence ‘ it might have had . Forty years of abject leadership and head in the sands politics has left political unionism up the proverbial creek without a paddle . Paisley’s near death conversion to power sharing with SF is 30 years too late IMO .
Posted by on Nov 03, 2006 @ 05:52 PMGeorge
‘If I was a unionist and in business I wouldn’t know whether to laugh or cry.’
Well at least it’s a better choice than what faces being a Unionist and being in politics . Their choices are not whether to laugh or cry but whether to crawl on their knees to HMG or prostrate themselves in the hope of ermine .
Gordon Brown’s package neatly sums up the political and economic cul de sac into which Unionist leaders have led their people .
Without the possibility of corporation tax reduction NI will continue to lose out in comparison to the Republic . Thus the stage is set for continuing economic divergence between the Republic and NI .The only way Unionism can reinvigorate the NI private sector ito make it competitive with the Republic is by leaving the Union . It’s the ultimate catch 22 or should that be catch 6 ?
Posted by on Nov 03, 2006 @ 06:16 PMIngratitude isn’t a strong enough term to describe the attitude of the CBI and some of the politicians.
70% OF NI income is via the public sector. It is approx 50% in Wales and Scotland and closer to 40% in England.
NI should take the money and run and be grateful. If I lived in Scotland or Wales, I’d be pretty fed up with NI politicians and their bottomless begging bowl.
Harold Wilson got it right when he used the term “spongers”.
As for Corporation Tax, it is illegal within the EU to have differing rates within the same member state. Also, if NI gets a lower rate why shouldn’t Scotland or Wales?.
A week ago we have Paisley claiming that he will stuff Tony Blair’s words down his throat then we have the DUP on their knees in Downing Street begging for yet more handouts.
There is a big tough ecomonic world out there and it’s time that NI started pulling it’s weight.
Posted by on Nov 03, 2006 @ 08:52 PMThis is not an insoluble problem nor will it be the panacea for all our ills when it is sorted out, as it will be.
Eastern Europe has in many cases a zero rate corporation tax and an educated workforce but their economies while they are improving haven’t caught fire in the way the economy of the South has.
Devolution in NI will eventually lead to an Assembly with real powers which will follow the path the Scots are already following and the economies of the UK will separate. By that time the North and the South will be coming together and no-one in Brussels is going to worry too much about what happens in part of a remote island on the edge of Europe.
Temporary little arrangements on the road to unity will be winked at. Reunification when it comes will be as quiet and non-eventful as the coming together of the Benelux countries.
Posted by on Nov 03, 2006 @ 09:08 PMMichael
Fair enough for some points, but you are wrong on Corporation Tax. The business groups want the main focus to be on reducing Corporation Tax as the only way to make a real change on attracting inward investment and cut the subvention from Westminster. The parties on the PFG Committee, in line with the evidence they had from economic advisors, backed this as the key thing that could make a real difference. Our economy is so weak, so dependent on public sector, that we couldn’t make the difference we need just by growth in existing local firms.
The evidence is not at all clear that different tax rates would be illegal. They have to be under the control of the regional authority, which has to bear the costs of any changes, otherwide it is illegal state aid.
They all have a begging bowl of sorts, but it is directed at the backlog in investment in infrastructure and skills training. In addition, Alliance has pointed out the costs of segregation as an area where we should invest to save future costs.
Posted by on Nov 03, 2006 @ 11:54 PMLib2016
I agree with the general thrust of what you are saying about the European Union. The problem in my opinion is not Europe, but lack of will in Britain, the old saying of where there is a will there is a way applies.
It would be very easy to make a strong case for a more devolved administration here that could be viewed as an entity that is if you like off shore, and though attached is apart from Britain. An entity disadvantaged by the tax structures of a neighbour.
Further NI is in the position of having been through over 30 years of war, with under investment in both the private and public sectors and we must consider the tax precedent set by like the Channel Islands and the Isle of Man.
I have just returned from central Europe and in my opinion there would be considerable support for any such proposal for reasons that are not entirely philanthropic.
With Corporation tax we have to ask will it make a difference. I set up a business with others, we buy, develop and generally sell. In my opinion Corporation Tax reductions are bound to help. If people like myself decide that there is a cost advantage to locate in Belfast rather than suffer the inconvenience of somewhere strange with different laws and customs and often questionable regimes then we will if it is politically stable. Also what is important is not the amount of money we personally have, but the amount of money we have access to. It also doesn’t matter if we develop in NI or abroad as long as our financial trail is through NI as that in itself will give rise to more local employment and greater local tax take.
My grasp of corporate tax and business structures is at times decidedly wanting, but I know people who have an adroit comprehension and it may be useful to also look at related company legislation. What we want is for companies to find it advantageous to operate through NI.
Corporation tax reduction will not solve all woes, you also need to enable people to make better use of the assets they have. Much of the indigenous wealth of NI is tied up in land and property and we need to be better placed to use that potential. I am not for one moment advocating a free for all in planning, but we really do need to look at this area in terms of both wealth creation and sustainability. We need a coherent efficient Planning Service. I think it needs to be fundamentally restructured and its role reappraised. Currently it is repelling investment!!!!!!!!!!
With regards areas like the Shankill you need to encourage and support business that set up there so that there is the possibility of a more diverse local economy. The position in some areas is so poor that in addition to getting rid of organised gangsters you would need probably 25 years of business rate relief. It will take decades and billions to reverse the decline in these areas. If we produce a package of measures for these areas it will also help with the problems of long term unemployment, role models for children, improving outlook etc but it is a major problem that does need to be addressed.
We should also look at increasing the number of University places here and the role of education, appropriate training, trade guilds and all that sort of thing, so that we build up a robust, skilled work force properly monitored and organised.
We are not looking for subsidies from Britain, what we what is less charitable donations and recognition of the real economic problems and a package of measures that would address those problems. We want to reduce our dependency.
Just visiting
The structural costs of segregation really do need to be addressed.
Posted by on Nov 04, 2006 @ 01:47 AMLet face a reality, NI lacks Capitalism, Capitalism would circumvent most of the anti-social problems that exist in NI. We are faced with a bunch of socialists (on both sides) with differing agendas.
Posted by on Nov 04, 2006 @ 01:52 AMJust Waiting - you are correct about the evidence, the Azores case makes it pretty clear how to comply AND vary corporation tax. The rub would be that NI would need to be seen to pay for it.
Without doubt NI will benefit from the UK providing this flexibility. If our politicians don’t succeed (as seems likely) in pushing this, the failure will be for ‘other’ reasons.
Even the most negative view estimates an extra 2.5 billion for NI. Devolution can decide how this money is used - it could achieve a lot.
Without devolution - no £2.5 billion and the block grant will be up for grabs. Politics in the UK is moving on and NI willfully being absent will suit many. SF will be delighted.
Unionism has yet to wake up to the fact that it has few friends - its survival depends on its ability to assess the options available.
I’m NOT saying unionism MUST conceed. What I will say is that unionism can achieve all - it is there if only it could conceive of each human being as equal. If it can - NI will survive. If it can’t - NI will fulfill the SF dream.
Unionism needs to get out of the bibles and start dealing with what unionism means. The DUP have achieved a lot - but ... nobody is interested in keeping the cropies down any more.
It’s OK to be a Methodist, Presbyterian or Catholic - or whatever. Some in SF and the DUP would disagree; but, you voted for them!
Watch what happens when the bible belt think they’ve got their way. It won’t be long before they scream.
Unionism has had many opportunities to share - all refused. That’s fine - there was a time when unionists generated money, were innovative and made Belfast a world-wide landmark for industry. The refusal to share has brought that to nothing.
Keep it up - and get nothing. Think yourselves the God given lemings that you are.
Wilson said it as it was; “SPONGERS”. Ireland agreed about the same lot of wasters and removed articles 2 & 3 just in case. Nationalists north of the border took benefits while the citizens of independent Ireland paid. It’ll be a long time before a SF’r will convince a “Free-Stater” that they have contributed - even though 1 in 10 seem willing to listen.
For unionists the message is simple. You can govern yourselves - or be governed. That means ...
Those still in possession of their anti agreement posters may need to search the attic. With your arse to the moon - nobody much cares what you find.
The SAA is IT for now. Take it or leave it - in the grander scheme it doesn’t matter to anyone beyond yourselves.
Posted by on Nov 04, 2006 @ 02:25 AMA foreign chancellor giving away English money to more foreigners. England must have her independence NOW!
Posted by on Nov 04, 2006 @ 06:43 AMMcGrath,
‘It seems Gordys’ strategy is to sell the house etc ‘,
I’d say Gordon’s strategy is to make into number 10 with as little hassle as possible . He’s not going to give Scot nationalists the ‘present’ of conceding a much reduced corporation tax rate to Northern Ireland .
‘You would na hae a telly the new if it was nae for the union ‘
Just as well that EU ‘restriction’ is out there to provide the Chancellor with cover.
Posted by on Nov 04, 2006 @ 11:05 AMjust visiting, Crataegus, Rubicon
Congratulations on three excellent posts each of which in their own way highlight differing facets of the inherent contradictions within ‘political unionism ‘
JV,
‘Our economy is so weak, so dependent on public sector, that we couldn’t make the difference we need just by growth in existing local firms. ‘
I agree . Which is why there will in all probability be continuing divergence between the Republic and NI in terms of economic performance , growth rate , new business creation etc etc . All of which would not matter if NI and ROI did not share a common border or did not have ‘unresolved ‘ constitutional issues which regardless of GFA/SAA keep the ‘uncertainty’ in play at least as regards the politics of NI .
Crataegus,
‘The problem in my opinion is not Europe, but lack of will in Britain, the old saying of where there is a will there is a way applies.’
Sometimes where there is a will there’s also a wont . Particularly for stubborn cases which have for a generation or more turned away from the economic realities of a changing world .
The lack of ‘will’ in Britain is nothing new . Britain’s relationship with Ireland (and I mean all of the island) has always been neither here nor there . Looking back it seems as if Britain could never make up it’s mind whether we were British , or just another colony or some half way ‘foreign’ country with a different religion .
Today Britain seems to have decided that the Reoublic is indeed Irish and that NI is still in a semi cose condition i.e neither here nor there . Thus the political confusion , the lack of will , the tendency to just muddle through and hope for ?Rubicon,
Well said - Et tu Brutal :)
‘Unionism has yet to wake up to the fact that it has few friends - its survival depends on its ability to assess the options available.’
And on the question of options there are’nt too many out there . The economic world has changed
dramatically during ‘unionisms’ long economic hibernation . Apart from the Republic , eastern europe , China , India and now even South America are targets for global investors .And so to Catch 22/6 . Northern Ireland’s only chance at catching up for a generation ahead is to have a similar ‘economic and tax regime’ as the Republic and they can’t have that option as long as they remain in the Union . The SAA will make ( assuming it’s agreed even) NI even more public sector dependent and would return NI to having Government without a practical ‘opposition’ which is where it all began .
Political ‘unionism ‘ has had it’s day . Time to accept that and move on . Unionists need to look to themselves and ask the tough questions .
No wonder so many head for the garden centres .
Posted by on Nov 04, 2006 @ 11:57 AM
