In Saturday’s Irish Times, former Taoiseach Garret FitzGerald brought back into focus an all-too-often neglected aspect of the relative economic performance between north and south.. the Provisional IRA’s activity. As he points out, it’s a topic he has covered at several points over the past 35 years [subs req]
“in the year 1953, I found that in that year Northern Ireland’s output per head was 27 per cent higher than ours. However, when I next wrote on this subject (Towards A New Ireland 1972), I found that our economic growth in the 1960s had narrowed this gap to about 18 per cent. Returning to this subject in 2005, I was frankly astonished to find that during the intervening decades this gap in economic performance had not merely been bridged, but had actually been reversed! Our output per head was now 21 per cent higher than that of Northern Ireland.”
He acknowledges aspects of the make-up of the industrial landscape in the north which have contributed to the changing economics during that time, such as the larger textile and clothing industries than the Republic, and the rapidly disappearing shipbuilding and associated heavy engineering sector..
Even if all other things had been equal, this would have left Northern Ireland at some disadvantage vis-a-vis the Republic during the industrial modernisation process of the late 20th century.
The additional factor that has inhibited Northern Ireland from catching up with Britain and achieving a level of output per head equal to that now enjoyed by the Republic was of course the campaign of violence and destruction waged over several decades by the IRA.
This had the effect of hugely discouraging investment in Northern Ireland. But for this factor, its economy would have been boosted at least sufficiently for it to have held its own vis-a-vis the Republic in terms of output per head – even if its lack of freedom to match our corporate tax regime would inevitably have held its growth rate below that of our State.
The scale of the divergence between the Northern and Southern economies created by the IRA campaign now poses what may prove to be an unbridgeable economic gulf between the two parts of our island. Why?
Simply because if Northern Ireland were now to move from the United Kingdom to an all-Ireland state, in order to maintain the living standards of its people we would need to find at least €6 billion to substitute for current British transfers to the North.
And that would require an increase of something like 12 per cent in our present level of taxation, which I greatly doubt our electorate would support.
Short of such a willingness on our part, there would be very few Northern nationalists, let alone unionists, who would be prepared to accept a reduction of something like one-fifth in their living standards.
As someone who has always thought that the division of the island in 1920 was a huge mistake, damaging in the long run to both North and South, I have to say that I deeply resent the damage thus done by the IRA in creating a major fresh obstacle to the prospect of eventual Irish unity.