A Castle Built on Sand

Six months ago I wrote in this column about the very generous welfare payments being paid in the Republic of Ireland, sometimes two or nearly three times the equivalent levels paid in the North(1). As the Republic now plumbs new depths of national indebtedness and near-bankruptcy, it is clear that this attempt at a welfare state was constructed on the flimsiest of foundations, a real castle built on sand.

During the weeks of Ireland’s financial ‘bail-out’ crisis this month, the Northern papers have featured amazed articles about the huge differences between Irish and Northern Irish social welfare and public sector pay levels: the contributory pension £195 per week in the South, £97 in the North; the jobseekers allowance for those over 25, £166 per week in the South, £65 in the North; child benefit for a first child £127 in the South, £88 in the North; a first year hospital consultant’s pay, £156-163,000 in the South, £74,000 in the North; a secondary school principal’s pay £80,500-89,000 in the South, £55,800 in the North; and so on(2).

The outspoken former president of University of Limerick, Dr Ed Walsh, has even suggested the Republic could solve most of its financial problems at a stroke by reducing such payments to Northern levels: “If we were to benchmark public servants’ pay to those in Northern Ireland, we could save €15 billion, and if we were to bring key social welfare benefits down to those in Northern Ireland, we would save a further €8 billion a year.”(3)

In a letter to the Irish Times in late November, University of Ulster economics professor Dr Vani Borooah wrote: “A single person in Ireland pays tax after €18,300; in the UK this is closer to £9,000. In my own profession, a full professor at a university earns on average £60,000 annually; in Ireland this figure is at least €100,000. So get real: you’ve overpaid and under-taxed yourselves too long.”

It is clear that the Republic of Ireland, with a sovereign and bank debt that some economists estimate could reach an astonishing €220 billion by 2014(4) (nearly €55,000 for every man, woman and child in the state) is facing a prolonged period of economic stagnation. The attitude of the ordinary Irish citizen to this appalling situation was summed up by economic commentator, David McWilliams(5), when he said that this was “morally a bill we shouldn’t pay, and financially a bill we can’t pay.”

In these dire circumstances it is hardly controversial to suggest that any moves towards a united Ireland, or even a more economically integrated ‘island of Ireland’, are off the table for the foreseeable future.  North-South cooperation at present and maybe slightly expanded levels is probably as much as we can reasonably expect.

In mid-November I chaired a session at a superb conference at University College Dublin entitled ‘The Agreement Generation; an Opportunity for Change?’ at which a wide range of young people in their twenties and thirties from both parts of Ireland gave their views on  political, economic and cultural ways forward for the island. It was striking how little animosity was expressed by the DUP and Ulster Unionist speakers, Richard Bullick and Kenny Donaldson, towards the Republic of Ireland. “There’s a new equilibrium and maturity in our relationship with the South, while mutually recognising the separation of the two jurisdictions,” said Bullick, who is an advisor to First Minister Peter Robinson. “The real success story of recent years is that the North-South relationship has been taken off the political agenda, and no doubt it will continue to grow in the years ahead.”

Donaldson, whose home is in South Armagh, said North-South cooperation would happen “if it is seen to be to the mutual benefit of both jurisdictions” and stressed that it was in Northern Ireland’s interest that there should be a strong economy in the Republic – “for so many reasons we are reliant on each other.”

Maybe it is now time, given that the Republic of Ireland is fighting a rearguard action to maintain its status as a sovereign nation, for Northern nationalists also to start reconsidering their position. Nobody wants them to abandon their long-term aspiration of a united Ireland. However in the shorter term perhaps they should resign themselves pragmatically and thankfully to living in a United Kingdom which is also facing very large public finance cuts, but whose banks are at least functioning and whose economy is beginning to emerge from recession (to the extent that the British government can offer an unpopular loan of nearly €8 billion to its Irish “friend in need”, in George Osborne’s words). At the same time they should content themselves with the levels of North-South cooperation that the Irish and British governments are willing to engage in and capable of sustaining. I won’t be holding my breath.

Andy Pollak

1 ‘Does the South now have a better welfare state than the North?’ A Note from the Next Door Neighbours (45), May 2010
2 Belfast Telegraph, 24 November 2010, p.9
3 Mapping a slump…Dr Ed Walsh urges radical action. Irish Independent, 16 October 2010
4 For example, Dr Constantin Gurdgiev, Sunday Independent, 28 November 2010
5 The Pat Kenny Show, RTE, 29 November 2010

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