#StateofState “The billion pound deal negotiated by the DUP to support the Conservative Government was well designed”

This is the time of year Deloitte release their State of the State report which reviews the performance of the UK government and the devolved administrations. The report in its entirety can be read here. What I will focus in here is the findings from Northern Ireland.

Austerity

The report points out the general public tiredness with austerity by noting the following;

After the June 2017 general election, Chancellor Philip Hammond reflected that voters had become “weary of the long slog” of public spending cuts and as a result, many commentators heralded the end of austerity. The Chancellor’s assessment certainly reflects the sentiment in our citizen survey, which finds that the public’s attitude to austerity has hardened.

It goes on;

While Autumn Statement 2016 committed to greater capital spending, austerity is more concerned with spending on day-to-day administration and public services – and there is no indication that this spending is set to return to the levels of growth seen in the decade before the financial crisis.13 In fact, government departments are expected to come under particular pressure in 2019-20 when their resource budgets face the third steepest fall of any year since this austerity decade began.”

Of course, these spending plans may change. But if the government remains committed to eliminating the remaining £58.3 billion of its annual deficit, a blend of continued austerity and tax adjustments will almost certainly be required. OBR analysis suggests that if deficit elimination continues at the pace it is expected to be falling by 2021-22, the deficit will not be eliminated until 2025-26.

How does this feeling break down by region?

Northern Ireland actually translates (from this perception anyway) with the public feeling least hit by the various budget cuts implemented from Westminster than many other regions. This is probably due to some measures taken by the Executive to mitigate cuts in areas.

Collapse of the Executive

Responses from local interviews

A government without ministers is unprecedented for a major part of the UK, and the absence of executive decision-making could become increasingly apparent. Under legal advice, civil servants have continued to maintain government and press ahead on programmes in accordance with guidance from ministers when they were last in post. But increasingly, that guidance is becoming out of date. Civil servants may well be minded to stretch their mandated powers in the public interest, but could face judicial review for doing so. But many will be aware that as the months go on, policy decisions that require ministerial approval have not been taken. That could come at an opportunity cost for Northern Ireland, especially where public sector reform stagnates and decisions that could save money are not taken.

It goes on;

The next steps remain unclear. Direct rule from Westminster could restore budget mechanisms to the Executive and provide for ministerial decision-making. Several interviewees in our research considered that direct rule could well begin by the start of 2018, though some reflected on whether the existing devolution model may need to be rethought for a future Northern Ireland government.

Tory/DUP Deal

The billion pound deal negotiated by the DUP to support the Conservative government was well designed. Crucially, it splits investment in public services between funding to relieve immediate pressures and investment in transformation to continue reforms of the health and social care system.

Brexit

In Northern Ireland, as in the rest of the UK, the dangers of Brexit are at present more apparent than any benefits that could emerge. But as responsibilities are repatriated to the UK from the EU, there could be potential to strengthen Northern Ireland’s powers.

Economically, Northern Ireland has remained resilient in the face of the uncertainties that are inherent in Brexit. Its economic growth of 0.3 per cent in the first quarter of 2017 was higher than UK-wide growth and would put Northern Ireland’s annual growth at 2.4 per cent compared to the UK rate of 2 per cent.31 However, numerous factors – not least the border, the strong agri-food sector and high levels of EU funding – could make Northern Ireland’s economy particularly exposed to
Brexit uncertainties in the year ahead.

Overall, the report highlights public weariness with tougher economic times, however this is at odds with the governments priority to bring the deficit down. In a Northern Ireland context, what comes across is the uncertainty from no Executive, but there is praise for the DUP deal & how it is structured.

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  • ” in transformation to continue reforms of the health and social care system” what reforms are these exactly?

  • MainlandUlsterman

    “In Northern Ireland, as in the rest of the UK, the dangers of Brexit are at present more apparent than any benefits that could emerge.”
    People have to be given the option not to go through with this.

  • John

    From what I understand 30% of German car output comes to the UK. Behind this is a huge network of manufacturers with a significant work force depending on these sales. Whose interests are served shafting the UK.

  • Salmondnet

    Deloite represents just another (largely internationalist) special interest group of the kind that offered us all many prophesies of doom during the referendum campaign. What it says is no surprise and will be taken seriously only by those who oppose Brexit anyway. Its views do not constitute a reason to revisit the referendum (except on the usual EU basis of forcing people go on voting until the get it right – in the EU’s view).
    While there is no justification at all for another UK wide vote,if NI wants to opt out it does have a route. Support Irish unity and demand a border poll. No serious resistance is likely on the Eastern side of the Irish sea.

  • Roger

    Bang on with your last pint. UKNIers are a privileged bunch!

  • SeaanUiNeill

    I do not believe that anyone wishes to shaft the UK. But if the current inept attempts to blag on negotiations continues the EU is offered the choice of simply dropping decades of standards legislation or acting punitively towards the unrealistic and bizarrely unreasonable demands of the UK.

  • Gary Thompson

    The north could opt back into Europe through a border poll.

  • Sean Danaher

    Living as I do in the NE of England there is a belief that Labour run areas are being deliberately “shafted” by the Tory government. See for example this now rather old article https://www.theguardian.com/society/patrick-butler-cuts-blog/2015/jan/14/council-cuts-burden-falls-again-on-north-and-inner-cities. Your chart above does not separate Yorkshire, the NE and NW of England but There is belief that the NE as been hardest hit.

    I would say there is little detail on the DUP deal, but there is considerable resentment here that NI is being unfairly funded. Our road system is possibly even worse than NI with large parts of the A1 between Newcastle and Edinburgh still single carriageway and Salmon fishing in pot holes is predicted to be the next recreational sport!

  • George

    From what I’ve read its 20% of German car exports to the UK. It’s 57% of UK car exports to the EU. Doesn’t stop many in the UK from thinking it will shaft the EU.

  • William Kinmont

    The harm is done , it wouldnt be a vote for the status quo but a return to a Europe in which UK had no influence as why would Europe take them seriously again.Some woild see it as a signal to accelerate the ferderal program.
    Best we can do is hope for some sort of special status that could potentially be a best of both worlds.

  • Reader

    Sean Danahar : Living as I do in the NE of England there is a belief that Labour run areas are being deliberately “shafted” by the Tory government.
    For instance, Labour run Birmingham being shafted by having £55bn spent on HS2?

  • Karl

    The DUP negotiated a deal to support a bigger deal that will shaft NI. They tied themselves into supporting a government that will make this happen. Their return is 1.5 bn that causes resentment in the remainder of the UK and can only be disbursed when an Assembly is in place (not any time soon and at the gift of SF) or by direct rule, which is being assiduously avoided by the UK govt. The lack of flexibility in their position is amateurish. The lack of an ability to dot the i’s and cross the t’s given the length of the negotiations to ensure the money was delivered regardless was incompetent.
    The DUP have been DUP’ed by The Tories.
    If the DUP dont like this, they can withdraw support and deliver Jeremy to number 10.

    I know the common line on here is that the DUP played a blinder to get the money, with Nigel being named Best negotiator evs, but strategically they have tied themselves to a sinking ship, been comprehensively out thought by SF and have just delivered a border poll wrapped up as EU membership within 3 years.

  • Sean Danaher

    I cant speak for Birmingham per se; for us it is very far south, but there are many who hold the belief that HS2 is a vanity project and will shaft Birmingham in that it will make even Birmingham a dormer town for London. There are many headlines predicting “HS2 will Suck the Lifeblood from the North.”
    In terms of infrastructure there have been many years that for every £1000 spent in London £2.50 has been spent in the NE. See for example https://www.theguardian.com/news/datablog/2014/aug/07/london-gets-24-times-as-much-infrastructure-north-east-england

  • Skibo

    A positive border poll would remove one of the criteria to a trade deal between the UK and the EU.

  • Skibo

    The price of a German car will rise by 10%. That won’t stop BMW and Merc owners from upgrading their cars.
    What will happen is an increase in inflation and a possible lift in interest rates. How will people on mortgages cope?

  • John

    According to reliability studies VW group, Merc and BMW are grossly over-rated, over priced and over here. So I would not be wasting any sympathy on those individuals. As far a mortgage holders are concerned that is a bit more complicated. House prices are clearly completely silly, and driven by government policy benefiting no-one except money sellers. A sensible government in Stormont exercising proper tax controls could address this.

  • John

    No-one except the continually growing collection of bureaucratic zealots that is the EU.

  • SeaanUiNeill

    It’s like law John. You can claim that the judge got it wrong, but he must attempt to work with things as they are. The EU simply cannot let someone trade freely in Europe who does not hold their goods in conformity with European standards. The British negotiators are looking for some apparent relaxation of the regulations that bind EU members, and crying fowl when they are told that it is impossible. Look at the Norway deal, that’s the probable best we could expect, and it will cost the administration fees as ongoing payments.

    You have been sold a hyperbolic fantasy about the exit from Europe by people too lazy to seriously examine the difficulties. Do not be fooled by a scoundrel wrapping him (or her) self in the Union Flag and promoting you a future of milk and honey with a Porsche thrown in.

  • John

    If the EU cannot let someone trade freely in Europe who does not hold their goods in conformity with European standards why are we importing basic foods from around the world that are worlds away from EU standards of production with production costs far below EU costs.
    In any case to be a member of a club, the club has to exist. The EU is bankrupt, will the EU even exist in 10 years.

  • SeaanUiNeill

    You should perhaps actually read up on how EU trade actually works rather than guessing. Your comments on EU world trade brought that scene to mind in the last episode of Hamish McBeth where McCrae senior told his son about how you worked out decimal points by “guessing” and how he never seemed to “ guess right”. If you wish to comment meaningfully you really need to do the background work, over and above that of driving up your own blood pressure.

    I’m afraid I’ve stopped using my own crystal ball, so what will happen ten years hence may have to wait until nearer the time in my own understanding. What a gift! To actually know the future with such certainly.

    I’m afraid also that you may still find what actually happens over the next few years to be a disappointment on many fronts. The UK is already boasting nine out of ten of the poorest regions in Northern Europe. We should soon be in serious competition with some of the poorer countries in Africa. “ Be careful what you ask for, you might just get it” as my psychoanalyst mother in law used to tell her clients.

    Although you can easily access any number of the documents prepared by the EU to offer guidance on trade requirements with a simple internet search, I’ll still post a few links later on today when I get to my MacPro. If you read them you’ll perhaps become aware of just how seriously European standards are taken in such matters.

  • SeaanUiNeill

    John I know anyone can say the words “ a sensible government at Stormont” but is it not actually something of an oxymoron in the current period?

    And are you contemplating UDI? I thought that such taxation matters were reserved to Westminster, and I doubt that any government at Westminster is going to challenge the “ money sellers” any time soon!

  • John

    Yes you are absolutely right as far as the current period is concerned. However I understood that limited local control over taxation was a prospect. History teaches us that apartheid was constructed piece by piece over several years. Even with limited powers it is possible to at worst disrupt the “money sellers” and their hangers on

  • John

    I am afraid 40 years working in agriculture has shown me that the playing field is not level. Incrementally over the years regulations have evolved to dramatically increase production costs here in Ireland. We both know that food imports from outside the EU are not subject to the same rigors and therefore costs in Ireland.

  • SeaanUiNeill

    It is worth looking at the regulations which actually govern trade from outside of the EU. There are serious constrictions on anything other than raw materials for industry. Any form of manufacturing, including the manufacturing of food, is affected. I will post links for you tomorrow.

    In all sincerity I can tell you that whatever is negotiated (or not) by Britain it will not succeed in improving the lives of farmers here in any sense, quite the opposite. That is why I have been so surprised at how many farmers around me have voted against staying in the EU. I genuinely believe they have been seriously imposed upon by those recommending the exit strategy.

    And I’m not unfamiliar with the situation of farmers here, and with the enormous amount of regulations they are required to conform to. I have family in farming and discuss the endless difficulties of the current situation with them regularly. But that is the way all the whole world is going anyway, and these problems are like to increase rather than be lifted by exiting Europe. In many ways, despite how things have been represented, the EU has been a protection from the sort of tariff problems which the loss of the larger European market will bring up in a situation of world trade, especially if the insanity of Britain becoming tariff free without reciprocal arrangements is actually implemented.

  • SeaanUiNeill

    The problem remains that the bankers hold all the cards and are going to be able to lobby any government, especially the devolved small local administrations such as Stormont. One has only to look at situations such as the meeting between the large US developers who purchased Northern NAMA property with DUP blessing a few years back to see just how flattered our local boys are by the attentions of the “ money sellers.”

    I simply do not see anyone at Stormont, other than the Green Party, or People Before Profit having any will to effectively challenge such people. The larger parties seem to think they have too much to gain by co-operating with them.

  • John

    All true particularly our great leaders 40 year love affair with property developers. However concerted efforts to force down property prices would be a considerable benefit to the Irish economy.

  • John

    The simple reality is that the last 40 years has seen wealth destruction on a vast scale in agriculture. Agricultural lending to agriculture in the early 1970s was £200 to £300 million, in 2017 this figure is in excess of £1.1 thousand million. Mortgages on farm homes was simply unheard of in the 1970s, agricultural equipment was purchased with hard cash, an acre of land was £1,000 to £2,000, and could be bought and paid for out of profit made from the purchased acre. In 2017 an acre of land is allegedly £10,000 +/- which can yield no profit at current product prices.
    Obviously the last 40+ years has been a golden era for agriculture in Ireland. Even the money-sellers came through this golden era bust. Great stuff this EU

  • SeaanUiNeill

    I’m in entire agreement. My cousin in South Dublin has, of course, benefited by the increase of value, but talks about his leafy suburb having been ruined by pushy people without any sense of community who see their homes as assets rather than as somewhere in which to have a real life.

  • SeaanUiNeill

    Part of the pushing up of prices has been thevlaxity with which farm numbers and the subsidies on land have been handed out to anyone such as major local companies buying up land and letting conacrecto real farmers intilnregulations on farm payments tightened a few years back. There has also been the scam of family members qualifying for numbers by holding an acre or two, and getting payments for land they did not see from one years end to another.

    This is not the EU, but is local practice which the EU has begun to address. The situation is different in other places, where the funds have been strictly directed as farmers who really farm.

    What you are complaining of is the Globalisation process, and the EU is, if anything, a firewall on this, despite how it looks to you. Most of those engaged in taking us out of Europe are simply nvolved in that view of the world and will leave you in even more difficult exposure to world markets than ever the EU! That has been one of my most serious worries about the exit. While local food producers are squeezed by open borders to world trade, the actual prices will go up as the supportcaspects of the EU are set aside in the interests of free trade.

  • John

    In the late 1970s as a very young naïve salesman I spent the last week of every month collecting money. I visited customers and after the obligatory tea and scones and moaning about the weather, the lady of the house was dispatched to get the “tins”. Two tins were set on the table, one contained cheques, milk marketing board cheques, pig marketing board cheques, mart cheques etc, the other tin contained some cash from selling fat cows, calves, spuds broken mouthed ewes etc. I rummaged through the cheques to get close to the statement amount and made up the difference from the cash tin. It was not unusual for cheques to come back from the bank because they were in fact out of date. What this meant was that these cheques had been cheerfully resting in the “tin” for 6 months because they were NOT required for any particular purpose. At that time there was hundreds of salesmen like me visiting thousands of farms. Clearly the amount of liquid cash kicking around the system was a very, very large sum. So in the last 30 or 40 years we have gone from virtually no debt and lots of liquid cash to vast levels of debt, no or very little liquid cash, hardly a spectacular success for agriculture in Ireland. Globalisation, the EU and growing army of bureaucrats has certainly contributed mightily to this wonderful achievement. A last simple question where the hell did the all the money go?

  • SeaanUiNeill

    It’s complex to really unpack but a simple answer would be “ the 1%”!

    The problem was that with a general debt culture being filtered in even here under Thatcher, the peace and the Belfast Agreement aftermath was marked by a heavy sell of loans to everyone. With none of the habits of careful and intelligent borrowing which the professional classes of the past had approached such things with, the newly enslaved imagined that this was a kind of “free money”, and with farmers and other small businesses being told to borrow to grow and expand their business, people started running just ahead of payments. As the value of farm land rose, so it could be used as collateral on loans at the inflated values. So now we have most of the community focused on making interest payments as their principal activity in life.

  • John

    So you believe that Maggie and Ronald (Regan) and their “Big Bang” other wise known as the de-regulation of the banks is responsible. And that this is all the result of a “play” by the banks which simply put was, give the muppets access to silly levels of credit and they will spend more and more driving up the price of houses, land and cars etc to the point they will have no choice but access credit and pay lots of lovely interest. We will have Christmas every day and pluck the turkeys at our leisure, if it goes wrong we will be “too big to fail” and the politicians will bail us out. In the mean-time we will stroke the politicians and bureaucracy who will then lay on heavy doses of the mushroom treatment (dark and lots of s__t) to keep the muppets in line.
    Personally the moral of this tale is, 40 years of this experience with politicians and bureaucracy does not augur well for the future.
    What have we got left to loose?

  • SeaanUiNeill

    It is always dangerous to say “what have we got left to loose?”

    Someone with a dark sense of humour might be listening from on high. He might even let the current negotiators pull off the horlicks of the exit negotiations that they appear to be making already, and then the last forty years, big ugly warts and all, will appear to have been a golden age!

    The Athenian statesman Aristides was put up for exile by his political enemies once. As the vote was underway he spoke to a voter who had asked his help in writing a name on his shard of pottery through which the vote was cast. Asked to put the name “Aristides” on the shard, he asked “why?” I’m sick of hearing people call him “ Aristides the just” was the reply. As a good democrat, Aristides wrote the name on the shard for his fellow citizen.

  • John

    In a nut-shell, better the devil you know, don’t rock the boat. At this point you seem to agree that our great leaders over the last forty years have shown repeatedly that whatever interests they have been serving certainly were not the interests of those that put them in positions of power. Our public servants have acquiesced over the period. The system is broken, trying to fix it is another sticking plaster on top of many others. We have shafted our children and grand-children, maybe something different will yield solid foundations on which to build.

  • SeaanUiNeill

    But in a situation where these things are very far from being recognised, let alone addressed, there are still aspects of the EU which offer all of us a thin layer of protection from such things. I’m seriously worried about being left out in the cold with people apparently so unconcerned about human freedoms such as Michael Gove and Boris!

  • John

    There are apparently 195 nations on this earth. The EU accounts for 27 of them, arguably the EU has amongst the slowest growth rates amongst all the nations of the earth. Why oh why would anybody want to exclusively hitch their wagon to the slowest donkeys on the planet. If you are expecting a bunch of over-paid, over-fed bureaucrats over here to protect you rather than their gold-plated pensions, the very best of luck with that.

  • SeaanUiNeill

    Because the trade agreements which “the slowest donkey on the planet’ can negotiate will favour us rather better than anything we can negotiate on our own. Economy of scale., the EU coming only after China in its share of world trade. A single nation acting alone simply cannot trade with China, Europe or the US from any position of strength. That is why we are paying those over paid over fed bureaucrats in Europe to fight our corner against even more over fed over paid bureaucrats who have our interests even less at heart.

    But this will all become crystal clear after 2019, anyway.

  • John

    Being amongst the slowest growing economies out of a total 195 in the world has nothing to do with trade agreements either existing or future. It has to do with the fact that the EU is in very bad financial shape a less kind individual than I, might even say bankrupt. Bureaucratic systems like the EU hoover up wealth to protect the system, not the “people” who provide wealth. There are many nations amongst the 195 that will experience real and profound growth during the coming decades and will require increasing trade with industrial nations to maintain and drive local growth. All we have to do is compete. In the mean time the EU will continue to eat it’s young to maintain the bureaucratic monkey on it’s back.

  • John

    The only people in danger of being left out in the cold are the layers and layers of overpaid and gold-plated pensioned administrators.

  • SeaanUiNeill

    The problem is that there is no way we can compete with a third world which the Globalisers are exploiting to undercut every major economies manufacturing structures. Without the EU we are exposed to this. When it develops, the patterns of exposurexwill be obvious, and those now managing the exit appear to have other intent than their communities interests. But by the time all of this is evident it will be far too late.

  • John

    Clearly there is not a moment to loose, we must show engineering businesses in Derry, Tyrone, Armagh and darkest Fermanagh the error of their ways, we must tear down the big signs at their gate advertising jobs for welders etc at £16 per hour. Making things and selling them to Africa, Austrailia, New Zealand, USA and the EU is clearly ruinous and must be stopped forthwith. Deviant behaviour like this must be stamped out until our dear bureaucrats have had their day in the sun.
    Unfortunately the genie is out of the bottle, our great leaders and betters neglected to inform these miscreants that the can not compete in the big bad outside world, they are doing it anyway and VERY SUCCESSFULLY.

  • SeaanUiNeill

    Successfully, because they are trading through economy of scale trade treaties already negotiated by the EU.

    You need to look deeper than appearances, especially to the sort of openings for individual countries trade wise. Free trade…..well..,…

  • SeaanUiNeill

    Yesterday’s version, and this year the EU is just passing the US in growth. All those useless beiroctazs appear to have been rather necessary after all. You do not perhaps imagine that the attempt to go it alone in world trade will somehow not require the development of a whole layer of our own bureaucracy to administer a similar pattern of accountability in order to work with our new trade partners? It’s not just the EU, it’s how the world is now functioning, ie: Globalisation.