Why is Derry So Poor ? Part II – The Reasons

How did Northern Ireland’s second city find itself at the bottom of the pile? Before considering this it is important to acknowledge that there is nothing inherent to Derry which condemns it to the status of an economic outlier. Even its location on the north-western fringe of Europe should not be a major impediment – as proven by the relative success of locations like Galway, Limerick, Cork and Inverness.

To the contrary, Derry features many of the things you would expect to find in any prosperous city. It has an excellent quality of life – with an abundance of parks and greenery and beautiful scenery on its doorstep. Derry also has good schools – some of which rank amongst the best non-fee paying institutions in the UK – and the city produces many talented people. It also has a vibrant cultural scene, which has improved further since its year as the UK City of Culture (2013). The cost of living in Derry is low, and the city has a compact size with little genuine congestion. It is also famously friendly, and quietly resolved years ago the type of cultural issues that still plague other parts of NI (such as parade disputes). It is even striving to overcome the thorny issue of its name, through the official adoption of the ‘Derry-Londonderry’ moniker. And it is a genuinely beautiful and historic city that has largely avoided the type of architectural horrors that have blighted many other locations. Derry should be precisely the kind of place which attracts those with the skills, income and freedom to pick and choose where they live. Instead, its people leave at a young age, rarely to return, and few are attracted to take their place. So what has turned a city with such positive attributes into an economic outlier?

1. Partition

Ireland was partitioned along religious lines in 1921, with no genuine consideration of its economic or social impact. Nowhere was impacted greater by this than the city of Derry. Derry’s economic and social hinterland had long included a substantial portion of County Donegal, and overnight the city had an international border placed across its backyard. The post-partition Boundary Commission acknowledged the damage that splitting Derry and Strabane from their hinterlands would cause by recommending parts of east Donegal be transferred into the new Northern Ireland, but the proposal was quietly dropped.

The relatively sudden imposition of partition was an economic shock for Derry. The appearance of tariffs and checks on trade across the new frontier, plus different prices, taxes and currencies, undermined the city’s traditional status as the main export route for people, goods and livestock from north-east Donegal. Partition also impacted the city’s famous shirt-making industry, which for decades had relied on the use of home workers in Donegal (‘outworking’) and the crisscrossing of parts and products between the two counties. The division of that economic eco-system via an international border helped contribute to the start of a slow and steady decline in Derry’s shirt industry. Though the city’s heavy reliance upon that trade was itself a contributor towards Derry’s later downward shift in fortunes.

2. A Narrow Industrial Structure

Derry contained many industries at the start of the 20th century but was most famous for its shirt making. By the time of partition, 44 shirt factories were providing employment for 8,000 people in the city (18% of its entire population), and a further 10,000 were employed elsewhere in outworking. Derry was “the shirt maker to the world”, and the city’s prosperity had become heavily reliant upon it. With more people employed in shirt making than in all other industries combined, the city was essentially an economic monoculture.

The period after partition saw a slow but steady decline in the city’s shirt industry, punctuated only by the brief prosperity of World War Two. By the time the Troubles broke

out in 1968, Derry’s economy was languishing and unemployment was rife (particularly amongst Catholic men). A major investment by US manufacturer Fruit of the Loom provided the city’s textile trade with one last swansong in the late 1980s, until those jobs were transferred to Morocco some years later. In 1990 Derry had 18,000 manufacturing jobs. Today it has only 3,000. Crucially – alternative employment sources neither grew locally nor were introduced externally to fill the void it left. Derry’s economy has not adapted to its post-industrial reality – and the disappearance of its shirt industry has had a similar impact as the closure of mines did on communities in Britain (though over a longer period of time, and not at the behest of government). In hindsight, it was probably unwise for Derry to bet its proverbial shirt so heavily on any single industry. But no-one could have foreseen partition and the impact it and other dynamics would have upon the city’s economy. And no-one could have expected that the decline of the city’s textiles industry would be left largely unmanaged without alternative employment introduced. Which brings us to a more controversial contributor to the city’s current economic predicament.

3. Discrimination

Industrialisation triggered a migration of labour into Derry from surrounding areas at the turn of the 20th century, with a significant impact on the city’s demographics. By the 1960s two-thirds of Derry’s population was catholic, and the Unionist Party was alarmed at the prospect of losing a city that held a central place in the Protestant psyche. It responded at a local level with gerrymandering to ensure the council remained in unionist hands, and at a Stormont-level by stifling the city’s development to stop the growth of its Catholic population. A period of chronic under-investment in the city therefore followed, in which the basic tools Derry needed to prosper (e.g. infrastructure, skills and employment) were largely denied it, with economic investment heavily skewed towards the east of the Bann instead.

Derry’s railway lines (the city had four at one stage) were wound down. Its cross-border rail services were scrapped, and only the Belfast line remained (thanks only to a last minute reprieve). In common with many other towns in the west which also saw their railways scrapped, promised motorway replacements never materialised. The city also missed out on a number of key public investments that it rightly felt entitled to. The first of these came via the 1963 Matthew’s Report – tasked with creating an economic and population counter-balance to Belfast. It recommended that a ‘new city’ of Craigavon be built between Lurgan and Portadown, despite being less than 30 miles from Belfast. The report also recommended a number of other towns for development, all of which were located in the east (Antrim, Ballymena, Bangor, Carrickfergus, Downpatrick, Larne and Newtonards). Despite Derry’s appalling shortage of housing and employment at that time, and the impoverished state of the west of the province, Craigavon became the focus of a £140m Stormont investment (approx £2bn in today’s money) before the Troubles brought the project to a premature end. The Derry Journal remarked in February 1964 that “There is a deep political motive behind the Belfast government’s eagerness to implement the grandiose project of a brand new city in North Armagh. It seems significant that the new city, a lesser Belfast, so to speak, is to be planted where there is the most solid support for the Unionist government”. The Englishman who led the design team for the project, Geofffey Copcutt (previously chief architect for the new town of Cumbernauld in Scotland) resigned – informing the press that the project was unwise, and that in his view Derry should be developed instead. Critical of the Northern Irish government, Copcutt stated “I have been disenchanted with the Stormont scene…. Stormont has showed signs of a crisis-ridden regime, too busy looking over its shoulder to look outwards”. And he remarked that “religious and political considerations” were hampering plans for the New City. Copcutt confirmed in later years that he resigned because he had been asked to ensure the new city did not upset the area’s religious voting balance.

The insult of Derry being overlooked as the preferred counter-balance to Belfast was trumped two years later with the 1965 publication of a report into the creation of a second university for Northern Ireland. The committee which prepared the Lockwood Report did not contain any Catholic members and had not been asked to recommend where such a new university should be located. It nonetheless chose to make clear that the Protestant town of Coleraine was its preferred choice of location, rather than NI’s second city. This proved to be an indignity too far for Derry and led to the formation of a huge cross-community campaign, led by a young teacher called John Hume. It was to be in vain, however, as the Stormont parliament voted for Coleraine. Derry unionist MP Robert Nixon claimed that the Stormont Cabinet had “directed Lockwood” towards Coleraine, and he complained that “nameless, faceless men” within his own party had been campaigning against the city as part of an “anywhere but Derry” strategy. The Lockwood Report added further insult by recommending the closure of Derry’s small Magee College (a pre-partition remnant of Trinity College Dublin), but it was reprieved as a sop to the city. Fifty years on, the award of NI’s second university to Coleraine still rankles in Derry – and the city still awaits a proper university of its own.

Derry has paid a high price over the years for the chronic under-investment caused by decisions such as these. But so too has Northern Ireland – for only two years after the university decision, the thirty year ‘Troubles’ erupted on the streets of Derry.

The old Stormont government was abolished in 1972, and a new post-Troubles power-sharing Assembly took its place in 1998. Yet suspicions remain that political Unionism’s attitude towards Derry has changed little in that time. Government Ministers are supposed to make decisions in the broader interests of their entire jurisdiction, yet examples abound of unionist ministers neglecting or undermining Derry in modern times. In 2005 Derry was chosen as the landing point for an EU-funded transatlantic data cable and Telecentre (called Project Kelvin) which would offer businesses located there superfast communications. Without warning the project was shifted to Coleraine by then Enterprise Minister Arlene Foster, instantly causing outrage in the city. A fudge was eventually offered in which Derry and Coleraine both received the cable connection and a Telehouse data centre. Nine years later when the creation of Northern Ireland’s first (and still only) Enterprise Zone was announced – offering tax incentives and simplified planning processes to high-tech businesses – the location chosen for it was Coleraine, rather than Derry, with the rationale given that Coleraine contained a Telehouse. Later that same year (2016) DUP Communities Minister Paul Givan announced the creation of 170 new civil service jobs within NI’s Social Security Agency, as part of a new £8m UK government contract. He allocated 150 of those roles to his party’s electoral stronghold of Ballymena, with the remaining 20 granted to Derry (doubtless to keep their Sinn Fein government partner quiet). This was despite the significant disparity in unemployment between the two towns suggesting the allocation should more fairly have been weighted the other way around. Especially as Derry’s small allocation was filled by internal transfers, resulting in no net increase in jobs or income for the city.

Derry’s status as a predominantly Catholic city led to chronic under-investment in the key ingredients it needed to prosper (jobs, skills and infrastructure) at the hands of the old Unionist Party. Fifty years on, and suspicion remains that little has changed. The difference now, however, is that NI is no longer a one-party Unionist state – and the SDLP and Sinn Fein have both been involved in government here. So why have nationalist politicians also achieved little to alter the fortunes of the north’s most deprived city when in positions of power?

4. Electoral Reality?

The 2017 Assembly election saw the DUP win just one more seat than Sinn Fein, and for the first time in NI’s history, unionist parties did not secure a majority vote. Both the DUP and Sinn Fein are now locked in an ongoing electoral arm wrestle over who will be NI’s largest party (and get to nominate its First Minister). It is a high stakes tussle for the very soul of Northern Irish politics, and could have huge implications for our constitutional future. Derry is Northern Ireland’s second city, returning 5 MLA’s to the NI Assembly. But that pales in comparison to the 20 MLAs returned by the city of Belfast – almost a quarter of the entire Assembly (and with more still elected from the surrounding parts of Greater Belfast). As we know, elections in NI are largely about identity, religion and tribal affiliation. Whilst Derry is an overwhelmingly nationalist city, and appears unlikely to change in that regard, Belfast’s demographics are in flux – with the city becoming increasingly catholic. A combination of those shifting demographics and its large cohort of MLAs ensure that Belfast is likely to be the north’s key electoral battleground for the foreseeable future. Sinn Fein currently have 7 MLAs in Belfast, versus only 2 in Derry. And the DUP have 5 in Belfast, and narrowly retained their single seat in Foyle by only 600 votes. So in the tussle for NI’s electoral soul, Derry has been reduced to fringe importance – particularly for the DUP, but strategically also for Sinn Fein. So when faced with a choice of delivering for Belfast or Derry, which way does electoral reality suggest these parties will lean?

Decades of chronic under-investment has stunted Derry’s population. And the irony of Northern Ireland finally having democratic politics (after 50 years of one-party domination and 30yrs of violence) is that this stunted population has diminished the city’s electoral importance. Has Derry been ill-served by both nationalist and unionist politicians since the Good Friday Agreement, because the city just isn’t important enough electorally to either? And to what extent can the disregard of Derry’s plight by those in positions of power be explained as a conscious phenomena, rather than an inability to see beyond Belfast?

5. A Belfast-centric Outlook

Fifty years on from the start of the Troubles, and many feel little has changed for Derry. NI as a whole may be reaping an economic peace dividend, but there is limited evidence of it extending beyond the Glenshane Pass. If an entire city anywhere else in the UK or Ireland had been lagging behind for so long, it would have become the focus of dedicated government attention long ago (as happened in Liverpool, Glasgow and London’s Docklands). But not so in a Northern Ireland which exists primarily as a Belfast city-state.

Belfast dominates NI in every facet of life – politics, economics, employment, media, culture, transport, sport, tourism, events etc. It is a situation in which the key levers of power and influence, and the people controlling them, are primarily based in Belfast. And those people are often unable or unwilling to see much beyond there. Our civil servants and Stormont governments have in the past made nods towards the need for regional balance in Northern Ireland, but no genuine attempts have been made to address Belfast’s overwhelming dominance of Northern Irish life. As a result – the vast majority of public funding, focus and attention continue to be instinctively directed towards the Greater Belfast region. It has reduced Northern Ireland to the equivalent of a city state – a poor man’s Singapore, with rain and painted kerbstones.

Examples abound of this. In economic development – Invest NI create significantly more jobs in Belfast than they do in Foyle, despite Derry having the UK’s highest unemployment. Between 2011 and 2014, for example, Invest NI gave Belfast’s four constituencies £211.4m in assistance, while Foyle received twelve times less (£17.8m). Invest NI (coincidentally headed by a former DUP Special Advisor) claim that their funding is led by demand from potential investors, but no credible voices in the North West believe they are doing enough to improve the economic fortunes of the west in general or Derry in particular. On civil service jobs – whilst the Department of Agriculture is scheduled to relocate to Ballykelly, the North-west still has a below average level of civil service roles. Figures show that the majority of NI’s civil servant jobs are located in Belfast. And of NI’s 26 former council areas, only four (Castlereagh, Armagh, Craigavon and Belfast) have an above average allocation of civil service jobs, highlighting just how concentrated these roles are in specific pockets of the east. In sport – £53m has been spent to-date by the Northern Ireland Executive on the creation of top-class stadia for football, rugby and Gaelic games in Belfast – including £9m on a controversial Casement Park redevelopment that has yet to receive planning permission. Once approved, that project will attract a further £61m of public money – bringing the total investment in Belfast’s sporting infrastructure to over £100m. Meanwhile Derry not only has the worst stadium provision of any city on the island, but its council-owned Brandywell Stadium received only a partial upgrade recently after it was unable to secure Stormont funding to complete a new stand there.

An inability to see beyond Belfast is an affliction that affects all politicians here – whether nationalist, unionist or unaligned. In 2016 Sinn Fein Finance Minister Mairtin O’Muilleoir introduced a pilot ‘Business Empowerment Zone’ scheme to boost regeneration in working-class areas. That provided an opportunity for a nationalist Minister to prove they understood the need for regional balance across NI and had a desire to do something about it. Instead, his chosen locations were the Falls Road and the Newtonards Road – a Nationalist and a Loyalist district, both in Belfast. Such is the way that things are done in Northern Ireland.

Decades of under-investment in NI’s western half have reduced the province largely to the status of a city-state that revolves around Greater Belfast. It is a problem that would not be left unchallenged if it was happening anywhere else in the UK, and it helps to explain why even in the modern era places like Derry are often ignored by those in power. Though it is also important to look much closer to home for our final consideration of the reasons for Derry’s economic predicament.

6. Local Leadership

Derry must also look to itself for some of the answers as to why it is being left behind. In particular, at the vision and ambition of its own civic leadership and institutions.

Accusations are regularly levelled within Derry that key local institutions lack genuine ambition for the city, and are too willing to settle for second best. Phrases like “the crumbs from Belfast’s table” and “Good enough for Derry” are often heard whenever people perceive a willingness amongst local bodies to uncritically accept whatever the city gets offered. A prime example of this is the furore over Translink’s proposal for a new railway station for the city – located at the currently vacant 143yr old former Waterside station. Translink has submitted plans for a mediocre refurbishment of the building, with no trains allowed inside and a car park dominating the city’s riverfront. As a junior partner in the proposal, Derry City and Strabane District council stand accused of failing to appreciate the regeneration, tourism and place-making opportunities presented by the development, and of uncritically nodding along with a plan designed solely to suit Translink’s needs. And with almost 3,000 signatures on a petition opposing the plan, Londonderry Chamber of Commerce has also come under fire for backing it publicly despite admitting they hadn’t even looked at the counter-arguments beforehand. Derry’s civic leaders were also asleep at the wheel when it came to Ireland’s bid to host the 2023 Rugby World Cup, from which the city was originally excluded (whilst Belfast had two stadia involved). It took a grassroots campaign by Derry people based in London to force the issue onto the agenda locally, and to ensure that Derry was included in the final bid.

Derry certainly showed ambition when it put itself forward for (and won) the accolade of UK City of Culture in 2013. But five years on there is little or no physical legacy to show from that landmark year. And fifteen years after the Ministry of Defence handed two large former barracks to the NI Executive for public use, both sites sit largely vacant and under-utilised. The locally-based ILEX regeneration company that had been tasked with their redevelopment had its contract terminated by the NI Executive in 2015.

Derry’s civic leaders have also struggled to determine a credible yet ambitious economic strategy for the city over the years. For the last two decades, the focus has largely been on the creation of a retail-led economy – offering low-pay and unstable employment in a sector that is now being decimated by online shopping. Tourism is rightly identified as an area with great potential for the city – yet little is being done to enable Derry to genuinely compete with alternative attractions like Titanic, the Causeway Coast and the Wild Atlantic Way. Whilst £80m of public money was spent creating a world-class Titanic-themed visitor centre in Belfast, Derry’s big idea for tourism is a poorly-defined £11m Maritime Museum that is a number of years behind schedule, and will be located away from the water in a former military base used primarily by land rather than naval forces. Meanwhile Derry’s famous 400-year-old Walls – the largest monument in public ownership in NI, and a facility that should be the city’s golden goose – lacks any visitor or interpretive centre, and regularly falls victim to inappropriate or insensitive alterations and development (often at the hands of public bodies). And Derry’s civic leaders continue to vest their hopes for major university expansion entirely in Ulster University, despite repeated disappointments from doing so, when it might be strategically wiser to hedge their bets (and chivvy Ulster along) by pursing alternative HE providers at the same time.

One area where Derry City and Strabane District Council has performed admirably is on the subject of a City Deal (something I will explore further in Part III of this article). Derry was significantly ahead of Belfast in the development of a proposal for City Deal status when the UK Chancellor announced that the initiative would be extended to NI last Autumn. Yet as I outlined in a recent article, the city still found itself snubbed over the issue : https://sluggerotoole.com/2018/01/04/anger-over-city-deal-snub-as-derry-grows-restless-for-change).

Finally – the role of ordinary folk must also be considered, Derry people are proud and passionate about their city. But years of constant neglect and indignities from on high have left an air of resignation and negativity about the town. If Derry is to reach its true potential, a change in the mindset of its citizenry will also be required – to be more positive and aspirational, to celebrate success wherever it occurs, and to be eager to find solutions from within rather than wait for permission or answers from elsewhere. In short – if no-one else will do it, Derry people need to be more willing to use their undoubted talents to drag their city up by themselves. I will explore this notion further in Part III.

Running any council is never easy. Running a city like Derry – with its combination of long-term neglect and ‘second city’ envy – must be harder still. Derry has had to contend with more than most other cities, and still has a lot of work to do just to become average economically. Given the city’s current economic standing, there is a view in some quarters that Derry would have little to lose from some genuinely brave and ambitious thinking. Yet it is Belfast that has the reputation for being forward-thinking and dynamic at a civic level within NI. Its council has unveiled an ambitious twenty-year plan to attract £1bn of investment to the city – creating 50,000 new jobs and increasing its population by 70,000. Derry’s comparative growth strategy essentially asks for the same much-needed basic ingredients that the city has been seeking for decades (e.g. roads and university expansion), but little else. And the council is predicting a stagnation in Derry’s population, despite the young age of its citizenry and a stated desire for 5,000 extra students. Derry’s growth strategy is a workaday proposal which, if achieved, would help steady the city’s economic ship. But it would do little to genuinely help it catch the wind.

Derry requires significant external investment to put it onto a footing where it can become genuinely competitive in a globalised world. But it must also be more willing to challenge itself – to be more creative and ambitious and to harness the talent of its own people if it is to genuinely fulfil its potential. Because no-one will be able to match the passion for improving the city that can be shown by it’s own people and institutions.

Part III of this article will look at some of the ways in which a much brighter future can be secured for Northern Ireland’s second city.

For Part I of this article, click here…

Steve Bradley is a native of Derry, who is now based in England. He works as a regeneration consultant, writer, commentator and social entrepreneur. You can follow him on twitter: @Bradley_Steve