Monday, March 26, 2007

Northern Ireland- Good News For Taxpayers?

Right- let's talk about tax cuts

We seem to have had so many false starts, we're quite right to be wary about yet another carefully photo op'd "agreement". But the self-styled Big Man and the bearded one who "has never been a member of the IRA" have at least been observed sitting at the same table, albeit a bizarre diamond shape so neither was at the top.

We mainland taxpayers should keep our fingers crossed. The province may be small- only 1.7m people- but it consumes £5bn pa more in government spending than it pays in taxes. And that's on top of the ongoing cost of army security operations there.

And if we tot up what it's cost us since the troubles began in 1969- even setting aside the human toll- we're talking hundreds of billions.

Naturally we got fed up with the whole thing years ago, and have longed for it to be given back to the (southern) Irish. But as we discovered very early on, no way do they want it.

And even though the bombing seems to have stopped, they still don't want it. Because the Northern Ireland economy remains a basket case. Despite public spending at over 60% of GDP, it's still one of Britain's very poorest regions, with per capita GDP nearly 20% below the UK average.

And compared to the South, per capita GDP is around one-third lower: before the troubles it was one-third higher (for a good and punchy overview, see here). Why would the southern Irish want to shackle up to that? They saw only to clearly what happened to those affluent dynamic West Germans when they took on the Ossies.

Now, you and I know what needs to be done: Northern Ireland's dependence on the public sector needs to be slashed, and taxes need to be cut to southern Ireland levels. In particular, in order to attract a much bigger share of inward investment, NI needs to cut its Corporation Tax rate from its current 30%, not to Gordo's promised 28%, but to the Irish rate of 12.5%.

So will the resumption of power sharing do any of that? Would our Westminster politicos let them?

Hmmm... let me see...


But at least they've stopped killing each other.

And at least they've agreed to work together.

The irony is that what seems to have finally knocked heads together was not bullets, nor the Almighty, nor even Tony Bliar. But a public outcry over new state water charges. Aka taxes.

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