>From MCELROY@zodiac.rutgers.edu Sun May 23 13:37:50 1993 thanks to the author, Mike Tomlinson, for passing this on to reg.ireland. ********** The Cost of the North Article submitted to the Irish Times by Mike Tomlinson, Department of Sociology and Social Policy, Queen's University, Belfast. "Three billion pounds", Sir Patrick Mayhew told Die Zeit, "for one and a half million people - we have no strategic interest. We have no economic interest in staying there". So, it seems, the Secretary of State for Northern Ireland would "happily" pull Britain out of the North, giving a much needed boost to the British Exchequer in the process. The cost to Britain of sustaining the North appears to be rising rapidly. When direct rule was established in 1972 it was #181million. By 1980 it had climbed to just over #1billion and by the mid-1980s the subvention was put at #1.5billion. By 1990 it was #2 billion and now, if we can believe the figures, the cash cost has risen by a remarkable 50% in three years. The figure quoted by Mayhew is an estimate of the difference between what is spent in Northern Ireland and what is raised there in taxes. There is nothing new in this deficit. Northern Ireland was financially unviable from the start. It was unable to pay the Imperial Contribution fixed by the British at partition. This was supposed to cover Northern Ireland's share of UK-wide expenditure on defence and maintaining a diplomatic service. The severity of the unemployment crisis in the 1920s and early 1930s, coupled with the costs of criminal injuries and policing in the aftermath of partition, led to the waiving of the Contribution and an acceptance that Northern Ireland could not pay its way. This was further institutionalised in the Social Services Agreement Act of 1949 under which Britain guaranteed to underwrite the costs of the British welfare state in Northern Ireland. Total public expenditure in the UK was #250 billion in 1992/3. How this is shared out territorially as between England, Scotland, Wales and Northern Ireland, is not easy to estimate because not all of the expenditure of government departments has an identifiable territorial element. Where comparisons can be made, the figures show that per capita public expenditure in Northern Ireland is actually lower for Transport, Health and Environmental Services than it is in Scotland. For the largest programme, Social Security, spending is only marginally higher in Northern Ireland. But for other programmes spending is higher, in some cases three or four times higher. In 1991/2 #300 per capita was spent in Northern Ireland on Trade, Industry and Employment compared to #68 and #130 for England and Wales respectively. The cost of the RUC and the Northern Ireland Prison Service, #536 per capita in 1991/2, is three times the cost of the equivalent services in England. This territorial calculation should not be confused with the Northern Ireland expenditure programme which is the responsibility of the Secretary of State. This programme, shown in the chart, amounts to #7.5 billion for this financial year (1993/4). [Data for Pie Chart] 1993/4 Northern Ireland Public Expenditure Programme (million) Social Security #2,503m Police, Prisons #902m Health, Personal Social Services #1,318m Education #1,234m Housing #244m Agriculture #258m Trade, Industry, Employment #472m Roads, Transport #174m Other #93m Environmental, Miscellaneous #277m The Northern Ireland programme excludes several types of expenditure incurred in the North. The cost of the Court Service, some spending on agricultural and the cost of the British Army, including the Royal Irish Regiment are not shown in the chart. The additional costs to the British Army of policing the North are carried under the UK Defence programme. A figure for these used to be routinely published in the public expenditure White Papers but this was dropped in the early 1980s. The Northern Ireland Office was unable to supply an up-to-date figure when contacted last month. This is a significant omission. The build up of military and police personnel in the North in recent years has hardly been remarked on by commentators. Full-time RUC and military personnel stood at 22,500 in 1984. There are currently 19,100 military personnel and 12,900 uniformed RUC officers in the North and by next year numbers are expected to have risen to the extent that there will be one Army/RUC member for every 3.7 Catholic males between the ages of 16 and 44. As a recent Defence Select Committee report pointed out, the Northern Ireland commitment has created a serious 'overstretch' problem, one indication of which is that a third of the troops in the North are not infantry but are drawn from gunner regiments, for example. They have to be trained for an infantry task then re-trained for their 'real' job. Arguably, the cost of the conflict now exceeds the #3 billion subvention. Using the last published figure and scaling up for current troop levels and inflation, today's additional cost of the British Army can be conservatively put at around #470million. Add to this the #1,600 spent per prisoner each week, the cost of the RUC, criminal injuries and damages, the courts, and the Security Service (MI5), and the total law and order budget incurred within Northern Ireland itself is of the order of #1.5 billion. But then the conflict carries costs outside of Northern Ireland. The Irish government has spent an estimated IR#2.5 billion over the years because of the conflict in the North, and is currently spending IR#200 million per annum. In Britain itself, there are the costs associated with the routine functions of the Prevention of Terrorism Act, MI5 and the police service, as well as those directly inflicted by the IRA in the form of death, injury and damage to property. The Home Office recorded 48 IRA attacks in 1992, evidence of an escalating campaign which has cost 27 lives since 1988. If we believe the loss adjusters, the two recent City bombs caused damage approaching #1.8 billion. All of this suggests a substantial 'peace dividend' for Ireland and Britain if a lasting peace could be negotiated. More positively, the surge in economic development which could arise from both peace and Ireland working as a single economic entity should not be underestimated. Unemployment in the North currently costs the British Exchequer #950million per annum. There are therefore substantial medium-term savings to be had from an economic upturn. Similarly, there could be considerably gains from EC funding. The North does relatively badly out of the structural funds and it is barred altogether from the Cohesion Fund, inspite of its Objective One status, because it is a 'region' not a 'nation'. One implication of Mayhew's #3billion is that there is a massive price tag to a British withdrawal from the North. This is not only questionable but also needs to be put alongside the economic advantages of a peaceful, integrated Ireland. NOTE: The above was published in the Irish Times on 1st May 1993. The last two sentences were omitted.