Sunday, August 12, 2012

Economic woes

In a week that we have learned that 11,000 private sector jobs have been lost in two years a leading economist has warned that the North's economy is facing meltdown.

Attempts to lower the North's Corporation Tax rate appear to have failed. Although we hear Finance Minister Sammy Wilson insisting that the issue will be revisited in the Autumn, the fact is, The North will not receive a special dispensastion for a reduced CT rate. The main reasons for this are that if NI were to receive a lower CT rate from the rest of the UK, there would be nothing to stop British firms based in London from moving operations to The North in order to avail of the lower CT rate. The other reason is that if NI got a lower tax rate Scotland, Wales and North East England would be screaming from the rooftops for equal treatment. With a Scottish referendum on independence in the pipeline, offering NI a lower CT rate while refusing to give it to Scotland is a high risk strategy for the Tory-Lib Dem coalition. It could be enough to swing the referendum for the 'Yes' side.

With a CT rate of 24% a deterrent to Foreign Direct Investment (FDI), the key strategy used to attact FDI to The North has been Sustainable Financial Assistance (SFA). This is basically EU funding used to offer foreign companies cash to locate to the region. This economic lever used to attract FDI to NI is due to be abolished by the EU next year. Given that SFA sounds very much like bribery this should not come as a surprise.

With the two most powerful economic levers either being phased out (SFA) or unattainable (CT), The North does not have many hands left to play. There is one hand though, a pocket of aces, if only it could be seen!


  1. One in five people (22%) in Northern Ireland are living in poverty.
    Pensioner poverty in Northern Ireland has risen by 27%.
    Between 2009 and 2011, 34% of working-age adults in Northern Ireland were not in paid work. This is higher than the Great Britain average but similar to Wales.
    Children on free school meals are less likely to attain expected levels of educational qualifications.
    In 2011, 38% of working-age women were workless compared with 28% of working-age men. This gap is closing and the gap in full-time hourly pay rates between women and men has closed.

  2. “The London Olympics, which were hailed as a reaffirmation of Britishness, have in fact made Scots more likely to support independence, according to a poll published in yesterday’s Sunday Times.

    The Panelbase survey found that 12% of respondents said that the Olympics had made them more likely to vote in favour of independence, as opposed to just 8% of Scots who say they feel more British because of Team GB’s performance.

    The poll also found that the gap between support for independence and support for the Union is now only nine points – requiring a swing of just 4.5% for a Yes vote in 2014. 35% of Scots say they intend to vote in favour of independence, with 44% saying they intend to vote against.

    The poll of almost 800 Scots also showed that 29% believe Scottish athletes should compete for Great Britain after independence while double that, 58%, say Scotland should represent itself.

    The findings show the opposite effect to that predicted by the anti-independence parties and the London based media. It was widely claimed that the London Olympics would create a wave of pro-British sentiment which would make Scots less inclined to vote in favour of independence in 2014.

    The results of yesterday’s poll suggest that Scots feel more alienated from the UK’s version of Britishness as a result of the Games.”