>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.
