'Return to Stormont not guaranteed to improve Northern Ireland's economy' senior economist says

A senior Northern Ireland economist has said a return to Stormont will not solve the economic problems of the region.

As world leaders descended on Belfast to mark the anniversary of the Good Friday Agreement Dr Esmond Birinie said the next 25 years of Northern Ireland must be focused on the economy not on politics.

He said there was a need for "hard decisions" on public spending.

It comes after a leaked document on the Stormont budget obtained by UTV which indicated the potential for the government to take a tough financial stance in the months ahead.

The document states the Executive is "losing over £700million a year by failing to introduce revenue raising measures".

There is a specific table comparing the decisions the NI Executive has made with those in Scotland, England and Wales.

It also highlights how people in England and Wales pay more for tuition fees, and that every other part of the UK has domestic water charges.

Dr Birnie says Northern Ireland's economy has failed to catch up with the UK as a whole.

The troubles reduced the country's GDP by up to 10% and by 2019, just before the Covid-19 Northern Ireland's economy was roughly 80% the size of the UK average.

It also has the poorest productivity of any UK region.

Dr Esmond Birnie was critical of the "use of statements about the economy as a stick to beat people towards a particular political outcome: a return to Executive alongside an acceptance of the Windsor Framework".

He also argued while the 25th anniversary of the Good Friday Agreement provoked a lot of analysis it is a pity some of it turned out to be 'mutual self-congratulation,' stating the deal was overwhelmingly about politics "It wasn't designed to promote efficient government or the long-run growth and development of the economy".

Although at the time, an emphasis on politics was necessary the next 25 years need to be much more about the economy and while he argues there is some dividend to Stormont returning if the devolved government runs well: "The hard evidence is lacking that during 1999-2023 Stormont did provide such good government."

The senior economist criticised the political parties here for being unable to make tough decisions even when the executive was up and running saying: "there was a tendency for all the NI Parties to act as though they were still in Opposition."

"There is a limit to how far the can can be kicked down the road. At some point hard decisions, such as, structural reform of the health service, introduction of domestic water charges, have to be taken."

Dr Birnie outlined a number of reasons why Northern Ireland's future outlook must be based on economics including the inability of the UK government to subsidise our finances.

Northern Ireland's fiscal deficit currently sits at 38%. This means more than one-third of our public expenditure is financed by Westminster and Dr Birnie is unsure how long the British Government will able to continue with such support:

"Levels of national debt post-covid imply that the UK Government has much less scope to subsidise Stormont with financial packages and other special arrangements."

Dr Birnie also spoke out against what he called 'wild claims' made by President Biden on his visit to Northern Ireland, such as tripling the size of NI's economy and the Presidents assertion that hundreds of American companies are waiting for Stormont to return to invest here.

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