Consequences of Tory victories
Sir, – Boris Johnson has made another hole in Labour’s red wall in the north of England. The result of the Hartlepool byelection may create waves beyond “the mainland”. The traditional Labour supporters who have deserted the party will not be long satisfied with the despatch of navy patrol ships to Jersey and other flag-waving gestures which do not butter any parsnips.
They will expect more tangible gestures of appreciation and these will have to be paid for.
Eoin Burke-Kennedy writes that Northern Ireland was one of nine UK regions to have a fiscal deficit in 2019 (“The North’s £9.4 billion subvention and the cost of Irish unity”, Business, May 3rd) but he does not go on to point out that its deficit is the largest on a per capita basis. Northern Ireland’s annual “fiscal deficit” is of the order of £10 billion or about £5,000 for every man, woman and child living there.
An interesting question is how far that annual £10 billion would go in dealing with deprivation in disadvantaged areas in the North of England and Wales.
And for how long will British taxpayers in deprived communities either continue to be unaware of the extent of the annual subsidy to Belfast or, if they are so aware, be happy to continue with the subvention?
While the subsidy continues to flow there is probably no compelling incentive for politicians in Northern Ireland to look at the challenging alternative of converting to or seeking to develop something approximating a functioning economy. That explains the apparent indifference to the economic opportunity offered uniquely to Northern Ireland by the Brexit protocol. It also explains the attitude of Northern Ireland politicians (unionist and nationalist) to the issue of corporation tax.
Northern Ireland’s business leaders had long argued that they were at a disadvantage in competing for international investment because the UK corporation tax rate was substantially higher than the Irish 12.5 per cent rate.
In 2015 the UK government published proposals to devolve corporation tax powers to Belfast. The Fresh Start Agreement committed the Northern Ireland Executive to reducing the tax rate to 12.5 per cent from 2018.
It did not happen, and in January 2020 the NI Minister of Finance Conor Murphy announced that the Executive “was not actively pursuing” a lower rate of corporation tax for Northern Ireland.
The explanation was that, for Northern Ireland to secure a reduction in the tax rate, it would have to agree to a reduction in the block grant it receives from London to fund public services.
Tellingly, politicians in Belfast preferred the certainty of the cheque from London to the potentially significant but uncertain benefits of a lower corporation tax rate. – Yours, etc,
Sir, – Boris Johnson has won another resounding victory in the UK despite being plagued by scandal and investigation.
Hartlepool has returned a Conservative MP for the first time in 57 years by a near two to one margin, illustrating once again that centre-right coalitions plus working-class concerns equals a potent electoral formula.
When, if ever, will Fine Gael HQ learn this lesson? – Yours, etc,
Sir, – Despite their decisive victory in the Hartlepool byelection, Denis Staunton believes that the Tories should have done even better (World, Analysis, May 7th).
But it looks like it’s curtains for Sir Keir Starmer not Boris Johnson. – Yours, etc,
Dr JOHN DOHERTY,
Co Dhún na nGall.