Of all the stories from this week’s release of state papers, one stands out fresh across the decades.
In 1997, US diplomat Martha Pope, the senior aide to peace talks chair senator George Mitchell, said Northern Ireland was "awash with money" for special interest groups and community organisations and suggested this was why many did not want to change the "status quo".
A note from the UK’s Washington embassy added Pope “thought it unfortunate that the political structures in Northern Ireland allowed the politicians to behave irresponsibly, knowing that the British government would pick up the tab”.
There are two types of excess funding being complained about here: blank cheques for groups, creating vested interests; and blank cheques for public spending in general, insulating politicians and the electorate from bad decisions.
There had been a view that security funding supported a web of British and unionist vested interests – Northern Ireland's own little military-industrial complex
Both were connected and about to become more so, as the 1998 Belfast Agreement put the vested interests closer to the levers of power.
Pope was ahead of her time with her observations, but only just.
At the end of the Troubles in 1994 the annual UK subvention to Northern Ireland was £6 billion at today’s prices. The security bill was £2 billion, split 60/40 between the police and army.
Set against these vast sums and the hope of reducing them, the cost of buying off special interest groups and community organisations was viewed as trivial. Even substantial increases in public spending were felt justified as an investment to bring costs down: the taxpayer’s “peace dividend”.
This was the financial context of the peace process, well understood in its early years, but its naivety soon became apparent. The ratchet effects of the extra spending kicked in and kept going – the subvention is now more than £10 billion.
Vested interests
Ironically, Pope was said to view loyalists and “to a lesser extent the Women’s Coalition” as exceptions, offering more selfless leadership. Loyalists are now the classic delinquent recipients of “good behaviour” funding. The Women’s Coalition acquired a comic reputation for filling quangos. Nobody was too noble to be swept off their feet by the tide of cash.
There had been a view that security funding supported a web of British and unionist vested interests – Northern Ireland’s own little military-industrial complex. This was one area of public spending that did fall precipitously: the army is gone and the PSNI has half the RUC’s budget. However, huge sums were spent on early retirement for police officers.
The quiet success of this raises the question of why others were not pensioned off the stage instead of paid to strut around it for the next 20 years. Some would not have left willingly but they could have been compelled to do so. Far more cynical compromises were eventually tolerated. The IRA was allowed to keep the proceeds of a bank robbery to help its members “stand down” in 2005.
Covid has caused all this to be forgotten again, as the whole world has written itself blank cheques – including another £2 billion for Northern Ireland
Describing Northern Ireland as “awash with money” could be seen as an insult to those experiencing deprivation, especially across the swathes of inner Belfast and Derry where such conditions remain endemic.
The greater insult is not to ask how it has rained money on these areas for years to little effect. Much funding has undoubtedly gone to local gangsters, ensuring the suppression of affected communities.
Yet far more must have ended up in the pockets of professionals, administrators, legitimate private and public sector organisations and everyone else who has come to make tackling this form of deprivation their business – a paramilitary-industrial complex. Pensioning that off would be considered inconceivable.
‘Paramilitary slush fund’
The Renewable Heat Incentive scandal revealed taxpayer largesse had turned Northern Ireland’s entire administration into a cargo cult. Another story broke at the same time, in late 2016, involving Stormont’s Social Investment Fund – christened the “paramilitary slush fund” by the SDLP – through which the DUP and Sinn Féin were disbursing grants to favoured groups.
Despite this, new thinking had begun on financial discipline. The same DUP and Sinn Féin administration had slashed civil service employment and agreed to bear the cost of cutting corporation tax as part of a wider plan to “rebalance the economy”. A strategy for tackling paramilitarism accepted funding had to be matched with criminal justice sanctions.
Stormont’s subsequent collapse caused more cash to be offered to get the show back on the road, but it was less than demanded and came with new conditions of probity and oversight in January’s New Decade, New Approach deal.
Covid has caused all this to be forgotten again, as the whole world has written itself blank cheques – including another £2 billion for Northern Ireland.
Novel theories about how government deficits might be financed have been seized on by Stormont’s glorified county councillors to wish away all budgetary constraints and consequences. It is one of the political tragedies of the epidemic that Northern Ireland will have to relearn the dangers of having too much money.
Pope’s comments are an agonising reminder of how long this lesson is taking.
