Monday, 27 September 2010

Normality still within our grasp in Northern Ireland - guest post.

The following is a guest post by Dr Phil Larkin


So, over the past days we have seen Tom Elliott, the “traditionalist” UUP leadership candidate achieve a very convincing win over his “moderniser” opponent, Basil McCrea. Initially, this author was a little disappointed at this result, believing that the Party itself, as well as progressive, outward-looking unionism needed someone like McCrea, a science (engineering) graduate who completed his first degree at an English university. However, on reflection, it is possible that, if McCrea and moderate unionists stand their ground within the Party, and do not decide to abandon it, and if Tom Elliott means what he says about the UUP continuing to be a welcoming place for the likes of McCrea and his allies, then the Party will continue to have a future. I do not believe that the “modernising” rump of unionists should even think about forming a new political grouping, but rather stay and fight for progress and common sense to prevail within the already existing UUP. The nearest example of what happens when a moderate breakaway faction leads a larger political grouping to form their own is provided for by the Social Democratic Party (SDP), in Great Britain, which led nowhere except oblivion.

Almost three years ago, I wrote an article for another blog advocating the unity of the two main unionist parties in Northern Ireland, the UUP and the DUP. Although I have no regrets about having written the article, I now view such a development not only as undesirable, but impossible also. There are simply too many irreconcilable differences between the different branches of unionism for a merger to work, and this is not just a simple question of metropolitan versus cultural unionism. Since becoming the major unionist grouping in Northern Ireland a number of years ago, the DUP have shown little inclination to move forward the narrative of local politics in any dynamic way. In addition, the all-important unionist middle-classes, who remain so detached from the world of politics, are still given no real incentive or encouragement to re-engage, something which is vital to the future of unionism in the long term. In certain respects, their somewhat traditional attitude towards local government curiously mirrors that of Sinn Fein, in that the vision of what they hope to achieve in office is largely concerned with “pork barrel” aims, that is, dividing up the spoils of the annual grant. That local politics could still be like this in 2021, the anniversary of the founding of Northern Ireland, is a profoundly depressing prospect (see the recent “Union 2010” series in the News Letter).

There is one key issue that the new UUP leadership will have to face up to if he wishes to reverse the fortunes of his party, and that is the local economy. I will proceed to explain later in this article.

The Persistence of Localism
As with everybody, some things in life just irritate me, and motivate me to comment in a more acid and angry fashion than I usually do. Sometimes no amount of harsh words can convey realities to people, but I intend here to have a go. The fact that during the summer a gang of rioters in West Belfast could still occur, and generate both serious newspaper comment, and recriminations from both SF and Unionist sources (with each basically blaming the other) does not surprise, but merely nauseates me. This carries on despite all the millions of pounds which have been spent on community development over the years, and especially in the last decade. During the era of the troubles, too many local people (even in the bigger cities and towns of Northern Ireland), journalists, politicians, community workers, even academics, got into the habit of believing that Ireland ended at the turn of their street, Europe ended at the end of their locality, and the world ended at the outskirts of Belfast, Derry, or wherever.

Not that ordinary local people can be entirely blamed for this, since in their attitudes they have been encouraged by people who really should know better. For instance, one local academic has pretty much made his reputation on research into the interface areas and peace walls in Belfast, and on this somewhat flimsy premise has exported himself and his ego around the world’s troubled spots. The Human Rights Commission in NI still limp on with their (mortally weakened) crusade to place responsibility for large areas of social and economic policy into the hands of the judiciary. Even worse, Mary McAleese, President of Ireland, demonstrated her wide and deep knowledge of European and international history and politics a number of years ago by comparing Nazi attitudes to European Jews to Protestant attitudes to Catholics in Northern Ireland. This comment did not at the time attract the vitriol which it merited, but it was instructive of a certain mindset, which fully justified Eoghan Harris’s description of “seeing world affairs from up the wrong end of the Falls Road” (which itself is derived from Churchill’s withering condemnation of Chamberlain as “that old town clerk, seeing world affairs from the wrong end of a municipal drainpipe”).

Why do certain leading politicians, academics, community workers and the likes, encourage such insular views? Bluntly, I believe that much of the reasons for this lie in simple vested interests. In the academic world, the amount of sponsored research which the troubles and “peace process” gave rise to, was (and still is) phenomenal, and helped make the names and careers of many researchers and leading academics (as well as providing some with comfortable lifestyles, foreign sabbaticals and outsized egos). Some of this work was and is genuinely useful, and I can think of at least one Professor in the Province whose liberal humanism, decency and beneficial research will live on long after he has retired, not only within Northern Ireland but the whole of the UK. However, much of the usefulness of other work will, quite frankly, end at the boundaries of Belfast or Derry. Similarly, why should a paid community worker in Northern Ireland (often well-paid) wish for a contented community where the vast majority of locals are in decently-paid, skilled employment, have either bought or are buying their own houses or flats, and can afford to go on foreign holidays each year? What would the community worker do then, if locals could manage without his/her ‘guidance’? Again, bluntly, it suits perfectly some political factions in the North for pockets of high unemployment and poverty to remain in their areas of control, since it is from urban dissatisfaction and grievance that they derive much of their strength.

On this occasion, I still believe that in time Oliver Cromwell’s final words to the Rump Parliament could be equally well applied to many publicly-funded associations and individuals in the Province: “You have been here too long for any good you have done, in the name of God go!” What guidance and advice are “community leaders” imparting to the young in deprived areas, when a substantial minority of them can still carry out so much damage – to their own areas and property?

The Future of Local Politics
Boiled down to logical conclusions, there are two ways of continuing with politics in Northern Ireland. The first is to continue with the present scenario of “identity” or “community” (or just religion based) politics, until one side, either the unionist or nationalist, prevails, the other lot are subdued, and the latter agree to adopt the beliefs and identity of the other. Even if it were desirable, such an outcome is, in fact, impossible. However, on a daily basis, we do see examples of this type of politics practised. It often takes the form of SF making some motion or gesture to “wind-up” unionists, to which the latter will often rise. The danger of persisting with this form of politics is that it invariably perpetuates tribal myths and folklore, and inspire some future generation, either unionist or nationalist, to employ violence out of a sense of pent up communal grievance. Dissident republicans have already shown ample signs of taking up this historical baton. The present and following generations of politicians in the North have both the opportunity and, indeed, the duty, to prevent this from coming about.

The second is to change the background against which politics are conducted in Northern Ireland. There are a number of facts that certain unionists either have not yet grasped or do not wish to grasp. The most important of these is that the constitutional status quo and future of Northern Ireland, whatever republicans may argue, has been resolved very much in favour of unionism. At the time of the referendum on the Belfast Agreement, Professor Paul Bew wrote in the Sunday Times “The Unionists have won, they just don’t realise it.” This is as true today as it was in 1998. The reality for SF is that the ambitions which they harboured for a role in all-Ireland politics have come to very little, and I have written elsewhere on this blog of the problems which may very well beset republicanism over the next decade or so. Yet the impression that they are leading Ireland in the direction of a 32 county, Gaelic and socialist republic still remains strong, with this mirage being remarkably difficult to expunge, and it continues to be a “horror story” which still frightens many unionist electors. Can a scenario be envisaged where such illusions can be seen by both communities for what they are? I believe so, and will go on to explain.

Changing the Backcloth to Politics
In the run-up to the recent General Election, David Cameron spoke about making Northern Ireland an “enterprise zone”, lowering the rate of corporation tax to match that of the Republic. If he and the Tories really meant what they said on this issue, then we in NI have a much better chance of achieving a parity rate of corporation tax with the Republic now than at any time under Gordon Brown’s premiership. If put into effect it has been suggested that NI, with its educated and skilled workforce, together with the reasonable costs of goods and services (at least, by comparison with the Irish Republic), would be one of the best locations (if not the best) in Europe for foreign investment. This would not occur overnight, but would build up gradually, year on year, attracting ever greater levels of international investment, and absorbing the labour of progressively more of our graduates and skilled workers, of which we have many. It is even conceivable, as Mark Finlay has suggested in the recent Newsletter “Union 2021” that, within a generation, NI could be mentioned in the same breath as Israel, Singapore, Hong Kong and Taiwan in terms of business start-ups, and a technologically advanced private sector. The Province of Ulster was built upon industry, not on public employment and shopping centres, and this fact is often overlooked. We live in a fast changing age, and other world centres of economic power are developing to provide competition for, if not rival, that of the United States. One of these centres is China, and as Colonel Tim Collins has pointed out (in the same Newsletter series), we have, in NI, living quietly in our midst, a huge advantage in the form of a sizeable local Chinese population, many of whom have maintained links with their country of origin, and who could act as the bridge between the local economy and the awakening giant that is the Chinese economy. Colonel Collins also pointed out that although NI is no longer famous for trades such as shipbuilding and linen, we do still design and manufacture many of the components which are later assembled in areas of the world where labour is far cheaper than back home. There is huge potential in the local economy, if only if it was made more attractive to invest in. The first step in unleashing this potential, and the first big step towards doing this would be to lower corporation tax to the same level with that of the Irish Republic, and if any of those companies which invest in NI are carrying out definite research and development in any scientific or other area, then they should pay as close to zero corporation tax as possible. This is what the UUP should be focusing upon single-mindedly at the moment, as loudly and clearly as possible.

Obviously there would be a price to be paid for this ability to reduce corporation tax, namely, a deep cut in the annual block grant from Westminster, but surely this would be better than the tepidly tolerable mediocrity in which we presently languish in the Province? In addition, it is surely not beyond the ingenuity of local and national politicians, in conjunction with economists, to devise a means by which the cuts in the annual block grant under the Barnett Formula are made gradually, rather than in “one feld swoop.” Out of work himself in the not-so-distant past, this author came in contact in places like the local sports centre and swimming pool with many young men, just finished their training at various building trades and skills, who are now facing a life on the dole, or, if they are lucky, a post in a call-centre or Sainsbury’s. Are these young men unemployed because they are lazy? No, and in fact many of them told this author in no uncertain terms just how desperate they were to work, and finally put into action the skills which they had spent years learning. Surely we owe these people the hope of a better future than they have now? Surely the days of inter-communal sectarian grief belongs to the ages, and both ordinary unionists and nationalists have concerns which are by no means dissimilar?

There are other, more political, benefits to be gained by the UUP in leading a powerful and vocal campaign to rebalance the local economy in favour of private growth. The first would be the re-engagement of the middle-class unionist (and to a lesser extent even the moderate nationalist) electorate with local politics, something which has been missing for a long time. Even in NI, the reality is that the old notion of society being pyramid structured, with a large working-class at the bottom is no longer true. Rather, the middle-classes prevail, in a society now structured like a rugby ball, with the centre portion prevailing over the extremes of wealth and poverty. Why are such voters disillusioned with the political process in NI?: the answer is because it appears to have little to do or say about their everyday, ordinary concerns, and seems trapped in a sectarian time-warp. Another possible second benefit is that the UUP would finally be leading politics in the direction that they want it to go, and not seemingly being a mere victim of events. It is likely that by building up momentum for corporation tax reform members of other political groupings will follow suit. Already, subtly, Margaret Ritchie has begun to change the SDLP’s rhetoric and emphasis of late in some of the public statements which she has made, and Peter Robinson, as mentioned above has spoken about ways in which the local economy can be rebalanced, to reinvigorate the private sector. It is likely that if a concerted campaign is made to begin this endeavour, then other political parties, including the ever-pragmatic Sinn Fein, will have no option but to jump on a bandwagon not of their making.

To those naysayers who would detract from the suggestions made above, this author would ask: if there is a viable alternative which would offer as much hope to the people of the Province, why not let us hear it? If there are genuine disagreements with what has been stated above, perhaps these could be aired in the usual way to give others food for thought.


Phil Larkin said...

I could also have added that as cuts of approximately £2 billion or more are to made in the NI budget over the next few years, is it not an apt time now for our local politicians to ask for a quid pro quo off the UK Government in the form of a corporation tax cut? This, at least, could make the province a more attractive for investment.

Surely this would be a better strategy than Mitchel McLaughlin's feeble anti-cuts protestations? These, bluntly, will lead nowhere.

Phil Larkin

K D Tennent said...

One of the best articles I've read about the situation in NI in a while. As a relative outsider, but a business school academic, I feel I've been shouting in the wilderness about the need for more enterprise in the UK as a whole for a while.

I guess even if NI were peaceful, it would suffer the problem of rising unemployment because of its peripheral position on the edge of Europe, and might find it difficult to reach markets. However, as with the rest of the UK economy there are opportunities in products that are difficult to transport or are technologically advanced (so for instance Scania make London buses in Larne). Its also got the advantage of being compact (or at least the Belfast area is) but relatively attractive scenically, so would seem the ideal place for campus based industry in high tech jobs. I wouldn't be sure about the Chinese community's ability to attract investment from China, but Aldergrove airport has direct flights to New York, something most UK provincial airports lack.

Is there an opportunity for a technology hub in NI, perhaps supported by Queens and Ulster Universities? This could be a use for the old Maze site, and IT and 'green' industries could be attracted. Google and Microsoft base a lot of their European activities in Dublin, perhaps the next big tech startup could be attracted to NI?

Phil Larkin said...

Thanks for the comment, Dr Tennent. I am of the view that many people in NI are of a similar view to that expressed by yourself and in the article, but the political momentum to carry forward such developments appears to be lacking. This, I believe, is the real task for the new UUP leadership, provided that enough prodding is given by internal pressures and from outside.

Sir Reg Empey himself wrote a piece recently in the Belfast Telegraph calling for a cut in the corporate tax rate, and for investment to be made in skills training for the modern labour market. Amen to that. Surely a big enough political head of steam can be generated in order for the UUP to use tax cuts and internal investment as a flagship policy in next year's Assembly Elections? Pressure MUST be maintained.

In relation to NI's Chinese community, I was not suggesting that they could attract investment per se, but rather act as a bridge between two worlds, using their linguistic and cultural knowledge of an emerging global giant to give us a head start.

Phil Larkin

slug said...

Phil, the 31% that Basil got wasn't bad at all considering the number of members (25%!) from Fermanagh and the fact that Basil was not the safest of pairs of hands. So, I agree, there is no need for pessimism.

As for CT, many businesses don't pay the higher level. CT gives a lot of money to unstrategic firms like retailing sector. Perhaps a more targeted use of the money would be better. And better education is also key (and more important than tax) to raising productivity. We have good education for the top 33% but the remainder "could do better"..

Phil Larkin said...

Slug, I agree with you about both Basil McCrea's performance and the importance of education for the future prospects of the local economy.

I also agree that resources could be better targeted, but surely something tangible and radical needs to be done in the here and now in order to make the Province a magnet for international investment, despite the flaws that are inherent in the local economy and education system? It is likely that if the CT rate was cut, then there are international firms currently resident in the Republic which would be keen to move north, for various reasons.

Sitting on our hands at present is simply not an option. Some action at least must be taken

Phil Larkin

thedissenter said...

Don't know if CT is all it is cracked up to be as a panecea for all economic ills. Cutting CT is no use if the high level of public sector remains. Made some recent comments on it and intend to make some more. At present there is a great deal of chatter, but little political will to be the first to call for the fundamental changes required and to spell out what that means a) a cut in the public sector b) a cull within the 'community' sector which is the second largest sector in NI (after public sector) and, though it hardly needs pointing out, also a non-contributor to wealth creation.

slug said...

When I say " CT gives a lot of money to unstrategic firms like retailing sector" I mean of course a cut in CT would hand a lot of money to Wal-Mart and Tesco shareholders etc which then goes straight out of Northern Ireland. So it is not targeted very well on things we consider strategic (such as high tech start ups).

Jeff Peel said...

Phil I read your piece but am not very inspired by it. You make some sensible points – some very obvious – but you reach the wrong conclusions. It is, of course, the case that we have institutionalised sectarianism in Northern Ireland that maintains itself because the political parties, NGOs, the media and the government keeps telling the population that it is genetically sectarian. The ‘them and us’ attitude invades everything in this society. Referring to the ‘two communities’ and bending over backwards to perpetuate this mind-set is sucking this society dry. It is a sorry disgrace of our political class.

But the main reason it is allowed to continue is because of the abject failure of the intellectual class to involve itself in politics. Political parties here are run by political pygmies. There is no real intellectual debate. And the intellectual class has an excuse to distance itself because playing at politics here is a mug’s game.

The only way they’ll get involved is if there is a wholesale realignment of political structures – and that will only happen when the nomenclature changes. Unionism needs to die. Irish nationalism is, thankfully beginning to die. There is no imperative any longer for unification – you are right that the Union has won. Unionism will only die when the political parties become secularised. That would be impossible for the DUP (and almost as difficult for Sinn Fein on the Irish nationalist side). That’s why we still need the British political parties involved. They need to organise for the sake of local political sanity. They need to break the stranglehold of politics defined by the fossils and deadwood of the provincial political dross.

Moreover the economic panacea that you outline is not achievable based on a lowering of corporation tax alone. Corporation tax reduction (I’m in favour by the way) will result in a migrant influx of higher earning workers hanging on the coat-tails of FDI. Our indigenous innovation-focused base is critically small. Moreover our workforce is not skilled enough for high GVA based business. It’s for these reasons that lower corporation tax will help reduce dependence on the public sector – but it will also cause a locally economically disconnected class. To suggest – as Mark Finlay does – that Northern Ireland has the potential to become a South Korea or Hong Kong is patent garbage. Just have a conversation with a lifer public sector employee to get a handle of the job of work to be done.

The Labour Party and Conservative party still have moral duties to organise here, seek membership, and contest elections. No government, or aspirant one, should have the right to govern a state where a portion of that state is systematically denied participation in the mainstream political debate.

Phil Larkin said...

In answer to the dissenter, I agree that things will not change without some pain at least in the short term, but I have never said that cutting CT by itself is a panacea in itself to all NI's economic trouble: it is merely one step on the road, albeit a big step. Once there is consensus on the need to start rebalancing the local economy, changes will have to be made.

What is the alternative? The only alternative is that we continue to wallow in the less than happy mediocrity in which we are in. As a long term future plan, this is frankly depressing. Something MUST be done, and this is the best opportunity to do it in years.

Phil Larkin

Phil Larkin said...

I could also have added to my reply on the Dissenter's comment that whether there is any political will or not to make culls in the public and "community" sectors, there are vast cuts headed in our direction anyway over the next few years. So either we can pretend that these are not coming, and continue dreaming of a socialist collective paradise (as some seem set to do), or we can look for ways of redirecting the local economy towards wealth creation. Is is far easier to divide up wealth than create it.

Phil Larkin

K D Tennent said...

To those arguing that NI does not have an adequately skilled workforce - NI has had an exceptional A-level and GCSE results base for some years, and this year was no exception - see

Additionally, Queens and Ulster remain very good universities - and I know personally a number of excellent academics from both who are NI born and raised, and whose work is internationally competitive.

Dilettante said...

Sorry Jeff, I got to put the question of Northern Ireland to Ed Miliband the night before his election and he basically stonewalled, mentioning 'the Peace Process' a lot. I don't think Labour will be standing any time soon.

CW said...

If NI wants to become a normal, civic society then one change which desperately needs to come about is an end to segregated education. Children are indoctrinated at an early age into their own insular tribal beliefs and even the most liberal and broad-minded grow up with a bias towards their own lot.

Yes, NI at present has exceptionally good schools in both the maintained and state sectors, but too many bright young graduates leave never to return.

The brain needs to be tackled of course, but if we want to end the social apartheid, the place to start is in the schools.

thedissenter said...

The over-focus on CT is a distraction to the bigger systemic structure reorganisation required, and therefore the wrong emphasis in the economic debate. The Eamonn makes in his interview is that the scale of public sector corrupts all process, adsorbing all (including that intellectual class, Jeff).

Putting a piece together that addresses this issue. Jeff says the intellectual class will not engage without a change in politics, but that is a cop-out (not by Jeff, but by the chattering classes). The fundamental shift in political life in the US and UK has arisen because of intellectual 'cover' or 'bedding' which allowed politics to ride the momentum of change. It was the 1970s work of Atlas, IEA, ASI, CPS that created the momentum for in-house Conservative Party lobby groups and, ultimately, for a shift in British politics that arguably changed and shaped the outlook of ALL political parties in the three decades since.

That bedrock of 'policy' ideas is absent in NI - we can't even talk about privatising NI Water. There is no group creating the ideas for change - who would want to be ostracised? That is the challenge for all those who want to see a fundamental shift in the Northern Ireland economy from public to private sector led within a generation or two - or sooner, preferably.

Lee said...

The economic argument ignores the EU issues with the policy proposal it is built upon.

Phil Larkin said...

Replying to the Dissenter's last point, perhaps it is the case that in the article I overfocused on the issue of CT to the detriment of other glaring defects in the politico-economic structure of NI.

I am not of the opinion that the failure of the Labour and Conservative Parties to establish themselves properly in NI is the cause of all our civic and economic woes. The idea that the larger mainland parties will simply "ride to the rescue" of backward sectarian Ulster is as much an illusion as that which Jeff accuses Mark Finlay of.

The very simple point that I am trying to make is that we have to start the process somewhere, and one means of doing that would be to put the responsibility for CT in the hands of the Assembly/executive. It is heartening to see that at least there appears to be a consensus on this issue in favour.

Phil Larkin

Stoffels du Plessis said...

CW's talking bollocks when he goes about social apartheid.

We got rid of apartheid here in South Africa years ago and we've still got plenty of problems!

CW said...

Stoffels, as ever your profound analysis and insightful commentary is second to none.

It’s interesting that Phil makes reference to a number of academics, politicians and community workers who feed off the sectarian divide and have made their careers and reputations from exploiting the conflict and social divisions within NI society.

You could make the same accusation about culture and the arts. There are certain novelists, poets, playwrights, film-makers, musicians and comedians who have based much of their creative output largely on the whole troubles/post-troubles Green v Orange phenomenon - without which many of them would be non-entities.
Having said that I’m guilty myself to a certain extent, having written material for The Hole in the Wall Gang and Paddy Kielty during my student days, as well as this short story [shameless plug!]:

Though admittedly most of these artistic people don’t draw their income from the public purse (especially now that funding for the arts faces massive cuts!), so at least they’re not quite as bad as the latter category.