Thursday, 4 November 2010

Parties must be led by practical economics rather than ideological adventurism.

If the article comes online I'll link it, but in yesterday's Belfast Telegraph I assessed the various finance papers and proposals which the parties in Northern Ireland have issued over the past few weeks.  My conclusion is that (to varying degrees) they're as much about long-term political objectives as practical economics and the problem to hand.

 Hot on the heals of proposals on the economy from Sinn Féin, Ulster Unionists and even the TUV, Peter Robinson launched the DUP’s own cuts strategy on Monday.  
In common with rival efforts, the paper is as much about setting out the party’s ideology and drawing some red lines for negotiations ahead, as about delivering savings or growing the private sector.  
When the party advocates reducing the number of departments at Stormont, it knows very well that Sinn Féin is adamantly opposed to a slimmer Executive.  And a proposal to squeeze North South bodies will attract nationalist ire, despite coy DUP claims that there are no ulterior motives to its suggestion. 
Likewise, the centrepiece to Sinn Féin’s financial analysis is a demand that tax varying powers should be migrated from Westminster to the Assembly.  That is extremely unlikely to happen, and if it did, the most likely effect would be to make us all substantially worse off.   
For the Shinners, though, it is important to be seen to attempt to wrest powers away from London to the island of Ireland, whatever the likely consequences.  Their aim is to present power-sharing as a ‘staging post’ on the road to a 32 county Republic, rather than a destination in itself.
In a similar vein, Sinn Féin’s document majored on hammering banks and Caitriona Ruane even helpfully suggested that she could save money by curtailing the number of A Levels offered to sixth form students at grammar schools.  
None of these ideas are likely to build consensus at the Assembly, or even to do much to address the budget shortfall, but they all symbolise neatly the party’s worldview and its political aims.  
The trend isn’t restricted to the two larger parties either.  ‘Social partnership’, the SDLP’s favoured response to the economic crisis in Northern Ireland, is little more than shorthand for an anti-Tory coalition between the Executive and Trades Unions.  
The Ulster Unionist document, ’You heard it here first’, is not statement of ideology as such, but it does form a fairly accurate summary of the party’s message over the past few years.  It’s a convoluted way of saying ‘we told you so’.  Even Alliance’s insistence that tackling division is the best way to save money, owes more to the party’s long-term goals than to immediate economic necessity. 
By producing finance documents post haste, the parties are eager to give the impression that they have engaged with the crisis facing Northern Ireland.  In truth the hard work has scarcely begun and these papers and proposals represent little more than positioning for the difficult negotiations ahead.
The acid test will come when the Executive meets behind closed doors and at that point the serious power-brokers will be the DUP and Sinn Féin.

The prospects of successfully blending two apparently incompatible documents appear bleak, but there are at least some common coordinates.  Both the DUP and Sinn Féin acknowledge, for example, that the public sector wage bill is a problem, although they suggest different approaches to tackling it.  
The bravest proposal from Peter Robinson’s party is a two year salary freeze for civil servants earning over £21,000.  That’s some distance from Gerry Adams’ insistence that top public employees should take a wage cut, but it does suggest a useful place to start the bargaining. 
Unfortunately none of the parties, other than Alliance, is prepared to champion the introduction of water charges: a revenue stream which the Executive surely cannot ignore indefinitely.  The DUP do suggest that the regional rate should be unfrozen, but rises in line with inflation will not substantially improve the balance sheet.      
Whether a more realistic approach prevails when the Executive meets to thrash out its emergency budget, time will tell.  The day of reckoning is approaching for our politicians and if ideological wrangling takes precedence over practical economics, there will a real cost in terms of jobs and prosperity, felt by everyone in Northern Ireland. 

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