Newton Emerson: North should return to idea of paying for itself

The best general solution to all Northern Ireland’s problems of governance is to have less government. That is the big idea lost in the crises of the past five years – a tragic loss as the idea was a long time coming and had just begun to succeed.

The Stormont House and Fresh Start agreements of 2014 and 2015 culminated in Sinn Féin, the DUP and the British and Irish governments signing a package of policies to “rebalance the economy”.

Civil service employment was to be cut by over 10 per cent via a redundancy scheme, with similar reductions across the public sector. Stormont’s 12 departments would be merged into nine and its 108 assembly seats reduced to 90. Savings from this and a wider programme of public service reform would help pay for corporation tax to be devolved and matched to the rate in the Republic.

Purchasing peace was clearly suffering diminishing returns while generating bloat and indecision

Everything except the corporation tax cut was delivering on schedule for the assembly election in 2016, a significant achievement by the standards of government reorganisation anywhere.

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Stormont had only six departments until the Belfast Agreement. Their number was doubled purely to give more parties a place at the executive table. Expanding government to create buy-in for the peace process was quickly recognised as the basic context of post-agreement Northern Ireland. It applied not just to the political class but to whole social classes, brought in through public sector employment and funding.

The agreements of 2014 and 2015 followed the flag protests and a three-year executive stalemate over welfare reform. Purchasing peace was clearly suffering diminishing returns while generating bloat and indecision. To achieve even a modest reversal of this was to consciously set Northern Ireland on a new path. Fresh Start also permitted Stormont’s first official opposition. After the 2016 election, the DUP and Sinn Féin formed an unprecedented two-party executive and set off together into their rebalanced centre-right future.

When detailed reform of a complex bureaucracy disappoints, cutting it down to size should be a natural reaction, if only through frustration

Nine months later, the Renewable Heat Incentive (RHI) brought Stormont down. The dysfunction exposed by RHI and the subsequent inquiry seemed to make a mockery of Fresh Start’s tentative success.

Stormont returned under 2020’s New Decade, New Approach deal with another package of public sector reforms, this time informed by RHI. However, the big themes of reducing government and rebalancing the economy had disappeared. In their place were new layers of oversight of public spending and the civil service, some conducted directly by the UK treasury. Governance problems were to be dealt with by more government, cajoling Stormont to improve.

Then Covid-19 suddenly swept away all normal concepts of fiscal discipline. More government was the answer to everything – a view the cost-of-living crisis and the invasion of Ukraine could prolong for years.

This week, the Northern Ireland Audit Office expressed "disappointment" with how the RHI inquiry's recommendations are being implemented. Auditor general Kieran Donnelly identified some progress, but also a continued culture of unaccountability in the civil service.

When detailed reform of a complex bureaucracy disappoints, cutting it down to size should be a natural reaction, if only through frustration. Donnelly has no remit to make that proposal but it is striking that no media or political reaction to his report made it either.

This week also saw an interim report, commissioned through New Decade, New Approach, advising partial devolution of income tax powers.

Sinn Féin now claims unification would cost almost nothing, which is preposterous – or that it would be funded by the UK and EU, at least for a period, which is unlikely

Making Stormont raise more of the money it spends might have been seen before RHI as a powerful new incentive for responsibility and rectitude. Most responses this week ranged from alarm to ridicule.

What has been lost with the idea of less government is Fresh Start’s remarkable consensus. Cutting the cost of running Northern Ireland suited the DUP’s economic philosophy and Sinn Féin’s constitutional goal. It was innovative common ground – exactly what the peace process hoped to foster.

The SDLP and Alliance also backed the rebalancing package through the Stormont House agreement. In the 2016 election, SDLP leader Colum Eastwood used the slogan "make Northern Ireland work".

RHI destroyed the DUP’s posture of financial probity and the party has since been consumed by its Brexit fiasco. Its economic pronouncements are dominated by complaints about the protocol.

After Fresh Start, Sinn Féin’s opponents in the Republic stopped teasing it about cutting public sector jobs to pay for a united Ireland. That jibe has returned.

Sinn Féin now claims unification would cost almost nothing, which is preposterous – or that it would be funded by the UK and EU, at least for a period, which is unlikely to any meaningful extent.

“The British will have to take out their cheque book,” Mary Lou McDonald said in 2020, partly because many people would “consider themselves British”.

The kindest interpretation of this demand is that Sinn Féin has not thought through the implications of suggesting Britain should pay for the unionist population.

How much better it would be if we could all return to the idea of Northern Ireland paying for itself.