Flegonomics

Although the controversy over the flying of the Union flag seems to centre on issues of identity, it is the economics of the situation that have come to the fore.

The ethical merits of neutral space, the democratic basis of the Council’s decision, and (in the face of illegal roadblocks and violence) the sanctity of the rule of law, have all been asserted. But it is the economic damage caused through lost trade, lost jobs, policing costs, and the tarnished reputation of Northern Ireland PLC that has had most purchase. Even people sympathetic to the protestors’ cause have endorsed the #backinbelfast campaign to support businesses affected by the disruption.

Equally, economic factors are held to underpin the unrest. There is feeling that working-class loyalist areas have been left behind by the ‘peace dividend’, in part due to the belief that nationalist communities were more successful in securing EU funding. More fundamentally it is linked to a loss of relatively secure employment in declining industries such as shipbuilding. While that job security has gone, the culture it produced - of complacency towards educational attainment - has endured, with obvious consequences for job opportunities. However with economic conditions as bad if not worse in nationalist districts, the idea of additional resources being directed solely towards loyalist areas of deprivation is difficult to justify in economic terms.

That is not to say that there is not an economic solution. The perception of relative disadvantage is real enough, and as the 2001-2002 Holy Cross protest showed, a financial package could help end the violence. However substantial investment has for years been directed towards deprived areas without a significant improvement in their economic well-being. Spending primarily to ‘keep the peace’ may have political appeal, but it does not provide a solid basis for economic development. Particularly in the context of the current constraints, public resources should be used to maximimise economic rather than political impact.

Nevertheless given the economic benefits of social stability, perhaps sensitive emblems should be left alone? Having ensured that the Council’s decision entailed a significant financial cost, protestors have declared ‘it cost nothing to fly the flag’. While that may be true in this particular case, in general there are substantial costs associated with symbols that, deliberately or not, have the effect of marking areas out as belonging to one community. Indeed economic considerations are central to the proposals for a shared future, published last week by the Alliance Party. It notes that sectarian division undermines labour market mobility, creates duplication of services, limits access to housing, contributes to a ‘brain drain’, and deters investment. A 2007 report estimated the financial cost of division at £1.5bn. This suggests that a shared future is an economic imperative, not an unaffordable cost.

A focus on long-term economic impact in public spending rather than short-term political stability, and the need for shared space. These are the two economic lessons that should be drawn from the flag protest.

The opinions, views or comments in this article do not necessarily reflect any views or policies of NICVA.

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