The Subvention

Sinn Féin’s call for a border poll has reintroduced the once familiar debate over the ‘subvention’ – the annual gap between public revenue and expenditure in Northern Ireland.

The subvention was a potent argument against Irish reunification, ironic given that driving up the costs of administering Northern Ireland was a key goal of the IRA campaign (Smith, 1997). Although that particular dispute ebbed with the advance of the peace process, the issue of the subvention never really went away. Instead it became part of a wider discourse in which Northern Ireland was urged to start ‘paying its own way’.

There are, undoubtedly, serious issues in terms of Northern Ireland’s lack of accountability for its economic performance, wasteful public spending, and an unwillingness to deal with sectarian division and its attendant costs. However, the idea that Northern Ireland should be criticised simply for spending more than it earns is curious given that the same is true of the UK as a whole. Indeed according to official estimates only three of the UK’s twelve regions (London, the South East and the East of England) are net contributors to the public purse.

This has led The Telegraph columnist Kelvin MacKenzie to demand an end to “the subsidy from London and the South East” and for the rest of the UK to “live within their means”. The audacity of this statement is remarkable given the role of London’s financial sector in contributing to the UK’s fiscal deficit and the broader economic crisis. But the more important point is that those who adopt this line rarely attempt to understand how regional economies work or how they might be improved. Rather, there is a tendency to marshal disarmingly simplistic, common sense sentiments such as ‘no one owes you a living’ in support of an agenda that is likely to reinforce, if not exacerbate, individual and geographical inequalities.

Reducing Northern Ireland’s reliance on the subvention is a perfectly worthy goal but achieving it requires more serious analysis than that offered by some of its most vocal critics.

References:
Smith, M L R. 1997. Fighting for Ireland? The military strategy of the Irish republican movement. Routledge, London.

 

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

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