Project Title:

Analysing the Economic Impacts of a United Ireland

Although there is no certainty that referendums on the creation of a united Ireland will be called in the foreseeable future, a majority both North and South believe that they will be held within ten years.  For undecided voters economic issues rank as the most significant issue for them, but the research on potential economic impacts is as yet limited.  This element of our project will draw on the developing research base to analyse the key economic issues at the heart of the debate.

The Projected Public Finances of the Early Years of a United Ireland

This report calculates the subvention in public finances likely to transfer to “Northern Ireland’ at the time of a United Ireland, based on the most up-to-date UK figures. It is the first peer-reviewed report to calculate the cost of unity over the first ten years, which takes account not only of the subvention, but necessary investment and gradual economic convergence with
the rest of the island. The report breaks down the key financial issues such as pensions, debt, defence spending, UK central costs and taxation to justify this figure and calculates that the cost of the subvention, currently paid by the UK, which will transfer to a United Ireland will be £1.5 billion pa – not the, often quoted, figures of £10b to £14b. It then models three different economic growth scenarios under which convergence with the South would take place, factoring in the remaining subvention, an additional 1 billion in public spending to deal with needs in health education, welfare and infrastructure, along with a gradual equalisation of public sector wages and a gradual transfer of pension cost. Depending on growth, NI would end its need for a subvention in five to nine years.

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The key economic issues: