David's Blog

The UK as a whole spends about 40% of its GDP in the public sector. In the worst pre-Thatcher days of the mid 1970s the UK figure for public spending was roughly 50% of GDP. Northern Ireland on the other hand spends 67% of its GDP in the public sector. We are extremely subsidised. In the mid 1970s the British economy was on a downward spiral, due in part to the high levels of public spending.

Northern Ireland public spending fortunately does not come from Northern Ireland raised taxes, but is given by large scale transfers from the rest of the UK. We are one of the most highly subsidised regions on the planet. While some government subsidies may be necessary and they are occasionally even beneficial, the level of subsidy that our economy receives is so utterely enormous that we must devise ways of reducing it.

The people of Northern Ireland are too addicted to a socialist dependency mentality that thinks that the rest of the world owes us a living. It doesn't. We need to learn to stand on our own two feet. This can only happen through massive reductions in public sector spending.
Remember that only private sector business actually generates any wealth in the economy. Public sector employment spends wealth rather than generating it. This is why business is in many ways more crucial than anything else because wealth creation is necessary for a healthy economy. Redistributing wealth means nothing if there is no wealth to redistribute, as the USSR discovered to its cost in the late 1980s.

We need to encourage people into the private sector. Most people in NI work either directly or indirectly for the public sector. People will not be encouraged to go into the private sector when they can get a much better paid and vastly more secure job in the public sector. So long as the large public sector spending continues at its current level we are locked in a cycle of dependency on a continuing British government subsidy, which may or may not continue. Under this system we will never become self-supporting.

The only way that I can see to break out of this cycle is to reduce public spending drastically. We can see from the Thatcher years that this will be an unpopular policy, but it is still a necessary one. The only constant thing in life is change, we need a more flexible and slimmed down set of fiscal policies to be able to cope with change rather than closing our eyes, putting our fingers in our ears and hoping that the subsidies will come over from Westminster for ever.