It is often said that the last key differentiator between here and the south is the corporation tax rate.
That has been on my mind of late as we approach the 10th anniversary of the Corporation Tax (Northern Ireland) Act.
No doubt that unwanted anniversary will spark renewed discussion in the weeks ahead, but here I want to unpick the thought that the different rates north and south are the last differentiator.
I know the hospitality sector will immediately cite the different VAT for hospitality in the south as a significant issue.
For me, one area that sums up a key point of difference is pace.
There was an election in the south on November 29 last year. Forty-eight days later, a programme for government was agreed.
In the north, there was an Assembly election on May 5 2022. Eight hundred and fifty-nine days later (or, if we are being kind, 220 days after the restoration of the Executive in February 2024), a programme for government was issued in draft for consultation.
This difference in pace is hugely significant. The south acts, the north plans to act.
The slow pace of delivery here is not just something for economists and political analysts to grumble about.
It has serious consequences for our economy, public services, and our long-term competitiveness.
It is painfully obvious to anyone who has been unfortunate enough to engage with the health service recently that it is a service under massive pressure.
I have heard three separate examples since Christmas of people falling out of the health service’s computer system and not getting the care they need as a result.
A lack of investment and a failure to implement change is definitely failing us, and failing health service workers.
In a similar vein, NI Water has confirmed that of 37,000 properties waiting to be connected to the sewage network, 19,000 applications for development cannot go ahead.
The system is at capacity due to historic underinvestment.
That historic underinvestment is a genuine explanation for how we have got to this point but who is grasping the nettle and plotting a way out of this mess?
The difference in pace between the two parts of the island is increasingly evident in other policy areas.
Let me be clear, the south has a broad range of challenges too, including housing shortages and other socio-economic issues.
But it has moved quickly to take political uncertainty and the inertia that comes from the lack of a plan off the table through the agreement of a new programme for government.
It is a programme for government filled with ideas across broadly similar themes to our own, including:
- Economic growth: The government aims to create 300,000 extra jobs by 2030.
- Housing: New ambitions to build significant numbers of housing, including a plan to introduce a new starter home scheme to promote homeownership and tackle homelessness.
- Public Services and infrastructure: There is a commitment to providing high-quality and accessible public services and the infrastructure required to sustain a growing society. This includes pushing ahead with new roads and public transport projects and building four new elective hospitals.
Of course, we might wonder what specifically any of the south’s programme for government means for us, if anything.
Significantly, the new Irish Government is recommitting to the Shared Island Fund and adding a further €1 billion to the fund up to 2035 to foster reconciliation, mutual respect, and growth.
There are also commitments to develop the vision set out in the All-Island Rail Review and to improve connectivity with the north-west by working with the Northern Ireland Executive to deliver the A5 road upgrade, establish air connectivity between Dublin and Derry City airports, and progress key cross-border initiatives.
So, there is plenty to be positive about in that, and a sobering lesson for us that putting a detailed programme for government together does not need to take hundreds of days.
The south’s approach demonstrates what can be achieved with urgency and collaboration.
Northern Ireland’s struggles with pace and delivery are clearly starting to impact – too many elements of our public services are creaking. It is time to up the pace.
Andrew Webb is chief economist at Grant Thornton NI
