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DUP deal: How much extra money has the party extracted from Theresa May? And is it fair? DUP deal: How much extra money has the party extracted from Theresa May? And is it fair?
(35 minutes later)
Theresa May has concluded a deal with the Democratic Unionist Party of Northern Ireland to keep her minority Government in power.Theresa May has concluded a deal with the Democratic Unionist Party of Northern Ireland to keep her minority Government in power.
It involves an increase in public spending in Northern Ireland.It involves an increase in public spending in Northern Ireland.
But what is in the deal? And is it fair on other UK taxpayers?But what is in the deal? And is it fair on other UK taxpayers?
In return for agreeing to the “supply and confidence deal” with the Conservatives, the DUP have extracted a series of financial pledges for “additional financial support” for the Northern Ireland Executive.In return for agreeing to the “supply and confidence deal” with the Conservatives, the DUP have extracted a series of financial pledges for “additional financial support” for the Northern Ireland Executive.
This includes £400m for infrastructure development in the province.This includes £400m for infrastructure development in the province.
There is £150m for ultra-fast broadband rollout and £200m for heath. There’s also money to tackle deprivation and mental health.There is £150m for ultra-fast broadband rollout and £200m for heath. There’s also money to tackle deprivation and mental health.
The total package of additional spending adds up to around £1bn.The total package of additional spending adds up to around £1bn.
There are around 1.86 million people in Northern Ireland so this £1bn equates to around £550 per head.There are around 1.86 million people in Northern Ireland so this £1bn equates to around £550 per head.
According to the Office for National Statistics, the size of the Northern Irish economy in 2015 was just £32bn, so this represents a non-negligible boost. According to the Office for National Statistics, the size of the Northern Irish economy in 2015 was just £34bn, so this represents a non-negligible boost of 3 per cent of GDP.
However, £850m of the money is being spent over two years, and the rest over five years.However, £850m of the money is being spent over two years, and the rest over five years.
Yes. Northern Ireland in 2015-16 received £26bn of public spending.Yes. Northern Ireland in 2015-16 received £26bn of public spending.
That’s £14,020 of public spending per head of the province’s population. That’s £14,018 of public spending per head of the province’s population.
This was more than a fifth higher than the UK-wide average of £11,579. The region receives more per head than Scotland or Wales.This was more than a fifth higher than the UK-wide average of £11,579. The region receives more per head than Scotland or Wales.
The additional spending announced on Monday will increase this discrepancy further. Further, Ireland contributes less in tax revenues than the national average, meaning that Northern Ireland’s imputed fiscal deficit in 2015-16 was £10bn, or around £5,400 per person, higher than Scotland’s £2,800 and Wales’ £4,500.The additional spending announced on Monday will increase this discrepancy further. Further, Ireland contributes less in tax revenues than the national average, meaning that Northern Ireland’s imputed fiscal deficit in 2015-16 was £10bn, or around £5,400 per person, higher than Scotland’s £2,800 and Wales’ £4,500.
London, by contrast, had a £26bn regional fiscal surplus, or £3,000 per person.London, by contrast, had a £26bn regional fiscal surplus, or £3,000 per person.
Northern Ireland has higher public spending per head, in part, for historic reasons.Northern Ireland has higher public spending per head, in part, for historic reasons.
Successive governments since the Good Friday Agreement was signed in 1999 have been willing to spend more in Northern Ireland, particularly on public sector employment, in order to reduce the possibility of a return to the Troubles. Successive governments since the 1999 Good Friday Agreement have been willing to spend generously in Northern Ireland, particularly on public sector employment, in order to reduce the possibility of a return to the Troubles.
Many will see this as a reasonable price to pay for preserving peace.Many will see this as a reasonable price to pay for preserving peace.
But whether it’s worth augmenting this subsidy primarily in order to keep the Conservatives in power is another question entirely.But whether it’s worth augmenting this subsidy primarily in order to keep the Conservatives in power is another question entirely.
Especially as this might not be the end of the demands.Especially as this might not be the end of the demands.
“£1bn for Ulster is just a downpayment,” tweeted the former Permanent Secretary to the Treasury Nick Macpherson, someone with experience of overseeing Northern Irish spending requirements.“£1bn for Ulster is just a downpayment,” tweeted the former Permanent Secretary to the Treasury Nick Macpherson, someone with experience of overseeing Northern Irish spending requirements.
“DUP will be back for more again and again. They have previous in such matters”.“DUP will be back for more again and again. They have previous in such matters”.
The cost for this £1bn extra spending for each of the UK’s 65 million people is around £15. The cost for this £1bn extra spending attributable to each of the UK’s 65 million people is around £15.