Category Archives: Economy

A Bangor “marina quarter” could thrive

I have had occasion to be in what is referred to as “Bangor town centre” a few times recently and it was in general a pleasant experience. It always struck me, even when I served in its Council, that Bangorians can be a bit hard on their own town. However, I would venture to suggest that is partly because they have a peculiar view of what Bangor is, and indeed what its “town centre” is.

Firstly, Bangor is (by Irish standards) a large town but it is essentially at the end of the line. Unlike places like Lisburn, Banbridge or Ballymena, it cannot hope that people from elsewhere will just pop in for half an hour or so – people have to have a specific reason to visit. This has implications, particularly for what it must offer.

Secondly, after its comparatively rapid expansion during the Troubles (when it was seen as something of a “safe haven”), the geographical and demographic centre of Bangor is in fact Bloomfield. Indeed, Bangor may now be the only town in Western Europe most of whose residents live outside its so-called “ring road” (really a throughpass now)! This too has implications – in line with residential locations, we have business parks, wildlife centres and several major leisure offerings springing up outside the so-called “ring road” and thus away from the so-called “town centre”.

Thirdly, Bangor’s nighttime offering cannot be turned back a generation. The youth of Northern Ireland used to descend on Bangor from all arts and parts again because of the aforementioned “safe haven” perception. The end of the Troubles and the revival particularly of the vastly bigger (and, for most people, nearer) Belfast city centre has changed all that permanently. The past is the past in that regard.

So, what can be done about this? More or less what is being done about it, thankfully.

In fact, I have long believed the area around Bangor High and Main Streets leading from Ward Park through to the Station should be re-designated the “Marina Quarter”. This would be primarily a daytime (but occasionally also specific nighttime) leisure offering, ranging from outdoor facilities (such as Pickie Park) to indoor facilities (more or less as now proposed for Queen’s Parade) with a significant marine element (such as the boat tours now available). This should be accompanied by a deliberate attempt to bring small businesses in the service sector to that location, as it is now decently served by restaurants and coffee shops already and well connected by bus and rail, but much cheaper than Belfast city centre – there is no reason PR or law firms could not be based there, for example. Indeed, the now dilapidated Flagship Centre could perhaps be best reinvigorated not by shops as a retail centre but by service sector start-ups as a business hub. This in turn would bring more people to the area during the day, helping existing hospitality and retail businesses to thrive.

The thinking, in other words, has to go beyond what was there before and also beyond “shops” (twenty years from now most retail offerings will consist of a single Northern Ireland store supported by an internet-based delivery network incorporating new technologies such as 3D printing anyway). In Bangor’s case, provided the designation is right, with determined leadership to follow through roughly on the current course, the future could be very bright.

Advertisements

UK harmed by bizarre exceptionalism

I was planning to write a piece on the frankly bizarre British exceptionalism evident in Brexiteers’ cheery dismissal of the simple facts around the poor performance of the UK economy and its huge vulnerability to leaving the Single Market (which will inevitably send living standards crashing, particularly among the poorest).

It turns out I do not need to, the CER has done it for me here.

Anyone with a genuine interest in the UK’s future and the well-being of its people must read and grasp that linked article.

Is the West really poorly served by roads infrastructure?

A recent post over on Slugger attracted a lot of attention because it made an apparently unanswerable case that there is an infrastructural east-west divide in a Northern Ireland. Although I myself have long been strongly supportive of improved road links to the North West, I would suggest the case that the West is particularly poorly served by infrastructure is, at the very least, debatable.

The maps in the linked post appear obvious – all of Northern Ireland’s motorways bar a small stretch of the western M1 and all of Northern Ireland’s railways except the scenic Coleraine-Derry line lie east of the Bann. Obviously, therefore, the West is poorly served?

Well, not necessarily. Here, for example, is the straightforward Google map covering all of Northern Ireland:

IMG_0201

Sure, all of the blue seems shifted to the east, but what about the green? If you choose to focus on primary roads rather than specifically motorways, suddenly the West does not seem particularly poorly served at all.

It is true that there is only a limited amount of dual carriageway in the west, but there have been notable expansions to the dual carriageway network there in the past few years, including the extension of the A2 from the outskirts of Derry to the airport and the extension of the M1, as the A4 expressway (the first in Northern Ireland in fact) to Ballygawley. There were also pre-existing stretches which clearly hinted at greater things to come before the Troubles intervened (notably the A29 north of Cookstown). Much of the single carriageway network in the west is in fact superior to that in the west; with their hard shoulders, the A6 single carriageway is better west of Toome than east of it and the A4 in Fermanagh is generally much better than, say, the A3 or even the A7 further east. Therefore, in terms of the basic primary route network, it is far from clear there is a west/east divide.

It should be noted that there are also stretches of road, most obviously between Lisburn and Newry (currently still a basic dual carriageway, not even an expressway), which are blatantly sub-standard but which serve significant social and economic corridors.

Then we come to population density. This again can be visualised here, courtesy of Wikipedia:

IMG_0202

The Belfast “Travel to Work” area accounts for less than a sixth of Northern Ireland’s land mass, yet it contains half the population. Not only is it therefore inevitable that the wider (multi-lane) roads are generally found there, but also that money will be spend on freeing up major intersections to improve traffic flow. Railways and expressways require critical mass – of the type found in areas as densely populated as Greater Belfast and the area around it, but not in rural Tyrone. Furthermore, even purely objectively, the above map shows there is at least a case for prioritising the Belfast-Armagh-Dungannon corridor (more or less the old Linen Triangle) ahead of any other – as was done when it received the first motorway.

The above map also demonstrates rather clearly why the A5 corridor (well to the west) was never prioritised before the Irish Government offered specific money towards it. In fact, the priority North-South corridors (linking M2/A6 to M1/A4) would objectively be Antrim-Lisburn and Magherafelt-Cookstown-Dungannon. Building an expressway to link such comparatively small population centres is not redressing a balance, but rather shifting it clearly in favour of the west. There is an economic case for doing that (albeit a highly contested one), but we need to be clear that is what is proposed.

The map also shows why it is difficult to maintain railways in the west. With such a low population density, in practice people need cars to move around from and to precise locations at precise times. With the population thinly spread and cars necessarily predominating, there is simply no chance that mass transit will be widely used. Overlay the current Northern Ireland rail network on the above map and you will see it is far from illogical that it serves where it serves.

On top of all of this is the reality (countered only by a heavily subsidised airport in Derry) that Northern Ireland’s ports of entry are in the east. Again, it is understandable why two ports and two airports are positioned in the Belfast area (and a third main port along the Belfast-Dublin corridor), given that most people and goods are arriving in from the east and, not least as a consequence of that, that is where most people live. Noteworthy also is that Northern Ireland’s main cross-border corridor is (understandably for the same reason) along the east coast to Dublin. This does not just mean that people entering Northern Ireland generally do so (again, to emphasise, for wholly understandable reasons) in the east, but so does freight. To get goods into Northern Ireland requires in practice bringing them in to Belfast (either directly or via Dublin along the east coast) and then distributing from there. It is hardly surprising, in this context, that infrastructure will reflect this reality. Put another way, good infrastructure around Northern Ireland’s ports of entry serves everyone in Northern Ireland, not just those who happen to live near them.

It is interesting, therefore, that we hear plenty about “evidence-based policy-making” but we do very little to explore the basis on which that “evidence” is developed. Clearly people living in the west, and perhaps Nationalists in general, will prefer to promote aspects of the Slugger article linked above to make their case, and they are not wrong to; but people in the east and perhaps Unionists more broadly will prefer to emphasise the points above. The notion that there is one set of “evidence” on which all decisions must be based is flawed. It depends, somewhat, on exactly what your vision is and what you are trying to achieve.

Nevetheless, we can say with certainty that the case that the West is uniquely poorly served by infrastructure in Northern Ireland is less clear objectively than it is to people in the West!

Careful whose analysis you buy on Conservative/DUP deal

I cautioned after the General Election about the risks of poor political punditry, and that warning has been plainly justified in the past 45 hours or so. Rarely has so much rubbish been written by so many about so few.

Firstly, the DUP was not given £1b – infrastructure and public services in Northern Ireland were. (Of course, should there be no Executive, the DUP will be the only Northern Ireland party with direct influence over this as it is the only party with representation in the Commons; but it is public money, not the DUP’s.)

Secondly, it is quite normal for parts of the UK to be given money over and above Barnett. Glasgow City Council was once given £500m directly. Whether it is right or wrong, it is hardly unusual.

Thirdly, the biggest expense incurred by the arrangement will not come to Northern Ireland specifically, but to pensioners across the UK through the maintenance of the Triple Lock and Winter Fuel Payment. Again, whether that is right or wrong is a debate to be had, but it is the case.

Fourthly, the arrangement does not directly endanger the Agreement. Of course, if Brexit were mishandled, there are some risks around common treatment of UK and Irish citizens which could breach at least the spirit of the Agreement, but a deal on parliamentary votes in itself does not breach it. After all, three SDLP MPs took the Blair and Brown Government’s whip on every issue throughout its term (even sitting on the government benches), and no one raised any query about that at all.

Fifthly, the best commentators (and there are some, but there is a clear difference between the good and the not so good) have noted the interesting details of the Northern Ireland aspects of the deal. Less than half the infrastructure spend is accounted for by the York Street Interchange, leaving the rest in the hands of future Finance and Infrastructure Ministers (Sinn Féin held both roles until 9 January); most of the Health spend is specifically for transformation and may not otherwise be spent (which means anyone holding up transformation will be deemed to be throwing away £200 million); commitments to shared education have essentially been abandoned (that is, at least, an honest assessment of where the four largest parties are on sharing).

Sixthly, no, the DUP did not ask for marches to be re-routed, creationism to be taught in schools, environmental safeguards to be reduced or even in fact for a single penny towards a Military Covenant. Note well those who thought they would, and heed not their analysis in future!

Seventhly, the DUP will continue to sit on the opposition benches because it is in opposition, just like Fianna Fáil in Dáil Éireann. This is confidence and supply, not coalition.

Eighthly, there is also some misunderstanding on behalf of Northern Ireland-based commentators with regards to Great Britain. Northern Ireland is not, in pure economic or infrastructural terms, a particularly special case. Other regions, not least Wales, are by most measures poorer; and many parts of the UK have inferior roads (and almost all have less comfortable, less punctual trains).

Oh and ninthly, as part of the overall UK Budget, £1b is not much. Some of the ideas around what it could have been spent on in Great Britain are fantasy. As noted above, the cost of the U-turn for pensioners is vastly higher.

Politically, UK-wide, the deal is probably enough to secure the Government through to the end of Brexit negotiations (although nothing is certain), but the numbers remain tight and Brexit will not now be quite as “hard” as once intended. However, it may not last much beyond that and it does not necessarily secure the Prime Minister herself in post for the full two years (indeed, arguably it makes it easier to replace her, in the knowledge that an election is at least twenty months way even from party conference).

In Northern Ireland, the will already existed on the part of the two main parties to restore the institutions so they will in all likelihood be restored (the deal makes little practical difference to this, contrary to many suggestions). Whether all the ducks can be brought into a row to achieve this by the end of the week is another question, and is in the balance.

Further fundamental errors are apparent in the external discussion of how this deal may affect Northern Ireland. There is the assumption that the Agreement itself suddenly brought peace to a warring place; actually that was a gradual process and indeed it is not yet complete (intimidation in the form of gangsterism right up to and including petrol bomb attacks continues to retain a higher degree of tolerance than it would anywhere else in Northern Europe). This assumption leads to a second assumption that somehow one political wrong step would see the whole thing unravel and people in Northern Ireland once again decide that the Troubles were better than the peace they now have (there is not even the means for that to come about, far less the desire). We are at once neither as well integrated nor as inclined towards outright civil war as the external commentariat seems confusedly to think.

Out of interest, many things are actually going rather well in Northern Ireland at the moment, contrary to its reputation as a backwater with nothing to offer but a begging bowl. Tourism is going through the roof; exports are up 14%; in soccer, boxing, motorcycling and other sports the locals are excelling. If politicians from the parties with the biggest mandates were to opt to take responsibility for smoothing things over for the rest of the decade and for using their mandates to engage in real reform, life here could be very good. We will see if they are up to it soon enough.

Constitutional question irrelevant to EU debate

The totally obvious point that, if Northern Ireland chose to “leave the United Kingdom and join with the Republic of Ireland in a United Ireland” it would then become part of the EU even after the rest of the UK had left, is not news. Nor is it really very helpful.

The significant political issue around Brexit is the status of the border. If this can be managed in such a way that the border remains a practical irrelevance with free movement of goods, services and people across it, Northern Ireland’s departure from the EU will be an irritation but potentially little more than that. If, on the other hand, the border becomes so relevant that vehicles are regularly stopped at it for customs checks and application of tariffs, then it is a whole different issue. This issue, Nationalists and some others suggest, could simply be solved by having a United Ireland.

Well, no. Placing Northern Ireland in a United Ireland in such circumstances would then place it on the wrong side of a “hard border” from what is by far its main trading partner – Great Britain. In fact, at a purely economic level (noting that if things were decided at a purely economic level the UK would not have voted to leave the EU in the first place), it would be the height of madness to swap the UK for the EU, given that the UK is many times more important to Northern Ireland’s economic and financial well-being than the EU is.

Therefore, that whole debate, not for the first time, completely misses the point. Irrelevant of constitutional desires, what Northern Ireland should be looking for out of the UK-EU negotiations is a gateway arrangement whereby it can trade as freely as possible both with the rest of the UK and with the rest of the EU.

It should be noted that Northern Ireland’s position in this regard is far from hopeless. The European Council (in effect now representing the European Union’s remaining member states post-Brexit) has already said that Agreements must be protected and the border must remain open. The UK Government seems rather more indifferent to the whole matter, but it too has no interest in anything other than a prosperous Northern Ireland with an open border.

Noting, additionally, that the race to the bottom on corporation tax now makes the case for lower corporation tax in Northern Ireland all but redundant, we now have to face the fact that the Northern Ireland economy has no “silver bullet” (if it ever had) to get it back on track. Why not replace a now redundant cause for lower tax with a “Gateway Arrangement” enhancing not just Northern Ireland’s economy but also its social well being?

Not for the first time, constitutional debates will get us nowhere; but a bit of creative thinking just may…

Brexit not UK’s biggest problem

An Irish diplomat was recently reported as noting that the UK Government has worked out just what an economic catastrophe Brexit is.

That is bad news.

If you pay attention to nothing else ever on this blog, pay attention to this, however – there is worse news.

Manic car buying on credit… frankly crazy mortgages… mass credit card debt… pay-nothing-up-front consumer booms… that was exactly where the UK was in 2007. We all know what happened.

Yet it is also exactly where the UK is now. In fact, the UK’s credit card debt ratio and car buying spree is in fact considerably worse than it was then.

Now, as then, all these debts (and leases) are being packaged up and sold in bundles, the majority of which constitute relatively solid loans and are thus packaged as “AAA” (the highest possible rating). Now, as then, banks simply do not have enough money in their vaults – too much of it has been lent out. Soon, as then, the minority of the debts and leases which are plain junk will bite, will cause a run even on the safe loans, and financial institutions will fall.

The result will be another financial catastrophe. House prices in England will plummet, lending will become impossible, government revenues will crumble.

Peculiarly, Northern Ireland will suffer least from this because house prices and car sales have remained at a relatively sensible (i.e. fairly depressed) level, although credit card debt is a serious concern as will be the inevitable “austerity” which affects what is still an overwhelmingly large public sector (though not as comparatively large as a decade ago thankfully).

In England, where the average house price exceeds £300K and car sales are the comparatively fastest in Europe, however, there is the real prospect of a calamity worse than the first “Credit Crunch”.

The simple fact remains, as it did 10 years ago, that the UK does not pay its way in the word. Its trade deficit, contrary to Brexiteer fiction, is actually a monumental disadvantage because it means the economy (and thus the whole of government finances for Health, Education, Defence etc) runs in deficit and thus on credit – which means when there is no credit (as there soon won’t be) the country is essentially bankrupt.

No one will heed this warning, of course, any more than they will heed the warnings about the insanity of leaving the European Single Market or the EU Customs Union. It is part of the human condition that we do not learn from negative memories, even if comparatively recent. Mark my words, however: we will soon regret that flaw…

Unionists need to realise what suits England does not suit NI

It was the shrug of the shoulders as David Davis said the agriculture industry would now face tariffs of at least 40% which worried me. The fact was, after all, already known to those (albeit seemingly a minority) who had been paying attention.

The agrifood industry is perhaps Northern Ireland’s most successful and important sector. The fact is it often competes with or indeed cooperates with the Republic of Ireland’s. Now, the Republic of Ireland’s industry will have access to the European Single Market with no tariffs applied, and Northern Ireland’s will face tariffs of 40%+. I will leave it to readers work out whether that is good news for the Northern Ireland economy…

But it was already known. Frankly, Northern Ireland’s agrifood industry should have been far more outspoken before 23 June, but it was running scared of the DUP. There is no saving it from here – there is no precedent even for special arrangements (such as Norway’s) to allow anyone outside the Common Agricultural Policy tariff-free access to the Single Market within which that policy operates.

It is too late to recover the damage, although it would still do no harm to point out it was DUP policy to inflict that damage on Northern Ireland’s economy and on its rural community. One thing we should do is learn from it.

So just by the way, David Davis’ shrug of the shoulders should tell us something fairly obvious – what suits England does not always suit Northern Ireland. The DUP is now getting very excited about the prospects for future trade deals – but at least now let us learn the lesson. A trade deal which suits England (and is therefore entered into by the UK) will not always suit Northern Ireland.

Frankly, I rate the UK’s chances of trade deals as extremely low. I can think of only one which is likely – New Zealand. What would such a trade deal consist of? Well, how about exchanging the UK’s financial know-how for New Zealand’s advanced agricultural products? Such a deal would make sense for England. But it would decimate Northern Ireland’s economy by inflicting on it competition on top of removing from it access to its key market.

Some people seriously need to wake up. And not just David Davis.

NI Civil Service must review Audit procedures

This blog post clearly did not convey the intended message with anything like sufficient clarity, so I will simply let the two comments below stand (as they do a much better job of making the point I was trying to make!)

There is no reason anyone would have been negatively affected by it, but sincere apologies for any misunderstanding, the responsibility for which (as ever in my publications) is entirely mine. 

Business has to think again about NI political preferences

A few months ago I appeared on Nolan to argue that the retail sector can only go so far in delivering jobs and growth, and that the focus needs to shift somewhat towards real exports. Understandably there was an opposite number from the retail sector arguing his case – but then, rather less understandably, he went on to heap praise on the DUP/SF Executive (in a kind of ‘I haven’t always agreed with them in the past but now they’re wonderful’ way).

It continued to be striking subsequently how few organisations, particularly though not exclusively in business, would dare criticise the Executive after it was formed in late May. Private conversations sometimes revealed some wariness, but this was always followed by a ‘But you have to understand…’

Well no actually I don’t have to understand. For example, all business organisations who polled their members found them majority opposed to Brexit in Northern Ireland (this went as high as 81% in one case), yet in the face of the DUP no outright campaigning was to be seen at all. ‘Ah but corporation tax…’

Ah but nothing. Left to its own devices the simple fact is, by a selfish determination to protect its Leader at all costs and a distinct lack of grace towards others, ‘Arlene’s candidates’ have taken just eight months to deliver catastrophic instability – at just the very time business (including retail) could not afford it.

Business organisations have a stake in Northern Ireland and now they must finally find a voice. The unstable situation brought on by the current Executive is intolerable; businesspeople have a vote; and they must use that vote to punish those who brought it about.

After all, that’s how democracy is supposed to work.

Brexiteers’ BMW farce

How anyone with a knighthood can repeat the total economic nonsense that the Germans will not foist a “Hard Brexit” upon us because “we buy BMWs” is cause for serious alarm about the state of democracy.

Firstly, this depends on trade – if the UK has nothing to sell, it will not be able to earn money to buy.

Secondly, if you wish to remain in a free trade zone, you need to abide by its rules – including its trade descriptions, trading standards and so on.

If people don’t want to leave the Single Market, frankly, they should not be advocating leaving the body which sets those rules – namely the EU.