One quirk of the welfare reform debate is that many of the reforms won’t automatically apply in one of the parts of the United Kingdom with the worst welfare problems: Ulster. As Owen Paterson, the Northern Ireland Secretary, points out in a speech tonight, ‘Northern Ireland has proportionately one third more households living on out of work benefits as the rest of the UK’. He also notes that 1 in 10 of the population there are on Disability Living Allowance, double the UK average. But the Work Programme doesn’t apply in Northern Ireland and any welfare reform there will have to be done by the Executive.
Paterson is now campaigning to make the case to local politicians for reform, for maintaining parity with the rest of the United Kingdom. His speech tonight is a strong argument for the importance of work and the private sector in reviving Northern Ireland. The current situation where public spending accounts for more than three quarters of GDP and the median salary in the public sector is £9,000 higher than in the private sector is simply unsustainable.
Key to boosting the Northern Irish public sector will be a corporation tax cut to assist the North in competing with the South. According to Paterson, the ministerial work group on the practicalities of cutting corporation tax there should have completed its work by the end of the summer.
The quicker this new lower rate can be introduced the better it will be for the stability of Northern Ireland. Indeed, the revival of the private sector in Northern Ireland is as crucial to its future peace and prospeity as the Good Friday agreement.
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