Short-term financial pain of Irish unity could see us reap rewards in the future

At the end of his magnum opus Candide, the 18th century French writer and philosopher Voltaire advises: “Il faut cultiver notre jardin (one must cultivate one’s garden).” This urges practicality – look to the business in front of your eyes – but also points to the future, with work done in the present anticipating dividends yet to come.

Politics could learn much from gardening, where painstaking work wins through eventually. Planting and cultivation yield results.

Sowing the seeds of positive relations and propagating constructive collaborations between both parts of this island are indispensable if reunification is to be achieved – and just as essential if not. Let’s be good neighbours in the hopes of becoming compatible bedfellows.

The national question is once again topical thanks to two factors: Leo Varadkar spoke about it on RTÉ News in his final interview as taoiseach on Monday, saying unity was a political decision not a financial one; and its potential costs were considered in a report last week for the Institute of International and European Affairs (IIEA) by professors John FitzGerald and Edgar Morgenroth.

While the study’s conclusions err on the side of pessimism, undoubtedly it has contributed to the unity discussion. Its title, ‘Northern Ireland Subvention: Possible Unification Effects’ indicates the primary focus: the annual cheque transferred from London to Belfast and how Dublin would fund its replacement. Clearly, we’re now drilling into one of the fundamental issues to consider in advance of border polls.

But there is a larger question which Varadkar identified: “Unification should never be about money.” Naturally, money matters – but it’s not necessarily the primary decider. Especially in the context of medium-term financial pain, indicated by the FitzGerald/Morgenroth study, being offset by overall gains in growth, prosperity and enhanced prospects.

The report presents a range of scenarios including one with no help towards reunification costs from Britain, the EU or the US. In that instance, it estimates unity at €20bn a year for two decades, to replace the subvention and bring benefits, pensions and public service pay rates into line with the Republic.

This would mean tax rises, additional borrowing or spending cuts. There is never any harm in looking at worst possible outcomes, although the US and EU have been generous to Ireland, and Britain knows it has obligations.

In such a worst-case situation, unlikely though it is, some in Ireland will be willing to shoulder those costs for the greater good.

It’s not as if we don’t have experience in that department. The universal social charge, applied on a sliding scale depending on income, was introduced in 2011 following the financial collapse and is still in place. A 2pc levy on motor and home insurance policies was introduced in 2012 and will remain until 2037, following buccaneering behaviour by Seán Quinn, the entrepreneur who started Quinn Insurance.

No tax is truly popular but some are more palatable than others – a strong case could be made for higher taxes associated with reunification. Inevitably there will be costs attached because unity should be on the basis of equalising up, not down, and it’s helpful now that the debate is examining some of those costs in a measured way.

But the benefits must also be kept in mind, including increased productivity which would reduce the bill.

Also, we hear endless negativity about the North’s bloated public service, but there is much expertise and dedication in its ranks which could benefit the Republic. Those public servants kept the region operating when the Assembly shut down.

Varadkar referenced German reunification during his interview with David McCullagh: “If you believe in the unification of your country, 3 or 4pc of GDP is a small price to pay. I don’t think when the Berlin Wall came down people in West Germany ever considered not unifying their country because of the cost.”

The gap between communist East Germany and booming West Germany was significantly larger than that between Northern Ireland and the Republic today. West Germany was one of the most affluent European economies when the wall collapsed in October 1989, whereas living standards in East Germany were low after decades behind the Iron Curtain.

If Northern Ireland is the UK’s poorest region, that emphasises Westminster’s neglect rather than failures by the resilient people of the North. Besides, only London and the south-east are net contributors to the British Exchequer – everywhere else receives a subvention. This is not unusual because a lot of economic activity in any country tends to cluster around a capital.

But different economic policies could be applied to the North. For example, all the big technology and pharmaceutical companies are situated in the Republic, more attractive to multinationals with its favourable tax regime, and EU and eurozone membership. A unified Ireland could see some companies locating in Belfast or Derry.

Reunification, should it happen as an expression of the will of the people, is a process. It is not a moment in time. During this process, voters will be invited to reflect on whether they are for or against the status quo, and a number may be persuaded to shift their initial positions on the basis of imagining that alternative.

Choices will be made on multiple grounds: some in the North will decide counter to traditional affiliations because they hope future generations will have a different experience, others will vote on ideology.

But partition was conceived by those who are long dead – why should today’s generation continue to live with its consequences without at least considering an alternative?

While economists agree that unity will cost money, it may not take the 20 years projected by last week’s study for Northern Ireland’s economy to be stimulated. The Republic bounced back from its bust in under a decade – Varadkar mentioned his surprise at the speed of recovery.

In fact, the study’s gloomy findings on costs (and caution is understandable, but it’s not the only criterion to apply) advance a compelling case for people in Northern Ireland to vote for reunification.

Not because it will transform the island into a Garden of Eden – all gardens are a work in progress – but because the Republic offers our friends in the North their best chance of higher living standards and decent job opportunities.

“If you believe in the unification of your country, 3pc or 4pc of GDP is a small price. I don’t think when the Berlin Wall came down, people in West Germany considered not unifying because of the cost”

Leo Varadkar