The mechanics of the DUP deal

Jun 30, 2017

By Dr Graham Gudgin
Policy Exchange Chief Economic Adviser, former Director of the Northern Ireland Economic Research Centre and Special Advisor to the Northern Ireland First Minister from 1998-2002.

The deal signed this week between the Conservative Government and the DUP is of historic importance. It will keep the Conservatives in power and may well have saved the referendum decision to leave the EU. Without the DUP, the Government had a majority of one over the other parties that take their seats (excluding the abstentionist Sinn Fein MPs). Everything then depends on the DUP’s ten seats. If the DUP were to abstain on key votes the Government could have scraped through even without a pact, although only if all of own supporters actually supported the Government’s measures and were always present to vote. With the DUP deal in place, the majority rises to a more comfortable 10, and not far short of the 15-seat majority inherited from David Cameron. The DUP’s support opens up a potential avenue – albeit a bumpy one – towards Brexit in 2019.

While Labour opponents of the deal have engaged in outrage and condemnation, it could also be said that they only have themselves to blame. The opposition parties have fallen victim to the legacy of Labour’s policies towards Northern Ireland in the years before Tony Blair. The Labour Party’s official policy at that time was ‘United Ireland by Consent’, a contradiction in only four words. Labour’s far left led by Jeremy Corbyn and John McDonnell went much further still, with a ‘troops out’ slogan, and what, at the very least, amounted to tacit supporting the agenda of Sinn Fein. To the DUP, a Labour party led by such people is beyond toxic, and there was never any doubt that they would line up behind the Conservatives to keep Labour as far from power as possible. So Labour – and its young supporters – have paid a price for Corbynian ideological imperatives from a past era: imagine where Labour would be now if Corbyn and his Comrades had allowed Labour to organise in Northern Ireland in the past and there were Labour MPs in the Province!

The DUP will support the Government on all important votes. Importantly, they will provide support for the measures likely to be needed to deliver upon Brexit. By luck for Tory Brexiteers, the only other pro-Brexit party to win seats, did well enough to provide a lifeline. In this respect, the DUP’s position on the Irish border has caused some media confusion. Popular opinion on all sides inside Northern Ireland is in favour of a hassle-free border for personal crossings. People do not want to be held up on the drive to Dublin airport to catch a flight for Marbella. The DUP’s consequential support for a “soft border” has been confused with support for a soft Brexit, which is decidedly not the case. In any dispute on Brexit between Davis Davis, and the Chancellor, Philip Hammond, DUP support will most likely be with the former. Moreover, the Treasury’s tough line on financial support for Northern Ireland in recent years, and their earlier hardball on the cost of transferring corporation tax to Northern Ireland will not have endeared Hammond to the DUP. Support for a full Brexit will be the DUP’s lodestar but they may be unexpectedly constructive on the issue of the Irish border.

The condemnation of the DUP during the projected negotiation of the deal has been striking has been wide of the mark and willfully blind to the mechanics of Northern Irish politics. With the DUP showing no sign of wanting to impose their cultural views on metropolitan England, most opprobrium now focuses on the cost of the deal. The DUP missed a golden chance to endear themselves to British public opinion by being seen to put their domestic pay day above the broader UK national good, as then UUP leader James Molyneaux had done when John Major’s majority was receding in the 1990s. Instead they went all guns blazing for the money, thumping their chests in self-applause for the fact that Ulstermen (and women) were not pushovers. In substance, what they got was much less than many apoplectic headline writers suggested. Few bothered to inform their readers or viewers that the financial deal was spread over 2-5 years. On an annual basis they have got £455 million to spend on infrastructure and health, equivalent to an extra 2% of public spending in Northern Ireland.

This money is not essential to Northern Ireland’s prosperity, and the DUP’s appeals to underinvestment during the troubles of 1969-1997 would cut little ice in normal circumstances. Northern Ireland already receives 25% more in public spending than the UK average. Some of this reflects genuine additional needs, for example more children per head of population than in GB. Other spending reflects a faster growing population. The large public sector provides well paid jobs which keep more of this population growth inside Northern Ireland, hence reducing migration to the congested South East of England. It is true that Northern Ireland receives rather more extra public spending than Scotland, which itself gets 16% more than the UK average. Scottish needs tend to be low however, leaving Scots free to run generous schemes for care home fees, student fees and much else besides. As Ruth Davidson pointed out, SNP demands for the DUP largesse to be reflected in filling Scottish coffers were if anything more grasping than the demands of the DUP itself.

The downside to Northern Ireland itself is that the extra spending will postpone a number of necessary reforms. Spending per person on health in Northern Ireland is only 4% higher than in England and much the same as in Scotland, but with a younger population we might expect it to be lower. Like Scotland, Northern Ireland has a poor record on metrics like waiting times, and the reforms needed to change this are hardly more likely to occur with more money in the system.

Author

Dr Graham Gudgin

Dr Graham Gudgin
Chief Economic Adviser Read Full Bio

Stay Up To Date

Latest Tweets

We have no further spaces for tonight's inaugural Colin Amery Memorial Lecture by @Roger_Scruton on 'The Fabric of the City' but you can watch it live on our Facebook page: facebook.com/PolicyE…