Northern Ireland is huge in TV, but post-Brexit reality is far less glitzy | Economic growth (GDP)
Bars are full, restaurants are turning away customers who don’t have reservations and, judging by the people laden with bags, the Christmas shopping season is already under way. Belfast has known plenty of crises down the decades but this doesn’t feel like one of them.
Instead, on a Thursday evening in November, Northern Ireland’s capital has the air of any other big provincial UK city, with a thriving hospitality sector and plenty of money changing hands. Were it not for the accents, it could be Leeds or Manchester.
But as with Leeds and Manchester, scars are visible just a short walk from the city centre, and in Belfast these result not just from the impact of industrial decline but from the Troubles, too. The Berlin Wall may have come down; the “peace wall” separating the Falls and Shankill roads has not.
Brexit has added a new level of complexity to the highly charged politics of Northern Ireland. The protocol agreed by London and Brussels prevented a hard border being created between Northern Ireland and the Republic of Ireland by putting a barrier between Northern Ireland and the rest of the UK in the Irish Sea.
If the plan was to make the peace process more secure, it didn’t work. Unionist politicians say strict interpretation of the protocol by the EU has made the agreement unworkable, and Brexit minister Lord Frost has for weeks been threatening to invoke article 16, which puts an emergency brake on the Northern Ireland chapter of the UK-EU deal. That could trigger a full-blown trade war, which would be devastating for businesses already feeling the impact of the extra trade friction.
Archie Norman, chairman of Marks & Spencer, says: “At the moment things are not too bad. We do have border constraints but they are deal-able-with. Things are a lot better than they are in the Republic of Ireland or in continental Europe, where we’ve announced a restructuring of our food operations.”
Norman insists there isn’t a food safety problem. “Our food standards are higher than those in continental Europe. The sensible thing would be to agree to product equivalence, where we would agree not to drop standards. If we were planning any variations, we would notify the EU and they could then decide what to do about it.
“In the grand scale of things the economic issue is so trivial. Northern Ireland has a similar population to Hertfordshire. Of course it matters hugely politically, but there is no hazard to anyone from produce from the rest of the UK arriving there. We are at risk of going to war over nothing.”
Northern Ireland secretary Brandon Lewis wants a deal that gives exporters the best of both worlds – access to the EU single market and the UK internal market.
“The conditions are met to trigger article 16,” he said, “but we don’t want to use it. We would much rather come to an agreement with the EU. That’s achievable with a different implementation process.”
Lewis says the public discourse over Northern Ireland focuses on Brexit and the Troubles, and it is hard to “cut through” that so businesses and individuals see the opportunities that exist. “Everyone wants to talk about the protocol and the legacy of the past. There is a different story going on.”
One part of that story is the boom in Northern Ireland’s film and TV industry catalysed by Game of Thrones. What began with some modest pump-priming in 2010 led to eight blockbuster series and acted as a magnet for other productions. “We invested heavily in the pilot. We took a risk and it paid off,” said Richard Williams, chief executive of Northern Ireland Screen.
GoT blazed a trail: after it came, among others, Line of Duty, Derry Girls, Dalgleish, a new mini-series based on Henry Fielding’s novel Tom Jones, and The Northman, a new Viking revenge film starring Nicole Kidman. Belfast now has three film studios, and Williams says the success of the industry is a “shining example of what was meant to happen post the Good Friday agreement”.
PAC group – a manufacturing firm in north Belfast that comes up with solutions to engineering problems – may lack the stardust of a new Kidman movie, but in its way it is emblematic of the Northern Ireland economy: small (45 employees) but growing fast post-lockdown, and now running into supply constraints.
Darren Leslie, the company’s business development director and one of its founders, said: “Things are starting to bounce back. Everybody is busy. Nobody can get people. Workload is going through the roof. We are having trouble finding the right people and keeping them.”
More than any other part of the UK, Northern Ireland is a land of contrasts. It has by far the highest share of public sector employment, yet Queen’s Belfast boasts the most spin-offs of any university, and over the past 25 years public-private partnership has helped build an impressive cybersecurity cluster. It is the poorest region and the happiest.
John Turner, professor of finance at Queen’s, said Northern Ireland had an abundance of social capital that may explain high happiness levels. “People have come through the Troubles and can deal with adversity. Maybe it has made people a bit more resilient.”
Graham Brownlow of Queen’s University’s management school said Northern Ireland had three sets of economic problems. First, it shared in the problems of the UK economic model and was entwined in that. Second, the UK’s weaknesses – such as poor productivity and low investment in R&D, were magnified in Northern Ireland. Finally, it had its own unique problems: the protocol, the shared border, and the fact that the Good Friday agreement didn’t really take account of the need to run for economic reconstruction alongside political reconciliation.
“A lot of people suggest solutions that don’t deal with all the sets of problems. They’ll suggest a silver-bullet solution – such as having the same low rate of corporation tax as the republic – but there isn’t one,” Brownlow says.
The Troubles held the economy back, leading to weaker investment and trade. Public spending plugged the gap, and has been rebadged since the Good Friday agreement to form part of the peace dividend. But political instability has been holding back the economy since partition in 1921, and in the early 1960s the Treasury pressed for closure of the shipbuilders Harland and Wolff as part of an economic restructuring.
The close links between politicians and businesspeople foster cronyism. The education system remains largely fractured along Catholic-Protestant lines. Northern Ireland has the largest proportion of Neets – young people not in employment, education or training – in the UK. Small businesses tend to stay small.
Owen Reidy, assistant general secretary at the Irish Congress of Trade Unions, also complained of a lack of a long-term strategy, and of squabbling local politicians possibily over-estimating their importance: “This is a little place on the fringes of Europe. There is too much emphasis on looking south, looking east or looking across the Atlantic.
“Some look to daddy in London; some look to mummy in Dublin. But mummy and daddy are not that interested any more.”
Giving ‘helicopter money’ a whirl
Ever since Milton Friedman coined the phrase, economists have been arguing about the merits of “helicopter money” – drops of free cash designed to encourage consumers to spend. Northern Ireland is putting the theory to test.
Taking its lead from a scheme tried in Jersey last year, every adult in the country has been given a Mastercard loaded with £100 that they have to spend before mid-December. In an attempt to support local businesses and encourage high street footfall, the money can’t be spent online.
Gordon Lyons, Northern Ireland’s minister of the economy, says if every adult spends up to the £100 limit, there will be a £140m boost to the economy. “We wanted to give businesses an immediate shot in the arm and we are at the peak of the scheme right now.”
Lyons is hoping for an even bigger boost thanks to a multiplier effect from, say, someone buying a new washing machine and needing to hire a plumber to fit it. Mastercard says there was a discernible multiplier effect in Jersey.
Even so, some say the money from the UK government’s Covid recovery fund might have been used more effectively. Peter Bryson of Save the Children in Northern Ireland said helicopter money would be better spent on topping up the incomes of those on universal credit or child payments to the one in four Northern Irish children living in poverty.
SDLP politician Matthew O’Toole asked: “Is this the right time for a stimulus? People are going to be using it on Black Friday and it is hard to see it having an added stimulus.”
He thinks it a fascinating economic experiment, though. “People will be doing PhDs on it for years.”