ANALYSIS:FIRST MINISTER Peter Robinson was almost certainly right when he admitted yesterday that Northern Ireland and its economy had "crossed the Rubicon to some extent".
"It is not in the interests of Northern Ireland to be the beggars of the UK," he said at the publication of the British treasury's consultation paper Rebalancing the Northern Ireland Economy.
“It is not in the interests of Northern Ireland to be dependent on the exchequer for further new growth within our own economy.” The North should become a net contributor to the treasury rather than relying on its substantial handouts, he said.
And therein lies the problem.
Northern Ireland has never “paid its way” in relation to the totality of the UK. Even in the days when shipbuilding and manufacturing were very much to the fore, the North has relied on a subvention since its foundation 90 years ago.
The conflict since 1969, the decline in the once-mighty heavy industries and the ballooning of the public sector mean that every Northern Ireland citizen receives £10,662 per head in public spending, 25 per cent more than the equivalent citizen in England.
But, as Robinson surely knows, you cannot cross the Rubicon “to some extent” – it is either crossed or it isn’t.
Metaphors aside, devolution in Northern Ireland and the sharing of executive power is now moving into a very different phase.
The transfer of tax-varying powers means that Northern Ireland, the last of the UK regions to enjoy stable devolution, could yet be the first to take on key finance powers in an all-out effort to break its economic dependency, its addiction to handouts and its ingrained notions that all solutions – both political and economic – must come from the outside. The US economic envoy Declan Kelly never tires of emphasising the need for greater self-reliance.
Whether or not greater fiscal autonomy, with its sensitive implications for sovereignty and the constitutional question, is tantamount to a redrawing of the United Kingdom is an issue politicians in Northern Ireland appear eager to shuffle around rather than tackle directly.
Dr Esmond Birnie, senior economist at PriceWaterhouseCoopers in Belfast and a former Ulster Unionist Assembly member, summed it up nicely to The Irish Timesyesterday when he said: "It obviously has some constitutional implications, although it doesn't need to imply that the UK breaks up. But for sure, it's a redefinition of how the UK works."
Such was the chorus of approval for moves to sharpen the North’s competitive edge by taking on tax-varying powers that onlookers could be forgiven for thinking the debate, rather than starting, has already concluded. Everyone wants growth and jobs.
But the treasury paper offers only its view of the potential costs and benefits of cutting corporation tax – and consultation will inevitably lead to other opinions.
Minister for Finance Sammy Wilson, for example, believes the treasury may be underestimating the positive impact of such a tax adjustment on growth.
What will be debated now is whether or not addressing corporation tax is the best way of “rebalancing” the economy and kick-starting the private sector.
There is no guarantee that the 12.5 per cent rate of corporation tax in the Republic was the overriding factor in the growth that fuelled the tiger economy.
The Stormont Executive may indeed be pushing on an open door in relation to fiscal powers, but it will also have to address skills training, higher education, and a host of other factors that affect the development of the wealth-creating sector.
Ministers in search of a quick fix are sure to be disappointed. Low corporate taxation did not immediately spark the good times in the South.
Stormont’s drive to refashion its economy is, by necessity, going to be a slow burner, with tangible results measured over decades rather than months.