N. Ireland Politics

City view central to Cameron vision

Stormont
Image caption Northern Ireland is not the only place where David Cameron believes the public sector is too big

It seems that Northern Ireland is not the only place where David Cameron believes the public sector has got too big.

But more significant than his desire to shrink the relative size of the public sector, is his aim of boosting manufacturing and reducing the UK's reliance on the City of London to pay the bills.

It is also worth noting that he chose to outline his economic vision in Bradford, a former powerhouse of manufacturing, now an economic wasteland.

It was perhaps a bit rich to accuse Labour of travelling in the wrong economic direction when, with the exception of the public sector growth, Labour governments simply followed the path set by the Conservative governments of the 1980s and 1990s.

Margaret Thatcher closed mines and state-owned industries and her monetarist policies killed off countless manufacturing firms in the north through sky-high interest rates.

Meanwhile, she created a "big bang" revolution in the city that not only grew that sector, but led to thousands of other service businesses in the south.

New Labour specifically wooed interests in the City before it came to power - with Mo Mowlam charged with the initial job - and when they assumed office the tax receipts generated by financial services ensured light touch regulation remained - it seemed - in everyone's interests.

London and the South East of England are not just the most productive parts of the UK economy - they are the only regions which make an overall contribution. Every other part of the UK is on the take.

Deficit

By the way, can you guess which region has the biggest deficit (as a percentage of Gross Value Added)? Yes, Northern Ireland - by a country mile.

The City cannot be expected to keep paying the welfare bills and funding the public sector jobs which keep the rest of the UK ticking over.

The global financial meltdown of recent times has demonstrated the precariousness of that situation.

That is why David Cameron talks about "rebalancing" the economy. The current situation is "fundamentally unstable" he says. And he means unstable and unsustainable both economically and politically.

Forget about Scottish independence - there is a danger that inhabitants of the M25 belt will seek to secede first.

Tackling this structural weakness in the UK economy is a huge challenge and it is yet unclear what policies the Coalition government are hoping will do the job.

But there is imaginative talk about tax breaks and enterprise zones. Northern Ireland is in the running for a break on business tax, but other regions will be seeking their own deals too.

On Sunday's Politics Show, we investigate the crumbling nature of our school estate and question whether new procedures for ensuring good behaviour by our MLAs will be as tough as needed.

Jim

PS - Declan O'Loan had hardly clicked the send button on his email extolling the virtues of nationalist unity when rumours of a second - clarified - statement began to circulate at Stormont. A Stormont source was adamant a retraction would be forthcoming. When asked to explain the delay the reply was frank: "It's hard for him to type with broken fingers."

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