Ireland: It’s the Economy!

In May of this year the unemployment rate in the USA had its highest monthly increase in 22 years. In the 26 counties (Irish Republic) there was the largest rise in the unemployment figures for 15 years. In early June the governor of the Bank of England, Mervyn King said:

"We are passing through the most prolonged period of financial turmoil that most of us can remember. Whether, as the IMF has argued, it is the worst period of financial stress since the 1930s is too early to judge."

He also said that recent financial "party" of cheap credit and excessive risk-taking has left a situation where, "when the party ends, some innocent bystanders may lose their homes altogether." (The Independent, 11th June 2008).

World oil prices jumped nearly $11 to a record $138 dollars a barrel, "after a senior Israeli politician raised the spectre of an attack on Iran and the dollar fell sharply against the euro" (Jad Mouawad, "Oil Prices Skyrocket, Taking Biggest Jump Ever," New York Times, 7 June 2008).

Oil prices have quadrupled since 2004.

All of these facts impact on Ireland both North and South. The implications of these facts need to be taken on board by Republicans in Ireland. To neglect the economic implications of these facts would be politically disastrous for any republican organisation. Historically Irish Republicanism has neglected the class struggle. (See Communists and the Irish Civil War, published in The Plough, Vol. 5, No 7).

During both the 1930sand the 1950s as the Irish emigrated in their millions, driven out by unemployment and poverty, mainstream Irish republicanism concentrated on military actions, almost totally ignoring the social conditions around them. Unfortunately today there are still some republicans who either deny the existence of class struggle or say that the class struggle can wait until the national struggle is solved. Such an approach will make republicanism irrelevant to the mass of the Irish people.

The four main Parties governing the Northern Statelet argued consistently in their campaigns to set up a Northern Administration that political peace would have economic benefits. They did not of course specify ho would receive those economic benefits. Now that they have achieved their aim of a local administration they are sending out messages that it may take decades to construct a vibrant economy for the north. For example the Institute of Directors calculates up to 140,000 new jobs will have to be created over the next decade if the economy is to show overall growth. Most economists suggest that inward investment particularly from the USA and a massive investment in tourism facilities are the best means of economic growth. Recently a lot of money was spenton a major investment conference bringing CEO's from major USA financial investment institutions to the North to "sell" our financial benefits to the USA investors. Years ago the then President Clinton "hosted an investment conference in Washington, and supported a similar one in Belfast, amid all the excitement after the signing of the agreement." (Paradox of peace: private wealth, a weak economy, Irish Independent, April 12 2008, By Brendan Keenan and Yvonne Hogan).

Positive economic messages are being sent out to investors all with a view for them to come and invest.

Should we all be equally optimistic and welcome the new riches we will all soon receive? Well actually it is not so simple as that.

Yes, there have been economic benefits of the new dispensation. Businesses in City centres have been transformed. There is a vibrancy and excitement about some of these city centres. Many working class districts have seen big increases in car ownership in the past ten years. The centre of Belfast has been transformed with major new buildings shopping centres and a vibrant café culture established. There are huge changes taking place in the Titanic Quarter with a new city village being established. The regeneration of the riversides in both Belfast and Derry is modelled on regeneration schemes in Britain The road networks are being upgraded to permit a faster flow of traffic. For two to three years there was a property boom as house prices increased by an incredible 36% in 2006.

Is this not all to the good? Well actually no. Take the Titanic Quarter, which is being built with imported migrant workers and few if any from East Belfast working class areas being offered work there. The apartments are being built with an eye for investors or aspiring white-collar city types.

The road-building programme is geared towards speeding up the movement of private lorries (even as oil prices soar) to facilitate big business and ignores almost completely public transport systems. Little or no environmental considerations are taken into account especially the effect on the health of working class communities adjacent to the motorways. The farcical appointment of S. Wilson as the new Minister for the Environment shows very clearly the priority the administration takes on the protection of the environment. Wilson is the least friendly member of the DUP towards that environment. Few expect Wilson to challenge the planners and business interests who have destroyed inner city working class life.

The so-called property boom has forced working class families out of traditional working class areas in Belfast, such as the Lower Ormeau Road, the Holylands, Stranmillis and the Village. These areas are now blighted by hundreds of "to let" signs and empty houses and apartments for much of the year while newly weds, young couples and ordinary families wait on the housing list for social and affordable housing that is not there.

The private investor is king. Many of these investors came from the South of Ireland and bought up huge blocks of apartments with a view to making quick financial gains. The result? There is now a growing housing crisis. This is of course the inevitable consequence of "Thatcherism". Huge swathes of public housing were sold off to tenants who joined the property owning classes. The Housing Executive, which once had total responsibility for public housing became weakened as many of its functions passed over to housing associations. Unfortunately the Housing Executive allowed itself to accommodate to local sectarian tensions by having separate points allocations for Catholic and Protestant families. That is why hundreds of homes in North Belfast lie empty within so called Protestant areas while hundreds of Catholics cannot get a house. If houses were allocated on the basis of need only then would all those empty homes be filled by families.

That of course would be the sensible attitude of any kind of radical Administration. Sinn Fein (Provisional) once posed as radical.

A radical response to the Housing crisis would be the immediate introduction of a Home tax of a £1000 per month on any apartment or house empty for six months or more and the seizure for public housing of any similar building without compensation if empty for two years or more.

Those two steps alone, would lower private sector rents immediately, make thousands of homes available at affordable rents to all and end the housing crisis within a short period of time.

Unfortunately it would also go against the pro-capitalist tendencies of all the parties in the Assembly so it is unlikely to see the light of day until genuine socialist voices make themselves heard.

But it is not only families on the housing waiting lists who are in distress. Recently the Northern Ireland Consumer Council revealed that families are now paying out more than £40 a week more than this time last year for the necessities. Price rises in food, fuel and mortgage repayments, as people came off two-year low rate mortgages, mean that most families are now paying at least £160 per month more. Food costs have risen by 7 per cent in the past year. For example bread has risen in price by 12 per cent and butter by more than 60 per cent in the last 12 months. (It's an odd time for assembly to hitch itself to US economy, By Patrick Murphy, Irish News, 13.05.08).

With the slow rise in the cost of a barrel of oil up to $139 compared to $40 last year we can expect a steady rise in the cost of living for most families in both parts of Ireland. Already electricity prices have gone up by 14% and are due to rise again in October. Some families who recently bought new homes are now in negative equity and some particularly those in the building trade where there has been a massive slowdown in economic activity, are having difficulty making the mortgage repayments. The housing charity Shelter estimates that there are likely to be about 53,000 home repossessions in Britain and Northern Ireland this year.

Overall the northern economy is heavily dependent on high levels of public spending. Public spending accounts for 60% of the economy as against 40\50% in Western European Union states. (Paradox of peace: private wealth, a weak economy, Irish Independent, Saturday, April 12, 2008, by Brendan Keenan and Yvonne Hogan).

This public spending paradoxically has benefited to a greater extent the professional middle classes. They have some of the highest disposable incomes in the British Isles. With the continued existence of elite Grammar schools these classes, don't ‑ unlike their counterparts in England and Wales ‑ have to spend a fortune on sending their children to British public Schools.

The commitment of the Stormont Regime to the neo-liberal agenda means that government public spending will gradually be reduced as creeping privatisation speeds up. The professional middle classes in the higher ranks of the public services can easily make the transition to the private sector. Those most to lose from this process will be those valiant civil servants at the sharp end of the civil service in the so called lower ranks who will see their jobs transformed and sold off to the private sector. That is why it is so important to defend public sector workers.

Unfortunately it is the policy of the Stormont regime to carry on the economic policies as dictated by the London Treasury. That same Treasury has benefited by the reduction in security costs due to the outbreak of peace. It is now pursuing a policy of making the Stormont regime pay its own way. And sadly the new administration has actually under-spent to the tune of £170million, money which reverts to the Treasury. Local attempts to be allowed to reduce corporation tax to 12.5% equivalent to that in the Irish Republic were quickly shot down by Westminster.

Against this gloomy economic background it should be clear that there will be increasing opportunities for those of us on the left to make gains among working class people who find life increasingly difficulty under capitalism.

After all "N. Ireland is the lowest region for productivity, 80% of the UK average, public expenditure amounts to 62% of GDP, compared to 42% for the whole UK and 27% for the Republic; 23% leave school with no qualifications and the economically inactive are 27% of the workforce, compared to the 21% UK average." (Good Fences don't mean good neighbours, Barry White, Belfast Telegraph, Tuesday, May 13, 2008).

Put simply there are now great opportunities for Left Republicans and Socialists to make gains within the working class movement. Now is clearly the time for an intensification of class work. Lest some think such a call for class struggle is somehow a dilution of our republicanism and/or a retreat into some form of "Trotskyist economism" may I suggest that they go back to basics and read again James Connolly:

"As we have again and again pointed out, the Irish question is a social question, the whole age-long fight of the Irish people against their oppressors resolves itself, in the last analysis into a fight for the mastery of the means of life, the sources of production, in Ireland. Who would own and control the land? The people or the invaders; and if the invaders, which set of them - the most recent swarm of land-thieves, or the sons of the thieves of a former generation?

"The revolutionists of the past were wiser, the Irish Socialists are wiser to-day. In their movement the North and the South will again clasp hands, again will it be demonstrated, as in '98, that the pressure of a common exploitation can make enthusiastic rebels out of a Protestant working class, earnest champions of civil and religious liberty out of Catholics, and out of both a united Social democracy." (Labour In Irish History, James Connolly)

[Originally published in The Plough, Vol. 5, No 7, E-mail newsletter of the Irish Republican Socialist Party, Thursday, 12th June 2008, Web Site]

• Ireland: ten years on from the Good Friday/Belfast Agreement by Gerry Ruddy (April 30, 2008)
• Ireland - An Overview 1967-2007 by Gerry Ruddy (August 10, 2007)
• Ireland: Republicanism and Revolution by Alan Woods
• Ireland section on our website