From Militant Irish Monthly, June 1988.
Transcribed and marked up by Ciaran Crossey.
Proofread by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL). (July 2012)
One of the major debates at this year’s conference of the Northern Ireland Committee of the Irish Congress of Trade Unions was on the state of the Northern Ireland economy. There was no controversy over the present catastrophic economic condition of the province – the facts speak for themselves.
Despite the so-called boom of recent years unemployment and poverty remain endemic. One measure of the poverty is the fact that more than a fifth of total household income in Northern Ireland now comes in the form of social security benefits. The structural nature of unemployment is seen in the fact that despite these “better times”, 56% of unemployed males have now been out of work for over a year and 38% for more than two years.
But if there was agreement on the disease, not so the remedy. A motion from the Civil and Public Service Association which explained that private enterprise had failed the North and called for the nationalisation of the major industries and finance houses under democratic worker’s control, was heavily defeated.
Roger Jeary, an official of the self-styled, ’new wave’ trade union MSF, later explained that this motion was opposed because the majority of delegates recognised it “as being unrealistic and little more than a rehash of the Bullock proposals of the mid 1970s” (Fortnight, 5/5/88).
That any trade union leader could confuse a call for nationalisation and workers’ control with the piecemeal proposals for workers’ participation of the Bullock report, says more about the level of debate at the top levels of the trade union movement than anything else. However, the main argument put forward against the motion is correctly described by Roger Jeary – that the motion is “unrealistic”.
The conference debate and the resolutions which were passed echoed the proposals which the NIC-ICTU has put forward in recent documents. These include calls for greater public expenditure and a development of the role of the public sector – ideas with which no trade unionist would disagree.
But it is on the key question of how the manufacturing sector of the economy is to be revived that the differences arise. John Freeman, Regional Secretary of the ATGWU, made the keynote speech in the overall economic debate at the conference. After presenting a scathing indictment of the present state of the economy he went on to offer what he called a “realistic and practical alternative”. “It can be done by using the skills and expertise developed by the public sector to assist the development of private sector enterprise in a new concept of public/private partnership” (Unity 30/4/88) [Newspaper of the Irish CP.]
So the same trade union leadership who vote down a proposal for nationalisation as “unrealistic” instead plumb for the “realistic” alternative of taking steps to assist “the development of private sector enterprise”. A brief examination of the role of private enterprise in the Northern Ireland economy quickly establishes who has their feet on the ground in this debate.
Over the past three decades, Northern Ireland’s manufacturing base has been fairly steadily eroded. During the 1960s the old indigenous sectors of heavy engineering, shipbuilding and textiles suffered a decline. Job losses were compensated for by the expansion of new sectors – electronics, man-made fibres and others. The new factories were lured by the huge hand-outs offered by the then Ministry of Commerce and later by the various Departments which dealt with economic development after the abolition of Stormont.
The recession of 1974/5 effectively closed this chapter of development from abroad. As the world economy shrank and as government grants ran out the new industries simply shut up shop. Grundig, Goodyear and ICI all closed completely. The man-made fibre industry, which had been developed to replace the old linen industry, was devastated by recession and by cheap imports from Asia and virtually disappeared. Courtalds is now only a memory in the North.
In 1979 the world economy again sank into recession. As this second blow fell the North had not yet recovered from the first. There followed a further and even more catastrophic collapse, worsened by the monetarist policies of Thatcher. Between 1979-81, real GDP fell by 7%. Manufacturing investment, the key to any future expansion tumbled also. Gross fixed capital formation fell by an average of 8% a year between 1979–83.
As with the previous up-swing in the late 1970s, the North’s economy has been largely bypassed by the boom in the world economy since 1982. John Freeman himself pointed this out in figures he gave to the NIC-ICTU conference. Between 1981–86 economic growth was 15% in Britain but only 6% in Northern Ireland. Manufacturing output has risen by 10% in Britain since 1985 but in the North there has been a real decline.
Figures from other sources (1987 Coopers and Lybrand Report) reinforce the point. Industrial output today remains 11% below the level of 1979. In January 1987 manufacturing output was at the same level it had been in 1968. No trend is entirely uniform. Some sectors, notably food and drink, paper production and textiles, have experienced growth. The textile industry has received a boost with a revival of the market for natural fibres. With such exceptions the general picture is one of continued stagnation.
Employment figures graphically bear this out. In 1979 there were 145,000 jobs in manufacturing. Today there are about 97,000, a fall of some 33%. Closer examination of manufacturing employment reveals an even more precarious position for private enterprise.
Those manufacturing jobs which have survived have done so very largely because of massive state intervention in the form of grants and hand-outs. If Thatcher’s dictat of “laissez faire” capitalism were really to be applied to the North, nothing much would be left of the economy. The so-called Industrial Development Board (IDB) acts as the main channel of state funds to private enterprise. This body has little to do with industrial development but acts more as a casualty ward for sick industry. Since 1981, it has ’developed’ around 17,000 new jobs while it has “maintained” or “rescued” almost 48,000. The Economist recently estimated that of the 98,000 (its figure) manufacturing jobs about 90,000 are supported directly or indirectly by the state. This works out at an average of £39 per week for every manufacturing employee.
The recent small drop in unemployment has not been because of a revival in manufacturing but because of phoney job schemes such as the YTP and the ACE. The recently announced expansion in ACE means that by 1989 this will constitute the single largest employment in the North!
The degree of buoyancy which has existed in the economy in the past two to three years has been due mainly to the expansion of personal credit on the one side and to continued high levels of public expenditure on the other. Bank lending rose by 19%, in 1987, maintaining and boosting retail sales. Sooner or later the explosion in lending will reach its limits.
Public expenditure meanwhile has risen to 70% of the province’s GDP. Of total employment, 45% is now in the public sector. This accounts for 50% of total household income. The wealth to maintain this spending is not generated by the contracting industrial base. Rather the books are balanced by an annual hand-out from the British exchequer. This now amounts to one-third of total state spending each year.
The growth in public expenditure has been slowing and is set to slow further. Between 1979–82 it grew at 2.5% each year. From 1982–86 the average annual increase was 1.75%. The projected figure to 1990 is 1.25%. This is before recent government cutbacks are taken into account.
Even if, for political reasons, high levels of public spending and the huge exchequer subvention are maintained, the economy faces a bleak future. What has been described in this article is the best that capitalism can offer, the situation after six so-called boom years. Now a new world recession is looming as the credit expansion and military expenditure of US capitalism can no longer sustain the boom. It is not possible to predict precisely when this will begin but, given the contradictions within the world economy, it is likely to be the deepest recession since the Second World War.
Despite rising public expenditure the North, relative to other economies, was very severely affected by the past two recessions. There is little reason to doubt that this again will be the case. Given these facts and this prognosis it is easy to see which policy is unrealistic – NIC-ICTU’s call for development through the private sector or the call by CPSA and Militant for nationalisation and the development of a socialist economy.
What the NIC-ICTU leaders argue today is no new departure for them. During the 1960s and early 1970s they backed the government’s efforts to lure foreign companies with grants and concessions. They even participated, along with the CBI and top civil servants, in overseas delegations where their role was to give assurances about the good industrial relations record in the North. It was as close as any union leader at the time came to offering the type of no-strike deals which now threaten to split the TUC and presumably ICTU also. The climax of this policy came in the late 1970s when the unions supported the giving of millions to John De Lorean. The NIC-ICTU leadership will probably want to forget the day when they organised a car cavalcade for jobs through Belfast – led by a De Lorean sports car with placards reading “2,500 jobs created”.
Clearly this “realistic” solution didn’t work. Yet today these same leaders are advocating a modified version of the same thing! Instead of unconditional hand-outs as before they propose hand-outs with strings – grants to be given provided certain conditions concerning long-term employment, investment strategies, and equal opportunities are met.
In this they acknowledge the need for planned industrial development but they forget one thing – you cannot plan and control what you do not own. Private enterprise will come to Northern Ireland on one basis and one basis only – if it is profitable for them. The area’s remoteness from European markets is a major disincentive.
If the unconditional hand-outs on offer in the past failed to overcome this and other handicaps, a new package of incentives hedged with strings and conditions is even less likely to do so. Planned regional development is impossible under capitalism, particularly in a period of crisis such as the present. The notion that a joint strategy based on co-operation between the public and private sectors can revitalise the Northern Ireland economy is completely utopian.
What is needed is public ownership, under workers’ management and control, of all the key sectors of the economy. This would allow for a co-ordinated development of industry, energy and natural resources together with the transport system and the entire economic infrastructure. All privatisation – of Shorts, of lignite mining, of electricity should be resisted.
But the trade unions need to go further and campaign for the rest of the economy including profitable industry together with banking and insurance to be taken into public ownership. It is true that this in itself would not solve the problems, the North is neither large enough nor self-sufficient enough to develop as a socialist economy on its own.
Also necessary would be the nationalisation of the commanding heights of the economy in the South and in Britain, to allow for the planned and equitable integration and development of these economies on a socialist basis.
That could be a first step. The further socialist integration of the economies of Europe and beyond would pave the way for the first time ever to the elimination of poverty, of want, and lead to unprecedented and previously unthinkable leaps in production and in living standards.
Northern Ireland has a capitalist economy which is among the weakest and most decrepit in Europe. Consequently the argument for socialist change should be most loudly heard here. Yet the trade union leaders, incredibly in view of the facts, scorn socialist arguments and instead insist on offering proposals to make capitalism work better. In practise this means consigning the North to the economic dark ages of worsening poverty and economic stagnation.
They should instead campaign for the socialist alternative, which they now round on as unrealistic, and so place the working class of the North at its rightful place in the forefront of the European struggle for socialism.
Last updated: 18.7.2012