We sometimes talk about the subsidy that Scotland receives from the rest of the UK via the Barnett formula*. But the part of the UK that receives by far the most public sector intervention is Northern Ireland. Public spending accounts for over three quarters of the economy in Northern Ireland (in large part for many obvious historical reasons). In a speech last night, in Belfast, Owen Paterson, Secretary of State for Northern Ireland, put the figure at a Soviet 77.6%.

Mr Paterson spent most of his speech arguing that the province should embrace the same kind of welfare reforms that Iain Duncan Smith is enacting over here, in London. He made a robust case for paying off Labour’s debts. A smaller welfare state and reduced borrowing can only be part of the solution to Northern Ireland’s unbalanced economy, however. It’s at least as important that Northern Ireland’s private sector grows.

Read the rest of this article online at:

http://conservativehome.blogs.com/thetorydiary/2012/02/owen-paterson-wants-belfast-to-have-the-same-low-corporation-tax-as-dublin.html