How dependent is Stormont on Westminster subvention?

CLAIM: Northern Ireland were once net contributors of revenue to HM Treasury.

CONCLUSION: True, up until the 1930s. But data show that Northern Ireland has run a fiscal deficit since 1966. The most recent figure, from 2013-14, is a subvention of £9.2 billion.

The UUP’s 2016 manifesto states: “There was a time when we were net contributors to Her Majesty’s Treasury, now Stormont is dependent on an annual £11 billion subvention from Westminster every year.”

This claim is based off Professor Bob Rowthorn’s research, which describes how when Northern Ireland was created it was seen as “an integral and self-supporting component of Britain’s Imperial system”, generating a fiscal surplus. Thus a regular “Imperial Contribution” was paid by the province, until the economic crises of the 1930s.

Northern Ireland residents pay taxes directly to the UK Government. The UK Government then allocates the funding to its departments and the devolved administrations. The taxes generated within Northern Ireland are considerably less than the level of funding received from HM Treasury — the shortfall made up by a subvention.

Figures published by Ulster University’s Conflict Archive on the Internet (CAIN) show how subvention rose from the period of 1966-1993. Subvention was first recorded as costing £52 million annually (£489 million in 1992 prices), rising to £3.34 billion by 1996-97.

Further figures are provided by the Net Fiscal Balance report, produced by the Department of Finance (UK). The latest estimate, for 2013-14, is a fiscal deficit of £9.2 billion.

HM Treasury is responsible for managing and implementing UK fiscal and macroeconomic policy, as well as determining public expenditure allocations across the UK regions. As a result, Northern Ireland’s Budget, along with that for Scotland and Wales, continues to be determined within the framework of public expenditure control in the UK.

Source: Net Fiscal Balance reports (Department of Finance (UK)).

Northern Ireland Annual Fiscal Deficit (£m)

  Year   Nominal   Adjusted
(2014£)
1966-67 £52 £973
1967-68 £63 £1,149
1968-69 £74 £1,284
1969-70 £74 £1,217
1970-71 £88 £1,355
1971-72 £126 £1,758
1972-73 £181 £2,346
1973-74 £312 £3,671
1974-75 £389 £3,845
1975-76  £565 £4,233
1976-77 £620 £3,879
1977-78 £688 £3,624
1978-79 £848 £4,096
1979-80 £944 £3,949
1980-81 £1,090 £3,739
1981-82 £1,064 £3,215
1982-83 £1,149 £3,174
1983-84 £1,305 £3,439
1984-85 £1,489 £3,727
1985-86 £1,536 £3,611
1986-87 £1,593 £3,618
1987-88 £1,570 £3,415
1988-89 £1,698 £3,513
1989-90 £1,757 £3,445
1990-91 £2,018 £3,681
1991-92 £2,436 £4,110
1992-93 £3,296 £5,320
1993-94 £3,505 £5,517
1994-95 £2,895 £4,467
1995-96 £3,340 £5,020
 –
2002-03 £6,197 £8,261
2003-04 £6,218 £8,177
2004-05 £6,461 £8,322
2005-06 £6,525 £8,208
2006-07 £6,682 £8,212
2007-08 £6,639 £7,867
2008-09 £8,718 £10,113
2009-10 £10,291 £11,547
2010-11 £9,956 £10,673
2011-12 £9,634 £10,029
2012-13 £9,459 £9,601
2013-14 £9,160 £9,160

Source: Net Fiscal Balance reports (Department of Finance (UK)).

Image: “Fifties” by William Warby is licensed by CC BY 2.0