ABSTRACT
This chapter explores the credibility of the economics of Irish unity. It argues that incremental yet decisive moves towards building an all-island economy need to happen at pace. The starting point for any assessment of the feasibility of the economics of Irish unity has to be Northern Ireland’s public finances. The large subvention from the United Kingdom (UK) Treasury required annually to sustain living standards in Northern Ireland has long been the ace-in-the-hole argument of unionism against a united Ireland. Public expenditure in Northern Ireland — commonly referred as the block grant — is determined by the Treasury through what is known as the Barnett formula, named after the Labour peer Lord Joel Barnett, the Chief Secretary to the Treasury in the late 1970s, who oversaw its introduction. In the context of discussions about the economics of Irish unity, an important distinction that needs to be made is between identifiable and non-identifiable public expenditure.
