Pension provision in a united Ireland : redux

Last week I wrote an article suggesting that in the event of a united Ireland, the British government would propose that the future Irish government assume responsibility for paying the former Northern Ireland state pensions, on the basis that it would already be receiving the benefit of historic pension contributions that were invested in the form of public spending there. The article noted that this was the proposed arrangement in the event of Scottish independence (see page 139).

This drew quite a bit of criticism in the comments section. In some cases, my argument was perhaps unclear; in other cases, some people seemed to misunderstand the point being made, or some of the realities of the social welfare system in the UK. 

I didn’t see a single comment which both supported Irish unity while also accepting the possibility that a united Ireland might be expensive. This suggests to me that, five years on from the brexit referendum, Irish nationalism still hasn’t made any serious effort to debate what reunification is going to cost. 

In addition, almost all of the criticisms of my article either ignored or dismissed the precedent set in Scotland. Any argument that the idea of the Irish government covering historic pensions is unrealistic or unworkable needs to address the fact that the Scottish government proposed to adapt exactly this approach and that the SNP made it a selling point of independence.

I’ve paraphrased some of the typical criticisms below, with my responses in each case.

1. They can’t just take away our pensions and leave pensioners destitute. 

I did not argue that anyone would take away pensions or leave pensioners destitute. 

I argued that the Irish government would assume liability for meeting the costs of paying pensions. The entitlements of the Irish welfare state, including pensions, would be extended across the whole island. 

2. I’ve paid national insurance contributions for 50 years. The UK government must pay what they owe.

The UK government has already paid what they owe. The money that was paid in national insurance contributions was spent at the same time it was collected – on public services, infrastructure, and the social welfare system in operation at the time. For at least the past 50 years, if not longer, the UK government has spent more money in Northern Ireland than they have recovered in taxation. 

3. But I don’t like how the British government spent the money. I want them to pay for pensions.

This is like asking someone to un-bake a cake. The money has already been spent and Northern Ireland has already seen the benefit of it. If the money had not been spent and instead kept to one side in a pot somewhere, this would be reflected either in a higher national debt share in Northern Ireland, or in public services that were not provided, roads or hospitals not built, etc.

4. If I knew my national insurance contributions would not used to fund a pension, I would have refused to pay

If you had refused to pay your national insurance contributions, you would have been fined and/or imprisoned. 

5. I’ve paid taxes/national insurance in England my whole life, but I now live in NI. This proves that your idea can’t work. 

Firstly, this is not my idea – it was agreed between the Scottish and UK governments in the case of Scottish independence. 

The reunification treaty between the Irish and UK governments would have to make provision for these various corner cases. The base case, however, is that of citizens entitled to Irish citizenship who have made the majority of their National Insurance contributions within NI. 

6. The Scottish precedent does not apply as it was only an informal agreement and the Scottish government is not sovereign.

There is no reason to believe that the agreement between the UK and Scottish governments in respect of independence would not have formed the basis for a future treaty, particularly given that it would have been de facto approved in the independence referendum. 

Unless there is an armed insurrection or UDI leading to a vote at the UN, there was and is no way for the UK to negotiate the terms of Scottish independence with a sovereign Scottish government, since the sovereign state will only exist after independence has taken legal effect.

7. The present-day SNP does not accept the Scottish precedent and intends to renegotiate it.

Maybe. But it seems unlikely that the UK government will move from its position.

8. The British government is required to pay for pensions under UK legislation. 

Parliament can amend any legislation at any time. In respect of state pension provision, it has done so many times, reducing payments to pensioners, or altering pensioner entitlements. It has done this in recent years by raising the pension age generally, especially for women aged over 60. Some years ago, they abolished the dual pension system, replacing it with a single one. They’ve also recently broken the triple lock guarantee that links pension payments to inflation. There is no legal or contractual recourse to any of this.

If a border poll passes, the British and Irish governments will draw up a treaty which will deal with all of these matters, including responsibility for covering state pensions. When the treaty is agreed, both Parliaments will ratify it and enact legislation to give it effect, and that will include amendments to any existing legislation. As such, existing British legislation will no longer apply.

9. You are clearly wrong : the UK had to back down and pay for pensions when it left the EU. 

The pension contributions referred to within the EU withdrawal agreement cover pension liabilities as an employer, not pension liabilities as part of a social welfare system. Public sector employer pensions are contractual obligations. My original article did not discuss those (although, particularly given the size of the public sector in NI, it is an area that requires serious attention). 

Those who use this argument seem to be suggesting that a smaller body departing from a larger one must continue to contribute to certain costs borne by the larger body prior to the former’s departure. In our context, that is effectively to argue that in a united Ireland, Northern Ireland must continue to contribute to the UK so that it can fund Northern Ireland’s pensions. I doubt this would be palatable to northern nationalists (or anyone else). 

10. The UK government is desperate to get rid of us. They will happily pay just to offload us.

People are entitled to believe this if they wish, but there’s simply no evidence to support the contention that the UK government is moving to offload Northern Ireland, much less evidence that they are willing to make huge financial concessions in order to to do so.

The UK government has a responsibility to protect its own taxpayers, and will be particularly keen not to set any precedents that could be exploited by other parts of the UK considering secession, or in other scenarios internationally.

11. The Americans and the EU will force the UK to pay the costs. 

There is no reason to believe that either the Americans or the EU will attempt to interfere in what is a bilateral issue between the UK and Ireland in a way that effectively involves forcing the UK to reach into its own pocket to pay for something it has a case for arguing it has already paid for.

12. The Americans and the EU will give us money to cover any shortfall.

Ireland today is a wealthy, stable country, successful at attracting inward investment.  In a world wracked by poverty, famine and war, it is inconsistent that it should expect cash grants from other countries in order to implement self-imposed constitutional change. 

It’s also important to highlight that Ireland is a country that sells itself, in part, as a tax haven. I have no doubt that there will be goodwill in the western world towards the reunified Irish state and countries will have a desire to help, but there are political limits to how far this can go. The optics of sending cash grants to a tax haven which is attracting businesses and jobs away from those countries are not easy to sell. 

13. This is all speculation. You don’t know what will happen. Everything is up for negotiation.

It should go without saying that any article written about events in the future is speculation by definition. 

And yes, everything is indeed up for negotiation. The British government could, for example, agree to gift everyone in Ireland a Ferrari. But in practice, I think it makes sense to talk about what is realistic, and that means understanding that the UK government will have to strike a balance between ensuring that constitutional change in Ireland leads to a stable outcome, while protecting itself and its own taxpayers. 

14. You’re just a unionist talking down a united Ireland. 

Ad hominem criticisms of this kind are not really worth paying attention to, but no, I am not a unionist. Maintaining the UK union isn’t something that particularly interests me. However, a serious conversation about Irish unity must incorporate careful consideration of what it will cost and how it will be implemented. So far, the necessary degree of seriousness has been conspicuously absent.

In my opinion, there should not be a border poll at the very least until a serious plan has materialized that has consensus across Irish nationalism, and preferably when nationalism can demonstrate that the consensus has a chance of securing a majority at a referendum. The lack of serious discussion about issues such as pension provision, and a variety of other things, suggests that this day is further away than ever. 

The author is a member of the Alliance Party, but is writing an entirely personal capacity and does not speak for or represent any other person or organisation