Northern Ireland's Financial Crisis Sparks Fears of Violence

Belfast
The 'Good Friday' agreement should have ended Belfast's troubled period but sporadic violence, such as the unrest last year, continues. Alex Livesey/Getty

On a damp Friday afternoon outside ­number 6 Blythe Street in the Protestant heartland of ­Belfast, a tattered Union Jack flutters in the breeze. Nearby, a mural of footballer George Best, a victim of his own troubles, adorns the brick wall of a housing estate while another shows paramilitaries from the Ulster Freedom Fighters unleashing salvoes of machine guns fire into the grey sky.

It is just a short walk to the Catholic stronghold on the Falls Road. Screaming sirens herald a team of paramedics flanked by a police rapid response unit.

A young man, soon to be pronounced dead, lies in a pool of blood in an alley near Divis Street, his body punctured by gunshots. His name is Edward Gibson and he is 28 years old, the latest victim in a city where 3,568 people have lost their lives since the “Troubles” started in 1969, though the precise circumstances of his murder remain unclear.

Further north, the police are keeping a 24-hour vigil on the Twaddell Avenue camp, where loyalists have been protesting and occasionally rioting for more than a year about the right to fly Union flags. The police presence alone costs the British taxpayer £40,696 ($65,000) a day.

It is 16 years since the Good Friday Agreement, which brought about a shaky but enduring peace in Northern Ireland. This in turn helped launch the so-called “Celtic Tiger” economic boom, creating a short-lived time of economic parity between Northern Ireland and the Republic of Ireland in the south.

6 Blythe St In 2013, pro-British demonstrators took to the streets in violent protest when the city council announced it would no longer fly the Union Flag all year round at City Hall. Mark Porter

Now, while the Republic is quietly recovering from the financial crash after cutting spending and raising taxes, the north is in a fiscal quagmire. Its devolved Stormont government is currently thrashing out how to make savings to the welfare state, with public spending cuts likely to total up to £1bn.

Last month, the two biggest parties in the administration, the Democratic Unionists and Sinn Fein, agreed to back the budget following strong pressure from the UK Treasury, which threatened to cut a further £100m of emergency funding unless a tentative agreement could be found. Meanwhile, the other three parties who make up the administration abstained or voted against it, showing just how politically divided the province of Ulster still is.

There are fears that savage cuts to Ulster’s public services could trigger a new wave of tensions on its increasingly volatile streets. And with cuts to the already reduced police budget, there will be less ability to cope with any unrest.

“Further cuts will be an utter disaster, a vicious circle of which the only beneficiaries will be the criminals,” a former senior police officer told Newsweek.

Bumper Graham, assistant general secretary of the Northern Ireland Public Service Alliance (Nipsa), the 46,000-member union, said: “This is worse than anything that we have faced, worse even than the Thatcher years. We have ­increasing deprivation and an increasingly divided society. Northern Ireland is already one of the UK’s most disadvantaged regions and poverty has increased from 18% in 2002 to 22% in 2013. If implemented, the welfare cuts could cost £650 per adult of working age and up to £1bn per year lost from the economy. And you can expect to see 6,000 jobs being lost. The bulk of any growth here is in the private sector’s part-time, minimum wage sector.”

Graham’s assessment is a far cry from the business awards dinner being hosted on the same damp day when Edward Gimson was bleeding to death. The event was held at the 5-star Culloden Hotel in the city’s Holywood area, overlooking Belfast Lough. Here, the city’s great and the good, bow-tied and ball-gowned, congratulated themselves on just how well the private sector has been doing.

For this is a city of Haves and Have Nots, where the gulf between rich and poor has grown markedly.

George Best A mural of Northern Ireland footballer George Best, a victim of his own troubles. Peter Muhly/AFP/Getty

“Where once the divide was wholly sectarian, now it is largely financial, and looks set once again to open up old wounds,” says one longtime observer of Belfast politics.

The great shipbuilders, Harland & Wolff, have successfully remorphed into a vibrant but small company; train and plane makers Bombardier and high-tech pioneers Seagate are doing well; Caterpillar and BAe are big employers who have healthy balance sheets. The banks are coming back, too: Ulster Bank is looking healthy and various City and Wall St subsidiaries are moving in.

Then there is the Belfast film industry, part-owned by Tom Hanks, which is booming. Game of Thrones and the new Dracula movie were made in Belfast (and filmed largely on the ­Antrim coast) and there will be many more.

At the same time, the Province is hugely reliant upon the welfare state which, ever since 1969, has been bolstered by huge cash injections from Westminster. Some 60% of the population is employed either full-time or part-time by the public sector, and many now face the poverty trap as it contracts.

The chief economist of the Ulster Bank has ­likened the Northern Ireland economy to a house with a hole in the roof: fine until it starts raining. And now, it would seem, a force 10 storm is on its way.

“The analogy is exactly right,” says Dr Graham Brownlow, an economics lecturer at Queen’s ­University management school. “After the Good Friday Agreement there were good economic times. We rode the Celtic Tiger, money was coming in from the UK government and all was well. The problem is that the money was not invested.” He says the economies of Northern Ireland and the Republic were locked into the European economy and “if the Eurozone sneezes, the whole of Ireland catches a cold”.

A solution proposed by the business community to the economic problems of the North involves dropping the corporate tax rate from 20% to 12.5%, in harmony with the Republic.

“This is not a solution; it is a nonsense. We’d have ‘brass plaque’ companies. Also, because of EU regulations, London would be forced to implement a further cut of £400m in the public services block grant that the UK annually ­allocates to Northern Ireland,’’ says Brownlow.

There are other tensions. Down on the dockside, the giant yellow cranes known as Samson and Goliath look out across the biggest shipbuilding dock in Europe. They are the twin icons of Belfast’s once flourishing shipbuilding industry and symbolise the erstwhile might of Harland & Wolff, builders of the Titanic.

The company might not be building supertankers but it is busy refurbishing and building oil and gas platforms, offshore wind turbines and tidal power constructions, not to mention ship repairs and the manufacture of widgets. Indeed they built the world’s first tidal stream turbine in 2008 and take on extra casual workers when required.

All this requires skilled labour and much of this is coming from abroad, particularly Eastern Europe. There are currently 26,000 Poles living in the Province but integration is not proving easy, with frequent reports of racist attacks in the city’s more impoverished areas. Anxieties have been inflamed over housing and scarce resources.

Eva Grossman, a Polish émigré who is now CEO of the Centre for Democracy and Peace Building, teamed up with Professor Pete Shirlow of Queen’s University to produce the Unite Against Hate campaign following a series of high profile race attacks, mainly perpetrated by young unemployed Protestants.

The Protestant underclass are the “left behind” of the troubles, the progeny of the old shipyard workers now disenfranchised by an economy that no longer needs them.

Often illiterate with only basic numeracy, they remain firmly rooted to their communities and are easy fodder for the “conflict entrepreneurs”, those who are making money from the grey economy, according to Dr Mike Tomlinson, professor of Sociology at Queen’s University. “They don’t have the same structure as their Catholic counterparts, who have well worked migratory routes to jobs abroad.”

They are also easy prey for the bosses of organised crime and troublemakers who are back on the ascendent, said Dr Joanne Murphy, author of Policing for Peace in Northern Ireland. Cigarette, alcohol and fuel smuggling have replaced terrorism, and there is a growing issue with drugs and prostitution.

At the Belfast Central Mission in Glengall Street, the Reverend Richard Johnston is concerned about the prospects for the city’s vulnerable young. At the Methodist centre, he is busy planning 5,000 food and toy parcels for the poor as Christmas approaches. The Mission is 70% funded by the government to work across the community, and the future is far from clear.

“This is a divided city. The queues at the food banks get longer. Our job is becoming increasingly difficult as the poor get poorer,’’ Johnston remarks.

Back at Stormont, the government headquarters, plans for cuts are being thrashed out. Details are unlikely to be known until early in the New Year. The recent talks have been overseen by former American senator Gary Hart, who has been appointed new US special envoy to Northern Ireland and will oversee his country’s colossal investment in the country.

Hart is not playing down the difficulties ahead: “It’s at least as complicated as our very complicated talks with the Soviet Union on nuclear ­disarmament over the years,’’ he says. “And I don’t mean that facetiously.”