Northern Ireland

NI state papers: Economy 'bleak' in 1986

Harland and Wolff shipyard, Belfast Image copyright PA
Image caption The Belfast shipyard still employed thousands in the mid-80s

The bleak state of the Northern Ireland economy in 1986 is captured in previously confidential government files just released in Belfast under the 30/20 Year Rule.

A report on the economic situation, dated 23 June 1986, noted that the oil crisis of the early 1970s had a severe impact on the economy.

In the period 1979-85, manufacturing output in Northern Ireland declined by 7.5% (compared with 5.2% in the rest of the UK).

There were 460,000 people employed in Northern Ireland, reflecting a shrinkage of 11% from 1979.

The public sector accounted for 44% of employees, compared with 38% in Great Britain, and provided much-needed spending power to maintain other jobs.

In addition, 14,100 were employed in the RUC and prison service.

Staggering

The report noted that the region's traditional industries such as clothing, footwear, textiles and tobacco accounted for most of the collapse in the manufacturing industry, yet "the remaining rump of these traditional industries still accounted for 40% of Northern Ireland's manufacturing base".

The size of the public sector was staggering. Harland and Wolff (workforce 5,000) and Shorts (7,000), Northern Ireland's two largest manufacturing companies, were both operating in "precarious world markets" and could suffer job losses.

Also, many of the indigenous industries were being supported by the Industrial Development Board (IDB).

In total, some 80% of manufacturing employment was either in companies assisted by the IDB (66,000) or in private ownership (Harland and Wolff and Shorts - 12,000 employees).

The report was discussed at a meeting of Northern Ireland Office (NIO) ministers and senior officials at Stormont Castle on 15 June 1986.

The head of the Northern Ireland Civil Service, Sir Ken Bloomfield, said that economic prospects were a cause for concern.

He highlighted the fact that "some 30% of Northern Ireland's A-level students, normally the better ones" were entering university education outside Northern Ireland.

Of these in 1984, 85% did not return.

Responding, Dr Brian Mawhinney, the NIO minister for education, noted that there would be a need to promote 12,000 jobs a year just to keep pace with unemployment.

Image caption Dr Rhodes Boyson - Westminster was becoming impatient

For his part, Dr Rhodes Boyson, minister of state, felt the tensions in the community after the signing of the Anglo-Irish Agreement had added to Northern Ireland's difficulties in attracting new industrial investment.

He felt that Westminster was becoming impatient with Northern Ireland. There would be difficulties in persuading Whitehall that it was a special area.

Dr Mawhinney agreed that they should take a radical view.

"People needed to be aware of the consequences of their actions," he said.

"At present, they were insulated from the full effects of damaging business expectations because Northern Ireland, as part of the fiscal union, could not devalue, reduce public expenditure or raise taxes.

"But decoupling from parity in wage levels and social security benefits, if it could be achieved, would introduce an element of realism."

While not disagreeing, Richard Needham, the NIO under-secretary, felt it would be difficult to move people away from parity in the social security field.

However, "people ought to be prepared for the political consequences of their political inaction and if present levels of unemployment were partly caused by the better-off opting out of the political process, then perhaps ways of paying consequences of their abstention would have to be sought."

He felt that differential wage levels raised interesting possibilities, especially in the health sector.

Radical re-think

Summing up, Secretary of State Tom King said there was a need to change perception and influence opinion in Europe and the United States.

He would fight again for the next Ministry of Defence order for which Harland and Wolff might bid, but it was clear that the shipyard would never be the major employer of former years.

The meeting recorded a bleak conclusion:

  • The economic prospects were very bleak
  • The manufacturing base was severely damaged and fragile
  • There was a need for a radical re-think.

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