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Social Exclusion, Social Inclusion
Michael Menissey Twenty-one of the 50 most deprived wards in Northern Ireland are in Belfast. Sixteen are in north and west Belfast alone. Some district council areas, like North Down, have none. Indeed, the most deprived ward in North Down (Conlig) is ranked 219th in the region as a whole.[1] As Vani Borooah has demonstrated a disproportionate share of income in Northern Ireland is held by its 'work-rich' households, exacerbating the poverty of the 'work-poor'. Inequality, particularly spatial inequality, is a dominant characteristic of the region. This degree of inequality has profound implications for regeneration programmes. Building a new social and political order will be severely inhibited by such divisions, particularly since those areas of greatest affluence have been least touched by two and a half decades of political conflict. Does a 'new Northern Ireland' need greater internal redistribution as well as external investment? Work-rich households have three advantages over the work-poor. Obviously, a high proportion of household members are in employment - frequently full-time, relatively well-paid employment. Secondly, a high proportion are in public sector employment and enjoy wage levels determined UK-wide (admittedly, the growth of decentralised wage bargaining is reducing this), while cost-of-living estimates, for example by Reward Regional Surveys, suggest Northern Ireland is one of the cheapest regions to inhabit. Finally, and relatedly, house prices are significantly lower than in other regions, suggesting outstanding mortgages are also lower. Since housing costs are generally the largest item in household expenditure, this last factor is said to augment disposable household income. It has also been suggested that this 'surplus' of household income is spent on leisure services and imported consumption goods, neither of which contributes to the region's economic growth. In assessing the scope for redistribution within Northern Ireland, however, the absolute - rather than relative - income held by individuals is most important, as it indicates the potential sums available. Yet, only 29.8 per cent of Northern Ireland households had weekly incomes greater than £375 in 1993.[2] This was the lowest proportion for any UK region other than the North of England and compared with a UK average of 36.5 per cent. Northern Ireland contains not only high proportions of households with low weekly incomes (28.7 per cent below £125), but also low proportions with high weekly incomes. In terms of individuals, only 3.7 per cent had incomes greater than £30,000 per year, compared to 6.4 per cent in England and 5 per cent in Scotland.[3] Moreover, about 7.5 per cent of total income tax in the UK is raised within the 40 per cent band. Only 5 per cent of Northern Ireland's total is similarly raised.[4] Nevertheless, the income tax data point to one anomaly: the average amount paid by individuals in the 40 per cent band in Northern Ireland is disproportionately high - almost £3,000 per year compared with just £2,000 in the North of England. Is this a basis for substantial redistribution through shifting income tax bands? There are 22,000 individuals in Northern Ireland paying tax in excess of the basic rate, which raised £60 million in 1992-93. If a special regional tax supplement increased the higher tax rate by half, to 60 per cent, the gain would be in the region of £30 million. This is hardly a princely sum. Indeed, if it were distributed among the region's poor, it would merely give each poor household an additional £6 a week! The argument that low housing costs increase disposable income is also less convincing than at first sight. True, in 1993, Northern Ireland households spent 9.4 per cent of income on housing, compared with a UK average of 16.2 per cent.[5] Again, however, to gauge the scope for redistribution, percentages have to be replaced by amounts. Also, the focus has to be on the owner-occupied sector, where the relative advantage of Northern Ireland lies, and here the relevant group is in the process of purchase rather than owning outright.
The average weekly mortgage repayment for this group in Northern
Ireland was £26.72, much less than the UK average (£42.96),
but only marginally less than the North of England (£30.66)
or Yorkshire-Humberside (£31.16). If the difference between
the Northern Ireland mortgage payment and that of the lowest British
region were somehow made available for redistribution (say through
the abolition of mortgage tax relief), the sum involved would
amount to just over £40 million per year. Thus, even if a tax premium was levied on those paying greater than basic-rate income tax in Northern Ireland, and the relative mortgage-payment advantage was reduced to that of the next lowest region, only about £70 million per year would be liberated for redistribution - adding no more than £15 per week to the incomes of the poorest households. Such resources are marginal indeed, compared to the subsidy between regions enjoyed by Northern Ireland-the subvention by the British Exchequer, now running at over £3 billion per year. Given the small sums the exercise outlined above would generate through redistribution within the region, it is questionable whether the gain would justify the effort. Moreover, it would undoubtedly be regarded as politically draconian, provoking substantial unrest from those expected to pay an income tax and a mortgage premium. Yet, even if the numbers are small, some mechanism of this kind remains worth exploring. This for three reasons. Firstly, the process of debating the concept of internal redistribution would place the political spotlight on the extreme spatial inequalities in Northern Ireland. Secondly, it would point to the universal responsibility for tackling social exclusion - particularly upon those who have experienced neither poverty nor the conflict. And, thirdly, it would emphasise that compensatory programmes, like Making Belfast Work, are not sufficient to address social exclusion: a comprehensive, integrated effort is required.
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