Peace deal brings hope of fresh investment for Northern Ireland

The European Union is likely to provide the most significant outside investment for regeneration, writes Anthony Bevins

NORTHERN Ireland can expect an enormous cash peace dividend if the new inter-party agreement stays on track.

Mo Mowlam, Secretary of State for Northern Ireland, reported only last week that a special European support programme for Peace and Reconciliation had topped pounds 300m since it was introduced in 1995, "as a means of contributing to the peace process".

That support is expected to continue beyond next year, as a way of underpinning the peace and regenerating investment in one of the most hard-pressed regions of the European Union.

The US is also expected to deliver special assistance, given President Clinton's involvement in the Stormont Agreement.

The Chancellor, Gordon Brown, will visit Washington on Thursday to chair an international meeting of finance ministers and to attend meetings of the International Monetary Fund and World Bank. Northern Ireland's economic and investment needs are expected to be discussed.

But aid from the European Union is likely to provide the most significant outside support for Northern Ireland - and the border counties of Ireland, also covered by the Peace and Reconciliation programme.

Total allocations from the existing fund have so far amounted to pounds 228.6m from Brussels, with a British top-up of pounds 77.1m. An overall total of pounds 71m has gone to social inclusion projects, while other programmes include urban and rural regeneration, employment, productive investment and cross- border development.

The Peace and Reconciliation aid comes on top of other European programmes, which go to all parts of the UK, including money from the European Regional Development Fund; European Social Fund; and the European Agricultural Guidance and Guarantee Fund. Total Northern Ireland receipts from those European Community institutional funds for 1997-98 were expected to total pounds 293m, compared with planned receipts of pounds 269m this year.

But Northern Ireland also continues to do very well from the distribution of the domestic cake, with the highest slice of per capita spending going to the people of the area.

Treasury statistical analyses published last week show that general Government expenditure by country for 1996-97 was pounds 5,484 per head for Northern Ireland, pounds 4,826 for Scotland, pounds 4,620 for Wales, and pounds 3,885 for England.

While there was a slight increase in the differential between Scotland and Northern Ireland in the four years up to 1996-97, the biggest jump was in the gap between England and Northern Ireland over that four-year period - from a difference of 39.2 per cent to 41.2 per cent.

While every man, woman and child in Northern Ireland received public services worth an extra pounds 1,302 in 1992-93, the difference had risen to pounds 1,599 per head by 1996-97.

If the peace is held, that difference could become more marked, even though savings can be expected from the law and order budget as the high level of security is reduced.