There's a distinct air of optimism within the Department of Commmerce building in Belfast these days. The gloom and despondency that perrvaded the place after the Strathearn Audio fiasco and during the major facctory closures of 1976 have seemingly evaporated. The obvious pleasure with which officials recount recent investtment coups implies a belief that in the fight to reverse the slide into mass unnemployment, the Northern economy is winning a decisive rearguard action.
On the face of it, this new-found confidence seems well based. In the year since Roy Mason announced a £ 1,000 million boost for the economy, Departtment of Commerce officials have travellled, often with Mason, throughout Europe, the USA and, more recently, Japan trying to tempt industrialists to set up shop in Northern Ireland. Their efforts have met with some success.
So far, four American corporations have announced plans to start 'up operaations. A VX, one of the world's largest manufacturers of electronic capacitors, intends to build a 300-job factory in Coleraine. General Motors is to take over the old Rolls-Royce plant in Dunndonald to produce seat belts and emmployment for 600 people, and Coronary Care Systems plans to manufacture addvanced heart-care equipment in Bangor giving a further 200 jobs.
The most spectacular promise of innvestment has, of course, come from the much-publicised John Z. DeLorean. If his plans for assembling 20,000 sports cars annually in a repossessed carpet factory in Twinbrook succeed, as many as 2,000 people from the blackspot of west Belfast will find work, some for the first time in their lives.
These successes, coming after several very lean years, have generated an exxcitement in the press and among offficials that sometimes transcends the harsher reality. One senior official at the Department of Commerce likened the present period to that when Brian Faulkner was at the Ministry of Commmerce. Between 1963 and 1969 Faulkner persuaded 104 companies to invest in the province and in the first three years of his stewardship he and his aides travelled over 150,000 miles in their quest for industry. Local and British press reaction to Mason's econoomic drive has been effusive. The Financial Times termed it "the turning point" and one magazine, the prestiggious trade journal, The Engineer, went as far as calling it "an avalanche of new investment which is decimating dole queues and paving the streets of Belfast with gold."
But four swallows do not make a summer - especially in the cheerless North. The long-term outlook for the economy is still bleak and while tradiitional investment criteria are rigidly addhered to it seems destined to remain so.
Northern Ireland not only suffers a severe unemployment problem but, more so, a chronic sectarian imbalance among the unemployed. This is reflectted in wide regional differences. While the average workless rate hovers bettween 13 per cent and 14 per cent, it dissguises the situation west of the River Bann, the effective border between east and west. Strabane, for instance, has 28.5 per cent of its working population idle, Newry has 24.6 per cent, Cooksstown 23 per cent and Derry 18 per cent. Similarly, the lower than average figure of 9 per cent for Belfast fails to reveal the situation in west Belfast where unnemployment ranges from 30 per cent to 50 per cent in some areas.
Given that Northern Ireland west of the Bann and west Belfast are predomiinantly Catholic, the obvious conclusion is that Catholics suffer disproportionaately from unemployment - a view with which the Fair Employment Agency agreed in January of this year when, in its first report, it showed that Catholics outnumber Protestants on the dole queue by nearly three to one.
Although the Catholic community has suffered from the present recession, the underlying reality is that, since the creation of the state, unemployment has been endemic to Catholic areas. The natural economic disadvantages brought on by partition deprived the west of much of its industry and ensured that the emigrant boats were loaded with Derry, Fermanagh and Tyrone families €a development much to the electoral addvantage of Unionists. Deprived of its natural hinterland, Derry and its once thriving port withered into insiggnificance.
Successive Unionist policies of conncentrating the creation of infratures in already prosperous east Antrim, east and north Belfast and north Down or in the artificial growth region of Craigavon has ensured scarcity of jobs for Catholics. One of the two rail links to Derry was abandoned and the New University of Ulster was sited in the Unionist stronghold of Coleraine. The first motorway was built, not to Derry, the North's second city, not to link up in the future with Dublin, but to Dunngannon via Lisburn and the new city of Craigavon. The second motorway serrvices Lame and the equally loyalist Ballymena. The electricity power staations were concentrated in east Antrim and the North's only major airport was built just north of Belfast.
In Belfast, this policy took the form of siting new industrial estates and addvance factories in the mainly Protestant eastern and northern parts of the city. A status quo was imposed on the trainning of industrial skills. Any Catholic seeking a career in the engineering inndustry still has to travel far to obtain training - and these days that can be dangerous. The only two Government Training Centres for apprentices in west Belfast concentrate almost exclusively on the building trade, in which one in every five Catholics work.
Any new industry looking for innvestment potential in Northern Ireland is therefore propelled, almost inevitably, towards Protestant areas. There it will find skilled labour well used to the disscipline of factory work, a good road and communication system, and access to the large British and European markets.
The consequences of this discriminaatory policy were highlighted during Brian Faulkner's tenure at the Ministry of Commerce. In his autobiography, he claims his strategy was to re-model and diversify the economy. The old tradiitional industries of textiles, shipbuildding and agriculture had by the late 1950's declined and needed to be reeplaced by younger, vigorous industries. Armed with generous development legiislation, his subsequent investment drive was a success.
By 1969 the 30,000 job target of his five-year development plan had been all but achieved. Large multi-nationals like Goodyear, Court aulds, ICI, Ford, Michelin and British Enkalon had esstablished plants in the North. One of these, Goodyear, later made Craigavon the base for its European operations. Faulkner's political reputation was creaated during this period. The image of a tough, energetic and super-efficient operator made him a natural contender for Unionist party leadership.
A closer examination of his investtment achievements, however, reeveals that not only did the new jobs merely replace those lost in declining Protestant dominated industries but that they went to those areas that needded them least. Seventy per cent of Faulkner's new factories were located east of the Bann when unemployment in the Belfast, east Antrim and north Down area was below 5 per cent. Even in those days of relative economic proosperity, unemployment in towns like Newry and Strabane rarely fell below 12 per cent.
The bulk of new jobs went to the food processing, engineering, motor, airrcraft and man-made textile industries, according to the Fair Employment Agency, which is dominated by Protesstants. Of the various multi-nationals that appeared on the scene during this time, only one, STC in Enniskillen, gave significant work for Catholics. The rest went to the Belfast-east Antrim-north Down triangle.
Far from having "created a soundly based and diversified economy," as he claimed, sectarianism in the factory and on the dole queue became firmly institutionalised during Faulkner's office. The average Catholic worker remained unskilled, low paid and victim to proolonged periods of idleness while his Prootestant counterpart continued in real terms to be much better off.
The present recession, however, has hit hard at the Protestant community. Not since the "hungry thirties" have there been as many out of work. Strings attached to a £1,000 million loan from the International Monetary Fund led to British government spending cuts in February 1976. As a result, the RollssRoyce plant and the Royal Naval Air Yard in east Belfast closed down and the two STC factories in Enniskillen and Larne were run down. Loyalist leaders protested at what they termed "British economic withdrawal" and Ian Paisley and William Craig shared a platform with trade union leaders to demand the re-instatement of Protestant jobs.
Despite political protests, hardly a week goes by these days without news of a factory closure and further job losses. Each month's unemployment figures are compared gloomily with those of the 1930s. In November, indu stry Minister Don Concannon described the economic outlook as "grim" and esstimated that an extra 30,000 more jobs were needed to restore unemployment to 7 per cent by 1981. The Department of Commerce has recently revised that figure to 40,000. Seven thousand new jobs are needed annually just to keep unemployment static and the Econoomist Intelligence Unit has predicted a workless total of 18 per cent by 198!.
Mason's present economic strategy is based on the hope that when the British and European economies recover and start to expand Northern Ireland will be carried along. In August last year he annnounced a massive injection of £1,000 million to give the economy some headdway. As a response to the Quigley reeport on the economy of July 1976, Mason's economic package was neither fish nor fow!. It did nothing to reverse the sectarian character of employment and actually weakened the structure of the economy.
By increasing capital grants from 40 per cent to 50 per cent, reducing the industrial tariff for electricity, prooviding 50 per 'cent research and deevelopment allowances and making £700 million available in grants over the next five years, Mason has made the North an attractive place to invest in. Before his plan was announced, the Brussels-based consultancy agency Plant Location Innternational had concluded that "Overall Northern Ireland gives the best package of incentives in Europe." Now that package must be one of the most generous in the world.
The Northern Ireland Development Agency, the Department of Commerce's merchant bank, can tailor any financial deal to suit the requirements of indiviidual companies. According to Don Conncannon, some investors need only pay 60 pence per £ 1 00 invested in initial plant and machinery. But the grants are much more favourable for industries that are capital-intensive. According to Plant Location InternationaL companies with a very high ratio of machinery and equipment to workers fare best with Mason's type of in centives. As techhnology-based industries, their inherent impulse is to reduce dependence on labour.
It's a situation of "running to stand still," as a Department of Commerce official put it. The creation of jobs not only becomes a much more expensive but also less fruitful and more risky. While the government uses a yardstick of £12,500 per job, the Delorean jobs will cost at least twice that. Michelin's expansion in Ballymena, mainly financced by the Department of Commerce, will cost £42,500 per job. Other commpanies have announced investment plans that will actually cause lay-offs. In Derry, Du Pont's £29 million expansion, announced after Mason's sales trip to the States in November 1977, will reeplace 300 men by new equipment. In February last year, Gallahers announced the prospect of 500 redundancies to follIowan £8.5 million investment project. The average number of jobs created per new factory has declined dramatically from 180 in 1963 to 68 in 1976.
By enhancing capital biased incenntives Mason has exacerbated the probblem of structural unemployment in the long term and effectively shelved that of Catholic unemployment. The option of state-directed investment or of state ennterprise has, in the wake of the failure of Strathearn Audio in Andersonstown, been firmly rejected. A more energetic government role in job creation would produce an uncomfortable precedent for unemployment blackspots in Britain. But with unemployment creeping innexorably upwards each month and a political solution nowhere in sight Mason, or his successor, may soon have little alternative .•