It is an enabling state, in which the pursuit of equality of opportunity and social justice is no longer counterposed to an environment favouring competition and excellence. Thus while the new Assembly chimes with international trends, its politicians will find the exercise of government by no means the pulling of the relatively simple levers of a quarter century ago. The task is to find the right level of autonomy in addressing the challenges of globalisation and competition. Indeed, the old debate around how much governmental intervention has become a debate about its quality. Market failure in Northern Ireland is reflected above all in the failure of the labour market to clear.
Social inclusion is the priority area for public expenditure and policy-making.
Yet the formula has yet to be applied in the context of decentralised government for which it was devised, owing to the collapse of the then Labour administration's devolution plans. Yet the Assembly can, and should, set itself ambitious policy targets, particularly in economic development and the quality of public decision-making. Central government will have to learn to 'let go'. But the increased visibility of fiscal transfers to Northern Ireland, Scotland and Wales is likely to bring pressure for reduction of the differential support they enjoy. The best response by the devolved bodies is to embrace transparency and support a comprehensive needs assessment and an Australian-style Territorial Exchequer Board.