Northern Ireland Assembly Flax Flower Logo

Northern Ireland Assembly

Tuesday 3 July 2001 (continued)

Mr Poots:

The Minister referred to the provision for footpaths in town centres and the need for collaboration with agencies such as district councils. Will the Roads Service liaise with the district councils at an early stage to establish ways to clear and grit footpaths in winter? The Department is trying to encourage people to use means of transport other than cars. Last winter, many pedestrians had to walk on the roads, which was very dangerous. I would like footpaths to be cleared and gritted.

Mr Campbell:

I am at a disadvantage, because I have not been present for the entire debate. The Roads Service will write to every district council to try to reach a series of agreements with them. Mr Poots is correct to state that many footpaths and pedestrian zones become dangerous in extreme weather conditions. There have been occasions on which council staff could have cleared those footpaths and zones, but were not asked to do so because the necessary agreements had not been put in place.

The review will speed up that process and ensure that there is urgent communication with councils over the next couple of months, well in advance of the winter gritting season. I hope that, at that stage, councils will be able to enter into an agreement with the Roads Service. Although the agreements will be voluntary, the public will benefit from them.

The Deputy Speaker:

Time is up. I congratulate the Minister and Members on keeping the debate brief.


Industrial Development Bill: Second Stage

The Minister of Enterprise, Trade and Investment (Sir Reg Empey):

I beg to move

That the Second Stage of the Industrial Development Bill [NIA 18/00] be agreed.

Members will recall that the Agenda for Government identified the focusing of the economic development agencies on new economic challenges as a key issue. In taking that matter forward by means of the Industrial Development Bill, I have considered how the economic development agencies within the remit of the Department of Enterprise, Trade and Investment can be reorganised to meet those new challenges in the most efficient and effective manner.

As a first step, I commissioned detailed research on the current arrangements and on how economic development support is administered in other parts of the United Kingdom, the Republic of Ireland, mainland Europe and further afield. I also sought a detailed report on local enterprise provision. Last October, I issued a consultative paper entitled 'Towards a new structure for economic development support in Northern Ireland'. It was sent to members of the Executive, to the Enterprise, Trade and Investment Committee, to business bodies and to other social partners, among others, through the Economic Development Forum and the Northern Ireland Public Alliance, the trade union representing staff in the existing agencies.

Responses were received from over 40 interested parties, representing a wide cross section of opinion. The overwhelming weight of opinion supported the view that the time was now right for better and more efficient delivery of economic development support services and that the best and most efficient means of achieving that was through the establishment of a new single agency. The predominate opinion was that such an agency would have more flexibility, more credibility and would be more responsive to the needs of its clients if it were at arm's length from Government.

The Industrial Development Bill will establish a single economic development agency as a non-departmental public body. Members will recall that I recently proposed that the new body be known as Invest Northern Ireland (INI). The Bill transfers the powers provided by the Industrial Development (Northern Ireland) Order 1982 to Invest Northern Ireland. That will allow it to exercise the functions currently within the remit of the Industrial Development Board (IDB), the Local Enterprise Development Unit (LEDU), the Industrial Research and Technology Unit (IRTU), the business support division of the Department of Enterprise, Trade and Investment - formerly part of the Training and Employment Agency - and the business support activities of the Northern Ireland Tourist Board. It also transfers the current assets and liabilities of those bodies and amends the Industrial Development (Northern Ireland) Order 1982 and the related legislation that underpins their activities.

The main purpose of the Bill, therefore, is to establish Invest Northern Ireland and transfer powers to it. Although the Bill specifies the parameters of matters such as membership and remuneration of the board of Invest Northern Ireland, as well as staffing and financial arrangements, it seeks only minor variations to existing powers in respect of the provision of financial assistance to business. Consequently, the Bill has no significant impact on the policy and functions of existing agencies.

The Bill consists of eight clauses and four schedules. I will briefly outline the key aspects of the principal clauses. First, I must point out that the Bill should be read in conjunction with the Industrial Development (Northern Ireland) Order 1982, as the main functions of Invest Northern Ireland will derive from Part III of that Order.

Clause 1 establishes Invest Northern Ireland as a body corporate, and, in tandem with schedule 1, sets out its status, constitution and procedures. Paragraph 1 of schedule 1 defines Invest Northern Ireland's status as a non-departmental public body; it is not, therefore, an agent of or the property of the Crown. Paragraphs 2 to 4 cover the setting up of the board of Invest Northern Ireland. They enable the Department of Enterprise, Trade and Investment to appoint a chairperson and a board consisting of between 10 and 20 members. The composition will reflect experience in the various activities of Invest Northern Ireland and shall, as far as possible, be representative of the community in Northern Ireland. The Bill also allows for a member of the board to be appointed as deputy chairperson. All appointments will be for up to five years.

It is intended that both the chairperson and members of the Invest Northern Ireland board will receive remuneration and allowances at a level determined by the Department of Enterprise, Trade and Investment. As Members will have noted, advertisements have already appeared in the local and national press seeking to recruit persons to a shadow board, which should be in place before the end of August 2001. We plan to advertise the post of chief executive designate before the summer is over. The chief executive designate will assist the shadow board in its deliberations on the preparatory work essential to the establishment of Invest Northern Ireland. For this reason, paragraph 5 of schedule 1 provides that the Department will appoint the first chief executive of Invest Northern Ireland. I will, of course, consult the members of the shadow board and involve them in that most important appointment. Invest Northern Ireland will appoint every subsequent chief executive.

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Paragraph 5 also provides for Invest Northern Ireland to appoint additional staff as it considers appropriate. Paragraph 6 allows for staff employed in the Northern Ireland Civil Service to be seconded to Invest Northern Ireland. It is envisaged that, in the first instance, a significant body of civil servants will be seconded to Invest Northern Ireland for a transitional period. That will mean that, from day one, Invest Northern Ireland will employ staff who are experienced in its field of operation. Through time, staff on secondment will have to decide whether to return to the Northern Ireland Civil Service or become permanent staff of Invest Northern Ireland.

Paragraph 7 empowers Invest Northern Ireland to determine employees' remuneration and allowances, to maintain pension arrangements and pay gratuities. Those determinations will require the prior approval of my Department and the Department of Finance and Personnel. Paragraphs 8 to 12 empower Invest Northern Ireland to establish committees and the proceedings governing their meetings. The accountability of Invest Northern Ireland is of paramount importance, and paragraphs 16 to 18 allow for the funding of Invest Northern Ireland by the Department. Those paragraphs also set out the requirement that the agency produce proper accounts for each financial year. As a non-departmental public body, Invest Northern Ireland will be able to make payments in accordance with terms and conditions to be agreed with my Department and the Department of Finance and Personnel.

Officials in my Department and the Department of Finance and Personnel are already working on the practical details of the new accountability arrangements. I look forward to working in co-operation with my ministerial Colleague, Mark Durkan, and the members of the Committee for Enterprise, Trade and Investment to ensure that we achieve the essential balance between maximum freedom and flexibility for Invest Northern Ireland and appropriate control and proper accountability.

From the financial year ending March 2003, Invest Northern Ireland must produce proper accounts and make them available to the Department of Enterprise, Trade and Investment and the Comptroller and Auditor General (C&AG). The Department will then lay the subsequent C&AG report and the accounts before the House for scrutiny. Similarly, the Bill requires Invest Northern Ireland to produce for the Department of Enterprise, Trade and Investment an annual report, which will be laid before the Assembly.

Paragraph 19 brings Invest Northern Ireland within the scope of the Commissioner for Complaints (Northern Ireland) Order 1996 and thereby brings it within the scope of section 75 of the Northern Ireland Act 1998.

Clause 2 and schedule 3 transfer existing industrial development powers to Invest Northern Ireland, thus creating its powers. In broad terms, that means that from the appointed day, Invest Northern Ireland will exercise the functions previously carried out under Part III of the Industrial Development (Northern Ireland) Order 1982 and article 3 of the Energy Efficiency (Northern Ireland) Order 1999. Clause 2(1)(a) will enable Invest Northern Ireland to provide financial assistance for industrial undertakings. Clause 2(1)(b) enables Invest Northern Ireland to take action for the purpose of promoting the efficient use of energy in industry.

Clause 2(3) obligates Invest Northern Ireland to advise the Department generally on the formulation of its industrial development policy. Although the Department of Enterprise, Trade and Investment will retain responsibility for economic development policy, an essential aspect of that will be guided by the practical experiences of Invest Northern Ireland in its crucial role of programme delivery. Clauses 2(4) and (5) empower the Department of Enterprise, Trade and Investment to issue directions to Invest Northern Ireland after consulting with it.

Schedule 3 sets out the amendments that the Bill makes to the Industrial Development (Northern Ireland) Order 1982 and the Energy Efficiency (Northern Ireland) Order 1999. Paragraph 15 amends schedule 2 of the Industrial Development (Northern Ireland) Order with regard to the compulsory purchase of land by Invest Northern Ireland. It will enable the Department of Enterprise, Trade and Investment to make a vesting order at the request of and on behalf of Invest Northern Ireland if the latter proposes to acquire land without agreement. One of the effects of the amendment will be to lessen the likelihood of any criticism that the body seeking the vesting order and the actual vesting body are one and the same.

Clause 3 and schedule 2 dissolve the existing bodies. Subsections (1) to (3) effect, from the appointed day, the dissolution of the Industrial Development Board (IDB), the Local Enterprise Development Unit (LEDU) and the Industrial Research and Technology Unit (IRTU). Clause 3(4) removes the Northern Ireland Tourist Board's powers to provide assistance for the purposes of providing or improving tourist accommodation. The power to provide assistance for those purposes will be exercised by Invest Northern Ireland under article 7 of the Industrial Development (Northern Ireland) Order 1982, as amended by this Bill. The Northern Ireland Tourist Board will no longer have the power to offer grant assistance for tourist accommodation. From now on, tourism businesses will be treated like any other businesses. That change is made in response to points raised by the Northern Ireland Tourist Board and the wider tourism sector.

Schedule 2 makes provision for the transfer of the relevant property, rights, liabilities and staff to Invest Northern Ireland. That will involve the transfer of permanent staff from LEDU and the Tourist Board and the transfer of property, rights and liabilities from LEDU, the Tourist Board, the Department, IDB and IRTU. It also specifies the transitional arrangements for the preparation and laying of the necessary final accounts and reports of the bodies being dissolved.

Clause 5 details amendments and repeals. Clause 5(2) removes an existing restriction in article 7(6) of the 1982 Order, with regard to the taking of equity as a means of offering financial assistance. Current policy thinking no longer sees the taking of equity as a last resort, and the amendment will enable Invest Northern Ireland to utilise the taking of equity more proactively in offers of financial assistance. That brings the legislation into line with existing practice. Reflecting 'Strategy 2010' thinking, it also offers the prospect that the Exchequer will benefit from the most successful projects, because the Government will have the opportunity to share in the success of companies.

Subsection (3) is a technical amendment to deal with a minor anomaly in the charging of interest on loans made under the 1982 Order. There have been instances where the principal and interest on a loan are not repaid by means of instalments but are repayable in total on or before a specified date. In such cases article 7(7) of the 1982 Order does not apply, and additional interest cannot therefore be charged. Hence, I am seeking to modify the provision to allow for additional interest to be charged irrespective of whether the principal or interest is repayable by instalments.

Clause 6 retains in the Department of Enterprise, Trade and Investment the powers under the 1982 Order to offer financial assistance to the gas and electricity industries, responsibility for which will remain with my Department. It is, however, only a temporary saving until the issue can be fully addressed in forthcoming energy legislation. The saving therefore expires three years from the appointed day.

Clause 7 gives the Department the power to bring the provisions of the Bill into force by order. As Members will be aware, it is intended that Invest Northern Ireland be established in early 2002.

I hope that the Bill will pave the way to the creation of what I believe is the desire of all Members and the wider business community: a new and vibrant economic development agency. The Bill will establish Invest Northern Ireland and will enable it to respond quickly, efficiently and effectively in an intensely competitive global marketplace in which the emphasis must be on getting the job done and not on bureaucracy.

I want to express once again our appreciation for the professionalism and hard work of those currently employed in the existing agencies. They have had exceptional years, especially last year. The moves that we are making are not a reflection on their abilities but rather an understanding that the nature of business and the relationship between Government and business must change in modern circumstances.

Northern Ireland is slowly climbing back to normality, and it is essential that we capitalise on the new opportunities that are opening up to us. If we are to attract the best, we must modernise, innovate and seek new and better ways of doing the job. The Industrial Development Bill lays the necessary foundations to enable us to realise our vision for a new and better Northern Irish economy, and I hereby commend the Bill to the Assembly.

Dr Birnie:

I pay tribute to the Minister. This change has been mooted for a long time, and he has taken the initiative and acted. The separation between the two main agencies, IDB and LEDU, based on company size, has created confusion. A precedent was recently set in the Republic of Ireland, where one agency was brought into being with two internal branches, one relating to industry of home origin and the other to externally owned firms.

I want to make three points about the Bill. The first is the need to build on past achievements; the second is getting the right person for the top of the new agency; and the third is the need for the general policy and direction of the agency to focus, as the Minister said, on raising the productivity of the Northern Ireland economy.

There is a need for a balanced view of the past. At the end of his speech, the Minister rightly said that as we are now marking the end of a series of agencies - or their incorporation together into one larger body - it is appropriate to pay tribute to all those who have worked in those bodies in previous decades. The bookshelves groan under the weight of the reports and books that have sought to evaluate those agencies over the past 25 years: the Northern Ireland Economic Council; the Economic Research Centre; the Economic and Social Research Institute; and others. I confess that I was involved with one or two of them.

As IDB and LEDU pass into history, we should note that since 1969 they have had to labour under more difficult circumstances than those faced by their counterparts in Wales, Scotland or the Republic of Ireland. It is also worth saying - the point has been made in this House, and it may be made this afternoon - that, contrary to the allegation that there was a bias in the way in which those agencies worked in different parts of the Province, all the available academic studies suggest that the distribution of inward investment into Northern Ireland was equitable. I refer to, for example, a study conducted in the department of economics at Queen's University, which came to that conclusion.

IDB and LEDU have had different cultures for dealing with companies. It is important that the good is preserved when we bring them together. For example, in the past decade, LEDU has built up a system of creating strong relationships with companies that were identified as having high growth potential.

My second point relates to the importance of getting the right person at the top of the new agency. It is not possible to go into specifics, but it would be desirable to have someone with a high level of business experience and wider international experience. They will have to be paid accordingly. It may not be populist politics to say so, but the salary should reflect internationally competitive standards for executive pay.

Finally, with regard to the broader policy environment, the agency should focus on raising the productivity, or output per head, of the Northern Ireland economy. There is a good argument to be made that that has been the crucial problem facing our economy since 1921, because it has fed through into so many other characteristics, such as relatively high rates of unemployment.

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Our levels of gross domestic product per head have moved up slowly toward those in the rest of the United Kingdom and Europe, but it has been a slow, and irregular, process of so-called convergence. Indeed, since about 1990, the available indications suggest that our standard of living has got stuck at roughly four fifths of the United Kingdom and European Union average. There are no clear trends of improvement. Similarly, there has been a shortfall in relative productivity, especially in manufacturing and some other sectors. During the early part of the 1990s, our wage levels began to decline in relation to those in the rest of the United Kingdom.

On a previous occasion, when referring to the development of the single agency, the Minister talked about innovation and research and development as the golden thread that would run through the structure and purpose of the new body. I welcome that, not least because there is so much evidence to show that increasing the level of research and development will, in turn, have an impact on the level of relative productivity and general industrial competitiveness. With those three points in mind, I commend the Bill.

Dr McDonnell:

The amalgamation of the IDB, LEDU, the Industrial Research and Technology Unit, the business function of the Tourist Board and the business support division of the Department of Enterprise, Trade and Investment was a high priority on the wish-list of much of the corporate community - indeed, most of the political community - in Northern Ireland for many years. I am thankful that that wish is now set to become reality.

I pay tribute to the work of many. I have no doubt that the process would have been significantly slower, and perhaps non-existent, had it not been for the work of the Executive, the Assembly and the Committee for Enterprise, Trade and Investment. Although I do not want to single out any individual, I feel that Members will forgive me for recognising the unique role played by the Minister. He has shown a single-minded determination to make the changes that he feels are required to face the commercial challenges of the twenty-first century. Many of us agree with him. Perhaps it is no accident, for his views were honed in the city hall in Belfast where, in the past, he and myself and others experienced only frustration and despair in dealing with the predecessor of the Department of Enterprise, Trade and Investment.

That said, the Bill is largely functional. It is difficult to disagree with it, because the functional role is largely taking over the existing liabilities and responsibilities. My serious concerns with the new agency are to do with its philosophy and culture, rather than the purely functional aspects. The Minister, in the course of his speech, suggested that the philosophy and culture would not change too much. I worry about that. I believe that the culture has to change quite a lot.

If we were to use a couple of words to sum up the restructuring process, they would be "creating synergy". At the heart of the process is the hope that the synergy of combining public sector experience with private sector expertise will significantly strengthen the hand of those promoting and nurturing new business in Northern Ireland. It has long been held that to get the proper calibre of investment, to provide the growth strategies required for new business and to target new areas for research, we needed to have a much stronger private sector influence. I hope that the decision to open up a space for private sector influence will make a significant contribution to the welfare of the whole community.

We have been assured that Invest Northern Ireland will not simply be IDB with three additional arms flailing about wildly. I believe that there is still a risk of such an outcome. The work of the new agency could be hampered by a heavy overlay of bureaucracy. The Civil Service has a key role to play in the process but, for better or worse, it should not have the dominant role. Too much bureaucracy strangles the culture of enterprise and risk. The safety mentality is at odds with the corporate culture of the bodies that we are trying to attract. Getting the balance right between, on the one hand, accountability and political control and, on the other, opening things up to commercial realities is at the nub of the matter.

Like other Members who have spoken, I salute the IDB and other bodies such as LEDU and the IRTU for the work that they have done. Invest Northern Ireland must be market-led and outcome-driven. We must speak the language of corporate USA, corporate Europe and corporate Britain - the language of marketing. The new agency must decide what it wants to achieve and what shape Northern Ireland business - Northern Ireland plc - should take in the next five, 10, or 15 years.

The top priority for the new agency - I have mentioned it before - is to create an open, dynamic and committed strategy for research and development. If that is not built in at the core of everything and at every level, we will never be able to do what we want to do. We have had some successes recently with call centres, software projects, and so on, but research and development is crucially important if we are to identify the opportunities offered by rapidly evolving technology. It is not a new approach on this island. In the 1980s, senior figures in the Industrial Development Agency (IDA) and the Department of Enterprise, Trade and Employment in the South made a major effort to identify opportunities and put their economy in a position to attract new investment. The result was what is referred to as the "Celtic tiger". I would not overrate the "Celtic tiger", but the Southern Irish economy was given a major boost.

We cannot offer a 10% corporation tax rate here, but we can offer many advantages. Our greatest strength is our people. There is a large pool of well-trained, highly educated people, ready and able to work, if the work is available for them. We also have a range of incentives that we can offer to those who might wish to invest here. We cannot simply react to events; we must think and act strategically, and research and development is a key component of that.

If we want to be market leaders in new and emerging fields, it is imperative that research and development be at the top of our list of priorities. We have had many success stories in the past few years in areas as diverse as global e-mail, wireless application protocol (WAP) technology and electronic components. Many indigenous companies triumphed. We must encourage others, and to do that we need an environment that is conducive to doing business.

Above all, we need to remove the fear and stigma of failure in business. Last August some Committee members accompanied the Minister on a visit to the United States, where failure is almost a qualification for future success. Those who have failed and have used that experience to come back and succeed are among the top business people in the United States. However, those who do not try at all will never succeed.

In Silicon Valley, California, which we hear a great deal about, the most respected leaders are those who have failed. Some of them have failed more than once and yet rise and fight again. In Northern Ireland, we tend to write off people who fail. In doing so, we are probably choking our potential future resource. Someone who has almost made it to the summit of Mount Everest has a hell of a lot of experience that can be brought to bear in climbing a slightly less elevated mountain.

Invest Northern Ireland should be a guiding light in creating a more business-friendly environment and in doing so should be the engine that makes things happen. If that can be attained, the restructuring will have achieved many of the Department of Enterprise, Trade and Investment's objectives.

Ms Morrice:

I welcome the Bill and the close co-operation that there has been between the Minister and the Committee for Enterprise, Trade and Investment. The Industrial Development Bill is an important step in the modernisation of Northern Ireland's approach to economic and industrial development. It is important that we get it right. The new agency is a vast undertaking, and it will become a super-agency with a combined budget for this year of at least £200 million.

The important message at the end of the Minister's statement was that the emphasis must be on getting the job done and not on bureaucracy. There is an absolute commitment that Invest Northern Ireland will not become tied up in its own bureaucracy as a result of being a super-agency. It must always keep its feet on the ground and get its priorities right.

The Minister mentioned the composition of the board; he suggested that, as far as possible, it should be representative of the community. That representation of the community should take gender balance into account. Sadly, there has been a lack of women at the top of the economic development tree in Northern Ireland. That is reflected in the world of economic development. It is one area in which women do not appear at the top of the management structure. It would be appropriate if as much as possible could be done to make the board representative of the gender balance in Northern Ireland.

Certain staffing representations were made, and the Equality Commission proofed the Bill on those grounds. The facts speak for themselves. A breakdown of staff according to gender is available for the new agency. Fifty-one per cent of the staff are female and 49% are male - exactly representative of society. However, at senior management level - principal and above - 16% of the staff are female and 84% are male. That is not acceptable today. Proactive measures are needed to encourage the promotion of women. Thirty-nine per cent of staff in middle management are female, but something must be done to break that glass ceiling and allow women to rise to their rightful positions in top management in economic development. It is right that people are nominated to the economic development forum, but it would be nice if something could be done to get more women involved in the forum. Their voices are important at that level also.

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I want to talk about the geographical balance of the aid provided by the agencies in Northern Ireland. It may be a policy matter, but perhaps it could be reflected in the functions of the new agency. I have read the figures of the Department of Enterprise, Trade and Investment and its agencies on the geographical spread of funding and support.

I will begin with the Industrial Research Technology Unit (IRTU) and the thousands of pounds committed. I note that north Down and south Down are at the bottom of the heap as regards research and development. It comes as quite a surprise to me that that is the case, when other areas can rise to £2 million or £3 million. My calculation is that south Down is getting £0·2 million. The geographical balance of aid is important.

I would like to talk about the geographical balance of IDB assistance by district council area. Although I represent North Down, I am astounded that Moyle does not feature. Perhaps there is a statistical explanation for that. There has been virtually nothing for Moyle in investments and IDB assistance by district council area in the last five years - and nothing for Armagh.

Mr Paisley Jnr:

Will the Member give way?

Ms Morrice:

No, I want to get to these points.

There has been nothing for Armagh, and that is an important point. I would be interested to hear the explanation for it. It could not be because those areas have no investment potential.

I welcome the fact that the Bill will promote the efficient use of energy in industry. It is part and parcel of the amalgamation that is part of the legislation. I would like to see much greater advances in that area, and I would like more notice to be taken of energy efficiency, renewable energy and aid for renewable energy. That is an important priority. Dr McDonnell referred to research and development. That is important, but I believe that green energy, whether it be energy efficiency or renewable energy, is very important.

The Minister said that there should be

"maximum freedom and flexibility for Invest Northern Ireland and appropriate control and proper accountability".

That is vitally important, and we will watch it with a great deal of interest. Dr McDonnell commented on the philosophy and culture. We believe that as far as possible there should be a grass-roots culture, which should protect and invest in local indigenous industry, while being farsighted in getting new industries on board.

Mrs Courtney:

I commend the Minister for getting the Bill to this stage. He has has gone into great detail about the new agency, Invest Northern Ireland, and the transfer of staff.

I would like to make a special plea to the Minister, and he will not be surprised to hear that it is for the north-west. Derry has been recognised in report after report as a regional hub. Would it not be eminently sensible for Invest Northern Ireland to have a substantial presence in the Maiden City? The closure of the IDB office some years ago left a particularly bitter taste in the mouth of the people of Derry, especially of those people who were actively involved in the economic and industrial regeneration of the city. The Minister has a unique opportunity to correct a wrong and at the same time to build upon Derry's spirit of enterprise and innovation. I ask the Minister to facilitate Invest Northern Ireland in locating a substantial presence in the north- west, particularly in our own Maiden City - not just a few additional jobs in the Derry office, but a real presence. It is important that the Minister act now. After Invest Northern Ireland is set up, the arms-length relationship will reduce the Minister's influence in decisions on job locations. For too long, the people of Derry have had to make do, without a substantial presence. I ask the Minister to address the matter.

Mr McHugh:

Go raibh maith agat, a LeasCheann Comhairle. This is an important Bill, and it has the impact that the Committee wanted. However, for the rest of us, its importance lies in what the new body might do in comparison with what has been done in the past in our own areas. I welcome the change to what is perhaps a superagency, but an important factor is that people will be watching what will happen. This body is not LEDU and IDB repackaged; it must make an impact on its own. However, I am concerned that there has been some jockeying of the previous bodies to make way for the future body. I hope that this is a change for the better.

Since 1982, massive changes have taken place in the global economy. The new body will have a completely different agenda to work to. It must deliver locally for small and medium-sized businesses in rural areas, and it must help the individual. An agency with glossy annuals is of no use if it neglects the representatives of small business who read of what can be achieved in the media but can achieve nothing for themselves. That perception must be surmounted by the new body; it must make a different image for itself by helping small businesses to achieve.

It was said that IDB and LEDU have delivered equitably. Fermanagh people would not necessarily go along with that. The difficulty with the way that those bodies were set up was that they were not able to deliver to small businesses. We hope that that will change. The economy in Fermanagh and Tyrone is like that of many other rural areas. It depends on small rather than large businesses. Businesses that create jobs for 50 plus employees often fall between two stools, while businesses started by single entrepreneurs that create between five and 10 jobs fail for lack of capital. The local challenge must be dealt with. Competitiveness and benchmarking against the achievements of the South and other countries such as the USA are critical. The South is the world's second largest exporter of IT software, the first being the USA. That is a considerable achievement, but such an approach also runs the risk of putting all the eggs in one basket.

I look forward to seeing the outcomes and achievements of this body. There is a mindset among people in many institutions - including, in some instances, the Civil Service - that everything stops at the end of the M1. Such people do not consider sending investors to places west of the Bann. That mindset must change. At the very least, investors must be encouraged to move to other areas. In the South, investment in the outer reaches is actively promoted. Perhaps that can be done here.

There is no doubt that we are limited to areas that people want to invest in. Some people may want to build their factory in Belfast or Craigavon, and we cannot do much about that. However, local Governments such as ours can actively promote areas, encourage investors to visit those areas and to see them as places where corporate people can enjoy a good quality of life. Quality of life is almost as important as the distance one has to travel for business.

The IT industry does not require transport over long distances. It can also work to enhance the environment in areas such as Fermanagh, where the environment is an important factor. On the other hand, people such as Sean Quinn would not be allowed to build anything today if it were up to the planners.

Designated tourism areas are important. We will gain much from tourism, but there are other industries that we would like to see moving to Fermanagh and Tyrone. The changes that will come as a result of the erection of the new body will be for the betterment of the people in those areas, improving their quality of life and creating jobs.

Sir Reg Empey:

I have listened carefully to what was said, and I will try to reply to as many points as possible. We will look at Hansard later and, if necessary, I will pick up on any concerns that Members have expressed if I miss them now.

Dr Birnie referred to the importance of having the right person at the top of the organisation. I assure him that the Department has been thinking about that. We have appointed special consultants, with whom I spent some time in London, and we went through the profile of the type of person that we would wish to see occupying that position. We also recognise Dr McDonnell's point that the appointee would have to be given a package appropriate to the post. We have taken advice on that. We have compared the situation with that in other jurisdictions, and we believe that we have arrived at a competitive package. I made it clear to the consultants that the person must know what a customer is. That type of experience is crucial to performing what will be a very important function. The person involved will preside over an organisation of 700 or 800 people with a budget of approximately £200 million per annum. It is an important and responsible job. It will involve interfacing with the public sector, and there are accountability issues. Therefore it is a high profile position.

Dr Birnie also mentioned the issue of productivity per head. There are a number of ways in which the Minister and my Department will continue to influence that. Three-year corporate plans will have to be produced, and there will be an annual operating plan. We will have to agree those plans, and it will be clear that we have to set out targets and objectives for the agency. That is the mechanism through which we intend to have influence over those issues. Targets based on benchmarking and scoping studies will have to be set, and the Assembly will have to be able to evaluate whether those targets are being achieved. Indeed, that will be one of the ways of measuring the success, or otherwise, of the agency.

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Raising performance levels and having a balanced view of the past are important, but it is felt that we have moved on, that businesses have changed and that the previous agencies were set up at different points over a 30-year period. Dr Birnie referred to the unique way that Northern Ireland previously divided businesses by size, when the principles very often remained the same. Also, large employers are no longer around as they were 30 years ago. It is time for a change. I want to make it clear to Members that it is not simply a matter of bolting together the existing agencies - we are creating a new one. I want to come back to that point.

Dr Birnie and Dr McDonnell referred to research and development, which I said was the golden thread that will run right through the agency. There is absolutely no doubt - Dr Birnie and Dr McDonnell have raised this point on many occasions - that if the innovation strategy is not brought right to the core of the agency, we will have failed. I readily accept that.

Things have moved on, and there must be a different approach. Many ideas have been generated through research in universities, by private companies and even in the public sector. Industry can convert those ideas into productive processes or tradable services that will enable us to bring products to the market and differentiate us from the low-wage economies.

Dr McDonnell also mentioned the philosophy of the agency. I hope that he did not pick me up wrongly. I do not anticipate that we will simply carry forward what was there before. There must be a new approach. I accept entirely that it must be based on innovation. Private sector involvement and influence will, of course, be crucial. However, we readily accept - and the Minister of Finance and Personnel is watching this closely - that although that there has been a reduction in the assistance offered by the state over recent years, it is not only money that matters to businesses. They require a whole range of other services and assistance that can be critical to their ability to survive and grow. The growth of small businesses and an increase in the start rate will be two of the benchmarks and targets that we must set. Although the sustainability of our new businesses is quite high, our start rate is low. That is another challenge that has been set up for us.

The concept of IDB with three additional arms flailing around is certainly not my vision, nor that of the Committee or of Members. We see a totally different organisation, but the new agency must start somewhere, and it will start with persons who currently work for the other bodies. It will take time to get going, but it will ultimately have control of its own destiny. Our task will be to ensure that the new agency is set targets and asked to do things that are realistic.

I have referred to the stigma of failure. Dr McDonnell is of a similar view to myself. It is a problem in Northern Ireland and in these islands. In the United States, the attitude varies from place to place, but people there do not wear bags over their heads if a business does not work out. As Dr McDonnell said, those people are often at a premium because they have had an important experience.

The issue of accountability has been mentioned. The new agency has been referred to as a very large organisation with a substantial budget. However, while wanting to have the maximum flexibility, we also want to ensure that the accountability arrangements are appropriate and that this House continues to have sight of and control of the resource. As I said in my opening statement, my officials are working with officials from the Department of Finance and Personnel to ensure that the issues of accountability are properly dealt with. The Department of Finance and Personnel has specific responsibility for those issues, and we will work closely with it as we move forward to ensure that there is access for the Comptroller and Auditor General and that Members of this House have full and free access to all financial and other information.

Ms Morrice referred to a number of issues, and I want to draw one or two points to her attention. She raised the question of gender issues, not only at board level but also at staff and other levels. She will be aware that some weeks ago we advertised very widely in local papers and further afield for membership of the board. We received in excess of 150 responses, but I have to say that the number of applications from women was in single figures. I want to put on record that, from a gender point of view, that response was exceedingly low and disappointing. That does not go into the nature and quality of the applications received, which are now being dealt with; rather, it refers to the volume of applications from women. That is a matter of very grave concern to our officials, who are currently interviewing for the board. We have of course brought in an independent figure to sit in on those interviews, and I am satisfied that the structure of those will meet with Members' approval.

Clearly, the concern about gender relates not only to the board. I take Ms Morrice's point. When this agency is up and running it will have its own equality schemes, and those will have to be approved in the normal way. Currently, schemes such as IDB's are covered by the departmental scheme. IDB is at present an integral part of the Department of Enterprise, Trade and Industry. There is no doubt that there is an awareness of the issue, not only in the economic development agencies but throughout the service. I know that the Minister of Finance and Personnel is watching these matters carefully, as we have made commitments in the Programme for Government to achieve progress in these matters right across the board.

I must make a number of points on the geographical balance of aid. IDB and the economic development agencies have client companies in different locations. Moyle was mentioned, and regrettably we have only two client companies in that district council area. It is not necessarily the case that those particular businesses either come forward with, or can be encouraged to - or wish to - put themselves forward for, any of the schemes operated by the Department. It also depends on the nature of the businesses. Ms Morrice also mentioned north Down and south Down. Again, with regard to research and development, it depends on the concentration of businesses and where the most appropriate businesses for that type of activity are located. There are historical issues that are outside our control. I can assure the Member that the question of distribution is one that is continuously and consistently brought to our attention. However, Members have to be aware that business is where business is.


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