SUBGROUP ON THE ECONOMIC CHALLENGES (Emerging issues session) Thursday 3 August 2006 Members in attendance for all or part of proceedings: The subgroup met at 3.34 pm. (The Chairman (Mr Wells) in the Chair.) The Chairman (Mr Wells): I call the meeting to order. I remind members that seven is the number required in order for there to be a quorum, so we have a quorum and no more. We are expecting one more member to attend, so I ask members to bear in mind that we need to keep seven around the table at all times. Dr McDonnell: Mr Chairman, I will be under considerable pressure to leave once it creeps towards 4.25 pm. The Chairman (Mr Wells): I hope that Mr McElduff will be here by then so that there will still be seven members. Once again, I remind members to keep their mobile phones switched off. Apparently, some of this morning’s proceedings could not be recorded because somebody’s mobile phone was on. It happened while the subgroup was inquorate, so it may not be crucial. Every now and then I hear the slightest hint of a text message — perhaps the results of the Galway races are being broadcast to members’ mobile phones. Mr Ford: That will be the DUP members. The Chairman (Mr Wells): I have received apologies from Margaret Ritchie. John Dallat is attending in her place. Mr Ford: Sean Neeson also sends his apologies. The Chairman (Mr Wells): I am very glad to see Mr Dallat here. Mr Mitchel McLaughlin is not here, but Mr McElduff is in his place. I understand that Ian Paisley Jnr is not here. Wilson, are you substituting for him? Mr Clyde: I am junior. [Laughter.] Dr McDonnell: No better man. The Chairman (Mr Wells): You have improved enormously, junior. [Laughter.] The Chairman (Mr Wells): Who are the Ulster Unionist representatives? Dr Birnie: My understanding was that David McNarry would be here. The Committee Clerk: He put a question mark over his attendance when I asked him earlier. However, we knew that if Dr Birnie were present that the subgroup would be quorate. The Chairman (Mr Wells): It looks as if this is it, folks. We must make absolutely certain that we keep our quorum. The Committee Clerk: I had a discussion with the Editor of Debates and the Deputy Clerk about the meeting being inquorate for six minutes earlier today. The decision was that we cannot have an Official Record once the subgroup becomes inquorate. An unedited transcript of the six minutes — minus the portion lost due to the interference of the mobile phone, whosever it was — will be produced so that we will have a verbatim record of what was said. Mr Weir: Is the quorum rule completely strict? If we start quorate but become inquorate in the course of the meeting, we cannot continue — The Committee Clerk: It is absolutely strict. Statutory Committees have become inquorate in the past. I had been advised informally that, if the subgroup became inquorate for only a couple of minutes, we could ignore it, which was what we did this morning. Clearly, that was not the case. Dr McDonnell: Some of us argued earlier that six members might be a better quorum, but some of your colleagues felt that they wanted seven. Mr Weir: It is a wee bit academic, since we have presumably been given the law engraved on tablets of stone from on high. The Chairman (Mr Wells): The draft minutes of today’s sessions will be tabled at next Tuesday’s meeting. There are no minutes as such. The draft transcripts of Tuesday’s session, including the evidence of John Simpson and Enterprise Northern Ireland, should have been issued to members. Everyone has seen them. Any corrections should be returned by the close of play on 7 August. Please look at the transcripts to make sure that they are OK. I want to get a couple of housekeeping issues out of the way. First, and I do not know whether this was reported this morning, I wrote to myself, and the Committee on the Preparation for Government agreed yesterday to the subgroup’s request to extend the deadline for our report by one week, to 25 August. Of course, that is predicated on the Secretary of State’s decision on moving the dates for plenary business to 11 and 12 September. We have not yet heard from the Secretary of State on that. However, the Preparation for Government Committee was more than happy to agree. The Committee Clerk: We discussed that this morning, and it was agreed that there would be two sessions on the draft report and a written evidence session the week before that. The Chairman (Mr Wells): That will be a busy period for us. The Ulster Unionist Party nominated Mr Jim Wilson for chairmanship, so the subgroup will have five Chairmen. I understand that the Alliance Party has nominated Naomi Long and that the SDLP has nominated Alban Maginness, who, as a former Chairman of the Regional Development Committee, is a very experienced hand. We now have a full complement, which will lessen the burden on Mr Molloy and me and enable us to concentrate on the meetings on the institutional and policing and justice issues. That is good news all round. The Committee Clerk: If the subgroup is content, we propose to put the three new Chairmen first on the rota and come back to Mr Molloy and you when you are available. That means that the two more experienced Chairmen who have been involved in more meetings will take the last few meetings. That seems a sensible approach. The Chairman (Mr Wells): Therefore, Mr Wilson will be the first. The Committee Clerk: Not necessarily. It could be any of the three. The Chairman (Mr Wells): Is everyone happy with the arrangements? We seem to have a fine mixture of youth, good looks and experience. Dr McDonnell: Is it reasonable to make proposals or suggestions, or do we just go on a roulette-wheel basis? The Committee Clerk: It will be on the basis of what is practical and who is available for each meeting. I will check with the three people and construct a rota that suits them. The Chairman (Mr Wells): Mrs Long has the youth, and the good looks I might add. Mr Ford: And a fair bit of experience, Mr Chairman. The Chairman (Mr Wells): We will now move on to the substantive part of the meeting, which concerns the emerging issues. I have found the evidence sessions that I have chaired and witnessed to be extremely helpful. The standard of questions and material presented to the subgroup have been extremely high. Perhaps I am biased, but I sat on the Enterprise, Trade and Investment Committee with Dr McDonnell for many years and we had much more difficult sessions than we have experienced here recently, and some very interesting and thought-provoking points have emerged. This morning, members were given a copy of a paper on emerging issues. Did everyone receive it and have a chance to read it? Of course, the paper does not include issues arising from this morning’s session. Our Clerks are good, but even they are not that quick off the mark. The subgroup needs to decide whether the paper captures the essence of the issues that have emerged, whether anything needs to be added, or if there is anything in the paper that members disagree with. The subgroup will then need to identify and agree the salient points that have come out clearly in the evidence and in the discussions. The Committee Clerk: Mr Chairman, a couple of papers need to be presented now. I have prepared a summary of the initial research paper, which was presented by Dr Gilleece. It also lists a lot of the main points of the evidence sessions. I have also asked the Clerk of Business, who has been working for the subgroup for the past few days, to prepare a paper which provides a summary but also goes into some of the potential solutions. A third paper has just been presented to the subgroup by Dr Gilleece, and he will talk to the subgroup about it shortly. The papers are really aides-memoires — thoughts that we have pulled together. The key issue for staff is to put all of the evidence into a report that the subgroup can sign up to. We must be absolutely clear about the subgroup’s direction, and this session will be a hour’s worth of thinking about that. The Chairman (Mr Wells): Is everybody content with that structure? We have until 4.30 pm to come up with the bones. Mr Weir: I would like to clarify one issue. Are we simply identifying the issues emerging from the evidence at this stage? I assume we are not agreeing any wording on particular issues at this point. The Chairman (Mr Wells): That is correct. Could we bring in Dr Gilleece now? The Committee Clerk: That would be useful. Dr Gilleece: Thank you. As regards innovation, several themes come through in the paper, which help demonstrate a lot of the issues that have been raised. The consistent message that we are getting from the presentations is the necessity for change and for transforming accepted working practice. 3.45 pm From an economic perspective there are several strategies that are accepted drivers for innovation, and these should be fully exploited. However, the presentations have also emphasised the importance of innovative practices in the public sector and of changing the way we work and the approaches employed to address social and economic challenges. Adopting a new approach is fundamentally the most important reason for the success of the economy in the Republic of Ireland. Also, from the economic perspective, a factor common to successful regional economies in Europe is the key priority given to innovation, in which R&D is key. Regions such as Emilia-Romagna in Italy; Baden-Württemberg in Germany, and Silicon Valley in California are acknowledged as having highly successful innovation systems. They fully exploit their innovative capability and consequently enjoy the benefits of rapid growth. A more R&D-intensive, innovative and knowledge-driven economy tends to result in better, more sustainable jobs and higher wages. Innovation does not refer just to economic strategies; it is also concerned with reviewing and changing all aspects of our working practices. The Northern Ireland Business Alliance made that point. Innovation’s importance is elevated as a result of the globalisation of competition conditions, which is a point that Liam Nellis of InterTradeIreland touched on. The 1995 European Green Paper on innovation stresses that innovation is not just an economic mechanism or a technical process; it is above all a social phenomenon. With regard to economic development, that often means the commercial exploitation of R&D. Innovation also refers to the adoption of methods of working that, while not necessarily new, are radical changes to a particular organisation or sector. That applies equally to the private sector and the public sector. The Northern Ireland Business Alliance (NIBA) made the point that radical policy change is required if we are to change the trajectory of the local economy. They believe that this requires a social partnership between the public and private sectors, business and elected representatives, trade unions and the voluntary sector. NIBA highlighted changes in approach in several areas that are required if we are to move from being a public-sector-led to a private sector-led economy. One of the key points in NIBA’s presentation was that public sector behaviour can have a major influence on how the private sector develops. It said: “If we are serious about making changes, we need a complete review of how the public sector in Northern Ireland is run”. — [Official Report, Bound Volume 19, page SG 23]. “The Civil Service is so good at maintaining stability it cannot be agile; it cannot transform. We must break it up with a hammer, so that those who want to get on and do things are not prevented”. — [Official Report, Bound Volume 19, page SG 31]. “It will stop your best ideas coming forward, because it is designed to create stability and even out change.” — [Official Report, Bound Volume 19, page SG 31]. Change in the Civil Service and the public sector goes beyond structural and organisational change. At crucial points in the development of the Irish economy, civil servants have thought creatively and have taken innovative approaches, and that was instrumental. Dr T K Whitaker, secretary to the Department of Finance, and originally from Rostrevor, prepared a report called ‘Economic Development’ in 1958 that was a watershed in the transformation of the economy in the Republic of Ireland from being a mainly agricultural society into a modern, industrial-based economy. By contrast, it has been argued that the civil servants in Northern Ireland appear to be motivated by a fear of appearing before the Public Accounts Committee. The recent controversy about token entertainment that public servants received only serves to make them less likely to act autonomously and, more importantly, to think autonomously. In the early 1960s the Organization for Economic Co-operation and Development (OECD) held a conference in Washington on economic growth and investment in education. They asked for two countries to volunteer to do a national survey of their entire educational system. The Irish and the Austrian delegates were the only countries that were prepared to risk exposing their countries’ shortcomings to the world’s gaze. The existence of the team and the OECD report that was produced are regarded as landmarks. In 2003 the Department of Education and Science in the Republic of Ireland invited the EU Directorate for Education to undertake a similar review. That indicates a willingness to invite scrutiny and receive criticism in order to achieve an overriding objective of performance. Moving on to policy development and delivery, John Simpson questioned the delivery of strategies for innovation, R&D and training. From recently presented facts, it would appear that strategies on innovation and entrepreneurship, for example, did not have the impact that they should. That might indicate a need to change how policy is delivered, but also perhaps how it is developed. According to the economist Mike Smyth, an ever-widening experiential gulf exists between policy-makers and private economic agents. How can that lead to good policy-making? Perhaps it may be appropriate to harness the potential of the public sector to stimulate entrepreneurship. For public-sector employees, entrepreneurship training and basic business skills may help to improve policy development and encourage entrepreneurship. Regarding the education sector, there are three principal features in the education system of the Republic of Ireland that have led to its success: first, the breadth of the secondary-school curriculum; secondly, the high standards of university degrees; and thirdly, the availability of post-school training. Government has stated that there is a need to embed business training in the curriculum at secondary level in Northern Ireland. The Northern Ireland Council for Voluntary Action would like to see greater emphasis on life skills, personal development and citizenship. However, the overall key issue may concern the breadth of our educational system and the efficacy of any new initiatives that we introduce. The rapid progress in educational development in the Republic of Ireland has been achieved without lowering educational standards, as appears to be the case in Great Britain, at secondary school level and in universities. I now turn to third-level interaction with industry. John Simpson said: “FE colleges still, to a large extent, determine for themselves what they offer. That cannot be right.” — [Official Report, Bound Volume 19, page SG 96]. Dr Michael Maguire of NIBA said that: “We need to be able to push those ideas through a responsive education system that considers its jobs to be one way of helping to develop the economy in Northern Ireland.” — [Official Report, Bound Volume 19, page SG 26]. As far back as 1978, the Manpower Consultative Committee was set up in the Republic of Ireland to allow for dialogue between the Industrial Development Authority and the education system. The education system in the Republic of Ireland is now tightly integrated with the country’s foreign direct investment (FDI)-oriented development strategy. The resulting programme from the Manpower Consultative Committee produced a sharp increase in the output of graduates in electronic and mechanical engineering and in computer science. Output of engineering graduates increased by 40% between 1978 and 1983, while the number of computer science graduates increased tenfold in the same period. The view of the Industrial Development Agency and Forfás, the policy advisory and co-ordination board for industrial development, in the crucial areas of the labour and skills markets, have been more likely to lead to new course initiatives, or pump-priming by the Department of Education and Science or the Higher Education Authority, than any other source. In conclusion, individual recommendations taken forward in isolation will not meet the challenges facing the economy. The economist Mike Smyth has said that if the economy of Northern Ireland is to return to a more normal growth trajectory, a unique or abnormal set of policies will be required. This will require creative thinking and the willingness to consider radically new approaches. Innovation is about ambition and taking risks. It is about foresight and vision. The Chairman (Mr Wells): Thank you, Dr Gilleece. Hopefully, your presentation has helped to set the scene. We will now look at the list that the Clerk has prepared. Again, I emphasise Peter Weir’s point that we are not asking the subgroup to put the issues in order of priority or attach any weight to them; we are simply deciding whether the issues are relevant and important. We can return later to the fundamental decisions on how to tackle them. I suspect that that will involve quite a lively debate, but it is best to simply go through them for now. If members have additional points, feel free to catch my eye and I will give you an opportunity to speak. Mr McElduff: One point that may need to be factored in is the desirability of political stability, or whatever term members want to use to describe it. The business sector is telling us that it wants the institutions restored to bolster economic development. That can be translated as a need for political stability, but an overall political context must be considered, which will not breach anybody’s party politics. Business people are basically telling us that they would be a lot happier if local Ministers were making decisions about economic development. The Chairman (Mr Wells): That issue is referred to at point 15 of the Clerk’s list. However, Mr McElduff has approached it from a slightly different angle; we might want to beef that up. Again, the fact that it is numbered 15 does not mean that we think that it is the fifteenth most important issue. Some members might place that among the top three issues. The Committee Clerk: The second page of my paper notes themes from the evidence sessions. I have simply listed, from memory and from looking through the Hansard reports, issues that have arisen. I emphasise that the order is immaterial and does not reflect importance. That point has been covered. Perhaps, as the Chairman suggests, the subgroup would like to go through the list, adding to it as it sees fit. I can then compile a reasonably comprehensive list of issues. Mr McNarry: First, I would like to say that Dr Gilleece’s presentation was excellent and very helpful. Perhaps my question will sound naive. The Secretary of State has spoken of £16 billion of investment over the next 10 years. It would be helpful if the subgroup could see how that £16 billion has been broken down; that way we could know where the money is going and how it will be used. The subgroup might want to look at the Secretary of State’s ideas for using that money and compare it to our thinking for differences of emphasis as we prepare for devolved government. The Committee Clerk: We have added the Department of Finance and Personnel to our list. Officials will be coming here next week and may well have those figures. I hope they do. I will see if I can get them. Mr McNarry: Yes, they may well. This Secretary of State has been burning my ears with this £16 billion. The Committee Clerk: I am just wondering whether it will be them or the Department of Enterprise, Trade and Investment. I will contact both and get that. Mr McNarry: What I am really asking is this: he said there is £16 billion to spend, and I want to see how he intends to spend it. The Committee Clerk: We can get that. Dr Birnie: Having two papers is confusing, but I will start with the one that the Committee Clerk has drafted. I agree entirely with the point of the first item. Maybe this is getting into more substantive issues, but I am not sure that we should congratulate ourselves too much by saying that we are not much different from Wales and Scotland. We can perhaps have that debate in due course, because they also have relatively large public sectors, and their economies are arguably structurally poor as well. Item 12 covers much the same area as Dr Gilleece’s excellent paper. We should elaborate on item 12 in two ways. As John Simpson pointed out, there seems to be a chronic slowness in implementing policies. Dr Gilleece notes that our Civil Service structure does not seem to be fit for the purpose of putting policy into practice. He also refers to people being scared of appearing in front of the Public Accounts Committee. However, there is inevitably a trade-off: we all want to see absolute probity in the use of public money, and as political representatives and the publics’ stewards we must ensure that; but on the other hand we encourage public servants to take occasional risks. Invest NI, for example, has to take risks with investing public money to promote higher return in job creation in the long run. We need to highlight that dilemma. Point 16 in the Clerk of Business’s paper refers to the brain drain. We should add to that: it is often assumed that the problem is simply that people are choosing to leave Northern Ireland or are forced to leave due to economic and other conditions. There is another aspect to it: could it be that local businesses and, indeed, perhaps even the public sector, either because it is relatively small, or because of a culture of management, simply do not want to employ certain highly-qualified people here? There may be a problem on the demand side in the labour market here. The Committee Clerk: It is an interesting point to make, Esmond, because the Department for Employment and Learning has prepared a paper on why people are leaving. Is it because there are not enough university places, or because there is not enough work? Dr Birnie: No doubt it is a mix of those, but we need to capture that. 4.00 pm Mr Weir: I want to make a procedural point. We have three papers in front of us. It might be helpful to pick one paper and go through it. Many issues are identified in the papers, and there will be a fair amount of overlap. We should concentrate on one paper and then move on to the next; otherwise, it will be very confusing. The Committee Clerk: I recommend that course of action, not as a preference, but because a simple list would be easier to deal with. Mr Weir: Mr McNarry’s point is similar. Mr McNarry: It is similar. It deals with the point raised by Esmond Birnie about item 12 of the Clerk’s paper. Would that allow the subgroup, with your guidance, to examine the reduction in the number of Departments referred to by the Secretary of State? The Chairman (Mr Wells): Only if we could establish that that is an impediment to economic progress. Mr McNarry: I agree with the Secretary of State that the Civil Service is an impediment to political progress. However, departmentalising it along economic delivery lines would present another problem. A theme in the presentations was that one bit is doing this and another bit is doing that — Barry McElduff referred to that. The concept of joined-up delivery seems to be all over the place. The Chairman (Mr Wells): We must be careful not to stray into the work of the PFG Committee. Mr Weir: The number of Departments is a separate issue, and I share Mr McNarry’s view on that. Problems have been identified, but I suspect that Departments have tried to pretend that they do not exist. There is a lack of joined-up delivery on economic development. The number of Departments is less important than the fact that some the responsibilities seem to lie in various areas across half a dozen Departments, and there appears to be a lack of co-ordination and integration. Some Departments deny that there are problems and say that there is full liaison. The Chairman (Mr Wells): It was clear from the evidence that there was a dichotomy between the Planning Service’s aims and aspirations and those of DETI. Mr Weir: Whatever people might think about individual projects, when DRD or Roads Service make announcements, how are they joined up to show the benefits to the economy? Those announcements may be of benefit to the economy. However, it is important to realise that, prior to reaching those decisions, there does not appear to have been a great deal of consultation with people in the economic sector. Dr McDonnell: I agree with Peter Weir and I apologise to Mr McNarry. It is not the subgroup’s business to get involved in the number of Departments. It is about communication and connectivity. We had connectivity problems in the old Department of the Environment, where one corner of it did not know what the other was doing. The number of Departments must be dealt with, but it should not be dragged into the economic argument. Mr McNarry: I do not want to get into the deep political aspect of this matter, but it has been said that there will be a reduction in the number of Departments, and we should at least factor that in and consider how the Departments would work, and how many there might be — be that seven or nine or 11. I did not mean that the subgroup should decide how many there should be. Dr McDonnell: I accept that. However, from my perspective, the problem is a lack of communication and energy within the Departments, and not how many there are. Mr McNarry: There is a lack of management as well. Dr McDonnell: Yes, there is a lack of leadership and management. We could reach the stage where one Department would run everything, and it would resemble a madhouse. I refer to the paper by Paul Moore. Point one relates to the imbalance between the public and private sectors. The subgroup must consider and agree on the clear requirement for substantial private-sector growth. The problem is not that the public sector is too large, although some trimming, streamlining, refocusing and reinventing of various Departments is required. As in any business, as circumstances change, something that worked 10 years ago may be redundant today. The big challenge lies in the fact that, in general, the private sector is minuscule, and we need massive growth in it. The subgroup needs broad agreement on some of the parameters around that challenge. The subgroup must be efficient in its efforts to focus on one, two or three projects or ideas to unlock the economy. There is no point in our coming up with 20 ideas. The Chairman (Mr Wells): Any potential savings and efficiencies could be teased out when the DFP witnesses come before the subgroup. Mr Ford: During my 17-year career, I experienced three reorganisations of health and social services, and I am not convinced of the Trotskyite concept of continuing revolution in institutional structures. David McNarry put his finger on it a few minutes ago when he talked about the ways in which Departments work. That ties into what Peter and Alasdair said about the announcement of a £400 million roads package this week, for example. Witnesses from DE and DEL mentioned that they have co-operated on various matters. If Departments recognise the need for co-operation, and actually co-operate as opposed to merely saying that they are doing so, that would cover some of the issues of concern. However, the problem arises when other Departments make announcements, such as that about the roads package, with no reference to economic drivers. The Chairman (Mr Wells): As it is 4.05pm, and I am conscious that Alasdair is pushed for time, let us consider the part of the Clerk’s paper headed, “Evidence sessions” and go down the list of themes. We may be able to cover some quickly; others will require discussion. Point 1 refers to perceived over-dependence on the public sector. Mr Weir: I want to pick up on Alistair’s point, and, again, this is perhaps more about phraseology. The point is that the problem lies in the weakness of the private sector rather than over-dependence on the public sector. To some extent, those are two sides of the same coin. I realise that we are not trying to agree a form of wording, but it is a slightly different point. The Chairman (Mr Wells): Is everyone happy with a change of emphasis to tidy that up? Members indicated assent. The Chairman (Mr Wells): Do members wish to comment further on point 1? It is obvious that it must be included, and there is no argument on that. Dr Birnie: It may be statistically correct that the size of the public sector in Northern Ireland compares to those in Wales and Scotland. However, the fact that productivity in Wales and Scotland, as in Northern Ireland, is falling in relation to the UK average arguably results in a comparison with a poor standard. The Chairman (Mr Wells): Shall we delete that reference to Wales and Scotland? Mr Weir: I was going to suggest that on this issue, the paper prepared by the Clerk of Business referred to an: “Unbalanced economy between public and private sectors — a clear requirement for private sector growth.” That emphasis is closer to what we are aiming at than the wording of point 1 of the paper prepared by the Committee Clerk. Dr McDonnell: There is no harm in keeping the reference to Wales and Scotland. The point is that our public sector can be compared with those in Wales and Scotland. Perhaps the public sectors in Wales and Scotland are not as robust as they should be, but we must try to ground ourselves in some comparative reality, and the real issue is private sector growth. I am slightly worried that the general view seems to be that the only problem is that the public sector is too large. At least 95% of the public sector is required to sustain the community and services, etc. Allowing the public service to be put at risk, or putting about the notion that slashing public services would somehow achieve anything, would only serve to erode existing services. The clear challenge is to create jobs in the private sector in high-wage, high-value-added areas. The Committee Clerk: So far, all the witnesses have been consistent about there being no need to cut the public sector. They have all said that there is a need to continue to invest. Public expenditure growth should continue, but the private sector should be strengthened. Ms Gildernew: A strong point has emerged about the public sector’s inability to be agile and, if you like, to turn on a 50-pence piece. I am not keen on comparisons with Wales and Scotland, and previous witnesses have told the subgroup that those regions are not good comparators. Peter Gilleece mentioned the unbalanced economy between the public and private sectors. The main point is that we need to grow the private sector rather than slash the public sector. Peter Hain has pushed the point that we need to slash the public sector because of the imbalance, but that imbalance exists because the private sector needs to grow. The Chairman (Mr Wells): There seems to be general consensus on that theme. The next point is the low levels of business start-up, the high-cost business environment and over-regulation. Ms Gildernew: In relation to business start-ups, it depends on which part of the North is being referred to. However, I am more concerned about nurturing those business start-ups through their next phase of development. The important issue is the success rates of business start-ups. Are high-energy costs and barriers to SMEs included on the list? The Committee Clerk: They are included. Ms Gildernew: Can challenges to the SME sector in areas such as energy, transportation and manufacturing rates be included on the list? The Committee Clerk: This is not a definitive list. The Clerks compiled it to stimulate debate, so it has been a useful exercise. Mr McNarry: The list sends out a negative message, which is not the type of message that we want to send. We need to include some positive elements in our report that send the right signals to the Preparation for Government Committee. I hope that the report will generate a debate in the House. I would not go as far as the Secretary of State does about being world class, and so forth, but it is a goal worth aiming for. The report could be full of doom and gloom. Early on in our discussions, we said that we wanted to hear what witnesses had to say so that we could raise issues with the relevant Ministers. Quite honestly, I have heard nothing positive about innovation or any sound arguments about what needs to be done. Can we scope those issues? If we were to that, some ideas might emerge on how to deal with them? Mr Weir: The positive and negative aspects can be married in. The report will have an introduction, which will highlight the positives. These two lists cover the impediments. The impediments have been identified, and we need to discuss positive solutions. By their very nature, impediments are negative. Mr McNarry: Witnesses have said that the solution is to throw money at the impediments, but my capitalist nature cannot agree with that argument. It is not the solution in a small country such as ours. The Chairman (Mr Wells): The next stage of the subgroup’s work will be a major philosophical debate on whether money should be thrown at problem areas. Mr McNarry: I appreciate that. The Chairman (Mr Wells): This is simply a matter of whether we accept that issues have been raised and are important. We are not dealing with solutions. Dr Birnie: I agree with Michelle’s point. Item 2 on Alan Patterson’s paper is very good as it stands, but we must add that it is not just a matter of getting firms started, it is a matter of getting them to grow. All the evidence suggests that if 100 firms were started tomorrow, each employing one or two people, a quarter or half of them would collapse within a couple of years, and only one or two would ever grow to a position in which they employed 50 or 100 people. The question is how the policy makers identify firms with the potential for high growth for business incubation. A supplementary point that I tried to raise during a number of the evidence sessions concerns whether Northern Ireland entrepreneurs are, on average, inclined to growth, or whether they are inclined to grow to a certain size and then stop because they have achieved a reasonable standard of living and have begun to question the need to endure the hassle or to risk losing control. Mr McNarry: Point 14 of Alan’s paper might deal with that matter. Dr Birnie: OK. I missed that. Dr McDonnell: This point may be contentious, but it must be raised. Grants have not been mentioned at the sittings at which I have been present. My thinking on them changed as a result of my involvement in the Committee for Enterprise, Trade and Investment, in which you and others were involved, Mr Chairman. My thinking changed because grants are doled out in Northern Ireland on an ad hoc basis. One can be lucky and get a grant, or one can be unlucky and not get one. Sometimes, it is very difficult pinpoint the differentiator. I believe strongly that we must consider a small firms loan guarantee scheme, such as that operated in the States. I hope to raise that matter with the Department of Finance and Personnel when its representatives appear before us. In the States, instead of handing out grants here and there, the authorities use £5 million or £6 million as a pump-primer key. That money is used as insurance and, in turn, the banks are asked to put £100 million on the table, with that £6 million used as the underwriting factor. The banks then loan money at base rate to businesses under a special business scheme to which everyone has access. Recipients must pay back that money — that is the only difficulty. However, instead of a lucky 20% of people getting access to a grant, 100% of people have access to the scheme. It does not matter whether someone is starting a grocery shop or a restaurant. That scheme is particularly important in the States because large numbers of migrant ethnic minorities want to start up in business. Another important point is that that loans scheme has created a culture in which women start two thirds of new businesses. I would be the first to admit that our business culture appears to be male-dominated. The reality is that, by creating a level playing field, one opens everything up. It may be that some people agree with me and some disagree. However, if we can do one thing only, it should be to discover how much money DETI and others give out in grants for small business start-ups. Take that money and go to the four banks and ask for a banking consortium to set up a loan fund. That scheme would be equally open to someone who is setting up as an agricultural contractor in Newtownards or to a Chinese guy who is setting up a Chinese grocery store in the Markets or at Donegall Pass in the heart of Belfast. Under that system, the banks would provide the assessors, etc, rather than Invest NI and the banks running three or four duplicated systems. Mr Chairman, it is important that, before we complete our work, we consider that. 4.15 pm The Chairman (Mr Wells): It is 4.15 pm, and we are still debating the second discussion point. Let us move to the third. Mr McElduff: I am not sure that we will get through this business today. That is a matter for your judgement, Mr Chairman. Point 2 of the Clerk’s paper concerns factors inhibiting small businesses. I stress that we must assert the importance of supporting the SME sector and local businesses. That ties in with David’s point about being positive. We always talk about the need to attract FDI, but we should make a strong statement about the general need to support local business and to recognise its contribution to the economy. I hear about that recognition consistently in the subgroup and in meetings of the Strabane employment task force. The Chairman (Mr Wells): That is a helpful point to add. Are there any comments on point 3 of the Clerk’s paper, namely the theme of skills deficit and lack of entrepreneurial culture? Dr McDonnell: I broadly agree with that. The Chairman (Mr Wells): Point 4 of the Clerk’s paper refers to the high rate of economic inactivity in Northern Ireland and flags up the impact that the Province’s high percentage of students have on those figures. We should stress that our public sector is not necessarily big, but that the huge inactivity sector skews the figures. That includes people in receipt of disability living allowance (DLA) or incapacity benefit, students, the retired, etc. Does anyone disagree with the contention that a large section of our community is inactive? Mr Weir: There is positive and negative inactivity. The fact that the figure for people in receipt of benefits is a lot higher than elsewhere is a problem for the economy. The fact that we have a higher percentage of students should be beneficial to the economy in the long run. We can contrast those. The Chairman (Mr Wells): Despite the number of students, one in ten adults is in receipt of DLA. Mr Weir: I am not disputing that, but a degree of differentiation must be made. The figures for incapacity benefit suggest that the gap between Northern Ireland and the rest of the UK is 6%. The Chairman (Mr Wells): No, that is six percentage points. It is an important distinction. Mr Weir: Of that, 60% was due to incapacity benefit. We are due to receive more figures to explain the student element. The Committee Clerk: Officials from DEL said that the same figures applied in the South, and student proportions had an impact there also. Dr Birnie: It is even more complicated than Peter points out, given that we export so many of our students. Mr Weir: I assumed that they were counting students resident in Northern Ireland. Dr Birnie: I think that that is measured by a “normally resident” criterion. Ms Gildernew: I wonder whether there is a correlation between those adults without adequate numeracy and literacy skills, and those in generational and long-term unemployment? If people cannot read and write well enough to hold down a job, the chances are that they are on those benefits to enable them to exist. Mr Weir: Areas that traditionally had high levels of unemployment 20 years ago now have high levels of incapacity benefit. That is because, down the years, Governments of various political hues wanted to keep unemployment out of the headlines. People have been pushed towards other benefits. They are economically inactive, but they do not count towards the unemployment figures. Areas such as Merthyr Tydfil in the Welsh valleys have some of the highest figures for incapacity benefit. I suspect that in parts of the UK and Northern Ireland, and perhaps the Republic of Ireland as well, there has been a desire to keep unemployment figures down. That is a large element of the figures for the economically inactive. The Chairman (Mr Wells): Do not mind if I shout your name; it is just to let Hansard know who is speaking. Mr Dallat: To pick up on Michelle’s point, it is important to look for correlations between different factors. For example, a very large percentage of the several hundred people in prison have no basic skills, and even though prisoners are out of circulation, they are still included in the economically inactive figures. The Chairman (Mr Wells): Is everyone happy that, regardless of how we look at the make-up of inactivity, it is a problem that we must address? Dr McDonnell: We could dissect the virtual bits — the university students, and so on. We were beginning to move the discussion towards reality, but, even excluding students, the inactivity rate is still high. Students will be relatively economically inactive, but there is not much that we can do about that. Let us deal with the areas that we can do something about. We grossly underestimate how difficult it is for people to return to work, particularly those women who have been out of work for five or 10 years rearing a family. That must be recognised. I know of female teachers who, after a few years out of work, have returned to work as classroom assistants rather than face the stress and trauma of going back and having to almost retrain. Equally, from time to time, I talk to people who had been making a valid and useful contribution to the economy only to find that returning to work after four or five years was a challenge. Those situations are not recognised. Ms Gildernew: I want to pick up on Alasdair’s point that there is definitely a barrier to women who want to get back into the labour market. It is the prohibitive cost of high-quality childcare, particularly in rural areas. I know teachers and nurses — well-trained and skilled women — who, once they have three children, have to drop out of the labour market because they cannot afford childcare. That is an impediment that they cannot overcome. I am not sure what the figures are, but there are hundreds, if not thousands, of people who care for either elderly relatives or for people with disabilities. The carers become economically inactive as well. They are caring for people who perhaps should be in nursing homes or who need professional care but who are not entitled to it or who cannot afford it. As a result, a member of their family is out of the labour market as well. The Chairman (Mr Wells): The carers’ allowance figures might give us some indication of the scale of that. I hope that when we get the statistics we do not find that 108 of the economically inactive are MLAs. [Laughter.] Mr Weir: They would have difficulty reintegrating into the real world. Mr McNarry: There would be nobody to look after us, that is for sure. Ms Gildernew: There would be a whole lot of classroom assistants. Mr McNarry: We need an MLA union. The Chairman (Mr Wells): Bear in mind that we are merely agreeing what should be included; we are not arguing about what policy to adopt. Point 6 is “Inappropriate fiscal environment — Mr McNarry: Chairman, perhaps we could consider that with point 17. That is the hot potato. Dr Birnie: Yes, it is. Mr McNarry: There is enough here for us to discuss, which is what we need to do. That would nearly take up a session on its own. The Committee Clerk: In writing the report, I find that new issues arise all the time. Many of the witnesses said that a cocktail of measures would be required, and that it is not a quick fix. Sir George Quigley today argued comprehensively in favour of lower corporation tax for FDI purposes, particularly as a beneficial shock for business start-ups. NICICTU then said that it preferred the equivalent amount in grant aid over a reduction in corporation tax. Clear issues, therefore, were raised. I shall meet with some DETI officials next Friday to learn how those issues might mix so that I can give the subgroup some advice on that. We must be clear, however, on the cocktail when it comes to the report. I thank David for his point. Yes, everything is included at this stage, but we shall discuss at the next few sittings what the subgroup will recommend. 4.30 pm Mr McNarry: We may have to have a vote on that when it comes to it. Dr Birnie: Mr Chairman, it comes down to a reduction in corporation tax versus tax credits. My preliminary judgement is that our recommendation seems to be pointing towards the former. Mr McNarry: We must be able to stand over our decision. There is no way that I want to state my political placement now before any election. I do not want to be a big guy and plump for changes to corporation tax, only to be unable to deliver them. The Committee Clerk: DETI has promised to send me some research. It has not been completed yet, but DETI has enough at its disposal to provide a model of the impact that a reduction in corporation tax would have on jobs and on the economy. Mr McNarry: Sir George Quigley was very frank when he told us how Gordon Brown said this, the Prime Minister said that and the Secretary of State said the other. Ms Gildernew: And what they did not say. Mr McNarry: However, they did not go the whole hog on it. The Chairman (Mr Wells): Are we agreed on point 6 on the Committee Clerk’s list of themes? Members indicated assent. The Chairman (Mr Wells): We shall move on to point 7. I think that we all agree that there is an infrastructure deficit, including issues such as water, of course, but I think that we can easily agree on that point. Members indicated assent. The Chairman (Mr Wells): Strong opinions were voiced in the evidence sessions on point 8, which concerns the underperformance of our tourism industry. That underperformance is quite easily measured as a percentage of GDP compared to, say, that of Scotland or the Irish Republic. We are miles behind. Our revenues are half those of the Republic by that measure. Alasdair, I know that you are very keen on the new growth areas such as biotechnology. Dr McDonnell: I cannot add any more on that, because I have harped on about it throughout the evidence sessions. I keep returning to the point that, although a great deal of pure research is done in universities, it is academic research and is not being put into practical application. One way to extract wealth from universities is through QUBIS Ltd and UUTech Ltd. UUTech seems to be better funded and better structured than QUBIS. QUBIS receives perhaps £50,000 or £80,000 of core funding from Queen’s a year, and it is in the market to get a few bob from whatever contributor to make up the rest of its funding. That is my understanding of the situation. It is not nearly enough, however, because some of our biggest hitters of today emerged from QUBIS’s assembly line. It is a bit like an hourglass. The universities are at the top, with the industries at the bottom, and in between is the bottleneck where the funding should be but is not. Trying to apply the technology is like attempting to get through the biblical eye of the needle at times. Mr Chairman, that is my argument on that. Then it is a question of mining the available opportunities, but my experience in that field is limited to knowledge that I acquired years ago, when Israel was struggling economically and had to subcontract. It formed partnerships with companies in the US — the bilateral industrial research and development (BIRD) initiative. Our Radius programme — subsequently the Radian programme — was modelled on that, but it never quite took off. Israel, however, effectively became a subcontractor for American companies that were overloaded with R&D that they could not handle. It built the high-tech side of its economy through the BIRD initiative, and it is doing very well. Another issue that we go round and round without tackling is that our tourism industry gives people what it thinks they should want, not what they want. That is the simple flaw. People have told me time and time again that we keep shoving product at people, but that we do not ask tourists often enough what they want. Our tourism is very primitive. Canadian friends of mine stayed in a bed and breakfast somewhere and they told me that they had to drive for half a mile to a shop to get change because the woman who ran the bed and breakfast had no change for them when they went to pay. Those are basic but off-putting failings. They said that when they were in Fermanagh they wanted to go to the Mournes, but the people in the guesthouse in which they were staying had no clue about how to go about finding a guesthouse in the Mournes. There is no network of links, although some work has been done. Some aspects of our tourism are very good and very homely but relatively primitive. Improving our tourism product is not rocket science. If tourists want to go hillwalking, let us invest in hillwalking; let us invest in what tourists want. Ms Gildernew: I am mindful of time: we are losing people. The Chairman (Mr Wells): Dr McDonnell is saying that underperformance in tourism should be one of the themes on which there has been a degree of consensus. Our debate on policy will be very interesting. Mr McNarry: All the themes should be included. The Chairman (Mr Wells): Let us try to get through them as rapidly as possible. I am sure that the next theme will get votes from the members on my left. Mr McElduff: North/South collaboration needs to be strengthened considerably, Chairman. The Committee Clerk: The Chairman talks about collaboration for mutual benefit. It is a balancing act. Mr Weir: The words are very well chosen. Mr McElduff: “To avoid unnecessary duplication of spending”; that is another way of putting it. The Committee Clerk: All the witnesses thus far have said exactly the same thing. They have been specific that they were not making a political comment, but that improved North/South collaboration would improve the whole economy. I hope that we can include that without any political overtones. The Chairman (Mr Wells): The Clerk has been very skilled in wording this item. Dr McDonnell: I was talking to someone last night — and this will warm Michelle’s heart — who told me that the promise of the M3 running through Aughnacloy to Derry is already having an impact on north Monaghan and the border areas of Armagh. People will be able to commute to Dublin in an hour — although they may not commute very far when the road is jammed. However, it is happening. Ironically, the political challenge for us is to take the politics out of greater North/South collaboration. We must depoliticise it and allow the economy the freedom to do what it does best: fill the gaps. The Chairman (Mr Wells): That strikes me as your agreeing to that theme being included. Mr McNarry: I take it that that comment is directed at the private sector. Dr McDonnell: Why? Mr McNarry: Because they are two jurisdictions. Ms Gildernew: Have you read the Good Friday Agreement? We are talking about mutual benefit and collaboration, which is not restricted to the private sector; it is very much overlapping. Mr Ford: I would have thought that we could have involved an element of university collaboration on research. Mr McNarry: There are political connotations to such collaboration that we must recognise. However, I do not disagree to discussing it and it is right to include it as a theme in the paper. The Chairman (Mr Wells): Do we believe that there is a high level of business crime? Is that an issue that needs to be dealt with? Members indicated assent. The Chairman (Mr Wells): An issue that came up time and time again, and the statistics back it up, is the low level of R&D. Our percentages, compared to the Republic or the rest of the UK or Europe, were quite frightening. Mr McNarry: Perhaps somebody could research that with the witness from DETI who said that businesses were reluctant to get involved in R&D and that there was a very low take-up of the tax credit. Should incentives be provided to get businesses involved in purposeful R&D? The Chairman (Mr Wells): Apparently there is very low take-up among small and medium-sized businesses. Mr Weir: I think that the Department for Employment and Learning spoke about the amount of red tape and hurdles around R&D and tax credits that was putting businesses off taking them up. The Committee Clerk: The Federation of Small Businesses said that. In fact, a lot of the witnesses have been saying the same thing: that there are a lot of tax credits available, but the bureaucracy around getting them is difficult. John Friel said that he had been eligible for R&D allowances and tax credits that he did not go for in the end because of all the form-filling. He just wanted a grant. Mr McNarry: The subgroup needs to accept that reality and find out what is being done about it. Mr Ford: That is the reality as regards small and medium-sized enterprises (SMEs) generally. Since Northern Ireland depends so much on SMEs, we need to find some way of addressing the issue more than other regions do. The Chairman (Mr Wells): All we need to agree today is that lack of R&D investment is a big issue. We do not need to try and solve the issue today. Mr Weir: Is there an additional point that too much bureaucracy is an impediment because it is a disincentive for people to take up grants? That is slightly different from just saying that there is low R&D uptake. It is the bureaucracy and red tape that form a barrier. Ms Gildernew: Absolutely. It is a disincentive. In the construction industry, filling in the paperwork for items such as Construction Industry Training Board training allowances is so time-consuming that half of the time, people do not bother with it. We must make it simpler for them. The Chairman (Mr Wells): We can add it to the list as point 18. Mr McNarry: Could we possibly add renewable energy here? A lot of research and development is going into renewable energy, and it is being driven by the private sector. The Government are also taking it up. The construction industry is going to have to adapt to it in 2008. Ms Gildernew: Could it be put into point 8 under new growth areas? The Chairman (Mr Wells): Yes, that is quite a neat solution. What about point 12 on the negative impact on implementation of too much Government? The Committee Clerk: I think we agreed that earlier on. The Chairman (Mr Wells): OK. Everyone agrees with point 13 to the effect that delays in planning inhibit investment. I cannot foresee any difficulty with that. The recent judicial review demonstrates the point. It states that all planning applications must be done in chronological order, should they be for harbours or dormer-window extensions. That is a big problem in my area. Everyone agrees that we must have a quick planning system for new investment opportunities. Do we have consensus on point 14, namely that a high proportion of small businesses are unable to expand or resistant to expansion? Members indicated assent. The Chairman (Mr Wells): Point 15 is: “political instability with resultant poor match between problem and solution and discourages confidence in the economy”. It is not number 15 in order of importance, mind you. Mr McNarry: If Barry McElduff does not come to the meeting we could get through that one quite well. The Chairman (Mr Wells): Regardless of the politics with a capital P, is everyone happy enough that political instability be included? Ms Gildernew: It needs to be in there. Mr Weir: I am not sure what is meant by: “with resultant poor match between problem and solution”. I do not disagree with the general point that it be included, I am just wondering what that actually means. The Committee Clerk: Some witnesses were saying that, for example, in terms of direct rule, Ministers are not in tune any longer. In fact, Sir George Quigley was saying earlier that previous Ministers, such as Roy Mason, pushed the Northern Ireland economy but perhaps that is less strong now. Therefore, the solutions that were applied tend not to be fit for purpose. The Chairman (Mr Wells): Number 16 is on the inability of small businesses to take advantage of procurement opportunities. I did not spot this one. Mr Weir: It came up today. Because of economies of scale, small firms are not in a position to bid for large procurement schemes or PPPs. Ms Gildernew: I would reword it. It sounds as though we are saying that small businesses are not able to take advantage of procurement opportunities, but these are usually policy-driven, and small businesses are excluded. In one of the first sessions, the Federation of Small Businesses talked about unbundling contracts in order to allow small contractors to be able to compete. Mr McNarry: I agree. It is unfair. Members indicated assent. The Chairman (Mr Wells): Finally, we have point 17: “No quick fix! Need for a radical solution that includes a range of targeted fiscal tools based on long-term needs, social partnership, stimulating the private sector through a business friendly environment”. Mr McNarry: That is a lovely sound bite: “no quick fix”. I find it difficult to buy into that unless it is fully expanded. There is no quick fix at all. Mr Weir: I do not disagree with point 17: the only complication is that all of the other points are looking at the impediments. Maybe that is not the intention of point 17, but is does not sit right with the others. 4.45 pm The Committee Clerk: A lot of the witnesses have been saying that there is not a single solution, and as a subgroup we need to recognise that we are offering a combination of solutions that meet particular needs. Mr McNarry: Could we add an eighteenth point? The Chairman (Mr Wells): We already have a point 18. Mr McNarry: What is it? The Chairman (Mr Wells): Bureaucracy is listed as the eighteenth. Mr McNarry: Can we add a nineteenth point? The Chairman (Mr Wells): The “quick fix” referred to the option of a reduction in corporation tax. John Simpson pointed out that the biggest beneficiaries of that would be the four big banks. That would do nothing to increase employment or assist the economy. Would you like to suggest a nineteenth point, Mr McNarry? Mr McNarry: I want to elaborate on the educational stuff that is coming through from every presentation. We heard it not only from the Department for Employment and Learning and from the Department of Education, but also from industry. There seems to be a focus going back to education, and it seems to be prevalent in nearly every point that we discuss. I wanted to see if we could add a nineteenth point so that we do not forget it. The Chairman (Mr Wells): That is a very valid point. Do members agree to add a point 19 on educational underpinning? Members indicated assent. Ms Gildernew: Are we removing “no quick fix” from point 17? I do not think we should. Dr Gilleece’s paper and Dr Whitaker’s 1958 paper show that there is no quick fix. Mr Weir: It depends on how you list it. I would not remove it from the report; but we are creating a list on the basis of the impediments, and saying “no quick fix” is not an impediment. That belongs among the solutions rather than the impediments. It is a question of where you put it rather than whether it goes in. The Chairman (Mr Wells): David, how different is your suggested point 19 from point 3, which dealt with “skills deficit and poor correlation between business needs and education provision”? Do you want to add something or is yours so radically different that you feel that it requires something additional? Mr McNarry: Can we leave in a point 19 so that it can be elaborated on? It may come out in the third point, but I am happy enough with that. A major education policy initiative is going on that I know we cannot get involved in, but we must keep a watch on it. The Chairman (Mr Wells): The quorum is in danger. We need to rattle through the Clerk of Business’s paper very quickly, because I can see that nearly everything has been discussed already. Can anyone spot anything on that list that we have not already included in our discussion of the Committee Clerk’s paper? The Committee Clerk: Chairman, apologies for giving you two papers, but we were working to tight deadlines. Dr Birnie: Chairman, we might transfer the theme of “brain drain” from the Clerk of Business’s paper; it is supplementary. The Chairman (Mr Wells): Yes. Also, what about the point dealing with the negative impact of high insurance costs? Dr Birnie: Yes, that is additional. We should transfer both onto the main list. The Chairman (Mr Wells): Lots of them have come up in a slightly different wording. Dr Birnie: Have energy costs been covered somewhere? The Committee Clerk: They are covered in point 6, alongside insurance. Mr Weir: We might incorporate into point 12 of the Committee Clerk’s list the observation that: “public sector (departmental) concentration on creation of visions and strategies [is] allied to a failure or delay in implementation”. Ms Gildernew: Yes, combining it with the need for greater operational agility. Mr Weir: It is perhaps the same point but might need rewording. The Chairman (Mr Wells): That is an important point because, for instance, we have been told that the new transport infrastructure will not start until 2015. That seems very slow. Mr Weir: Also, if you look at the scoring for the building of schools, a lot of schools are annoyed that announcements were made five years ago but nothing has happened. If the construction industry is not physically building the stuff that should have been built, there are implications on both sides. John Simpson highlighted that. Point 12 could be elaborated to set out those implications. Mr Dallat: Perhaps the subgroup could be given a broader remit as regards infrastructure. I know that this is an economic subgroup, but 50 people are killed on the roads here each year, and that has a huge economic fallout. The economists will calculate so many thousand pounds per person and try to put a value on them. However, given our horrendously bad record, the paper should reflect the fact that loss of business is not the only concern; there is a wider aspect to the economic loss in terms of hospitals being tied up and insurance claims — not to mention the emotional aspect, which is obviously the most important. The Chairman (Mr Wells): That takes us up to number 20, depending where number 19, Mr McNarry’s proposed point on education, is placed. Are insurance costs covered? The Committee Clerk: Yes, they are included in the paper. Mr Ford: Number 6 on the Committee Clerk’s list includes insurance. The Chairman (Mr Wells): So we have reached number 19. The Committee Clerk: I am very conscious of the time. I have got a lot out of this meeting. It was only scheduled to give me a feel of where the subgroup stands, because the report has to be completed in the next couple of weeks. Mr McNarry: My only disappointment — and I expressed it earlier on — is that it does not look as if the subgroup will be able to hear a young person’s perspective on the future. The Committee Clerk: I will ring the Youth Council. Mr Weir: There are at least a couple of us on the subgroup under 40. Mr Ford: We could get Naomi Long to chair that session. Mr Weir: I suppose it depends on how one defines young. The Chairman (Mr Wells): Forty-nine. Mr McNarry: I certainly do not consider anybody in here to be young. The Committee Clerk: I consider myself to be young at heart. Three witnesses are scheduled to appear on 10 August; the Quinn Group has now withdrawn. The best that I can do is to ring the Youth Council to see if it could send a couple of young people. It is most unlikely, but I will make a request nonetheless. Mr McNarry: I am disappointed. I appreciate that there has been some misunderstanding. However, the subgroup discussed this matter at the very first meeting, and it was decided that the Youth Council should be invited as witnesses. Having read the Youth Council’s response, I do not think that it has understood what we are looking for. The Committee Clerk: It was unclear. Mr McNarry: A contribution from the Youth Council would add value. The Committee Clerk: I will do my best, but it may be too late. I think that there was an issue with the handover between Cathie White and me — Mr McNarry: I am not getting into that. The Chairman (Mr Wells): Are we content that the Committee Clerk’s paper covers the sustainability of the Northern Ireland economy, given its small domestic market and proximity to a competing system, and the loss of incentive and threat to jobs posed by phasing out industrial derating and introducing water charges? There are only 1·7 million people in our domestic market, but I did not hear mention of the small domestic market of Northern Ireland in the first round of discussions. The storm clouds are gathering over industrial derating, water charges and so on. Mr Ford: These issues would fit in with point 6, which covers excessive business costs such as an inappropriate fiscal environment, duty, rates, insurance and bureaucracy. The Chairman (Mr Wells): That deals with current problems. Should we include future problems? Mr Ford: The words “present and future” could be added. The Committee Clerk: Point 6 very much covers the current position and the traditional arguments. One of the recent witnesses — John Simpson, I think — talked of the conventional arguments, including the peripheral nature of the economy. The report will cover those points. A number of witnesses have contrasted the current position with that in which we want to be. The report should include the positives and negatives of the traditional arguments and also consider more novel approaches. The Chairman (Mr Wells): The subgroup still has a quorum, despite David McNarry’s departure. Are members happy enough that we have hit all the right buttons? We have 19 points here. Mr McElduff: Is the subgroup satisfied that balanced economic development east and west of the Bann is included? Ms Gildernew: It is not really in there. The Committee Clerk: It is covered to a degree only. It is mentioned under infrastructure and east-west roads. Mr McElduff: The matter is evidence-based as well. I have heard witnesses mention it a number of times. Mr Weir: My point is slightly more generic, but the list has to be economically balanced. There is a range of issues: there are east-west and urban/rural dimensions, and issues around Greater Belfast and the rest of the country. As mentioned earlier today, there are even issues regarding jobs in Belfast and its hinterlands — for example, a couple of the Government Departments are shifting from Rathgael House to Belfast. There is a range of issues concerning equity and balance that must be represented in the economy. The Chairman (Mr Wells): Have we captured the key issues that have emerged to date? This is members’ last chance to raise any burning question that they feel have not been covered. I cannot see anything that is not covered by those headings. I am sure that the other Chairmen will not exclude any emerging issue that suddenly arises. Any other issues? Mr McNarry: If members are agreed, Mr Chairman, I shall take only five minutes. I appreciate and understand the work that has been done in putting together timetables. However, I have a difficulty with the meetings running over time. I can reschedule my diary to accommodate an extra 10 or 15 minutes, but, on several occasions, meetings have run more than an hour beyond the time allotted. I acknowledge my contribution to that. However, some of the people who have given evidence — is Hansard recording this? The Chairman (Mr Wells): Yes, it is. Mr McNarry: Can we turn off the recording? The Chairman (Mr Wells): Can we? The Committee Clerk: Not while the subgroup is sitting. The subgroup has already taken the decision that Hansard will report everything. Mr McNarry: Witnesses could perhaps be asked to shorten their presentations. Without mentioning any particular groups, some presentations went on too long. It is eating into our time, and we are flowing from one subject to another. The Committee Clerk: Witnesses have all been advised to make 10- to 15-minute presentations. One presentation today lasted the guts of 25 minutes. Mr Weir: To be fair, work becomes difficult as well. We are depending on people who, when questioned, want to answer fully, but they can go on too long. It is very difficult. Mr McNarry: I am only saying that, because I had to go due to another commitment and it left only six members present. I would not want to offend my colleagues in that situation, but it would irritate me that I had let people down by having to go. Perhaps we should do something about it. The Chairman (Mr Wells): The other option would be to have a deputy from your party on standby, ready to replace you at the appropriate time. Mr McNarry: We cannot do that. If you really want to get stroppy about it, it is not acceptable for the sitting to overrun by an hour. We were given a schedule that said that today’s sitting would end at 1.15 pm, and at 2.15 pm we were still here gassing. The Committee Clerk: The length of the meeting is a matter for members. The Chairmen have been encouraging concise questions and presentations. This is a huge and interesting area of debate, and one would expect sittings to overrun. From listening to the questions and from reading Hansard, I think that the standard of the questions has been excellent; they will elucidate all sorts of arguments and responses. All that I can ask you to do is to be as concise as you can in your questions. With due deference, political representatives do tend to prologue their questions. If we can avoid that and encourage concise presentations — Mr Weir: We have also probably pushed our report back another week. To be fair, in normal circumstances, there is no way that we would have so many sets of witnesses. The Committee Clerk: The subgroup is squeezing to its maximum. You are squeezing a normal inquiry that would take nine months into — Mr McNarry: I am conscious that many colleagues have travelled longer distances than I have. It has only happened once, but, nevertheless, I have been the cause of stopping a sitting because of a prior commitment. My commitments are based on the information that I have in my diary. I try to ensure that my attendance at the subgroup does not clash with other commitments, and I apologise to anybody who was affected. Mr Dallat: Mr Chairman, as a mere substitute who has travelled a distance, I do not think there is an awful lot wrong. The workmanlike atmosphere here, the friendship among the different members and our good relationship with those who give evidence cannot be exchanged for the odd wee hiccup. Sometimes it has been members’ fault for asking elongated questions, and sometimes it has been the fault of over-anxious witnesses. However, it would be wrong to give the impression that our deliberations have been anything but very good. The Chairman (Mr Wells): I am very happy with the standard of the evidence and the questions. Obviously, I am biased, being the Chair, but I have certainly seen an awful lot worse. Mr McElduff: I propose that this meeting end. [Laughter.] The Chairman (Mr Wells): I must inform you that the date of the next meeting is Tuesday 8 September at 10.00 am, and the witnesses are Moy Park Ltd, the Ulster Farmers’ Union, Wrightbus Ltd and the Department of Finance and Personnel. Adjourned at 5.01 pm. |