Tuesday 16 May 2006
The Assembly met at 2.00 pm (Madam Speaker in the Chair).
Members observed two minutes’ silence.
Roll of Membership
Madam Speaker: In accordance with the Northern Ireland Act 2006, the Secretary of State has directed that the Assembly should sit on Tuesday 16 May 2006 at 2.00 pm to consider business as it appears on the Order Paper.
I have had an opportunity to scrutinise the entries in the Roll of Membership, and I am satisfied that all 108 Members have taken their seats in accordance with Standing Orders.
Regarding designations of identity, six Members entered designations that I have deemed to be “Other” for the purposes of Standing Orders. Members will find details of the designations in the minutes of proceedings for yesterday’s sitting.
At the end of yesterday’s sitting, a matter was raised as a point of order, and I agreed to give it careful consideration. I am currently seeking advice from Speaker’s counsel, and I shall report back to the House when I have had the opportunity to consider the matter fully.
Mr Robert McCartney: On a point of order, Madam Speaker. Before the business of this body commences, I wish to make a point of order on the status of this body and you as its appointed Speaker. The media in general, and the British Broadcasting Corporation (BBC) in particular, continue to refer to this body as “the Assembly”. That has caused widespread public confusion, which should be removed.
Madam Speaker, you are aware that this is not the Assembly to which Members were elected in November 2003: it is simply a body that the Secretary of State has invited the Members then elected to attend.
Madam Speaker: Thank you, Mr McCartney. Can I stop you there? According to the Northern Ireland Act 2006, this is “the Assembly”. It is not the Northern Ireland Assembly and will not be the Northern Ireland Assembly until we restore full devolution. I was appointed by the Secretary of State, as were the two Deputy Speakers, under the Act, which is at the direction of the Secretary of State. All Assembly business is at the direction of the Secretary of State.
Mr Robert McCartney: Perhaps, Madam Speaker, you would permit me to finish my point of order. The Assembly, or this body, like Parliament, Congress or the French National Assembly, elects its Speaker to determine the Standing Orders for the conduct of business and the nature of the business to be debated. None of that applies to this body, convocation or assembly, however it may be described. You, Madam Speaker, were nominated by the Secretary of State, and, as you rightly say, the Secretary of State describes how business is to be conducted because he determines and amends, on a daily basis, the Standing Orders. He also determines what the business is to be. Now you, Madam Speaker, I believe unwittingly, said yesterday that you were the servant —
Madam Speaker: Mr McCartney, have you a question?
Mr Robert McCartney: Yes, but I have to frame it.
Madam Speaker: I have to say that your information so far has been quite inaccurate. As I said before, this is “the Assembly” and it is at the direction of the Secretary of State. All business must first be agreed in the Business Committee; it then goes to the Secretary of State, and an Order Paper comes back. That is the way it is. Unfortunately, until we get restored devolution that is the way it will remain.
Mr Robert McCartney: Madam Speaker, with respect, that may be the case. However, yesterday you declared that you were, and hoped to be, the servant of this Assembly. Since the New Testament was published:
“No man can serve two masters”.
Which is to be your master, Madam Speaker?
Madam Speaker: Order. After my appointment by the Secretary of State, I asked, in my personal statement, that Members realise that I am here as their servant. I hope that when we get full devolution we can look at the matter and, if necessary, elect a Speaker as you suggest. I think that we have had enough of that point of order.
Secretary of State Motion
Economic Challenges and
Madam Speaker: I wish to advise that the motion was referred to the Assembly by the Secretary of State and is not subject to amendment. The Business Committee has agreed that a minimum of two hours be set aside for the debate. The Committee also agreed that the first round of speeches should be limited to 10 minutes, with subsequent Members being allowed five minutes. I intend to send a copy of the Official Report of the debate to the Secretary of State.
That the Assembly considers the economic challenges facing Northern Ireland, in the context of both the UK and all island economies, to be a key priority for a restored Executive and calls on the Business Committee to take forward establishing a working group on this issue to make recommendations to a restored Executive. — [The Secretary of State.]
Mr Simpson: It is fitting that we discuss the Northern Ireland economy after this morning’s presentation from the Northern Ireland Business Alliance. I put on record my appreciation of those who gave it. It was informative.
Like so many people, families and communities, Northern Ireland’s entire economic fabric was targeted for destruction by terrorists. When the IRA gave its stand-down order last year, it claimed that on every front where it had visited death and destruction, it was, and I quote, “entirely legitimate”.
Those who gave their unqualified support to that claim must convince us that they now have a true concern for our economic well-being. One of the first duties of an Administration is to advance its country’s economy. Ongoing criminality means that Northern Ireland is still denied devolution in which local economic affairs are administered by locally accountable representatives. However, it is my hope that others will embrace democracy and that we shall have it.
The absence of full devolution should not inhibit direct rule Ministers from exercising their powers to do what is right by Northern Ireland’s economy — and there is much to do. Northern Ireland has enjoyed steady economic growth, with employment at an all-time high. However, our manufacturing base is eroding steadily, basic business costs are on the up, and reliance on the public sector remains dangerously high.
We need to find ways to diminish or even eradicate those elements that are a cause for concern and ensure that any economic indicator points in the right direction. Any future Executive must grapple with eight key foundations to encourage and underpin economic growth. These are a reduction in red tape and regulation; a concentration on skills development; an enhanced infrastructure; an improved planning process; lower business costs; a more attractive taxation system; reform of Invest Northern Ireland; and an efficient Government. If ever there were unnecessary intrusion of politics into business, it is in the expansion of business-based bureaucracy.
A priority for any future local Administration should be the unravelling of as much Government-generated red tape as it can. Businesses should be set free and allowed to get on with their work. Our economy lacks the required skills in many sectors, and that is not helped by high levels of economically inactive people. Business and Government need to combine to bring the right people with the right skills through the education system.
A proper partnership between an Executive, business and the individuals themselves is required to tool our economy for an increasingly competitive and cut-throat global economy. My party is consistent in calling for any future economic package to be ploughed into enhancing our ailing infrastructure. Thirty years of terrorism have deprived our roads, water and sewerage systems of much needed funds. Business would benefit as much as the general population from a better infrastructure.
Too many potential new investors or existing companies with an eye to expansion are put off by our cumbersome and constricting planning laws and procedures. An overhaul of the planning process could assist business growth immensely. Increased energy, insurance and fuel costs and new costs such as industrial rates deter growth and even discourage many from continuing to operate in this country.
Some of those costs are the Government’s direct responsibility. The Government must strike the right balance between making business a financial contribution to the economy and ensuring that business retains its competitive edge. My party and I have pressed the Government hard on reducing our corporation tax rate, and some months ago I secured an Adjournment debate on that subject in the House of Commons. Some progress was made with the then Minister with responsibility for Enterprise, Trade and Investment, and I hope to take this up soon with her replacement.
In our competition with the South — and let us not forget that the South is our economic competitor — corporation tax is the main and crucial difference. A rate of corporation tax lower than that of the Republic could increase the overall tax take as existing companies expand and new ones enter Northern Ireland. If that is too unpalatable for the Government, then we need to examine the possibility of bringing about a cocktail of measures that has the same net effect of lower overall tax for businesses.
Mr Burnside: I thank the Member for giving way. Does he agree that there will be a major problem in getting a reduction of corporation tax in Northern Ireland with the continuing joint administration between the British Government, the Northern Ireland Office and the Southern Irish Government?
It is highly unlikely that the South of Ireland that he refers to as our competitor will allow us to introduce a more incentive-based corporation tax system in Northern Ireland than exists in the Republic.
Mr Simpson: I do not think that we should have that defeatist attitude, but I see where the Member is coming from. I accept that it will be difficult, but through a cocktail of funding we may be able to get to the level that we require.
Madam Speaker: I would be grateful if the Member could address his remarks through the Chair.
Mr Simpson: That is not a problem, Madam Speaker, and I apologise. I will ensure that I keep looking in this direction.
Mr S Wilson: A very pleasant view it is too.
Madam Speaker: Order.
Mr Simpson: Madam Speaker, you will notice that I did not say that.
Reform of Invest Northern Ireland is also required, but equally important is a refocus of its work. Instead of concentrating on micro businesses that merely redistribute wealth or looking into the world for solutions to all our economic ills, let us make the most of what we have, sell it well, and assist it to the full instead of chasing pipe dreams.
Any future Executive should make efficiencies in its own structures. Efficiency does not necessarily equate to job losses in the public sector, but there should be a realisation and recognition that we can no longer rely on the public sector to drive Northern Ireland. Progress on those issues is absolutely essential if Northern Ireland’s economy is to lead in the right direction. However, I caution everyone not to fall into the trap of thinking that the Assembly is the answer to everything, given that we are as susceptible to global economic trends as every other economy.
Government must fix what is wrong instead of pursuing their fascination with fads and fantasies such as an all-Ireland economy. The motion is interesting, however, in that it refers to the UK economy, recognising our place there, and simply to an all-island economy, recognising the existence of two jurisdictions. Perhaps we could help our Southern neighbour and use the gravitational pull of the much larger UK economy to drag the South closer to the United Kingdom. We wish for good relations with our nearest neighbour. We are willing to co-operate if there are clear lines of self-interest for Northern Ireland, but the economic and financial cake is far greater and the benefits far larger.
Rev Dr Ian Paisley: Does my hon Friend remember that the South of Ireland benefited by £5 million a day for a number of years from the European fund? If Mr Simpson gave me that for Northern Ireland, I, too, could have a tiger machinery for business — the Celtic tiger — I am sorry, I missed its nationality.
Mr Simpson: I do not know whether to comment on that, Madam Speaker. A debate will soon take place in the Province on whether the Celtic tiger is sustainable, so it will be interesting to hear the outcome of that. To concentrate exclusively on an all-Ireland economy might do well for a tree-hugger but not in the real world.
Madam Speaker: I remind the Member that his time is drawing near. [Laughter.] Time is short, Mr Simpson.
Mr Simpson: I am nearly finished. We have had many advantages that have often been overlooked, not least our inherent spirit of entrepreneurship. Government should work alongside business and not against it. That can become the challenge that faces us to start us on our way to a brighter economic country.
Sir Reg Empey: In recent years, an element of complacency has entered into the treatment of our economy. This is partly due to the fact that we have been consistently producing low unemployment figures that are very appealing on the surface and look as though we are, in fact, making progress, but they hide a number of underlying weaknesses.
No regional economy, such as our own, is isolated from the real world. We are well aware of that. In Northern Ireland, to some extent, we live in a public expenditure bubble, which is relatively high. However, many would argue that it is entirely consistent with our needs. Nevertheless, our entrepreneurial private sector is much smaller than those in other regions of the United Kingdom and, indeed, further afield.
We must highlight, therefore, that, although the surface level of unemployment appears low, it disguises the fact that there are skills shortages and that we are bringing in foreign labour. Many manufacturing plants in Northern Ireland are dominated by labour from other parts of the European Union or from further afield. It disguises also the fact that there are still large numbers of people who do not have fulfilling and worthwhile jobs. Although that situation is, to some extent, disguised by events, it is an underlying fact that must be taken into account.
Just as our politics and society need devolution, it is important to note that the experiences in Scotland and Wales have shown that those regional economies, which face similar challenges to our economy, have benefited from local Ministers and devolved institutions.
Mr Burnside: Does the Member agree also that the advantages of devolution in those two parts of the United Kingdom — Scotland and Wales — have been based on coalition Government, agreed voluntarily by democratically elected parties? Is today not a fine example of how the democratic parties here could move ahead to form a voluntary coalition?
Sir Reg Empey: The Member makes a valid point. Indeed, one hopes the day will come when that is exactly how Governments are formed here — if we have them. However, not only have the devolved Administrations in Scotland and Wales delivered coherent economic strategies, related education and skills policies to economic needs, and worked in partnership with the business and trade union sectors, they have used UK, European and international platforms to talk up their regional economies. Indeed, even though they do not have devolution, regions in the north-east and north-west of England have developed elaborate skills policies and have been trying to retain their young graduates so that they can reduce the brain drain.
As Northern Ireland’s business community knows, the contrast between the performance of devolution in other parts of the UK and our direct rule Administration is inevitably stark and obvious. Clearly, Northern Ireland used to be the odd man out in the UK, as the only area with devolution. Now, the situation has turned around, and we are the odd man out because we no longer have devolution. Although we should not exaggerate what devolution can do, it can make a contribution.
Recognising the key role of the manufacturing sector must be fundamental to the economic vision of any future devolved Administration in Northern Ireland. Again, the lead given by the Scottish and Welsh devolved Administrations offers a model for us in this part of the UK. Scotland’s manufacturing strategy, entitled ‘Created in Scotland’, and the Welsh manufacturing forum are evidence of a genuine commitment to a dynamic future for the sector in those regions.
While the Scottish Executive have given a commitment to keep business rates competitive, alongside a small business rates relief scheme, Northern Ireland’s manufacturers are, of course, facing the imminent end of industrial derating. This historical concession pre-dated our entry into the EU. Thereby, it was not contrary to EU competition laws. Now, manufacturers will be disadvantaged because of Northern Ireland’s differences and because of the fact that our energy costs, which were the quid pro quo promised to the manufacturing sector if rates were introduced, have not been reduced. The commitment of £200 million made by Minister Pearson in September 2003 to offset the cost to industry has not been followed through as envisaged.
Consequently, the manufacturing sector is facing the double whammy of increasing rates and energy costs and, of course, transport costs.
This Assembly ought to be able to address that fundamental issue. The manufacturing sector has convincingly demonstrated that the Administration’s present policy could cost the Northern Ireland economy job opportunities.
The hon Member for North Antrim, Dr Paisley, made the point about aid to the Republic — I believe it was called the cohesion fund, and it was available to only four countries in the European Union — which has given them an enormous boost, but in fairness they have gone further and identified their next target area, namely fourth-level education. When we were dismantling our technical school and college education, they introduced it, and that provided a flow of labour qualified to meet the needs of industry. A local Administration could tailor policies to the needs of local businesses.
Ensuring that our workforce has the skills to compete in the knowledge-based economy of the twenty-first century must be a priority. Whether it is ensuring that our higher education institutions and colleges are attuned to the needs of our economy, or addressing the scandal of poor literacy and numeracy skills among our school-leavers, any economic vision for Northern Ireland will be mere words unless small and medium-sized enterprises (SMEs) and multinationals have access to a skilled labour market.
The hon Member for Upper Bann, Mr David Simpson, mentioned regulation. Attempts have been made to reduce regulation but, sadly, much of it derives from European Union legislation, to which our national Government sign up without necessarily understanding the downstream consequences — and they certainly do not have to meet the downstream costs.
Mr S Wilson: Does the Member accept that when we sign up to EU directives we “gold-plate” the regulations, thus making them far more severe in this part of Europe than in other parts? Perhaps that is what we should be addressing.
Sir Reg Empey: That is a valid point. It is often said that a seven-page document from Brussels comes out of a Whitehall Department as a 70-page document. We seem to be excessively rigorous in the enforcement of these measures.
Mr Paisley Jnr: I am sure that the Member is aware of the recent report titled, ‘Investing in Regeneration, Unlocking the Belfast Opportunity’. It makes a salient point about the problem of over-regulation, which the Member has touched on. However, it also states that in 2004 in excess of £1 billion was taken away from local investment in Northern Ireland and put into GB, principally because regulation here was preventing the entrepreneurial spirit from flourishing.
Sir Reg Empey: I agree that there has been a significant and proud tradition of innovation and entrepreneurial skills in this part of the United Kingdom. Somehow we seem to have moved away from that. At this morning’s presentation, Mr Paisley Jnr referred to the paintings of industrial scenes in the Senate Chamber, and that is very poignant. A local devolved Administration could contribute to encouraging the restoration of such industry. Of course, that cannot be achieved without the link to education at basic, further and higher levels.
We should not ignore the challenges, but nor should we fail to recognise the potential of the innovative approaches that our colleagues in the rest of the United Kingdom have taken. Devolution can mean the end of complacency and the beginning of a new, dynamic, nimble and agile approach — an expression that was used in this morning’s presentation. I commend those ideas to Members.
Dr Farren: The SDLP supports the general terms of this motion. We accept that, as we prepare for devolution, we need to examine not just how we can modernise and develop the economy of Northern Ireland on its own, but how we must do so bearing in mind the opportunities offered by a joint approach to Ireland-wide economic development, as well as the opportunities that exist in the wider EU and global contexts.
I stress the SDLP’s outward-looking approach, because of frequent accusations that we are fixated on looking inward or southward and have no regard to other dimensions and contexts — the SDLP recognises the global nature of the economy in which we live.
The SDLP’s objectives include maximising the economic potential of the whole island through a joint approach to planning and delivering infrastructure developments in roads, transport, energy supply, telecommunications, health, education and many other services where it makes sense to do so and where, in the words of the Good Friday Agreement, such developments would be to the “mutual benefit” of communities in both parts of the country. As has often been stated recently, those opportunities have never been better. At current estimates, over £100 billion will be spent over the next decade on basic infrastructure, North and South.
The distance we must travel in order to become a more successful economy can be measured in the gap between two major investments announced just three months ago: one for an enlarged retail development in east Belfast and the other for a pharmaceutical enterprise near Cork. Each promises around 400 new jobs, but there the similarities end.
The investment in east Belfast — welcome as it is — promises jobs at the lower end of the skills range; many are part time and many are at the lower end of the wage scale. In contrast, 80% of the jobs at the pharmaceutical enterprise in Cork, announced in the same week, will be for highly qualified and skilled graduates. When did we last have such investments? It is very hard to recall, because they have been few and far between.
To reach the point where the norm is investment offering many more opportunities for highly skilled, well-paid technicians and graduates, where those investments challenge our universities and institutes of further and higher education to produce a workforce capable of servicing technologically and intellectually challenging employment and where research and development increases from its current very low levels, needs a much more concerted and comprehensive approach than at present.
That approach must be supported by new fiscal and other incentives that put us on a more level playing pitch with the South’s headline-grabbing 12·5% corporation tax and with the many other economies emerging in central and eastern Europe. Those economies are liable to attract much of the mobile international investment, if we are not able to match the incentives that they offer.
Mr Paisley Jnr: Although I welcome and acknowledge that our neighbour’s economy is doing extremely well, does Dr Farren accept that Northern Ireland’s economy was blighted and stymied for years by gunmen and gangsters, who carried out the most vicious campaign of terror against the economy to wreck this country, to wreck investment and to wreck stability — and all in the name of Ireland? Does he thoroughly oppose that?
Dr Farren: Not only the effects of the troubles, but the failures to develop sustained partnership arrangements within this institution and to sustain the North/South institutions established by the Good Friday Agreement have continued to inhibit the development of the economy. The SDLP is working to ensure that all institutions are restored, so that we can ensure that the economy moves forward in the way that we all want.
To return to my theme, incentives alone will not be sufficient to enable us to move the economy forward in a step change. Underlying the success that we have seen in the South, there has been a strong social partnership with real buy-in from all of the key partners: trade unions; the voluntary sector; and business. This partnership has been in existence for well over 15 years, and it has given a high degree of stability — both political and social — to the South’s economy. The right fiscal incentives and the right workforce are also key to thriving economies worldwide.
Therefore, if we are to move from a public sector-dependent economy to one that has a greater reliance on wealth creation, we will not do so over the heads of the social partners. We also need a similar strong social partnership. I do not believe that the Economic Development Forum (EDF) as it is presently constructed — representative and all that it is — is the best forum for ensuring the kind of objectives that I believe need to be set for a real vibrant social partnership.
In such a partnership, poverty elimination stands side by side with wealth creation and greater productivity as common targets. The delivery of quality public services is a common concern. Equality and fair treatment of all workers — whatever their origin or background — are guaranteed. The delivery of such a social partnership requires the leadership that a return to devolution, to the North/South Ministerial Council and to all the other elements of the Good Friday Agreement alone can provide.
While the SDLP supports the motion of creating a working party as a necessary means of preparing for devolution, it is no substitute for devolution. The sooner that we can move towards achieving that aim, the better it will be — not just for our politics but also for our economy.
Mr Neeson: Madam Speaker, I welcome the debate. However, may I say that for months my colleagues in the Alliance Party have been trying to persuade the Secretary of State to set up an economic forum involving elected members of the Assembly. The economy is an issue that has gained consensus across all the political parties, and I am pleased that over recent weeks I have shared a cross-party platform on matters relating to the economy.
The modern economy is very complex. We have the whole issue of globalisation. Who would have thought that we would see such development in the likes of China and India as we have seen in recent times? We are also dealing with issues relating to the enlargement of the European Union, and in Northern Ireland we are in a unique situation in which our nearest neighbour is dealing in a different currency. Therefore, there are a lot of challenges to deal with, but there is also a great number of opportunities. It is also worth saying that society is changing rapidly, and I suggest that in every decade over recent times there has been a new industrial revolution. That is a challenge for us all to meet.
Following on from this morning’s meeting with the business sector, an important factor to consider is that in many ways it is up to us to create the climate in which we can move from a public-sector economy to a private- sector economy. An important issue in relation to that is for us to provide the necessary joined-up government.
I pose this question to Members: was the artificial creation of 10 Departments helpful to moving forward the economy? We must deal with that issue. When we had the Review of Public Administration (RPA), the Departments should have been reviewed at the same time.
It is important that we realise the problems that businesses face daily due to lack of co-operation among various Departments. We have been dealing with planning, which is one of the big issues. Other Members — Sammy Wilson in particular — and I have been working on planning, which is one area that must be investigated.
We have discussed corporation tax, particularly when compared with the lower levels in the Republic of Ireland. I know that I will not receive universal support in the Chamber, but I still believe that this Assembly should request tax-varying powers. Those powers could allow us to deal with the issue of corporation tax, as well as a number of other public issues. We have seen how the Scottish Parliament has successfully reformed services as a result of its having tax-varying powers.
Mr S Wilson: Does the Member agree that the tax burden increased when the Scottish Parliament got its hands on tax-varying powers? That seems to be at odds with the argument being made that we should try to encourage the private sector to invest in Northern Ireland, because we know that higher taxation and private-sector investment are not compatible. Higher taxation will tend to discourage the private sector from investing here.
Mr Neeson: I certainly believe that if we are to move forward the economy, we must find some way to bring about the necessary fiscal reform. The issue of tax-varying powers should be considered.
Mr Paisley Jnr: Although it is an enchanting argument that we should have a different rate of corporation tax — I understand how attractive that would be to various businesses — will the Member respond to these two points?
First, does the Member think that a different rate of corporation tax will help to create the 141,000 jobs that we need in Northern Ireland before 2015?
Secondly, if we get tax-varying powers, does he accept that the British Government will ask for a quid pro quo, which could involve putting the Barnett formula on the table? To do so would unravel a very beneficial formula that provides us with the rest of our subvention.
Mr Neeson: As we found out from this morning’s discussions, there is more than one issue. We must develop an entire package of reforms in order to create the climate in which the economy can move forward. In fact, the DUP, along with the other parties, met the Secretary of State for Northern Ireland, Peter Hain, to discuss industrial derating. The purpose of industrial derating was to allow Northern Ireland to compete with the lower rates of corporation tax in the Republic of Ireland. At least some consensus exists. It is important, however, that we develop a package of reforms.
I am also concerned about the amount of investment that is being taken out of Northern Ireland, because of the complex situation here, and invested in other parts of the UK. If I may say so, considerable investment is going to the Republic of Ireland as well. That issue must be dealt with. If we are to create the 141,000 jobs to which Ian Paisley Jnr referred, there must be reform.
Investment in research and development was highlighted this morning. The small-business sector is important, so we should acknowledge one of the biggest problems, which is the fact that 89% of those currently employed in the private sector work for companies that employ 10 or fewer people. That issue must be addressed.
I also hope that the Assembly will get the opportunity to deal with the reform of the education system. It is important that the education system that we develop recognises and acknowledges the needs of modern society and business. When Nortel was expanding some years ago, the local further education colleges provided courses to develop the skills necessary for it. The education system should recognise the needs of business and the economy.
Apart from Ian Paisley Jnr no one mentioned tourism this morning. It is an important element of the modern Northern Ireland economy, and we can see it expanding throughout Northern Ireland not only yearly, but daily. Tourism must be provided with the necessary facilities to expand. Finally, Madam Speaker —
Mrs D Dodds: Will the Member give way?
Mr Neeson: Yes.
Mrs D Dodds: Tourism is vital to the economy and could form part of a new vision for the economy in Northern Ireland. The Member also referred to the reform of the 10 artificial Government Departments. We also need to look at the creation of the artificial cross-border bodies that deal specifically with tourism. Northern Ireland pays twice as much to Tourism Ireland — over £22 million a year — as it invests in tourism in Northern Ireland. The Northern Ireland Tourist Board announced five signature projects, but the one for Belfast has no central Government funding promised for it and is proceeding with an application to the Big Lottery Fund. Tourism can advance Northern Ireland — [Interruption.]
I hope that the Member agrees that not only is tourism important but that the cross-border bodies are also important.
Mr Neeson: I appreciate that very much, but —
Madam Speaker: I am sorry, Mr Neeson, but your time is up.
Mr Robert McCartney: On a point of order, Madam Speaker. Unless the Chair limits interventions, Members will not give way, since the time spent on an intervention comes off their speaking time.
Some Members: Hear, hear.
Madam Speaker: Order. Members must limit their own interventions.
Mr N Dodds: On a point of order, Madam Speaker. There would be merit in considering the procedure in the House of Commons: if a Member intervenes in a time-limited speech, an extra minute or so is added for each intervention, with a maximum of two interventions allowed. It is then up to the Member to decide whether they wish to give way, and if they do they are not penalised for that.
Madam Speaker: Thank you, Mr Dodds. We will certainly consider that at the next meeting of the Business Committee.
Mr Newton: This morning’s meeting underpinned the importance of this debate. I am sure that most Members would agree that real peace in Northern Ireland, if we ever get it, would have to be underpinned by economic prosperity. However, underpinning any successful Western economy these days is the necessity for everyone of working age at all levels to attain skills and knowledge. I would like to consider briefly three areas that require understanding and attention to deliver a highly skilled workforce: the background to skills development; skills in the context of industry’s needs; and the development of entrepreneurial skills.
Under the Industrial Training Act (Northern Ireland) 1964, Northern Ireland once had a vocational training programme that was the envy of Europe. Statutory training boards covered all major sectors of industry, and the government training centres provided excellence in basic training for those undertaking apprenticeships. That is no longer the case; that system of training was demolished by a Conservative Government.
Recognising the need to move away from what were purely voluntary arrangements for vocational job training, the Government have seen fit to develop an infrastructure referred to as the Sector Skills Development Agency (SSDA). The recent formation of the SSDA — and, coming from that, the Sector Skills Councils — is a welcome move. While they go some way to meeting industry’s needs, they do not completely fill the gap left by the closure of all but one of the statutory boards. The recruitment by employers of eastern European labour to meet skills shortages evidences that.
The UK-wide Sector Skills Councils are currently establishing their presence in Northern Ireland, and the type of provision varies from industry to industry. In order to ensure that the sector skills requirements are met, each council is developing an agreement for its sector. It is fundamentally important that those agreements, developed as they are within a UK-wide framework, are resourced and placed in the context of Northern Ireland industry.
The Government’s recent programme of job-training provision, Jobskills, was described as one of the worst initiatives the Public Accounts Committee had ever examined. The poor ethos, delivery and standard of this £500 million programme must never be repeated. It let down the business community. It created poor morale among many trainees and within the bodies that delivered the programme.
Embedded in the Jobskills programme was the modern apprenticeship training programme. The scheme did few favours to our brightest young people who wanted to embark on vocational training as engineers, electricians or plumbers, with many leaving the programme without qualifying. The replacement programmes, as Jobskills is under review, must offer those who want to “serve their time” — our future technicians and technologists — training of the highest quality, based on real jobs, rather than just training places. The young people who take up apprenticeships need good guidance when they are ready to make a career choice. They also need to know that there is a career path in their chosen occupation. Let us remember that many of Northern Ireland’s leading businessmen started their careers as apprentices.
The business community needs assurances from Government agencies that a well-trained, educated labour force will be available to meet identified needs. The economy demands a joined-up skills strategy.
In its document ‘The Skills Strategy for Northern Ireland: A Programme for Implementation’, the Department for Employment and Learning (DEL) identified three different types of skills. First, there are the essential skills of literacy and numeracy and, increasingly, information and communications technology. It is sad that in my constituency 17,000 people have difficulty with reading and writing. Secondly, DEL identifies employability skills to enable young people to learn to work as part of a team and to undertake problem-solving exercises. Finally, perhaps the most important from the economic perspective, there are the work-based skills, specific to a particular occupation or sector.
The document sets out how DEL will take those proposals forward in partnership with employers and their representative bodies —
Madam Speaker: The Member’s time is up.
Mr Newton: Madam Speaker, if I could just finish —
Madam Speaker: I am afraid that the Member’s time is up.
Dr Birnie: Why should we debate this motion? Well, economic policy is a classic example of how direct rule is not working. There has, first, been pervasive delay in the making of policy. In February 2005, the Northern Ireland Office published ‘Economic Vision for Northern Ireland’. That document stated that it would be followed in autumn 2005 by a joined-up economic strategy for all the Northern Ireland Departments. Autumn came, then winter; now we are in summer 2006, and there is still no economic strategy.
Of course, our Secretary of State loves to chide MLAs for supposedly not doing their assigned jobs. It is worse than that, however. Economic policy under direct rule has shown signs of irrationality. When a new policy is introduced, it must be benchmarked by looking at what was done before to see what worked and what did not work. Unfortunately the Department of Enterprise, Trade and Investment and the other Departments have not been doing that under direct rule.
‘Economic Vision for Northern Ireland’ was published last year with much heralding. It outlined two major targets to test and evaluate economic improvement: first, raising the productivity of people at work; and secondly, raising the proportion of the population in work. There is no quarrel with the objectives; they are sensible. It should always be remembered that some people argue that up to 500,000 people here live in relative poverty. Surely it would have been sensible, before or during the introduction of ‘Economic Vision for Northern Ireland’, to ask what had become of what was still, at that point, Northern Ireland’s economic strategy, ‘Strategy 2010’, which was published in 1999. Some Members may remember it.
It seems that ‘Strategy 2010’, like so many others policies, be they in education or in health, has been consigned to that great dustbin of policy documents as if it were some redundant plan that Stalinist Russia threw out. We have never been told whether the policy was working. Did it realise its targets, of which there were 10? In about half of the targets — for example, gross domestic product per head here; wages here relative to those in Great Britain; new-firm creation; R&D spending; and possibly export levels and high-technology structure of industry — Northern Ireland was either falling behind Great Britain or was doing no better than keeping pace. One economic strategy was failing, but the direct rule Minister simply pulled another one, like the proverbial rabbit, out of the hat. That is not rational policy-making.
The motion, which the Secretary of State has handed down to us in a non-amendable form, refers to the Northern Ireland and Republic of Ireland economies. The Ulster Unionist Party is not afraid of soundly-based, mutually beneficial, democratically accountable co-operation, but we must ask for some economic realism. The Northern Ireland and Republic of Ireland economies are already well integrated. That was recognised in a report this spring by the Irish Business and Employers’ Confederation, which is the Republic of Ireland’s equivalent of the CBI. The report showed that the flow of road traffic across the Irish border every day is the same as that between England and Scotland. Members may say, “So what?” The combined population of England and Scotland is 10 times that of Northern Ireland and the Republic of Ireland. That statistic hardly suggests that the two Irish economies lack economic integration.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public”.
That was written in the eighteenth century by Adam Smith, the founder of economics. I would not apply that quotation to the Northern Ireland Business Alliance and what they said this morning, but there are two necessary points of caution. We must sift business proposals, because not all are for the general social good, and different business leaders suggest different things, such as calling for a change in the rate of corporation tax or for tax allowances.
Mr Dallat: Madam Speaker, this debate comes three and a half years late — certainly too late for the 400 people in the Coleraine area who have lost their jobs in the past 10 weeks.
There have been redundancies and threats of redundancies across the North.
Mr Poots: Will the Member give way?
Mr Dallat: No, I have only five minutes.
We can expect more redundancies when industrial derating changes rise above 25%. Sadly, many of those jobs will be lost in the most disadvantaged areas of the North. If the economy is to prosper and the haemorrhaging of the population is to stop, unconditional power sharing must be restored. If it is not, the situation will become worse. Indeed, the North/South bodies must be taken off care and maintenance, and the political trips to Killarney must cease to be one-day wonders. Personally, I fancy Kinsale.
Since this Assembly met last, the agricultural industry has gone into rapid decline, with thousands of farmers losing their livelihoods. The textile industry has been decimated, and many more jobs in call centres and in the engineering and electronics sectors have gone abroad. Our skills shortage, which has been referred to several times, is a serious problem.
Madam Speaker: Members, the chatting that is going on means that it is becoming hard to hear the Member who is speaking.
Mr Dallat: I can cope with it, Madam Speaker. It is not a problem.
In the North of Ireland, 250,000 people are experiencing the skills shortage that Sir Reg Empey spoke so eloquently about earlier. That is a problem for this Assembly. Mind you, judging by the rapport across the Floor, I am not so sure.
Commitments to decentralise the Civil Service must be made to catalyse the regeneration of the economies of our towns across the North.
Mr Hussey: Will the Member give way to a fellow westerner?
Mr Dallat: I have already said that I will not give way.
The 19% rise in regional rates has left many businesses reeling, with no idea how they will absorb this hike now that competition from the multinationals is at an all-time high.
As a direct result of the Review of Public Administration, many people in local councils will lose their jobs. Again, no one has outlined how those jobs will be replaced. For the past three-and-a-half years, there has been no Public Accounts Committee to investigate fraud and to query the way in which civil servants spend public money. That is totally irresponsible. If a working party is to be set up to consider the economic challenges facing Northern Ireland, it must be understood clearly that it is time-limited and cannot be viewed as part of an ongoing shadow Assembly. The SDLP will play no part in that and expects full devolution to be delivered before the deadline set by the two Governments.
We must mark today as a milestone from which there is no turning back. No u-turns, no somersaults, no side deals — only a genuine desire to earn our money by working for this generation and for future generations. Perhaps it is unwise to dream, but I have a vision of a future where there is no bitterness — such as that which I have experienced across the Chamber — and no desire to do people down because they are different or hold political views that are at odds with others. Is it too much to expect that division can be replaced by diversity; that hope will replace hopelessness; and that a new vision will overcome the darkness of the past, which left everyone blind? I thank those Members who had the courtesy to listen to me.
Mrs I Robinson: My contribution is unashamedly parochial. Over the past 10 years, the constituency of Strangford has witnessed a colossal downturn in its indigenous manufacturing industries. The promised peace dividend has not materialised. Industries and businesses, which have formed the foundation of the local economy, are declining and disappearing at an alarming rate.
The cumulative effect of the demise of Harland and Wolff; the job losses from Bombardier Shorts, TK-ECC in Dundonald and the textile industry; and the decline in the fishing industry has been to rob the area of its traditional employment base. At the same time, however, Government has sought proactively to ignore that fact and to avoid, as much as possible, marketing the Strangford and east Belfast area as a location suitable for inward investment.
If 5,000 jobs had been lost in constituencies such as West Belfast or Foyle, there would have been a markedly different response from the Department of Enterprise, Trade and Investment. Instead, there seems to be a fundamental unwillingness to develop a strategic approach to the crisis.
It is as if, when investors fly into Northern Ireland’s capital, there is a “No Left Turn” sign at the exit from Belfast City Airport. Instead the Department seems more concerned with rerouting investment to nationalist areas of the Province, at the continued expense of areas such as Strangford.
I wish to make it clear that I have no difficulty with nationalist areas attracting new investment, but I do object to an uneven playing field and the institutional discrimination practised against my constituency and others in the east of the Province. One wonders what must happen in my constituency before the Department of Enterprise, Trade and Investment sits up, takes notice and acts to deal with the crisis.
The inherent danger associated with the continuing decline of our traditional industries is that we are not only losing jobs but witnessing the removal of opportunities for future employment, and skills development and retention. As the manufacturing base continues to shrink there are an ever-decreasing number of opportunities for those with relevant skills. Some TK-ECC employees came from industries that had closed down, such as the textile firm in Newtownards and mid-Down.
Mr Trimble: Is it not a rather old-fashioned view of the economy to keep harping on about manufacturing industry when the most profitable forms of industry are tradable services? These are growing significantly in Northern Ireland and the level of profit is much greater than in traditional manufacturing industries, where we cannot hope to compete with cheap metal-bashing in the East.
Mrs I Robinson: You may say that, but I could not possibly comment. I feel that every job is important.
Mr P Robinson: And every sector.
Mrs I Robinson: And every sector. Thank you for that prompt.
Every time a factory closes, opportunities for employment are removed.
Rev Dr Ian Paisley: Your husband is helpful.
Mrs I Robinson: Sometimes.
If action is not taken to address the situation, the local manufacturing industry will be consigned to the pages of the history books. Mr Trimble seems keen for that to happen.
The TK-ECC situation also illustrates the fragility and uncertainty that comes with new jobs that are not anchored in Northern Ireland and which can easily be transferred to sites outside Northern Ireland and the rest of the United Kingdom. It did not go bankrupt; it was simply axed by its parent company. A company, therefore, can come to Northern Ireland, take advantage of generous Government grants, and subsequently up sticks as soon as the benefit has been obtained. With so much being made of the growth in call centres, one only has to look to the Prudential to see that job security in this sector is all but non-existent.
Invest Northern Ireland holds 917 acres of unused industrial zoned land across the Province, of which 8·6 acres lies in the Strangford constituency — less than 1% of the total. The Government need to look at equality in this respect.
Madam Speaker: I remind Members to address their comments through the Chair.
Mr K Robinson: Members have referred to the fragile condition of our once-thriving manufacturing industry — and I say that in its widest sense, not its traditional sense — and the adverse impact of derating changes on the viability of many of our firms. Across the UK, the manufacturing sector is perilously small at 15%, compared with our competitors in Germany, where it is over 30%.
In the process of downsizing we have lost 500,000 jobs across the UK, but at the same time this Government have created over one million public sector posts. Daily we are assailed by the Northern Ireland Office, the local arm of the Labour Government who have created these public sector jobs, and told that we must correct the problem. They are the people who have caused the problem over the last 30 years.
Our local manufacturing sector has been halved over that period, with a further 18,000 jobs predicted to disappear over the next decade. Our wealth-creating base has been systematically reduced until it is now almost non-existent. Simultaneously, there is the spectacle of venture capital flowing out of Northern Ireland, often to fund developments elsewhere, and yet many patents created by research and development projects within our universities are still unexploited, mostly through lack of finance.
Those findings, if properly harnessed and financed in a co-ordinated and coherent manner, could provide a platform from which to launch new businesses. If clear links could be developed between those university projects, available venture capital and a focused skills training programme for our workforce, the potential would exist to achieve something worthwhile for our economy.
Many of the vital components required to build a vibrant, successful economy, which increasingly moves from the comfort zone of the public sector and confidently embraces an expanding, adequately financed, sector-focused private enterprise model are already in place. The future co-ordination of efforts between the Department of Enterprise, Trade and Investment and the Department for Employment and Learning, together with the expertise of Invest Northern Ireland, must be seamless. No longer can any vestiges of the silo mentality be tolerated. Equally, those elements within the private sector must move away from lecturing and hectoring mode and instead work in conjunction, providing real vision, entrepreneurial drive and a determination, along with politicians, to lead this community forward into a vibrant and economically stable future.
The Department for Employment and Learning corporate plan perhaps provides a good basis for harnessing the largely untapped expertise of the further education colleges, through its document ‘Further Education Means Business’. It is also in a position to ensure that the enormous research and development potential of our universities is properly focused. I should point out, Madam Speaker, that there are about 2,000 jobs directly involved in research and development — much, much too low if our economy is to grow.
The small size of our manufacturing base might also lend itself to closer scrutiny of emerging opportunities, perhaps in niche markets. That, in turn, when supported by a focused upskilling of sectors of our workforce, could provide a much needed source for value-added jobs. The decision as to whether the relatively small size of the Northern Ireland economy represents a threat or an opportunity lies firmly in the hands of the wider business community, academia in all its forms, the financial sector, and politicians — both local and national.
I firmly believe that it is the agreed will of all those sectoral interests that Northern Ireland plc should not only survive, but thrive. This debate is an important initial step towards the completion of that necessary journey. I support the thrust of the revolution — sorry, resolution — if not the method. [Laughter].
That was a Freudian slip; I have been sitting beside Sammy Wilson for too long.
I support the thrust of the resolution, if not the method by which it has arrived on the Floor of the Chamber.
Mrs Foster: I speak in this debate on the Northern Ireland economy with particular reference to my constituency of Fermanagh and South Tyrone. Madam Speaker, I have been waiting quite some time to say the words “my constituency of Fermanagh and South Tyrone”, and I am delighted to be able to say them today.
Some Members: Hear, hear.
Mrs Foster: As the most westerly part of the United Kingdom, Fermanagh and South Tyrone has its fair share of economic challenges, but likewise there are many strengths for businesses that are not being recognised by Government because of its rurality. The strengths are clearly in the quality of the workforce; a workforce and a community that has suffered greatly from the downturn in manufacturing. I note the comments of the Member for Upper Bann, but his attitude clearly shows why the last failed Administration did not deal with the clear signs that the manufacturing industry was on a downward spiral.
The community will again suffer in Fermanagh and South Tyrone, and in the west in general, when the Royal Irish Regiment is disbanded. Where will those men and women go for employment? That is a question that we have been asking, but we are yet to hear the answer. Frankly, if jobs and business opportunities do not present themselves locally, those people will move from rural areas and the depopulation of the west will continue apace — a trend accelerated by the publication of Planning Policy Statement 14 as Government policy.
The infrastructure is poor in the west. Recently, I had the opportunity to host a visit to Fermanagh by my colleague, Jim Allister MEP, who wanted to look at these matters. My right hon Friend, the Member for North Antrim, Dr Paisley, mentioned European funding and the fact that the Republic of Ireland is a huge net beneficiary from Europe. As a region, Northern Ireland must not continue to be discriminated against in comparison with other European regions. Indeed, my party has set that as one of its primary objectives in Europe. While Jim Allister was in Fermanagh, we learnt of the many problems facing companies in the constituency of Fermanagh and South Tyrone, including energy costs, poor road infrastructure and the differing tax systems in Northern Ireland and the Republic of Ireland, not to mention the ongoing and increasing threat of industrial derating, which is hanging over firms.
My Friend, the Member for West Belfast, Mrs Dodds, referred to tourism and the difficulties faced by Belfast’s signature project. At least Belfast has a signature project. It was a quite bizarre decision taken by the Government not to include Fermanagh, which is Northern Ireland’s lake district, in signature status. It is a decision that must continue to be challenged and that I will continue to challenge.
Mr Donaldson: Does the Member agree that it is highly regrettable that the Member of this Assembly who represents the constituency of Fermanagh and South Tyrone in the House of Commons is not present in her place this afternoon; is never present in her place in the House of Commons; and, therefore, is incapable of representing the people who elected her? The sooner the Member behind me is the Member of Parliament for that constituency, the better.
Some Members: Hear, hear.
Mrs Foster: You may say that, I could not possibly comment. I will comment, however, on the fact that the Member for Fermanagh and South Tyrone, who sits here and in another place, does not come to represent the interests of her constituents.
The motion looks for solutions. Solutions to all these problems can be found through joined-up thinking, and that is why I support the creation of the working group. However, let me be clear: when looking for solutions, such a working group must take all of Northern Ireland into account and not just, as is regrettably so often the case, seek solutions to fit a Belfast-centric model. One size will not fit all in this instance, which is why I ask that when the working group is set up, it be geographically representative. I hope that the Secretary of State will take cognisance of that point when it comes before him.
I end with a positive message from the west. Business plans are in place for St Angelo airport, situated to the north of Enniskillen, and if the plans come to fruition, the vision of two local businessmen will offer significant economic potential for Fermanagh and, indeed, the whole region. The Member for North Antrim, Dr Farren, made mention of quality skilled jobs, and if the project comes to fruition, the jobs provided will be just so. We need to foster and assist the entrepreneurial talents of our indigenous people, and I trust that the working group will take that into account and make it its primary focus, and that the Government agencies involved with projects such as these will act expeditiously.
Ms Ritchie: There are major economic challenges facing all of us. It is clear also to the SDLP that the people who sent us here expect us to do something about those challenges and to act very soon to correct the punitive policies of the direct rule Administration. Pending restoration, the current political imperative to enable us to act on those challenges lies with the British and Irish Governments, but the community imperative demands that we get our acts together; get all the institutions up and running, as per the Good Friday Agreement; and set the economic and infrastructure agenda for the next 25 years.
That is a major challenge, which is now more compelling than ever and will not wait for another generation to implement. Despite the improved headline unemployment figures, our economy is not in good shape. By comparison with anywhere else in these islands, a low proportion of our people are economically active. By comparison with almost anywhere in the world, we have an inordinate dependence on the public purse. To put it bluntly, our economy is unsustainable, even in the medium term.
Of all the challenges facing us in the economic sphere, the first and major one, the absolute starting point for regeneration and resurgence, is the lack of political stability.
What our people need above all is a better life; we in this Chamber have the power to give them that. They need each of us to commit ourselves to the re-establishment of political institutions without delay and to a final end to sectarianism, violence, terror, criminality and racketeering, and to stand up for a lawful society and for policing institutions. That is what is needed to unlock our economic potential, to attract more inward investment, and to emulate and share in the outstanding growth and development in the Southern part of our island.
There is also a challenge for each one of us to put in place political structures that will say goodbye to disadvantage and deprivation, which is still rife in certain parts of Northern Ireland.
Mr Paisley Jnr: Will the Member give way?
Ms Ritchie: No, I will not give way; I have only five minutes.
There is also a challenge to each one of us to end the geographical inequalities and inequities of the past. We must ensure that each of our citizens has full access to all educational, employment and economic opportunities. We cannot do these things if we permit the current lack of regional balance, with developments clustering in the east and deprivation clustering in the south and west, to continue. There will not be balanced development unless and until we can offer well-distributed infrastructural investment on the quality levels demanded by investors — a revised and upgraded infrastructure with the development of all transportation networks on an all-island basis. Hence our policy of wanting the establishment of an all-island infrastructure and transportation body.
Solid, joint intergovernmental political action is now required to establish that body and to put it on board the North/South agenda. Economic competitiveness depends on the sound development of roads and railway infrastructure on an all-island basis.
Mr Trimble: Will the Member give way?
Ms Ritchie: No, I will not give way; I have only five minutes.
Many infrastructural challenges that would improve our economy and job-creation potential await us. There is a compelling need for all the political institutions of the Good Friday Agreement to be restored immediately in order to ensure that the infrastructural challenges that we need to address to meet the economic demands and challenges that we were told about this morning are fully addressed for the benefit of all on this island.
Madam Speaker: May I remind Members that several Members are making their maiden speeches in the House. I ask Members to accord them some courtesy.
Mr McNarry: From the boardroom to the shop floor, from the innovative and inventive to the inquisitive and the motivational, from the understanding and development of new technologies to the production of reliable skilled tradesmen — all in the beginning have first to be taught and then to find the opportunity to excel in their choice of future employment.
The consequences of damaging the business community’s confidence in our education system’s ability to secure proven academic and vocational entrance into the world of employment are too dire to contemplate. In this small nation of 1·6 million people, education has to be the keystone that guarantees Northern Ireland a role not only in job creation but in bringing forward those who can more than hold their own in sustaining our economy by competing with the best of other economies. A strong economy and an excellent education system are dependent on each other. Each will have a lasting effect on people’s standards and their quality of life.
Therein lies a challenge. It is, if you wish, a gauntlet to be received and acted on, or some day soon it will be stroked across our faces because too many failed to engage at the first hurdle and too little was done about it in this place.
I refer to House of Commons Hansard and a speech by the late Harold McCusker on 19 June 1979. He said:
“I cite the previous Secretary of State for Northern Ireland as my reason for saying that, because when he visited various parts of the world to attract industry to Northern Ireland at a very difficult time, what was one of his principal arguments?
It was that we have one of the finest educational systems in the United Kingdom. He could show a record in A-level and O-level achievement which was better than that of anywhere else in the United Kingdom. He was citing that as one of his principal arguments for encouraging industry to come to Northern Ireland at the same time as he was setting about dismantling that system in the Province. ”
Somehow, I have heard that before. Is it not incredible that, some 27 years later, in this Chamber, I would use Harold McCusker’s analogy linking education and business to make the point that, if we want to attract the best business investment, we must offer the best of all educational opportunities?
I support setting up a working group. Let it draw its expertise from this body, and let it report sooner, rather than later. Let it not be just something that we discuss here and then find that it goes to the consultation chamber.
I end by saying that, uniquely, this debate could result in myself and others not making just our maiden speeches, but our only speeches in this Chamber. I hope that, as we contemplate this motion and our responsibilities to the economy, this will not be the last time, and that we will participate in debate and send a message and a signal to the public that this is the place to do business, and this is from where our economy will be driven and survive.
Mr Buchanan: Following my good colleague Arlene Foster, I will mainly focus on the rural constituencies. The constituency of West Tyrone has much to gain from the establishment of a meaningful working group to consider the economic challenges that face our Province. Over the past 35 years, West Tyrone has witnessed the very fabric of its economy torn apart by terrorism. In the most recent years, it has suffered severely from huge job losses.
In Strabane, hundreds of jobs have been lost at companies such as Adria and Herdmans, while Omagh has seen the closures of the Desmonds, Nestlé and Rixell factories, with little or virtually no support or assistance from Invest Northern Ireland when it was requested.
Added to that, we have the uncertainties and concerns surrounding the current vacuum in the provision of proper acute healthcare provision for the south-west quarter of Northern Ireland. Although lifting the ban on exports of UK beef gave some hope to the rural economy, West Tyrone is set to suffer yet another blow through the decision to close the St Lucia and Lisanelly Army bases.
Far too often in the political storm surrounding these announcements, the fate of the many civilian workers is forgotten. Those are the people who will often struggle to find new employment as a result of having previously being employed in security bases. The closure of those bases will bring a large number of people out of economic productivity. It will be a huge challenge to ensure that the economy can be developed and that there are employment prospects for all those people.
There is, of course, also the added knock-on effect from the reduction of spending power, which will affect shops and other businesses in the surrounding area. When we access the indices of deprivation measures, areas such as West Tyrone are shown to be in need of help from a detailed look at the economy. Although I have mentioned some of the larger businesses that have closed in recent years, there are still many companies operating in rural areas that must be given the opportunity to compete on a level playing field.
A border region such as West Tyrone would severely suffer from a decision to push ahead with the end of industrial derating. Businesses in Omagh and Strabane have to look only a few miles across the border to see their competitors operating in a low-cost environment. While I appreciate that it is not the place for Government or this Assembly to do the job of businesses, we must create the best possible conditions for businesses to compete.
Businesses operating across Northern Ireland, particularly in rural areas such as West Tyrone, have much higher costs to contend with, such as electricity and transport costs, to name a few. However, one advantage that we have been able to highlight has been the derating of industrial businesses.
Manufacturing industries are not unwilling to pay rates, but they have rightly pointed out the need for the current rate of 25% to be kept. That is on a level with the rate set by the Government for freight transport companies and would allow the Government to set a sensible level of rating while not forcing companies to operate at an unsustainable cost base.
The Government have stated that they will listen to the views of the Assembly. I hope that they will follow that through and listen to what has been said today regarding the problems facing our economy and the measures that can be put in place to help remedy them. Areas such as West Tyrone face many problems, and I hope that a meaningful working group will help to deliver a strong and stable economy in my constituency.
Some Members: Hear, hear.
Mr Moutray: At the outset, I wish to express my disgust at the absence of one party from the Chamber. So much for its commitment to the Northern Ireland economy; but then it was always more committed to the night shift than the day shift.
A number of aspects of the Northern Ireland economy must change if the situation is to improve. The Province has a massively inflated public sector, and it is essential that we move quickly from a public-sector-dominated economy to one that is much more heavily influenced by the private sector. Such a transition, clearly, must be delicately overseen and managed.
Private sector investment must be encouraged, as it will prove difficult to sustain the current levels of public expenditure. Likewise, it is difficult to see how, in the short term, the private sector could fully compensate for the decline in historic levels of public expenditure. We currently spend billions more than our economy generates.
A comprehensive, new economic strategy for the Province is needed; a budget allocation for economic development should be ring-fenced and utilised to encourage job creation.
The size of central Government should be reduced. For many years, since the signing of the outdated Belfast Agreement, my party has advocated that.
I remain to be convinced that the Review of Public Administration will effect any substantial savings. In fact, it has been suggested that the new structures for local government, health and education will cost more. A reduction in the number of Government Departments would be much more productive.
Economic and social policy and its delivery should not be considered in isolation from plans for infrastructure, education and training. It will be difficult to increase our competitiveness globally, unless we are able to develop a world-class infrastructure in Northern Ireland. Our schools and education system must encourage children to consider careers in business. Similarly, school leavers must be provided with the necessary skills to succeed. Greater effort must be directed towards improving the marketing and sales techniques of our graduates and workforce.
Our current investment in innovation, research and development is among the lowest in the world. The managed transition away from the public-sector-led economy requires private sector expansion, increased foreign investment, growth in indigenous businesses and an increased entrepreneurial spirit. Relaxing unnecessary legislation and speeding up our labour planning process will stimulate investment in infrastructure and housing as well as reduce reliance on public expenditure.
There may be some areas in which working with the Irish Republic will prove to be in our interest and aid competitiveness. That is what it is about, and it is not an excuse for others to make foolish attempts to obtain political capital.
The percentage of the working-age population in employment or at participation level is at a record low. To meet the UK average participation level by 2015 means creating 68,000 additional jobs in Northern Ireland. Furthermore, our growing population means that 40,000 extra jobs are also required over the same period. Add that to the anticipated number of job losses over the next decade in such sectors as manufacturing and agriculture, and the overall total is above 140,000. Therefore, to reach by 2015 the average work participation rate for the rest of the United Kingdom, 140,000 new jobs must be created.
When economic indicators are considered, areas of the Northern Ireland economy appear to perform well. Northern Ireland has performed best of all UK regions over the past decade in growth in employment, reduction in unemployment, and the percentage of school leavers with qualifications. The last statistic is one that Northern Ireland Ministers conveniently ignore when they attack our education system.
Business survival rates are also quite good in the Province, but there are a large number of other indicators on which we fare badly. These include long-term unemployment, business formation, activity rates, the proportion of private sector employment, average earnings, and the percentage of the working-age population with more than two A-level passes. It would be remiss of me not to mention business crime, regrettably all too common, and on the increase. As one who has had some experience in the fuel retailing business, I know the impact of smuggling and racketeering, emanating in many cases from the paramilitaries. Business leaders and politicians must be seen to fully back the PSNI and all other agencies in the fight against crime. This gangsterism has caused, and is causing, job losses in businesses and small businesses around Northern Ireland.
Mr McFarland: I want to talk briefly about our skills base. Colleagues have covered the issue of tax rates and the need for some co-ordinated plan. However, how can we hope to compete without a properly developed skills base? A Member has described Northern Ireland as having one of the lowest participation rates in the United Kingdom. The economically inactive surely need to be encouraged to take full advantage of the training programmes available.
More importantly, we have a difficulty with schools. We are sending 25% of children out of schools into the workplace ill-equipped to deal with the jobs available. There are problems with mathematics, speaking in public, writing letters and particularly in the modern age, computer skills. How can our children compete in the job market if we are sending them out of our schools not equipped to do the jobs?
In a more confusing area, we are sending our children out of universities incapable of going into the industrial world. Colleagues will be aware that Bombardier Shorts has a special course for its university graduates. It finds it has to retrain them in mathematics, speaking and writing letters, because they come out of university not equipped for these jobs. It will not allow them into the company without taking this course.
Unless we get our act together with a co-ordinated plan that allows us to train our schoolchildren properly so that they leave with the skills required; go through university gaining the skills required; and at the end of all this co-ordinate with industry on the skills required by industry, and not on what academia thinks is needed, then we are really going to get nowhere on this issue.
Mr A Maginness: We in this House are faced with an awesome responsibility in relation to the political future of this Assembly and of the institutions under the Good Friday Agreement. That responsibility is a heavy one and is one that we should take very seriously. Many people have come to this House with very little hope, indeed some with no hope.
I remind the House that C S Lewis, who was educated not far from here at Campbell College, said that between little hope and no hope lies an ocean of opportunity. We do have an ocean of opportunity. One of the most vital tasks of this House is to prepare an economic plan that the incoming Executive can implement on behalf of all the people whom we represent, not just in our constituencies, but throughout the whole of Northern Ireland. That is an important task. It is not something to take lightly. There is a false sense of security in the House that the economy will plough on despite everything. That is untrue. This economy is highly subsidised and dependent on the public sector. We need to shift that balance to an entrepreneurial economy in which everybody will be enriched.
We look across the border to the Republic and see the amazing success of the Celtic tiger. That success was based on one basic resource: a highly educated young population. We have that educated young population and we can adjust our education system to service the needs of our future economy and of an entrepreneurial society. We can do that, but we must get our act together politically. The first building block of reconstructing our economy is to create political confidence that will inspire people outside this jurisdiction to come and invest money to create industry in which all our people can partake. That is our solemn task in this House today and throughout the coming months.
It is a pity that some people have absented themselves and have evaded or avoided their responsibilities to complete that task. There is nothing in the motion that is antipathetic to the idea of creating a new Northern Ireland Executive. In fact, the motion is very much attuned with the creation of that Executive. Those people have no political excuse for not being in this Chamber. They are denying their constituents and the rest of the people of Northern Ireland an opportunity for this House to unite around a comprehensive economic programme that can rebuild this society, which has suffered for too long not just from them, their supporters and their allies, but from others who have taken advantage of the situation. Therefore, we must renew our efforts to deal with that situation.
A second important building block is the creation of a new fiscal policy that will encourage industry in Northern Ireland. We have a land border; one of our colleagues said that, in many ways, the economy is integrated both North and South, but we must have a competitive, level playing field for Northern Ireland. Therefore, we must fiscally attune the situation here with that pertaining in the Republic. It is vital that we get that fiscal policy well defined so that we can all unite behind it, and when we go to the Westminster Government, we can say that we have a consensus on which we are all agreed. That will transform our economy and society. We have another advantage, namely that we are members of the European Union, which is an extensive market of which we should take advantage.
Finally, if the Secretary of State is serious about this motion, he should take the serious step of ending the introduction of punitive measures that will undermine business in Northern Ireland.
Mr Ford: There was much talk today, both this morning and this afternoon, about the size of the public sector and the private sector. However, let us be clear that the problem in Northern Ireland is not that the public sector is too big. I am not going to stand here and advocate sacking a single teacher, nurse or police officer. The issue is how we grow the private sector.
It is a simple fact that, within the last decade, in the Republic of Ireland, the public sector has grown. However, the private sector has grown enormously. The balance in the Republic has shifted and we must emulate that.
I wish to refer to some points made by other Members. The key ingredient for growing that private sector is getting away from the current low-skills and low-wage expectation of much of that economy. There is a real need to do much more on worker skills and training, and on integrating the work done by business with further and higher education.
There are real problems in the pseudo-competition that exists among a number of institutions. The Department of Agriculture and Rural Development showed the way when it established the three-campus College of Agriculture, Food and Rural Enterprise.
It deals in a collaborative way with all the aspects that are relevant to one of our major sectors. Unfortunately, the competition among colleges to obtain money by getting people into the lecture halls means that we may not have the necessary level of co-operation. There is much need for competition in the private sector, but there is greater need for co-operation in the public sector to deliver the range of services that is needed to build that private sector economy.
I refer to the speech — sorry, the intervention — by Mrs Dodds during Mr Neeson’s speech; a key issue regarding tourism has not been teased out properly. There is no doubt that we need to build on our tourism honeypots, but there is, moreover, no doubt that the tourism Northern Ireland will attract is heritage tourism or green tourism, and that can apply in every part of Northern Ireland. It is easy to see areas such as my constituency of South Antrim, which sits wedged between the Belfast honeypot and the Causeway Coast honeypot, as being purely for people to drive through, from one honeypot to another. Yet there is potential for developing other aspects of tourism in those areas. We cannot simply leave tourism to crowding people into central Belfast or one or two other resorts.
If we are to look seriously at the target of 141,000 new jobs, we must consider what can be done to attract foreign direct investment. There is no doubt that the record that Northern Ireland had some years ago has slipped recently, and it is a major target for Invest Northern Ireland to reach. We must consider the possibilities and we also have to be realistic, in that certain trades may work to our good, but there are others that we can no longer realistically depend upon. We cannot depend upon heavy engineering as being a growth area; we may or may not hold on to what we have. We need to find such issues as tradable services to avail of the opportunities that are there, and we must also consider the expectation that we will not attract the foreign investment that we hoped for to grow our own SME sector. There are major challenges in developing investment, training and R&D in a sector which is so dependent upon small and medium-sized firms. Yet, if we do not, we will not achieve the growth that is possible in Northern Ireland.
On the issue of taxation, it is clear that merely the ability to fiddle with the regional rate and industrial rates will not meet the needs of this sector. We are in direct competition with a low corporation tax economy and low excise duties across the border. During the economic briefing this morning, the business leaders suggested the need for a detailed research project on how lowering tax rates might improve total tax take in terms of corporation tax and income tax, and there is no doubt that that is of key importance.
However, another aspect, which has been almost ignored this afternoon, is how we actually seek to build a shared future in this society. There is no doubt that the successful economies across the world are those that are open, welcoming and integrated. We are getting a share of that with our new citizens coming from eastern Europe, but it is clear that until we provide opportunities for every person in this society, regardless of background, we will not have the economic growth that we need.
Mr Donaldson: It is almost 20 years since I last spoke in this Chamber, and, on that occasion, the party opposite — the SDLP — was not present, but I genuinely welcome its presence today. Also, on that occasion, the party known as Sinn Féin was absent, and, once again, it is absent today. Republicans ought to have learned by now that abstentionist politics does not get them anywhere, and it fails their constituents. They ought to be here today, putting their point of view. Their failure to attend the debate just demonstrates —
Madam Speaker: Please address the motion, Mr Donaldson.
Mr Donaldson: — demonstrates their apathy, Madam Speaker, towards the business community and towards addressing the problems in our economy, and that is highly regrettable.
Madam Speaker: Order.
Mr Donaldson: The motion calls for the establishment of a working group, and I hope that Sinn Féin will not be absent from that. It is essential that all the parties put their shoulders to the wheel to address the issues that concern the people that we represent. The presentation from the business leadership this morning was important, and I do not understand why Sinn Féin could be there to hear it but did not have the good grace to come and debate the issues that were raised.
We have a window here, an opportunity. There is leverage in advance of the Administration being re-formed at some appropriate time in the future. There is leverage to apply to the Government at Westminster. We must use this opportunity to get what we need in order to build a strong economy. Unfortunately, that will not be helped if one party absents itself from the job at hand.
We heard this morning that long-term unemployment in Northern Ireland is the highest in the United Kingdom. Of particular concern is the fact that youth unemployment here is also the highest in the United Kingdom. We need to offer our young people some hope — especially those who find themselves unemployed. That is why this debate is important.
I listened with interest to the comments made by the hon Member for Upper Bann, who is, unfortunately, no longer in his place — as is the case across the water. It will come as a disappointment to his colleague, who is a party officer. Of course, being an officer in the Ulster Unionist Party Assembly Group means something rather different after yesterday.
Madam Speaker: Mr Donaldson, please keep to the motion.
Mr Donaldson: There is a lot of emotion, Madam Speaker.
His colleague Basil McCrea, whom I have worked with very closely on the issue of industrial derating, will have been disappointed to hear the hon Member for Upper Bann say that manufacturing is not the future for our economy in Northern Ireland. Manufacturing is the future, as indeed are tradable services. Of course we welcome investment in those areas, but we need to support and develop the manufacturing sector.
The reality, as we heard this morning, is that only 65 businesses in Northern Ireland employ more than 500 people. Many of these are manufacturing companies, and they need our support. Montupet (UK) Ltd, in my constituency, has over 700 employees. The company faces an industrial rates bill of almost £1 million. What will that do for the future employment prospects of the people who work at Montupet in Dunmurry, or, indeed, at Harland and Wolff, which is facing a potential rates bill of £4·375 million?
Surely we should be doing something to help the manufacturing sector. Indeed, we took a cross-party delegation to meet the Secretary of State for Northern Ireland to put the case for capping those rates. That set an example. The working group would be able to take that issue forward, and other matters affecting the wider economy.
We need to help our economy; we need to help our businesses; we need to support our manufacturing sector. That means an end to the ongoing situation where the Government are taxing our businesses out of business. We, as political leaders, have a responsibility to do something about that. An all-party approach in the working group is the way forward.
Mr Beggs: Northern Ireland is over-dependent on the public sector. The days of significant increases in public sector funding are over. We face a bleak and degrading future if Northern Ireland has to rely on diminishing public funding in the long term. As politicians, we must help create the space for existing businesses and new enterprises to develop. More importantly, we must not create barriers to industrial development.
Engineers, scientists and entrepreneurs are the drivers of the economy. Politicians must contribute political stability. That may be the greatest contribution we can make to our local economy. We must all lead by example and not allow historic intransigence or emotive rhetoric to be misunderstood by our impressionable young people. We must all support the police and act to end all criminality and street conflict. Was that not agreed eight years ago, but not delivered by some?
We must ensure that Northern Ireland is business-friendly and learn lessons from other successful regions. We must forget about the politically charged rhetoric of an all-Ireland economy, which detracts from establishing genuine good relations. Manufacturing sales and exports surveys from last November reveal that 43·5% of Northern Ireland exports went to other regions of the United Kingdom, while 11·6% went to the Republic of Ireland. We must not narrow our vision to the so-called all-Ireland economy, but help local businesses to improve and export against European and global competitors.
Mr Hussey: We heard Mrs Foster, John Dallat and Tom Buchanan, representatives from the west, talk about the economic difficulties there. Does my Friend agree that it would be better for us as an Assembly to consider the east-west dimension within Northern Ireland, and with regard to the UK, rather than the Belfast-Dublin economic corridor?
Mr Beggs: The figures that I quoted clearly indicate that I do.
We must look for markets wherever they exist, because with businesses and export markets come jobs. We must allow business to establish where the markets are. If business activity is to be led by Government policy intervention, it must be mutually beneficial and subject to genuine local democratic accountability and scrutiny.
The recent industrial derating issue has shown how disengaged our locally unaccountable Northern Ireland Office Ministers are from the needs of the local business community. Our businesses compete over a land border and within a different fiscal regime, and that has not been taken into consideration. The Treasury and Northern Ireland Office Ministers appear unconcerned about the potential for company relocation to the Republic of Ireland, which is seen by some as more business-friendly. Why should we allow Invest Northern Ireland to spend millions encouraging inward investment when the full rates proposed for industrial premises have the potential to export or end many existing jobs? Clearly the planned manufacturing rates increases must be halted. A convincing and collective case must be put to the Treasury for the improvement of fiscal conditions to encourage development within Northern Ireland.
A prosperous economy will create opportunities for young people and enable any future Northern Ireland Executive to blossom. Market leaders such as Schrader Electronics, and FG Wilson in my own constituency, have led with R&D. They are worldwide leaders, and their exports are significant. As a region we need to change our approach to wealth generation. We must become more business-friendly. The efforts of our schools and colleges must closely meet the needs of local industry.
We would have liked to improve the wording of the motion, but, regrettably, that has not been possible. In particular, there is a need for a restoration-of-devolution committee, without which this is a lot of hot air. We could have six months of hot air, so I urge that such a committee be established as soon as possible so that we ourselves can make decisions in the future. I support the motion, and I hope that other Members will do so also.
Mr Dawson: I am glad of the opportunity to take part in this useful, and mostly constructive, debate. I agree with the Member from North Belfast, Mr Maginness, and my own colleague from Lagan Valley that it is a scandal that the Benches opposite are empty today as we discuss the economic future of Northern Ireland.
However, it is not surprising that Sinn Féin, which has nothing to offer economically, is not here to debate the economic future of the country. Whatever its public reason, I suspect that its real reason for not being here is that its Members cannot handle having to operate in a situation where they are armed only with the powers of argument and persuasion, like the rest of us.
Many issues have been referenced over and over again today by Members, both in the Northern Ireland Business Alliance meeting earlier this morning and in this afternoon’s debate. Reference has been made to skills, education, reducing bureaucracy, improving planning infrastructure and processes, developing infrastructure, and reducing business costs, including industrial rates. The working party can constructively examine and take forward all of those issues and make recommendations to the Secretary of State on how the economy can be bettered. However, whatever the future arrangements, we must ensure that an Audit Committee is not allowed to strangle a developing flexibility and entrepreneurial culture in Northern Ireland, as it did in the past.
I wish to refer to two specific issues. First, there is the issue of North/South co-operation. I have no hesitation in saying that in regard to strength, scale and long-term stability, Northern Ireland’s best economic interests lie within the United Kingdom, and within a United Kingdom context. However, my political convictions do not preclude me from wholeheartedly supporting the principle of economic co-operation with our Irish neighbours where that co-operation is practically and not politically motivated and where it is of economic benefit to the people of Northern Ireland. Trade between our two jurisdictions is of considerable benefit to many companies in Northern Ireland. That is the stuff of normal trade and politics; it is not the domain of politicians.
Dr Farren: Will the Member give way?
Mr Dawson: No, I will not.
I have no hesitation in encouraging companies to avail of that trade or in providing the opportunity for them to avail of that trade. That might refer to some matter on which the Member wanted me to give way.
However, no one should forget for a second that the Republic of Ireland is our economic competitor. Often, in the clamour to promote a false all-island economy, that fundamental fact is forgotten, along with two other harsh realities: there are two currencies and two tax regimes in the island of Ireland.
That takes me to my second point, which is corporation tax. I can understand the reticence of Her Majesty’s Government in relation to differential tax rates across the kingdom, but there are precedents. The challenge to the working party and others will be to convince Her Majesty’s Government of the negative effect of a 30% corporation tax in Northern Ireland, in comparison to our competitors in the South. Another challenge will be to convince the Government that because Northern Ireland’s position is unique — in that it shares a land border with another European state and is in transition from over three decades of violence and civil strife — it deserves a period of managed special treatment.
If, as they claim, the Government are serious about improving Northern Ireland’s competitiveness and making it world class, the Secretary of State’s single most important step would be to consider seriously a lower corporation tax rate for Northern Ireland, below that prevailing in the Republic of Ireland. That can be done either by changing the headline rate or by a cocktail of measures focusing on research and development, marketing and training that would help not only foreign direct investors, but indigenous companies.
That, Madam Speaker, brings me to my conclusion. Although on some occasions it seems that Northern Ireland is struggling as an economy, and there are economic challenges facing us in the twenty-first century, Northern Ireland is well placed to meet those challenges. With the right incentives and the right level playing field, Northern Ireland can go forward to a better future.
Question put and agreed to.
That the Assembly considers the economic challenges facing Northern Ireland, in the context of both the UK and all island economies, to be a key priority for a restored Executive and calls on the Business Committee to take forward establishing a working group on this issue to make recommendations to a restored Executive.
Adjourned at 4.04 pm.