Monday 11 September 2006
The Assembly met at 2.00 pm (Madam Speaker in the Chair).
Members observed two minutes’ silence.
Madam Speaker: In accordance with the Northern Ireland Act 2006, the Secretary of State has directed that the Assembly should sit on Monday 11 September 2006 at 2.00 pm and again, subject to the continuation of debate, on Tuesday 12 September 2006 at 10.30 am to consider the business as it appears on the Order Paper. Before moving to that business, I wish to advise the House of my rulings in relation to two points of order.
Speaker’s ruling on Standing Order 3
Madam Speaker: At the first meeting of the Assembly on 15 May 2006, Mr Peter Robinson asked me for a ruling in respect of the decisions I had made in publishing the list under Standing Order 3. I decided to take the advice of counsel on that matter. I have now received counsel’s opinion and have also had the opportunity to consider the representations of all parties and other Members on this issue. I want now to respond to Mr Robinson’s query.
Members should be advised again that, in line with custom, I will not enter into debate, either here or elsewhere, about the substance of my ruling. In making his request, Mr Robinson drew attention to the potential political consequences of a ruling. I remind Members generally that I am governed by legislation and Standing Orders, not by political considerations. I believe that my ruling is legally and procedurally correct. Standing Order 2(a) offers me the authority to make such a ruling. Political consequences are for others, not for me.
I should explain that Standing Order 3 had practical effect at the first meeting of the Assembly.
Standing Order 3(g) has a similar effect before any meeting of the Assembly where the business is referred by the Secretary of State under section 1(1)(b) of the Northern Ireland Act 2006; that is, the nomination of persons to hold office as Northern Ireland Ministers on the restoration of devolved Government. My ruling today will have few immediate practical consequences for Members. I trust that Members will reflect on the ruling and deal with its consequences as they see fit, or deem necessary, before such practical issues arise.
At the first sitting of this Assembly, my concern was to comply with the requirements of Standing Orders and the relevant statutes. The list of political parties published on 15 May was based on the information available at the time, and I am content that my decision was proper and in order. However, with the benefit of counsel’s advice, I have taken other factors into account, in particular the Political Parties, Elections and Referendums Act 2000 and representations made to the Clerk by political parties and other Members.
The Act represents the fullest expression of legislative policy on what constitutes a political party. Although it focuses on the financial regulation of political parties, the Act also details characteristics of a political party. Counsel has advised that the characteristics drawn from the Act assist in defining a political party for the purposes of Standing Order 3 and should be considered when publishing a list of party membership.
The characteristics of a political party under the Political Parties, Elections and Referendums Act 2000 can be summarised as: a short, suitable name; a headquarters, or at least an address for the purpose of communication; officers of the party, including at least a leader, a treasurer and a contact person, called a “nominating officer”, for the purpose of liaising with the Electoral Commission and others; a constitution; a scheme for financial support of the party; and an intention to contest elections.
In making a decision about any future list for publication, I shall require a party to have all those characteristics. From the information available, I do not consider that the Ulster Unionist Party Assembly Group (UUPAG) has yet demonstrated all those characteristics. I trust that Members will find this clear and helpful.
Mr P Robinson: I am grateful for the Speaker’s ruling, not least because it is in line with the judgement that my right hon Friend and I expressed some months ago.
The Speaker referred to serious implications. I stated those implications to ensure that there was a thorough consideration of the point of order that had been made. My colleagues and I are satisfied that there has been a thorough investigation, involving senior counsel’s opinion and consultations with others. The DUP accepts the Speaker’s ruling that the two parties may be inextricably linked in a group, but that that link does not constitute a party under the legislation.
As there are ongoing implications, you may be willing to meet parties privately and separately to consider the legal advice that you received. The criteria that you have laid down may well be applied in the future, and perhaps not only by the party that attempted to apply them on this occasion.
Mr McFarland: On a point of order, Madam Speaker.
Madam Speaker: I must respond to Peter Robinson first.
I am content to meet any Member who has a query and listen to observations on this ruling.
However, I am not content to discuss my ruling. Members know that that is not the convention. The convention is that the Speaker makes a ruling based on advice that he or she has been given. In accordance with precedent, I do not intend to waive that convention and share that advice.
Mr McFarland: During the previous Assembly, three independent Members formed the United Unionist Assembly Party. One of those Members, while remaining in the United Unionist Assembly Party, stood for election as a member of the Democratic Unionist Party. Does today’s ruling overturn the accepted custom and practice in the previous Assembly in respect of forming a party? The United Unionist Assembly Party would not have met the criteria for parties laid down in today’s ruling. Has there has been a change in the practices of the Assembly?
Madam Speaker: As I have already pointed out, this Assembly is governed by different legislation from the previous Assembly. That legislation allows me to rule exactly as I have done today. If, having read my ruling in tomorrow’s Hansard report, the Member wishes to discuss the matter further, I will be happy to do so. However, I will not change my ruling.
Mr McFarland: The legislation is quite clear; this is a different Assembly. Of course, when the Assembly is re-established, we will return to the old rules. Will your ruling apply then? Will it have any bearing then?
Madam Speaker: I repeat my request for the Member to read the ruling in the tomorrow’s Hansard report. Should he have any further concerns, my office and the secretariat will listen to any queries. As I said, the ruling will have more of an effect on future business. When a list of party membership is next published, I will restate this ruling so that it is clear that any party on the list must have those characteristics that I outlined. Any further matters are for Members to decide themselves. My decision was not political; it was in accordance with current legislation.
Mr Ford: Madam Speaker, I wish to ask a further question about your ruling. I do not wish you to add to the political embarrassment of the Ulster Unionist Party.
You made clear that the Political Parties, Elections and Referendums Act 2000 overruled the precedent set in the Assembly elected in 1998, and you referred to the composition of a list of party membership. However, a question remains about what happens when d’Hondt comes into play. I have correspondence from the Secretary of State that refers to the UUPAG. The UUPAG is currently represented on Assembly Committees. Has the UUPAG now ceased to exist for all purposes or will it exist only when the d’Hondt formula is applied?
Madam Speaker: As a result of my ruling, I now consider that, as regards this House, there is an Ulster Unionist Party and a Progressive Unionist Party. The main immediate consequence concerns speaking rights in the Chamber. The Secretary of State will concur with my decision because I have a right to make such a ruling; I hope that Members will do likewise.
Speaker’s ruling on Interventions
Madam Speaker: During the sitting on 7 July, Mr Alban Maginness raised a point of order in relation to the length of interventions; other Members raised related points. I have discussed the matter with the Business Committee. The current trial arrangement of allowing Members up to one additional minute of speaking time, when they have accepted one or more interventions and when speaking times are limited to fewer than 10 minutes, was agreed on the basis that interventions can provide a valuable contribution to a debate. I am, therefore, of the view that it would be preferable not to introduce rigid controls in relation to interventions.
With regard to the length of an intervention, I ask that all Members exercise the courtesy of limiting their remarks to a brief comment. When that courtesy is not observed, I may in future exercise my discretion and, when I feel that it is necessary, call a halt to lengthy interventions.
In relation to the number of interventions that a Member may make, again I would prefer that Members policed themselves. It is, however, entirely appropriate for me to remind Members that they cannot insist on a Member who has been called giving way. If necessary, I will call a Member to order for persistently interrupting another Member who has the Floor and does not wish to give way.
I remind Members that, when another Member has given way, it is in the interests of good debate that that courtesy should not be abused.
In summary, I propose, if necessary, to interrupt Members who make lengthy interventions and to call to order those who persist in badgering Members who have indicated that they will not give way. I hope that that approach will improve the situation without a need for rigid controls and without stifling debate.
Report on the Economic Challenges
Madam Speaker: I ask Members to be silent as I clarify how I propose to conduct the debate.
Members will understand that the relationship between the Committee on the Preparation for Government (PFG) and its Chairpersons is different from that which pertained in Committees of the Northern Ireland Assembly. In the light of that, it was agreed by the Business Committee at its meeting last week that a Chairperson of the Committee on the Preparation for Government will formally move the motion but will make no attempt to represent the views of the Committee; that there will be no winding-up speech on behalf of the Committee; and that I will put the Question on the motion.
The Business Committee also agreed that Members will be called to speak on the motion according to the usual convention with an upper time limit of 15 minutes to be applied to all those called to speak.
I have agreed with my Deputy Speakers that, for this and forthcoming debates on reports from the PFG Committee, although one of the Deputy Speakers, in his role as Committee Chairperson, will formally move the relevant motion, he will not seek to represent the views of the Committee or vote on the motion. In agreeing this approach, I am satisfied that my Deputy Speakers’ ability to assist me in presiding in the Chamber will not be compromised. Members will appreciate that such arrangements are unusual but reflective of the circumstances in which we currently operate.
In view of the Secretary of State’s direction that the Assembly meet today and again tomorrow, subject to the continuation of debate, I propose to suspend proceedings today at around 6.00 pm and resume at 10.30 am tomorrow, unless it becomes clear later in the debate this afternoon that the number of Members still wishing to speak is such that the debate could be concluded by sitting for a limited period beyond 6.00 pm. However, I do not intend that the House should sit later than 7.00 pm. If that is clear, I shall proceed.
Dr McDonnell: On a point of order, Madam Speaker. You are allowing Members one extra minute. Will you clarify whether that extra minute is to cover all interruptions, or whether it is one extra minute per interruption?
Madam Speaker: I take that point on board and will address it when necessary. That will not be necessary today, because each Member will be allowed 15 minutes. I hope that Members will police that 15 minutes themselves, and if there are interventions, I will look into that and give clearer guidance.
Dr McDonnell: When I speak, I am usually subjected to a torrent of abuse from the Members opposite. I would welcome an extra minute for every interruption. [Laughter.]
Madam Speaker: I am sure that you would, but you will not need it today. Each Member will have 15 minutes, and even for politicians that is enough.
Rev Dr Ian Paisley: On a point of order, Madam Speaker. Can you assure us that this debate will go on tomorrow? We have listed Members to speak tomorrow as well as today. There is a full complement. I would like to be assured that people who have come today, and those who will be here tomorrow, will have the opportunity, if there is time, to address the Assembly.
Madam Speaker: As I said, I have agreed with the Secretary of State that the sitting will continue tomorrow. If there are Members who, for good reason, are unable to be here today, and there are sufficient to continue the sitting tomorrow morning, then we will do that. I considered that for the convenience of Members I would stop the debate at 6.00 pm. If 6.00 pm comes and there are only two Members left to speak, we will continue and conclude the debate. If Members do not agree to that, we can extend the debate into tomorrow morning, but no further. Rest assured that each Member will have his or her say in this debate. That is useful for all Members to know.
Mr K Robinson: On a point of order, Madam Speaker. There is a difficulty with the acoustics at this end of the Chamber. There is an echo. It was difficult to hear Dr McDonnell and some of the other Members. May we have that checked before the debate begins?
Madam Speaker: I appreciate that there is a difficulty there. It has occurred before. We will look into that.
Mr Wells: I beg to move
That the Assembly approves the first report from the Committee on the Preparation for Government on the economic challenges facing Northern Ireland; agrees that it should be submitted to the Secretary of State for Northern Ireland and, pending restoration of the Institutions, calls on the Secretary of State, the Committee on the Preparation for Government and others to take action to implement the recommendations in the report.
I am confident that Members will have much to say about our report, and therefore I will not spend any time going into the finer points. Instead I want, on the Committee’s behalf, to thank all those who made it possible.
The Preparation for Government Committee has been meeting five days a week for three months; three days for the full Committee and two days for the Subgroup on the Economic Challenges facing Northern Ireland. That has placed an enormous burden on everyone concerned. I am grateful, therefore, to the three Members who agreed to act as Deputy Chairpersons of the subgroup: Mrs Naomi Long, Mr David McClarty and Mr Alban Maginness. Their help was appreciated, given that the other two Chairmen were so heavily involved in the full Committee.
I also thank the many witnesses who gave evidence in July and August, during the holiday period. The subgroup was delighted that so many organisations involved in the economic activities of the Province were able to come forward at short notice, give detailed evidence and appear before the subgroup to answer searching questions. It was much appreciated, and it is reflected both in the volume and the content of the report.
I also thank the Assembly staff, who gave so much to assist the subgroup in its deliberations. I do not want to pick out individuals, but at every level of the Assembly secretariat, staff — including Hansard, catering and security — gave of their time when many others were on holiday. We thank them for that.
It has been a long and, sometimes, a hot summer. However, I found the process to be an enjoyable one. I commend the report to Members and look forward to an interesting debate.
Rev Dr Ian Paisley: The Assembly is tight for time. A deadline of 24 November 2006 has been set, which we have been told is set in stone. Nevertheless, a reactivated Assembly now meets after a prolonged summer recess. The Minister for Foreign Affairs of a foreign country, Mr Ahern the second, has threatened that if we do not do what we are told, namely allow IRA/Sinn Féin, as it is now, into Government, we will be forced into what amounts to united Ireland oversight.
There is no doubt that a successful and prosperous economy requires a stable and peaceful environment. Each is dependent on the other. Over the last several days, the Secretary of State has been talking about the great measure of progress that has been made. Witness the empty seats today. No progress is being made, because the British Government, evidently supported by the Government of the Irish Republic in Dublin, are dedicated to having IRA/Sinn Féin, as it is now, in Government. The party that I lead, and others who hold the same convictions, will democratically resist that.
Sinn Féin/IRA is boycotting the proceedings of the Assembly today. Sinn Féin demanded that the PFG Committee meet, decided when it sat on the Committee that the report should be published and yet refuses to come to the Assembly Chamber to discuss that report.
Madam Speaker: Dr Paisley, please keep to the motion.
Rev Dr Ian Paisley: I am keeping to the motion. The motion relates to the report, which Sinn Féin has stated should be printed. Sinn Féin stated that during proceedings of a Committee of this House, and that is recorded in volume 4 of the report. I am trying to steer carefully. Madam Speaker, I know that you are so well briefed that you think you may knock me out. However, I do not think that you will do so, because I will stick to what Members are supposed to discuss.
Madam Speaker: I have no intention of knocking you out.
Rev Dr Ian Paisley: Thank you. I am greatly relieved. [Laughter.]
The Secretary of State is quick to claim that Sinn Féin/IRA has done all that has been required of it. All right-thinking people in Northern Ireland will reject such a conclusion. An end to the illegality and criminality of the IRA has yet to be seen. Its very existence has robbed the Northern Ireland economy of millions of pounds each year. IRA/Sinn Féin refuses to support the police, the courts and the rule of law. Such behaviour cannot be a basis for admission to Government in any democratic country.
The Secretary of State has done nothing to address those issues. He must remember that unionists are not blocking the way. His time would be better served by ensuring that IRA/Sinn Féin gets off the backs of the people and that the days of crime and gangsterism are over. One need only look at the recent events in Newry, when millions of pounds worth of damage was done to the economy, to see that those days are not over. How, in those circumstances, can the motion that is before the Assembly be implemented? That cannot happen in the current atmosphere.
Threats or any form of pressure from the Northern Ireland Office (NIO) to reach any agreement that falls short of the democratic test will have no effect. If time is required to build a solid, democratic foundation for future generations, let us take that time. For 35 years, the people of Northern Ireland were subject to a sickening sectarian murder campaign. As well as taking the lives of over 3,000 individuals, the terrorists wreaked havoc on our ability to function as a normal society.
Business bore the brunt of terrorism. Shops, offices and factories were frequently blown to smithereens. Businessmen who supplied the security forces were personally targeted. I am sure that other contributors to the debate will elaborate on those points.
A former chief executive of the Industrial Development Agency (IDA) Ireland once remarked:
“In the battle to attract overseas investment to Ireland, no financial weapon has been more important than tax in convincing new industry to locate here. It remains the IDA’s unique selling point, giving Ireland a critical advantage in winning new investment.”
That illustrates why Northern Ireland’s corporation tax rate must be on a competitive footing with that of our Southern neighbour. Let there be a level playing field, and let us not deny the Ulster people what they should receive at this time of difficulty and rebuilding.
Many in the Chamber want to embrace the Irish Republic more closely in an economic sense, among other senses. I am all for Northern Ireland businesses selling their products to the Southern market, as long as that happens organically and is free from political interference. That is how trading happens between any two bordering states. However, the cold, hard fact of business is that the Republic of Ireland is our economic competitor for foreign direct investment (FDI). The Irish will do nobody in Northern Ireland, irrespective of their political leanings, any favours when it comes to securing some multi-million pound investment. Reducing the headline corporation tax rate to a lower figure than that of the Irish Republic would obviously boost our ability to compete and could lead to an increase in corporation tax revenue from Northern Ireland.
The Exchequer must understand that, far from losing it revenue, in the long run, a corporation tax reduction could yield higher tax revenue as new jobs are created, new companies invest and existing companies expand. If reducing the headline rate is too unpalatable, the Treasury should seriously consider other measures that would have the same net effect as lowering corporation tax to less than the Republic’s rate of 12·5 %.
There are alternative ways of achieving the same result, such as the proposal that approved and allowable expenditure on research and development and training and marketing that is included in the corporation tax computation be multiplied by a factor of three. That expenditure could be then deducted from taxable profits for businesses based in Northern Ireland.
In addition to enhancing Northern Ireland’s attractiveness to investors, the proposal should also address issues such as research and development, increase of exports and the development of new skills. The Democratic Unionist Party strongly supports a wide-ranging financial package for Northern Ireland. The effects of terrorism are still felt today: low investment; undeveloped tourist potential; skills deficit; educational underachievement; and poor community capacity.
Northern Ireland faces unique challenges in the United Kingdom. In particular, no other part of the UK has a land border with another EU member state and has to deal with all the implications that that brings. No other part of the United Kingdom has suffered as Northern Ireland has over the past 30 years or faces such huge obstacles to attracting investment and retaining indigenous firms. We are also on the border of the United Kingdom and Europe, and, consequently, we face additional costs.
We are not asking for special treatment; we are asking for recognition from the Government of the hardship that Northern Ireland’s economy endured. If the Province had not been forced to weather the storm of terrorism, our economy would be stronger today. A fully funded and targeted economic package that addresses all Northern Ireland’s infrastructural needs, education and skills requirements and that includes financial incentives to encourage the growth of the private sector is essential if Northern Ireland is to advance out of the economic challenges generated by 35 years of terror.
I wholeheartedly endorse the aspects of the report that promise to our people the opportunity to apply their talents, to pull themselves out of the pit that was dug by our enemies and give them the chance to rebuild a Northern Ireland where everyone — regardless of their class or creed — will live in peace and harmony. I trust that the House will send the message that we intend to rebuild our Province on principles that will last not only for our days, but for the coming days for our children and our children’s children.
Madam Speaker: Before proceeding, I ask Members — particularly Ken Robinson — whether they can hear clearly. I have been informed that the fault has been rectified.
Mr K Robinson: I heard every word that Dr Paisley said.
Madam Speaker: I am sure that, like myself, you clung to every word.
Mr McNarry: The Ulster Unionist Party offers its sincere gratitude and thanks to those who freely gave their time to contribute to the first report on the economic challenges facing our country.
The report contains a consistency of clarity confirming that the restoration of the devolved Assembly would be good, not only for Northern Ireland but better for the economy. The evidence from the economic coalface indicated a sense of despair with our direct rulers. Those on whom we depend to drive the economy would trust locally elected representatives to talk up Northern Ireland, to boost its opportunities for economic outreach and to go the extra mile in encouraging investment rather than have the NIO invective that implies that Northern Ireland has a failed economy.
It is unfair to single out one contributor to the subgroup, because all contributions were thought provoking. They must be heeded, and, for justice to be done, they should be advanced by a restored Assembly or by those who are in charge of direct rule. However, I ask the House to take note of the contribution from the Northern Ireland Youth Forum. Regrettably, the absence of Sinn Féin today is another insult to those young people, and others, who feel that the Assembly remains the best opportunity to provide effective leadership for facing up to and addressing current and future economic challenges.
If Sinn Féin cannot share space in this place today and participate in a debate on a report that it signed up to, why should it expect the House to embrace it in sharing in our work on any other occasion? Does Sinn Féin think that, by insulting guests of the House, by disrespecting its MLA colleagues, and by displaying disdain for a report on the economic challenges facing our country, it will advance its inclusion and automatic entry into any future accountable role of responsibility that deals with the economy or with any other devolved matter?
To be frank, Madam Speaker, those Laurel-and-Hardy antics are not the type of behaviour with which my party wishes to be associated.
During the debate, my party leader, Sir Reg Empey, and my colleagues Esmond Birnie, Roy Beggs and Leslie Cree, who attended meetings of the economic subgroup, will — along with Ken Robinson and other Ulster Unionist experts in particular fields — expand on much of the detail and recommendations contained in the subgroup’s first report.
We can all agree that the report is very comprehensive. Given the tight schedule, it is all the more remarkable that the completed work is before us today. Meetings of the PFG Committee and the economic challenges subgroup elicited some very interesting thoughts from the most unlikely quarters. There were moments during the consideration of the small matter of putting together an economic-package-cum-peace-dividend when the debate took place with such competitive enthusiasm that there was a danger of it turning into an auction. Having agreed that the Irish Republic should make a significant contribution of euros, Sinn Féin kicked off with a bid that the Irish and British Governments should make £10 billion available over the next 10 years. However, not to be outshone by their Irish-unity-aspirational soulmates, the SDLP weighed in with its own bid of £20 million over the next 10 years.
Dr Farren: It was £20 billion.
Mr McNarry: It was £20 billion.
Dr Farren: Why not?
Mr McNarry: Needless to say, while all the bids have been banked, the report presented today falls short of giving a conclusion on a recommended sum. Perhaps a figure will be identified in the second report of the subgroup, which is due for endorsement by the PFG Committee on 4 October. I hope that we will have an opportunity to debate that report.
Considering the key elements of proper negotiations that are being talked up for next month in some Ulster-Scots bolthole, it is encouraging to note that skills of negotiation are to be tested in direct talks with the Government on securing an appropriate sum that is to be used in delivering an equitable form of economic regeneration. My party’s position is that the auction concept is superfluous to the positive identification of the problems and real needs and to ensuring that the distribution of any package is used for specific purposes, not wish lists. While people can talk, speculate and prepare wish lists, there remains unresolved the underlying factor of a requirement to see the books, to peruse the balance sheets and to find out why Northern Ireland stands accused by direct-rule Ministers of not paying its way.
The bid frenzy did not stop at those seeking a package for economic regeneration. A fairy godfather emerged who, within days, was out-fairied by one of his party colleagues. That is important when considering how corporation tax reductions are to be paid for. The question of who may suffer as a consequence of those corporation tax reductions must be thoroughly thought through, as must the questions of who may gain and how those gains can bring overall benefits to the economy.
On two separate occasions, different members of the DUP sprinkled fairy dust on the corporation-tax-magical-reduction formula. The first DUP proposal that was alluded to was that our headline corporation tax should be reduced to a rate lower than 12·5%. If that proved unacceptable to the Treasury, the DUP would consider a cocktail of incentives to achieve the same reduction. Perhaps the mixture of fairy dust and cocktails proved to be intoxicating for the DUP because, a few days later, it told the subgroup that 10% was the lower-than-12·5% figure that it wanted for corporation tax.
Madam Speaker, what brilliant tactical negotiators we have in our midst. We have the anti-British Members who cannot set foot in this House today but who want £10 billion of peace money to repair the carnage that they caused to all aspects of life here, including the economy. We also have the great self-anointed best negotiators who announce in advance what they are seeking when going to the table. Of course we require and deserve an economic package, and of course we should help the business sector compete with the Irish Republic. We will assist in driving forward competitiveness, but this economic report, thankfully, is more important to our people than an eye-catching sound bite or a fleeting Hansard reference.
Ulster Unionists share with employers and employees the seriousness of facing up to the economic challenges that are detailed in the subgroup’s report. We take employment seriously, realising the importance of providing better services in schools and hospitals, training young people, helping people back to work, and not taxing people out of their homes. We take every element of Government seriously. We also take seriously the ugly and nefarious use by our direct rulers of the stresses and strains of the economy and of personal and company taxation as a means of blackmailing and spinning against the integrity of every Member in the House today.
There are grubby hands wielding dirty sticks to beat out of us an endorsement of foul-smelling concessions made to those who are not here. However, Members will have noted that the extensive report, covering over 1,000 pages, does not contain a recommendation compelling us, or anyone, to rush forward demanding the keys to the devolved economic vaults.
I mentioned that seeing the books is essential; so too is knowing how the impediments highlighted in the report can be overcome. Those impediments are: excessive bureaucracy and regulations; departmental paperchase bottlenecks; highs on strategic tittle-tattle, but lows on implementation and decision-taking; poor spatial planning; a poor planning process; poor literacy and numeracy levels among school leavers; a skills deficit; lamentable urban regeneration; the infrastructure deficit; transport problems; an uncompetitive fiscal environment; and low incentive for business expansions. Those are the crucial issues facing us, and the Government, here and now.
It took a well-organised and highly publicised public protest to shake the Government on their stance on manufacturing rates relief, to the extent that the Secretary of State has formed a working group to consider the issue further. Is protest the only process open to civic society?
At the top of the list of impediments is the issue that only local politicians can resolve: support for the institutions and the police. Political stability and its staying power are bound to be high on any investor’s enquiries about Northern Ireland. That is why, after consultation with Sir Reg Empey, the Ulster Unionist Party insisted that the report recorded references to two recent statements by people who should be aware of unionist sensitivities. Our views on comments by Peter Hain MP and Sir Tony O’Reilly are expressed on pages 30 and 31 of volume 1 of the report.
I draw Members’ attention to the performance of Maria Eagle MP when she appeared before the subgroup. Having been away from her desk for a month, it would have been unfair to expect the Parliamentary Under-Secretary of State, with ministerial responsibility for the Departments of Enterprise, Trade and Investment, Employment and Learning, and Education, to have read the report, which her Departments had not received. However, it was disappointing that she had not been briefed on the subgroup’s work.
That is where so-called joined-up government becomes jumbled-up government. I say that because the most senior personnel from each of the three Departments for which the Minister is responsible gave evidence in person to the subgroup. Information about the subgroup’s activities was also regularly published on the Assembly website. Unfortunately, the Minister was not best prepared for her meeting with the subgroup. That is why I am pleased that she has agreed to be better prepared for the next meeting that she has promised to attend. I am also pleased because I expect a response from the Minister on two Ulster Unionist proposals: one to initiate a knowledge bank, which is recommendation 6; and another to establish a dedicated post in the Department of Education to drive improvement in science education, which is recommendation 7.
Working on the Committee on the Preparation for Government, and its subgroup, has so far been a privilege and a useful exercise. It has not been pistols at dawn. All in all, the scoping work is steady as she goes, with many aspects remaining works in progress.
On behalf of the Ulster Unionist Party, I offer sincere thanks to all the staff. I thank, in particular, the two Deputy Speakers who chaired our meetings. Mr Wells, who has already spoken today, has been most gracious in the manner in which he has conducted both himself and our meetings. I regret that I cannot refer personally to the other Deputy Speaker. Perhaps, Madam Speaker, you may consider making a ruling. If the Assembly is called again to debate the reports that are due to be completed shortly, will we have a Sinn Féin Deputy Speaker doing the job that Mr Wells has done today? Perhaps the House should know that in advance.
I thank the staff. Without their work, their integrity and the manner in which they kept us together, I very much doubt that the report could have been completed in time for us to be here today. I commend the report to the House.
Ms Ritchie: On behalf of the SDLP, I thank all those who were involved in the preparation of this report: the various Chairpersons of the Committee; the members from the different parties; and the Clerk and all his staff, who helped us through the last few weeks.
The economic challenges report contains an in-depth assessment of the current state of our economy, many of the ingredients necessary to pump-prime our economy, and the fiscal challenges that might promote foreign direct and indigenous investment. The report considers whether an economic package or peace dividend could contribute to economic regeneration and how that might be delivered. Much further work remains to be done in that area.
Approval has been given for that further work, with a focus on the economic dividend, the appropriate fiscal environment in which business can grow and what has to be done to promote an education and skills strategy that best reflects the needs of the local economy. Nobody — not even those who provided evidence to the subgroup — suggests that that is an easy task. However, it should no longer be left on the political back-burner. Political stability and economic growth are inextricably linked and bound together. If we are to do this, we need the immediate restoration of the political institutions. None of us can shirk from that responsibility.
The Assembly first discussed this issue on 16 May. On that occasion the SDLP said:
“There are major economic challenges facing all of us ... 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.” — [Official Report, Bound Volume 19, col 1, p 16].
That position has not changed and is now more compelling than ever. Pending restoration, the political imperative to enable us to respond to those challenges lies with the British and Irish Governments. The community imperative demands that we all get our acts together and get all the institutions up and running as per the Good Friday Agreement to set the economic and infrastructure agenda for the next 25 years. What have we been doing? How have we been acting on that community imperative? Are we going to wring our hands like Pontius Pilate and claim that others should do it for us? Are we going to remain in the political vacuum or grasp the baton of political power and make change to improve the lives of all the people who live here? The choice is clear: restore the political institutions.
Why are we waiting? Why are we taking so long to implement the mandate that we were given? Why are some of us afraid and dilatory about implementing the wishes of the people? Do we want our economy to stagnate further, our infrastructure to crumble further and our young people to be either part of the brain drain or not given the education and skills training opportunities that they require?
Each of us, and I say this again, must seize the political opportunity facing us now — we must not leave it to someone else. Do we want the people that we represent, and the coming generations, to face an ignominious future? We should examine our consciences and take the issue seriously.
It was not surprising that, following an in-depth investigation of our economy, many challenges and impediments to its growth were identified by those who gave oral and written evidence. Chief among those challenges is the need to provide political stability, which I referred to earlier, and that is within our hands. We must not wait for the publication of another report and a debate. Let us get on with the job of restoring the institutions and providing that political bedrock upon which our economy could grow and develop and deliver for all of us.
Other structural weaknesses in the Northern Ireland economy were identified in the oral and written submissions. The Minister underscored them when she gave oral evidence to the subgroup last week. The specific areas were: the need to increase investment in research and development and promote innovation and creativity; the need to promote and encourage enterprise; the need to ensure that our people have the right skills for future employment opportunities; the need to ensure that we have a modern infrastructure in place to support business; the need to address working-age inactivity levels, which are 28% higher than the average in Great Britain; and a weak private sector compared to a dominant public sector subsidised by the Treasury in London.
Twenty-one recommendations have been proposed to enable the dilution of the challenges and to ensure that our economy grows into a vibrant force. Some of the principal recommendations are: that the current level of public expenditure should be protected during a transitional period that is agreed with the Treasury to allow competitive fiscal challenges and targeted investment to rebalance the economy towards high value-added foreign direct investment and our own indigenous companies; that investment in vocational training skills and R&D activities in universities should be increased and an effective strategy developed to enhance knowledge transfer from applied R&D activity in commercially viable products; that FE college curricula should be best integrated with the needs of business and focused on areas where skills shortages are hampering future economic growth; that any savings that may be made from Government efficiencies should be retained and used in Northern Ireland; and that detailed analysis is undertaken to identify economic opportunities through establishing effective clustering and collaboration with the rest of this island on infrastructure development.
I am pleased that the SDLP was able to secure the last point, because we have to work our North/South agenda to be able to tap into all of the economic opportunities that exist and to deal with the impediments that were laid down when partition occurred. Many people felt cut off from their economic hinterland. We must ensure that those deficiencies are corrected and that people never suffer the great disadvantages that many of our neighbours suffered for over 70 years.
We must look at skills training along designated economic corridors with the express purpose of addressing regional disparities, whether it be in the west of Ireland — and I mean the west of Northern Ireland as well as the South, for those who do not catch my drift — or elsewhere. We must look at the North/South agenda.
We must also recognise that Northern Ireland has suffered from years of underinvestment in infrastructure and that the planning process should be reviewed immediately, adequately resourced and properly and effectively managed. Quite often, the Planning Service, due to delays in processing applications, has acted as an impediment to business and economic development and growth.
Mr Donaldson: I thank the Member for giving way.
To residents of north or east Antrim, Glasgow is as likely to be a part of the economic hinterland as is Dublin. Therefore, is it not just as important to build and sustain the economic east-west links to an island that has almost 60 million inhabitants, and is the fifth largest economy in the world, as it is to develop North/South links?
Ms Ritchie: I thank the Member for Lagan Valley for that point. I agree that we must consider every possible opportunity. The SDLP does not wish to deny anybody his or her opportunities, and it hopes that its colleagues on the opposite Benches will consider the pragmatic opportunities that lie within the North/South agenda.
Some Members: Hear, hear.
Ms Ritchie: I see from Members’ assent that they concur with that view.
The SDLP believes that an urgent review of the most appropriate and effective structures for developing urban and rural regeneration plans should be undertaken. Some work has been done in many of Northern Ireland’s towns and villages, but much more needs to be done, and it needs to be concentrated on the rural economy.
The economic package should focus on the following areas: community regeneration; infrastructure; education and skills; and a range of fiscal incentives capable of attracting FDI and encouraging the growth of high-value-added indigenous companies.
Since the subgroup completed its report, some interesting facts have emerged, which I hope are not intended to be a barrier or a distraction to the Assembly’s addressing the need to rejuvenate and incentivise the economy. First, in her submission last week, the Minister with responsibility for Enterprise, Trade and Investment said that economic development is a top priority for the British Government and that the desire is to change the direction of the Northern Ireland economy for the better — I hope that that is not to be achieved by hectoring Members. However, the Minister deftly refused to answer some key questions about the structure of the economic package and whether the funding for it would be additional to the block grant or come from the sale of land at Belfast harbour. We need to push the Minister, the Department of Finance and Personnel and the Department of Enterprise, Trade and Investment to specify the areas that they have undertaken research on and what they suggest the economic package should contain.
In parallel — and this is being done as part of the subgroup’s future work — we urgently need to undertake independent party and external research into what is required to upgrade Northern Ireland’s infrastructure. That does not mean that the people of Northern Ireland should be further taxed to pay for something that is not their problem. We did not cause the problem; we did not have responsibility for it at the time. Members must consider what is required to grow the economy and determine the appropriate financial costings. That work is required urgently.
There were two worrying articles in Friday’s ‘Belfast Telegraph’. One suggested that a confidential document pressing the NIO on its preparations for a major Government spending review had been leaked from the Treasury. Apparently, it contained a raft of controversial proposals for cutting expenditure in Northern Ireland, including examining the scope to introduce road tolls. Quite clearly, the leaked document ignored one of the recommendations in the subgroup’s report: that the current level of public expenditure should be protected and that the business investment programme budget needs to be reviewed and upgraded.
Where does the debate on the economic dividend fit into that leaked memo? Are the Government giving any serious consideration to a financial package that would upgrade the deficits in Northern Ireland’s infrastructure, which they have failed to address over many years and that they want the local population to pay for through the additional tax burdens of increased and unequal rates and water charges — charges, of course, that many consider to be major impediments to economic growth?
The other article referred to the fact that organised crime costs the economy about £600 million a year. The British Government estimated that figure last Thursday, and the figures were included in a report on criminality in another place. Those who are absent today have a duty and a responsibility to ensure that our streets are rid of criminality so that our economy can grow.
Suffice it to say that urgent political action is now needed to restore the political institutions to ensure that the infrastructural, educational, training and economic challenges are met and addressed and that a plan is put in place to consign disadvantage, deprivation and criminality to the history books.
We need a restoration of the political order that was ushered in by the Good Friday Agreement. That agreement provided the prescription for a sound political bedrock upon which the local economy could grow and develop; act as an incentive to foreign direct investment; pump-prime indigenous industries; encourage the private sector to blossom; ensure that all economic opportunities are availed of; and ensure that we eventually eradicate the economic disadvantages caused by the partition of this island.
Members on the opposite Benches may smile and grimace, but either we are serious about this or we are not. We must ensure the provision of a better way of life for all the people who live here, whether they are unionist, nationalist, loyalist or republican. Let us subscribe to do that, to work together from this day onwards and ensure the restoration of the political institutions to safeguard an economy that can grow and develop for us, for our children and for future generations.
Some Members: Hear, hear.
Mr Ford: It seems to be a cliché of the debate that each contributor must express thanks to a large number of people. In proposing the motion, the Deputy Speaker started that trend. On this occasion, it is not a cliché; a significant amount of work was done during what would normally pass for the summer recess. We should record our thanks to the Chairpersons and staff who looked after the business of the Committee and to the wider secretariat who provided support. I thank the Deputy Speaker Mr Wells for ensuring that there was some nice vegetarian food at lunchtime. I thank the members of all five parties who took part: the DUP; Sinn Féin, which, unfortunately, is not here, despite its contribution to, and unanimous agreement for, the report; members of the former UUPAG; the SDLP; and Alliance.
Despite formally being a member of the subgroup, I delegated much of that work to colleagues, so I can praise them without blowing my own trumpet too much. A significant number of people provided oral and written evidence. We should be grateful to them for that, especially as they were also largely working through their own summer holidays. It is invidious to single people out but, if it is not too embarrassing to David McNarry, I certainly agree with him that the Youth Forum made one of the most positive contributions. I also welcome the fact that the Minister appeared before the subgroup with three senior officials. Perhaps it is the nature of ministerial presentations and Civil Service responses that they were not nearly as interesting as the Youth Forum. However, they were of substance, and we should be grateful for the Minister’s willingness to come, and to agree to come back as the Committee continues it work.
However, although the report contains some significant work, in many senses it only scratched the surface. Much remains to be done, and I welcome the fact that the full PFG Committee has now given its authorisation for the subgroup to continue its work. The three terms of reference for the subgroup were: to identify the major impediments to the development of the economy in Northern Ireland; to consider fiscal initiatives that might promote foreign direct investment; and to consider how a local economic package might contribute to economic regeneration in the event of restoration of the institutions.
It is absolutely clear that the third of those matters was barely touched on, except in the Dutch auction that was mentioned earlier. Much further detailed work needs to be done in the coming weeks, and there will be a real challenge for the PFG Committee and the Assembly to move away from the begging-bowl mentality of statements such as: “I want £10 billion”; “I want £15 billion”; “I want £20 billion.” Instead, we must look at realistic prospects for costed proposals that will make a significant impact on the welfare of all the people of Northern Ireland.
We must not continue the 30-year begging-bowl mentality but ensure that the resources that we may get from the Treasury can finally be targeted to meet particular needs. I therefore welcome the fact that we will continue to discuss that issue in the coming weeks, because there is still a huge amount of work to be done in engaging with Ministers, Departments, economic partners and social partners in general. We owe an enormous debt of gratitude to the Northern Ireland Business Alliance, the Irish Congress of Trade Unions (ICTU) and the Northern Ireland Council for Voluntary Action (NICVA) for what they have done already, but I suspect that we will be speaking to them again.
The issue of fiscal incentives preoccupied the Committee to a considerable extent. Clearly, that work is not finished because, as Members who were not involved will see in recommendations 16 and 17, there is still much to be done. It is very difficult to see how we can gain the practical benefits of changes in fiscal arrangements. At the beginning of the debate, Dr Paisley highlighted the obvious issue of the headline corporation tax figure. Moreover, we have evidence that targeting the potential benefits in such areas as research and development may have a much better long-term effect.
In the past we have brought in, by particular measures, foreign direct investment that has lasted only a relatively short time. We have all seen what happens when basic metal-bashing industries are brought in. They move on a generation later, because international capital is footloose and goes wherever the benefits are. Low wage rates will beat anything that we can offer in the United Kingdom or in any part of the western section of the European Union.
The European Court of Justice (ECJ) made an interesting decision last week when it ruled against the Portuguese Government on the issue of variable corporation tax in the Azores. I am not a lawyer, but there are plenty of lawyers in this place who immediately read ECJ decisions. As I understand it, the decision of the court stated that one principal requirement to have variation in tax rates across a single nation was the right to have a separate local jurisdiction. The message is clear: only if we can transform this Assembly into the Northern Ireland Assembly that it should be, with all of the institutions working properly, will we be able to seek and get European approval for variations in corporation tax, whatever way we target that matter. If that is to be a crucial part of the package that Northern Ireland has to offer, it places a huge responsibility on everyone in this Chamber and, indeed, on those who are not in the Chamber this afternoon.
In the past, we have seen what went wrong when we depended on traditional heavy industries, and then on man-made fibres. In my constituency of South Antrim, over the last couple of weeks, we have seen the almost total closure of Daewoo, which was a third-generation electronic assembly business. At one stage, it was one of the most successful video recorder makers in Europe, but it is now defeated by the wage rates paid in the Mediterranean, the Far East and central Europe.
We must start to build on a skills economy and use the type of work that is being done in our universities on a range of new technologies to build on the skills that exist in various technology parks and firms at the cutting edge of development and transform those into numerous jobs for highly skilled people. Unless we do that, our corporation tax rate will hardly matter, because we will not get anywhere, given the wage rates that exist in this part of the world. We will simply see any prospect of manufacturing jobs, including R&D elements of manufacturing, moving to places such as India or China. It is a huge challenge for us to ensure that we can move those matters forward, and the Committee will continue to work to see how that can be done. Others can reflect on recommendations 16 and 17 over the coming weeks.
It seems that, in one very real sense, the history of this society is an impediment because we believed that traditional industries — whether heavy engineering or agriculture — could provide employment for our people and, over the last 30 years, we have realised that they cannot.
There is another major impediment that has not been highlighted as much as it might have been in the report, and that is the simple failure to move forward on the issues of the institutions and policing to ensure that we build a new society that will enable a new, successful economy to develop.
It is easy to examine other issues in which responsibility lies elsewhere, but, in this case, responsibility lies with us. I do not know of any successful world economy that is built on segregation and an apartheid mentality. Northern Ireland has to move forward and build a shared future in order to have a prosperous and successful economy.
The divisions of the past 30 years have had economic consequences. If 0·5% of the gross domestic product (GDP) growth is shaved off for every year of the troubles, the cumulative effect is a huge measure of how far Northern Ireland has fallen behind the UK as a whole and the Republic of Ireland. There are many instances of lost investment, and some people might cite the level of investment lost because of a single weekend on the Whiterock Road this time last year. The black economy, organised crime and paramilitary intimidation and extortion have all driven away employment.
There have also been economic losses in the tourism industry. It might serve us well to compare the statistics for friends and family visiting with footloose tourism. Visitors might go to one or two establishments in Northern Ireland, but they are paying for accommodation in Dublin or Donegal. We are not reaping the benefits that we should.
There is a lack of labour mobility because people feel that they cannot apply for jobs in certain areas. There are financial costs attached to segregation because sometimes two sets of bodies, which often have inferior accommodation, have to be set up to deal with the legacy of the troubles. Our children are educated in several different types of school, which adds 30% to the cost of education provision. Those issues may seem to affect only the public sector, but they do affect the private sector also.
In relation to the growth of the private sector, some of Northern Ireland’s brightest and best young people seek jobs outside Northern Ireland or seek safe jobs in the professions or in public service. If we want to build an enterprise culture, we must find some way to move that forward.
As we start to move society forward, some benefits are emerging. Had European enlargement happened 10 years ago, not so many people from Poland, the Czech Republic and Estonia would have wanted to live and work in Northern Ireland. There are some inklings of movement in that area. However, it is up to us to build the kind of society in which such people will come and contribute to our economy alongside those who have been born and bred here.
It is easy for us to agree on other people’s responsibilities. It is easy for us to criticise the Government — and we can be critical about what the Government have and have not done in recent years. It is easy to agree on the economic measures that we seek, and it would be easy to pass around the begging bowl and ask for many billions of pounds. However, we bear the primary responsibility for changing this society into a society in which we can work together and deal with the outstanding issues. The economic challenges subgroup showed how partnership can work, and it is only by the five parties in the Assembly, the two Governments, the business community and other social partners working together that we can build a shared, peaceful, prosperous future.
Mr Dawson: I support the comments of other Members in thanking the secretariat staff who have worked through the summer to put the report together. I also thank the Chairpersons from the various parties. It was a difficult task for the officials to pull together all the strands of evidence, be cognisant of political sensitivities and formulate recommendations to the satisfaction of all the parties around the table.
For the most part, the parties behaved in a businesslike way in subgroup meetings. In the early days, that, perhaps, gave us a false sense of encouragement. It is very disappointing, therefore, that the Benches opposite are yet again empty and that Sinn Féin agreed the report in the economic challenges subgroup but subsequently rejected it in the Preparation for Government Committee. It must have been the dissident influence.
I understand that Sinn Féin has gone through a number of somersaults and U-turns since its original crisis about whether to accept or reject the report. Today, the party’s position is that it has accepted the report but is not prepared to talk about it or to debate it in the Chamber. It is rather strange that those who lecture the rest of us about engaging in dialogue and debate are afraid to debate the report that was agreed unanimously in the economic challenges subgroup. Yet again, that betrays the fact that Sinn Féin has nothing to offer Northern Ireland in respect of the economy. Having bombed and blasted the economy for 35 years, it now has infantile economic policies, which it is not prepared to debate in the Assembly.
(Mr Deputy Speaker [Mr Jim Wells] in the Chair)
Many Members who were involved in the economic challenges subgroup also attended an event on Wednesday 6 September at Queen’s University, at which many business leaders were present. At that event, business leaders and economists again discussed the needs of the Northern Ireland economy. It was good that business leaders confirmed that the issues raised in the economic challenges subgroup’s report go a long way to meeting the expectations of the business community. However, I must point out that the report is more holistic than the views expressed on that occasion. The report clearly points the way to developing an enterprise culture throughout the education system, which was hardly mentioned during the discussion at Queen’s University. My colleague David Simpson will elaborate on that point later.
Corporation tax is consistently at the top of the issues raised by the business community as being most important in encouraging economic advance. However, there are disagreements within the business community about the method of corporation tax reform. Perhaps the business community will be able to reach consensus on that before 24 November, but I seriously doubt that it will. Therefore, the Assembly, or a Committee, will have to consider the issue further.
There are four clear points underlying the business community’s thinking that I want to reiterate. First, Northern Ireland’s regional economy will not have the step change required without a measure as radical as significant variation in corporation tax. All other measures included in the report and referred to in other places are simply variations on what has gone before. They will produce more of the same, but they will not produce the step change required to drive forward Northern Ireland’s economy.
Secondly, a varied corporation tax must be competitive against that offered by the Republic of Ireland. There is absolute agreement across the business community that, with regard to FDI, Northern Ireland is in direct competition with its nearest neighbour. On that basis, parity of tax rates would not fit the bill for this jurisdiction.
Thirdly, whatever economic offering is constructed for the benefit of our economy must be clearly understood and communicable to the target audience. With all due respect to the economists and accountants who have advised us at different times, we must not create a complicated structure that needs an army of experts to explain it to any potential investor seeking to come to Northern Ireland.
Fourthly, the measures that will be put in place must encourage indigenous companies to grow, expand and export alongside foreign direct investors, bringing a scale and quality of R&D-focused jobs that will be sufficient to deliver the 140,000 jobs required over the next 10 years, thereby adding value, as well as job numbers, to the economy.
Given those headline factors that the business community focused on, I commend to the House the Democratic Unionist Party’s position of a single headline corporation tax rate of 10%. However, as Members mentioned, we are quite happy to consider a cocktail of measures targeting R&D, marketing and training, which would create an effective rate of around 10%.
I note the offer of negotiating assistance from the Member for Strangford Mr McNarry, but, given the record of his party in negotiations, I must respectfully decline. I trust that the work outlined in recommendation 17 of the report will be carried out and that a competitive corporation tax rate can be achieved for Northern Ireland.
Leaving corporation tax aside as the key issue, it is the role of the Government to facilitate economic and employment growth. Having come to this House from the industry sector, and having listened to businessmen and women on a daily basis, it seems to me that somewhere along the way the Government have lost sight of the key message that their purpose is to facilitate growth and not to hinder it.
Government Departments have taken on a life of their own, divorced from the economy and the primary need to promote local economic growth. It seems that delay and indecision are the hallmarks of all Government Departments, and, all the while, businesses across Northern Ireland are losing contracts and jobs at home and abroad. For example, a small firm in my constituency, which is highly innovative, research led and export driven, has been dealing with the Planning Service and the Environment and Heritage Service for more than two years on a project that has immense potential for Northern Ireland’s economy. Frustrated by the lack of progress here, the firm took the same project to another part of the United Kingdom and, within five weeks, all of the relevant documentation and licensing were made ready for implementation. Northern Ireland is the loser. That business is now thinking seriously about relocating its entire operation to Scotland and away from Northern Ireland.
Under those circumstances, why would a company prioritise research and development? Why would it, under those circumstances, seek to grow? Why would a foreign investor, regardless of what part of the world he came from, consider locating in Northern Ireland, where he would be frustrated by the bureaucracy of Government? Our Government structures are simply too hard to deal with, too obstructive and too focused on self-protection and self-preservation.
The report before us today refers to the need to refocus Departments on the needs of business and industry. Departments must be agile and responsive to business needs. Time, in business terms, is money. Delays lead to job losses and to a lack of investment by the business community. No business should be delayed or hindered in delivering growth while waiting for a Government Department.
I am convinced that many local businesses and businessmen are being held back because of the activities of Government Departments. They have been taught by experience that it is better and easier to maintain the status quo in their business than to go for growth. I note that some Members referred to the ongoing rates review. I trust that the Government, in putting in place the review of the industrial rating proposals, will not seek to delay or stymie debate in the subgroup but will ensure that a proper conclusion is reached.
If our economy is to develop, Government Departments must be transformed into champions for industry. They must become cheerleaders for business, and they must stop acting as a brake on business development. That will require leadership and the re-engineering of Government Departments, the outsourcing of activities and the cutting away of every layer of bureaucracy that is not focused on creating economic growth. Failure to do that will mean that today’s report, like so many other reports on the economy, will simply add to our paper-recycling rate, and nothing will change.
In conclusion, I wish to focus briefly on the economically inactive population in Northern Ireland, which is becoming increasingly essential to the development of our economy. With unemployment currently at an all-time low, this group is one of the few available labour resources of which any business or commercial operation can avail.
We are all aware of the huge numbers that are involved, and behind every statistic there is an individual who has been alienated, for whatever reason, from the world of work.
In an effort to deal with industrial absenteeism, employers are encouraged to get to know individuals, their motivational issues and the problems that may lead to absences. That same process will be necessary to reduce economic inactivity. It is best done locally, in partnership with local employers, ensuring that the needs of individuals are met and that they are planned back into the world of work at a level that matches their abilities and expectations.
Inactivity in the economy will be reduced if well-paid jobs are available; however, that alone will not be enough. Experience in other places has shown that some people need incentives, as well as encouragement, to contribute to the economy. We simply cannot afford to have as many economically inactive people in Northern Ireland as there are in employment. Unemployment levels fell because they were prioritised and managed. Economic inactivity will fall only if it, too, is actively managed by Departments. I am glad that that matter has been prioritised in the report.
I am pleased to have been part of the subgroup that was responsible for producing the report. Like the economy, it is a work in progress, but it covers many of the essential areas and deserves wide acceptance in the House, in Departments, and in the business community that we seek to serve.
Sir Reg Empey: The UUP has always taken the view that a Committee and subgroups of this nature would be good for the Assembly, and we made those representations to the Secretary of State. What has happened over the summer has shown that parties in the Assembly have a willingness and capacity to work together. It may be useful to cast our minds back to the beginning of the summer. There were rows for weeks over who would chair the Committee. We had many ideas, but eventually the problem was solved. The Deputy Speaker and his colleague filled the gap — and did so, from all reports that I have heard, with dedication and impartiality. They are to be congratulated for that.
In spite of all the rhetoric that accompanied the formation of the Committee, and all the rows over who should chair it, its work proved conclusively that people from every perspective could engage and focus on the issue at hand. That is not a new experience, as people of differing perspectives were given the opportunity to pursue economic development, and were encouraged to work together and achieve things, through local authorities in the mid-1990s. The hon Member for South Belfast Dr McDonnell will know that that achieved a healing process in Belfast and in other places.
Some Members have spoken about the empty Benches opposite and how terrible that is. I am not looking at any Member in particular, but I remember the days when we would have been glad to see empty Sinn Féin benches in local government. I also remember the arguments that went on. Certain people, who shall remain nameless, would have made efforts to keep them out of the room by physically blocking the door. It shows that times and attitudes have changed, as people no longer do that sort of thing.
On a more serious note, this morning we had a presentation from the First Minister for Wales, and recently we had a presentation from the First Minister of Scotland. I listened to both Ministers’ presentations, and I was struck by their enthusiasm for their jobs, for devolution and for what they could achieve. I have studied the work that they have carried out in the past few years, and there is no doubt that their achievements have been significant. They have been clearly focused on delivering for their people. The Scottish Parliament and the National Assembly for Wales may have different powers, but the common denominator is their willingness to work closely with their own people, and with us, through the British-Irish Council (BIC), for example. Rhodri Morgan’s enthusiasm came across today, and I hope that that will encourage us as we move into a very difficult couple of months during which we will be confronted with some very difficult decisions.
Dr Paisley, a Member for North Antrim, mentioned the Minister for Foreign Affairs in the Irish Republic, Mr Dermot Ahern, who made a speech at Oxford at the weekend. That speech clearly implied a significant level of threat. The member for East Londonderry is not present at the moment, but he commented in the press this weekend that the speech was “disastrous”.
I am as strong a supporter of devolution as anybody in the Chamber, but will the lesson never be learned that people cannot be threatened into devolution? It is a partnership, and people can enter into it only if it is their desire to do so. That is their decision to make, and they must base it on the issues and the facts. A political cudgel will not achieve the positive outcome that we seek.
Many Members have commented on North/South co-operation, of which I have always been in favour. When I was Minister of Enterprise, Trade and Investment, I did my best to promote and benefit from North/South co-operation. However, in a communiqué emanating from the British-Irish Intergovernmental Conference (BIIGC) on 25 July, the Secretary of State announced a series of far-reaching decisions, which received relatively little publicity. Reference has been made today to our being in competition with the Irish Republic. In many sectors, we are indeed in competition. How is it then that, according to that communiqué, were Invest Northern Ireland to run a trade mission to, for example, America, it would be open to any company on this island? There can no longer be a Northern-Ireland-only promotion in another jurisdiction. How can that be, given that we are in competition with each other? That is one of many far-reaching decisions in that communiqué, which seems to have been swept under the carpet.
I see that it has been decided that the overseas facilities and offices of the Industrial Development Agency and of Invest Northern Ireland should be open to any company on the island. I have no difficulty in co-operating where we can. However, we must understand that we are in competition with the Irish Republic, and we cannot be transformed from a regional economy in the United Kingdom to a regional economy on this island. That is what I read into the Secretary of State’s decisions and much of the rhetoric that has flowed from the communiqué. The remarks of Mr Ahern at the weekend merely add currency to something that has the potential to significantly damage the improved North/South relationships.
Dr Farren: I thank the Member for giving way.
Does the Member agree that there are benefits to collaboration, notwithstanding the inevitable competition that exists everywhere, whether within Northern Ireland, between Derry and Belfast, or between Cork and Dublin in the Republic? Does he not note the favourable comments of those who participated in the Irish-Government-led delegation to India some months ago, in which several agencies, institutions and businesses from Northern Ireland participated? Some investors might be attracted by the mutuality of facilities between North and South, in that the existence of R&D in one part of the country might support a case for investment in the other part. Therefore we are not being invited to sacrifice ourselves to anyone else, but to take mutual advantage of what is on offer in both parts of the country.
Sir Reg Empey: The Member knows that I support that idea, and he knows that I carried out such work. I worked with the Irish authorities on a number of projects. We agreed in the north-west to form joint activities with the then Industrial Development Board (IDB) and similar authorities in the Republic. I am not against such work, but that is not what the BIIGC statement said. It definitively said that all future missions would be open to every company on the island, irrespective of whether there would be mutual benefit — although frequently there may be.
I am against being put into a rigid position. If, for example, we wished to have a joint mission with people from Scotland, would that mean that everyone could join in? When that matter is taken in conjunction with what the Secretary of State described as our economic failure, it appears to show a total lack of confidence in our ability to do anything here without being propped up by someone else. That sends out the wrong message. I am not against co-operation; I am entirely in favour of it, but it must be kept in context. The statement verges on an attack on sovereignty, and that is not where we want economic co-operation to be.
There was a proposal in the report concerning the financial services sector. The Permanent Secretary of the Department of Enterprise, Trade and Investment is not here, although his worthy deputy is. He will know that before I was involved in that Department, while I was involved in it, and since, it has always had an ambition to see a meaningful financial services sector developed in Northern Ireland. I strongly support that element of the report. We have very good potential right now. We know that the cost base in Dublin — where the financial services sector almost began its economic revival — has become very high. The same is happening in Glasgow, and Members know about the cost base in the City of London. A wonderful opportunity exists.
There are signs that some essential key companies are showing interest, and there has been some success. I strongly support that aspect of the report. As a community, we should be aiming for a successful financial services sector. If we could point to a sophisticated financial services sector that covers the whole range of services from banking and insurance to brokerage and reinsurance, it would provide good quality employment, give us opportunities to get involved with all sorts of investment and improve our status as an investment location. There are huge opportunities, and they should be pursued with vigour.
Immigration was mentioned in the report. The Member for East Antrim Mr Dawson said that a section of the community is not sufficiently skilled to fill many of our jobs. People who probably have better qualifications are coming in from other countries and filling those posts. As the labour market has been able to fill those posts with people from other parts of the European Union, there is a great temptation to forget about the pool of people who do not have the sufficient level of skills to take those jobs. Since they are filled by people from elsewhere — whether from Poland or Lithuania — we are inclined to forget about the people who are left on the scrap heap. That would be a tragedy for this country, and it could be the basis of social unrest in the future. I hope that we can develop a strategy with employers to deal with that pool of people and ensure that their skills are sufficiently improved. I believe that that strategy should be developed here.
The First Minister for Wales made the point this morning that Wales has a policy of encouraging the retention of graduates, which we know is also true of Scotland and England. We are the only part of these islands that has no such policy. While in the Executive, I, together with Dr Farren, who was then Minister for Employment and Learning, attempted to track graduates and to keep in touch with them, to ensure that, on leaving university, they could be involved in economic activities here. All that is gone. There is no policy at all. It is just laissez-faire; we let them go. That is grossly irresponsible.
I hope that we will be spared in the coming months to resolve our difficulties, serious though they are, so that we can come to the House with confidence to deal with those problems. Believe me, no one is going to solve them for us.
Dr McDonnell: I am delighted to participate in the debate this afternoon and to throw a little light on the economy, if not as much as I would like. I want to pay tribute to all my colleagues — the core group of 10 who attended throughout, and also the 10 or so others from the various parties — who did so much to ensure that our report was produced rapidly. I also compliment you, Mr Deputy Speaker, for your part; the other Deputy Speaker; and also the alternate Chairpersons: my colleague Mr Maginness, Mrs Long and Mr McClarty.
It would be remiss of me not to mention the Assembly staff and the effort that they put in. They sometimes burnt the midnight oil to keep us going. I was impressed by the commitment of the many dedicated witnesses who made presentations to us. I am even more impressed to look up into the Gallery and see that some are here for today’s debate. I see members of the Federation of Small Businesses there now; John Simpson was there earlier, as were others. That represents a level of commitment and interest that the Assembly should not ignore.
In the past hour, we have debated whether Northern Ireland is a regional economy within the UK or within the island of Ireland. It does not matter much. Northern Ireland is both. As I said in the subgroup, I am prepared to take my chances with whatever benefits or opportunities are available in the UK, in the island of Ireland, in Europe or in any other network that we can plug into. We must underpin the hopes and dreams of our constituents, particularly those who are underemployed or outside the employment network. As public representatives and as individuals, we all have dreams and hopes and would like to see a prosperous community.
If Northern Ireland does not have an economy that works efficiently and delivers high levels of value and, as a consequence, high wage levels, many of the constituents who elect us will be forced to emigrate and find opportunities in England, the Irish Republic, Europe, the USA or even as far away as Australia or New Zealand. Members have a solemn duty to do what they can to produce economic opportunities for the graduates to whom my colleague Sir Reg Empey referred a few minutes ago. We must produce economic opportunity and hope for those who need them.
The report is a useful piece of work. Criticisms of it have been muttered, and they are justified. The report was prepared in five short weeks. It has to be viewed as a work in progress. No one should view it as the be-all and end-all. In those five weeks the subgroup gleaned as much information as it could from a wide range of witnesses. We did not see half of the people that we would have liked to have seen, but we probably distilled five months’ work into those five weeks.
There is still a lot to do. Members need to continue to gather information, to debate, to become better informed, to fine-tune and to introduce any necessary changes. We cannot leave economic issues aside for 10 years. Our competitors, wherever they are, are not sleeping, and neither should we. I echo the words of George Dawson — who has now left the Chamber — who said that the Government must enable, empower and facilitate economic growth, not inhibit it.
During the previous Assembly, some Members were involved in the inquiry into ‘Strategy 2010’. We learned a lot, but much of our effort was lost due to suspension.
The economy can be looked at from many angles, and many approaches can be taken. However, we should not take a philosophical or light-hearted approach, nor should the economy be used as an excuse for an academic discussion. Although those approaches can be useful, Members must be realistic and hard-nosed. We must focus on creating a competitive advantage by targeting two, three or four key niches in the economy that offer an opportunity for a high-tech new economy and in which it may be possible to build the competitive edge that is necessary in a global economy. Opportunities must be aggressively pursued until every last one has been exploited.
I do not wish to dismiss successful existing businesses that deserve to be part of an open and honest economic development agenda. However, we must recognise what will work and what will not work. I feel aggrieved that the textile industry, once a big part of the economy, has now been almost wiped out. However, there is still an opportunity for a well-managed niche market in the textile industry to add high value and to deliver high-quality goods at a high price, resulting in high wages.
That applies equally to agriculture. It is a crime that practically the entire agriculture and food industry in our society is hanging on and does not know what its situation will be from week to week or from month to month. That industry requires stability.
However, the economy will not be reinvented through textiles or agriculture. Reinvention must happen primarily, but not exclusively, through a knowledge-based high-tech economy. Radical new ways of financing small business start-ups must be conceived. An environment wherein a much larger percentage of start-up companies survive and prosper must be created. Much can be learned from north American cities that have reinvented themselves, such as Pittsburgh, Pennsylvania, and Halifax, Nova Scotia in Canada. North Carolina’s technology triangle and the technology operations that are centred on Georgia Tech in Atlanta also come to mind. Although there is much to learn from US cities, a great deal can also be learned from the Irish Republic, Scotland and, as we heard this morning, from Wales.
Time is scarce. If I had more time, I would talk about modern apprenticeships, which deserve more attention. I would talk more about North/South trade — and some of the anxieties about that that I have heard in the past hour are, if I may so, exaggerated. It is not a matter of forcing North/South trade; however, it has been inhibited for a couple of generations. Organic growth must be allowed to happen without inhibition or obstruction.
Members could talk about industrial derating, rates in general or corporation tax. I would also like an opportunity to talk about financial relationships in the context of corporation tax and about the financial relationships between the Isle of Man and the UK Exchequer, and between the Channel Islands and the UK Exchequer. We could also talk about generating downstream businesses.
However, in the limited amount of time that is available, I want to talk about three subjects. The first is the dire lack of education and skills about which we repeatedly discovered as we compiled the report. Twenty-five per cent of pupils leave school with limited numeracy and literacy skills.
Secondly, I want to talk about research and development. Finally, if I have time, I will talk about the vital role that universities can, and must, play in economic success.
Any future growth in employment can be achieved only as long as there is a workforce that is sufficiently trained and capable of meeting the requirements of the jobs that arise.
(Madam Speaker in the Chair)
At times, people appear to dream that investors in New York or California, for example, will be persuaded to give us a big lump of foreign direct investment. However, our people must be trained in advance of such investment. No foreign direct investment operation will come here if the necessary skills base is not in place. That skills base must be created in whatever niche markets exist.
A recent ‘Lifting the Barriers to Growth’ survey singled out a lack of basic skills as a major concern of employers. When employers want to provide training, they must be supported and given back-up in order to do so. Some 65% of employers are willing to provide staff training if funding for it is available. Surprisingly, we have weaker communications skills, customer service skills, basic IT skills, and foreign language skills than other UK regions. Those issues must be dealt with quickly.
It is, however, positive and helpful that we are stronger in most other areas, such as advanced IT skills. We have many people who are well trained in technology, but few who possess basic skills in that field. We have strong sales and marketing skills and general technical skills. However, a substantial programme of restructuring and investment in education and training must be carried out in order to raise standards and increase the focus on the opportunities that exist here. The education system must place enhanced emphasis on the development of practical skills at its core. The role of universities and colleges of further and higher education must be at the heart of any change, with functional partnerships being formed.
Another objective must be to create a positive culture for R&D. It is talked about as though it were a magic bullet; it is not. However, much could happen if attitudes towards it were changed to ensure that reasonable goals and timetables are set that allow improvements to be made and a cleverer and more efficient approach to be taken.
The current culture is one in which matters are left as they were 20 or 30 years ago. We desperately need to build better skills and become more competent. We must, at every opportunity, seek to make changes that will raise motivation and bring about improvement. As somebody said in a meeting that I attended, we may need to divorce the R from the D, because perhaps R&D intimidates people. Perhaps research must take place in and applications be doled out to small companies. Certainly, the less complicated it is for people to set up small businesses, and the more help that is available to them, the easier that will be.
There is a massive need to meet R&D challenges at the coalface of business. The economy cannot be improved or function at full steam if the intellectual power in universities is not harnessed. There is a major lack of investment in R&D in Northern Ireland — we have the lowest spend of any region in the UK or European Union. Many small businesses simply do not have the necessary resources, and support must, therefore, be made available to them. The tax system must be enhanced in order to encourage small businesses.
The Federation of Small Businesses said that it wants Invest Northern Ireland and DETI to encourage local, indigenous small businesses that have used R&D successfully to act as champions for it and sell the idea to other businesses. I believe that that would be useful.
Earlier, George Dawson said that more of the same will not be sufficient to provide the step change that is required to drive Northern Ireland’s economy forward. We must avoid “more of the same”. In order for that to happen, the universities must be harnessed. The universities could provide 10,000 to 12,000 high-powered, highly paid jobs, which in turn would provide an engine for 50,000 to 60,000 back-up jobs. The universities do not provide that at present. I have done research into that and could provide relevant details. There is a clash in universities between pure academic research and applied research.
There must be some mechanism in place to create a balance and a bias towards one area. For instance, there is a bias towards research in the United States, and that generates money for the universities. Many universities accept the need to become clear in their overall mission, and they find special and sustainable niches in the teaching-versus-research and in the pure-versus-applied spectrum.
Our universities are fairly good at what they do, but there is still much to be done. There is a need, for instance, to create four or five times the number of spin-out companies that we have at present. There is also vast potential in the medical faculty, a flicker of which we saw in the new cancer centre; but the medical faculty in Queen’s University could generate massive numbers of real economic opportunities. We need to remove the impediments that obstruct those opportunities; if I had time I would list them, but time is not on my side.
I urge colleagues to support me in the call for the establishment of a Northern Ireland technology alliance led by a small executive team and supported by a working board comprising high-level representatives from the Government, universities and the business community to ensure that the energy and potential in our universities are released.
Madam Speaker: Dr McDonnell, your time is up.
Dr McDonnell: Thank you, Madam Speaker. The energy and potential will not flow on their own; they must be released if we are to prosper. [Interruption.]
Madam Speaker: Order. I will tell a Member when his or her time is up.
Mr Robert McCartney: Many of the major topics relating to our economic situation — or plight — have been developed by Members who spoke earlier. Some have been developed with gravitas, some with erudition, some with a mixture of both, and the least said about the rest the better. However, I endorse Dr McDonnell’s comments about education. When one reads the report, particularly the sections on education, one notices the recurrence of several themes. Evidence was received from witnesses such as Mivan, one of our leading companies, and the Department of Education, and many of the witnesses mentioned the absence, in many circumstances, of basic literacy and numeracy skills — reading, writing and arithmetic.
When one considers Northern Ireland’s ability to compete with Sri Lanka, China, north Africa and other places that have an abundance of relatively cheap labour, one should also remember that we offer a well-trained, educated working population that is capable of communication. There are also labour requirements in higher-skilled areas such as research and development and marketing. People involved in the higher levels of research and development should know something about physics, chemistry, mathematics and marketing, and they should possess the social and communicative skills that are necessary to place our workforce on a competitive footing with those who can overwhelm us with cheap labour and sheer force of numbers.
One may ask: “Where do we begin?” We begin at the beginning with the primary school children. It is in that aspect of our development — the education of our future scientists, researchers, development managers and engineers — that we must find out what is going on.
Some £42 million was recently spent on a strategy to establish the state of literacy and numeracy in our primary schools. That investment was investigated by the Public Accounts Committee, which concluded that the money was spent without any result. The Northern Ireland Council for Curriculum, Examinations and Assessment (CCEA) failed to build in the necessary testing measures for telling us whether the strategy was working. It was a waste of time.
Within the last week, I have had an interview with the permanent secretary of the Department of Education to discuss the early-years enriched curriculum, which is currently being rolled out. Examination of that project demonstrated that pupils in P1 and P2 receiving this so-called enriched curriculum actually performed much worse than their peer group who were pursuing traditional methods. This was despite the project allegedly being assessed by the department of psychology at Queen’s University. My experience of psychologists of that kind is not a happy one; I will attempt to share it with the House.
Further investigation revealed that central to this whole escapade, for that is how it might properly be described, was that children, particularly from disadvantaged areas — the very areas that we seek to develop and give jobs to — would not be taught to read or to count until the age of seven. Children were to be involved in play and allegedly develop predispositions that, like some hump of educational happiness, would suddenly manifest in the children becoming very, very bright after a period of being very, very dim.
When I raised that with the permanent secretary, he said that he had investigated it all and was happy that the methodology employed in the early-years curriculum, which was patently failing, was nevertheless one that the Department should endorse. That meeting took place on Tuesday 5 September. The following day, the Secretary of State for Education, Alan Johnson, announced that the strategy for teaching reading and numeracy to the children of the United Kingdom through a mixed methodology since 1998 had been a total failure. From then on, the recommendations of the Rose Report were to be adopted, and children aged four and five were to be taught at the earliest possible date to read and count by the traditional method of phonics.
In the midst of Northern Ireland’s economic plight, looking to the future and to developing people who can communicate and impress employers with their ability to read and count, as desired by Mivan and the Department of Education, our children are to be subjected to a form of primary school education that has been deemed a failure in England after nine years and has been condemned by those who have examined it.
Mr S Wilson: The Member has raised an important issue. Does he agree that the curriculum is being driven by a cabal of educationalists who have taken over the whole range of educational provision in Northern Ireland and by the amount of money that the CCEA has invested in the project, about which it is now embarrassed and on which it cannot go back?
Mr Robert McCartney: I could not agree more. There is a group of so-called educationalists in Northern Ireland, driven by some constructivist method, that is determined to impose, particularly on the controlled sector, a form of education that has been deemed absolutely disastrous by all reputable researchers in the United States, the United Kingdom and further afield. If the fundamental building blocks of being able to read, count and communicate are not put in place, at what level will our workforce be developed, be they neurological surgeons, plumbers, carpenters or bricklayers who are required to read plans and communicate directions to those below them, or researchers?
We are not lacking at primary school level alone. Recent results have demonstrated that, for the umpteenth year in succession, Northern Ireland has produced the best results in tough A level subjects in the UK.
I return to Alasdair McDonnell’s point about research and development: if we do not produce physicists, mathematicians, chemists and, as he mentioned, linguists, where will we obtain the specialist skills that will be our defence against cheap labour from abroad? We will have no such defence. It is all very well to talk about a range of immediate panaceas to cure our economic ills, but if the basics for future generations are not put in place now, Northern Ireland will be put to the sword when competing with others.
It may seem a bit off the beam to concentrate so strongly on education in this debate, but from the days of Adam Smith and his book ‘An Inquiry into the Nature and Causes of the Wealth of Nations’, the wealth of nations has depended on the education, skills and entrepreneurial drive of people who make up those nations. All those factors are formed from the earliest possible date.
When I look at some of the A-level results and, indeed, at some of the degrees conferred by our two universities, I wonder if there will be a surfeit of people who will thrust Northern Ireland forward as a result of degrees or A levels in media studies or drama? There must be a point at which there is a glut of people so qualified; yet that is what is being churned out.
The number of A levels studied by students are constantly increasing; standards are constantly decreasing, and the number of easy options is such that five A-grade A levels are no indication to any of the major UK universities that a person is a star act. Students are now being awarded A-star and A-plus grades. Some major universities are talking about holding their own examinations, moving away from A levels to an international form of examination.
If we are to guarantee an economic future for Northern Ireland, we must seriously examine what is going on and what is being foisted upon us and upon our society by the sort of people that Sammy Wilson mentioned, people who draw large salaries and try to create commercial kingdoms. Test papers and examination formulas have become a billion-dollar industry in Britain and in Northern Ireland.
If we do not examine what those folk are doing, we will be unable to produce the people who will be required to fill jobs that may be filled by Indian, Chinese and Malaysian graduates who are being taught in their universities the things that we used to be taught. They are coming here as first-class mathematicians, physicists and scientists. When we look at some of our home-trained people, we find that they are seriously lacking.
To establish an economic programme, let us begin at the bottom by looking at how we will produce children who, at every level and regardless of their status, whether they be tradesmen, professionals, researchers or scientists, have the basic ability to communicate with their fellow man and be educated in something more than simply being a tool of industry.
We hear a lot about vocational skills, but, in this world, is it sufficient merely to be trained as some sort of robotic adjunct to the requirements of industry? Additional skills must be considered.
It is worth referring to Mivan’s written submission to the subgroup’s report. Mivan believes that, although they are essential, vocational skills cannot be capitalised on without other skills, such as communication, literacy, numeracy, team-working and technology. Unless a system is created that allows those skills to develop, any grand plans, whether they be for corporation tax or a packet of economic dolly mixtures or magic dust, will go nowhere. Instant solutions will not solve lasting problems for the economic future of Northern Ireland.
In so far as the report has highlighted that issue and others, I am more than happy not only to congratulate those who prepared it, but suggest to the House that it should be endorsed.
Mr Simpson: I add my thanks to those members of staff who assisted the economic challenges subgroup. I am not going to repeat a lot of the issues that have been raised. The subject tends to be repetitive. However, it is an important subject to debate and, hopefully, Members can move it forward.
I am certain that true democrats will agree with my wish that, finally, we shall soon be able to say that the nightmares of recent decades have been put behind us and that Northern Ireland is entering a new and better future. While some of us have been attempting to bring that day closer, others — and I refer to Sinn Féin/IRA MLAs — have been content to give only the illusion of a commitment to a better future for us all.
Yes, Sinn Féin sent representatives to the PFG Committee who trotted along to the meetings of the economic challenges subgroup. Yes, those Members agreed the subgroup’s report. However, when it came to the crunch, to the time to progress the recommendations and to the time for the doing rather than the talking, the Sinn Féin/IRA overlords — to use a good Ulster term — shafted their own team. They shafted the economic challenges subgroup; they shafted the business sector in Northern Ireland; and, ultimately, they shafted the entire population.
I am given to believe that Sinn Féin/IRA’s position on the report has changed yet again. First, the party agreed the report; then it would not. I am told now that Sinn Féin has decided to agree the report again, only this time its position is that, although it will agree the report, it will do nothing to progress the recommendations. I realise that it is early in the week; Sinn Féin’s position could change a few times before the week is out. However, that should not overly surprise Members.
After all, when a party does not have any real economic policies or any real interest in growth and prosperity and no true commitment to a stable and prosperous future, it is hardly surprising that it ends up drowning in a sea of its own incompetence when faced with real bread-and-butter politics. When a party’s commitment to Hamas and Hezbollah is greater than its commitment to the local high street, it is hardly surprising when it ends up making a spectacular fool of itself.
If we are to create a better future for our citizens in a vibrant and forward-looking society, we need to face up to what is becoming clearer with every passing day. One of the parties that the Government wish to see sitting in an Executive appears incapable of acting in the interest of the general good and to have no desire for, or commitment to, a stable and progressive future for our people. We cannot and dare not ignore that.
In the last Assembly, we witnessed Sinn Féin swap planting massive bombs in the hearts of local towns for letting off political bombs in their Departments. It appears not to have learned. There is a great onus on us, as the democratic parties, to attempt to put in place the necessary framework to take Northern Ireland forward. That being so, in seeking to underpin what I hope will eventually be the new and better future that so many of us long for, we cannot overemphasise the importance of a strong, prosperous economy, nor can we overemphasise the requirement for economic, political and social stability.
While there are some good economic indicators, they conceal underlying and well-documented structural weaknesses, such as an underdeveloped private sector; over-dependence on the public sector; low levels of business formation and R&D spend; low levels of labour market participation; high levels of long-term unemployment; and uneven sub-regional growth. The £5 billion annual subvention from Great Britain is not sustainable.
To the above list one might add a demographic time bomb. It all means that we are facing major challenges. We have an imbalanced and vulnerable economy, which has an aggressive economic competitor immediately to the south, whose Government have made crucial advantages available to its business sector that the UK Government have withheld from us.
My colleague Mr Dawson mentioned the recent debate in Queen’s University on whether the Northern Ireland economy can be rebalanced. I stand to be corrected, but every single contributor to the debate agreed that the economy could, and would, be rebalanced, simply because of the ingenuity and determination of the Province’s business community. Those businesspeople have come through 35 years of hell on earth — if they faced that, they can certainly face any future challenges.
Equally, our long-established dependence on the public sector does not help our economy achieve the increased levels of innovation and entrepreneurship and the competitive advantage that it will need in order to survive and flourish. To that end, we must develop a robust and more buoyant private sector and attract increased inward investment.
Another factor that can help to turn the situation around is having more effective R&D support. We have heard a lot about that today. Funding to the commercial and education sectors must be better targeted. Indeed, I fervently believe that closer co-operation between educationalists and entrepreneurs would be beneficial. We should reconfigure education so that it is made to measure for the needs of business and industry.
Dr McDonnell spoke earlier about linking the education and business sectors. In the subgroup, he mentioned closing the circle in that way. I supported him in that. The Youth Forum agreed that there is a gap in the circle between colleges, business and industry.
We need to close that gap in order, as Mr McCartney said, to create young entrepreneurs and people for the future. As an employer, I know just how often people present themselves as potential employees without even the most basic of skills. There must be a proper partnership between the education system and business, so that education is tailored to the needs of the workplace.
Research and development uptake is poor, although the available R&D assistance for firms could be better used. The creation of a business culture infused with a spirit of innovation would also be achieved with a reduction in corporation tax to below the rate in the Irish Republic — to clarify the position for Mr McNarry, that means 10%; we will not need the angel dust or the fairy dust to explain that — as part of an overall package of fiscal measures. [Interruption.]Yes, angel dust is used in the meat industry. The Member is going back and showing his age.
Mr S Wilson: He is going to dust. [Laughter.]
Mr Simpson: Madam Speaker, there are 21 recommendations before us, and I am sure that the business community and other interested parties will ask when those are to be acted on. After all, we have had discussions and debates before and assurances made by the Government regarding the Northern Ireland economy. For example, in May, the Secretary of State gave a commitment to establish a working group, chaired by Minister of State David Hanson, to explore the issue of industrial rates. My understanding, as of last week, is that that working group has yet to meet.
The Secretary of State was very keen that Members of this House should meet over the summer on both the economic challenges subgroup and the Preparation for Government Committee to deliver documents and recommendations, yet when it comes to such an important issue, which deals with the economic lifeblood of the manufacturing sector and others, it did not seem important for the Secretary of State to have any work done during the summer. Madam Speaker, I ask you, through your good offices, to make some enquiries about why that working group did not meet to help the manufacturing industry.
I am sure that everyone in this House who has agreed with these recommendations will join me in wishing the industry well and will look forward with me to a better and more prosperous future for Northern Ireland and for the generations to come.
Mr Nesbitt: I support the motion. I am conscious of the volume of paperwork that we all received and of the time spent by those who participated, and, like others, I thank them. However, I am also concerned and disconcerted that the underlying problems that have been alluded to in this debate are not new but long-standing. Dr McDonnell and Mr McCartney made very thoughtful comments about what needs to be done in Northern Ireland. These are not new problems. Until one is conscious of the problem that one is trying to solve, one can find it very difficult to identify the solutions. The problem is the first thing to identify.
We all wish to have a better standard of living in Northern Ireland. Ours is lower than that of the rest of the United Kingdom. That means greater productivity, a central element in any country with an industrial private sector and part of the wealth creation of that region. In this more global economy, there must be greater competitiveness. Other Members have talked about who might or might not compete and take the work from us.
All of that is aimed at improving living standards. For economic reasons, people moved from working on the land to working in industry. In turn, they moved from working in industry to working in the public sector, which took up a lot of the slack. The public sector is now under threat, and it needs to be trimmed. However, many jobs must be created in the private sector, which must play a bigger central role. That is not to deny the fundamental role of the public sector, but the private sector must be enhanced.
Inactivity — hidden unemployment — is also a problem in Northern Ireland that must be addressed. We all know about the problems; they are not new issues. There have always been problems, and we are still discussing them. Dr McDonnell and Mr McCartney spoke about there being a means to address those problems. That means is the Northern Ireland skills base. Those people are the value-added element, and they can improve the standard of living. Those people can allow Northern Ireland to compete with the wider world, where there is an ever-decreasing interdependent economic market. We can make a phone call to a call centre in India to discuss a local or personal issue. Northern Ireland must compete in that global market, and people must have the appropriate skills.
The report also refers to enterprise. Dr McDonnell spoke about research in the university sector. With my background, I am conscious of that issue.
The Government have the capacity to deal with problems in the economic infrastructure. None of those problems is new, and we know what needs to be done. The sad thing is that we are at the stage only of discussing the issues.
The expression an “all-island economy” has crept into our vocabulary. It is used on the front page of tonight’s ‘Business Telegraph’ and in other publications. This constant push for an all-island economy is being presented as a panacea. I want to comment on that. Politicians should not interfere with what the business community does best. They must create the environment, but must not impede the market. The business community in Northern Ireland must decide whether it wants to work with a sister industry in the South of Ireland or wherever, where comparative economies of scale might be financially advantageous. The European Union has freed up economies and broken down economic borders. We must ensure that the business sector is allowed to do what it does best.
North/South co-operation, which was referred to earlier, is not the only issue. The east-west dimension is as important — if not more important — as North/South factors. World markets and economies of scale can be achieved on an east-west basis that could lead to Europe and America. We must not have an insular mentality, believing that an all-island economy is the panacea; it is not.
Business should be allowed to do what it does best. Government can facilitate the private sector and make contributions to energy and transportation, which affects all of us. Government have their place in helping the economy, whether that be on an all-island basis or farther afield.
A third element is the fiscal taxation dimension. It is very easy to make the clarion call for 10% corporation tax, but it must be carefully thought through. My party wants to see the best economic environment for business to flourish. We do not want to be negative — quite the reverse. However, in being positive, we must also counsel caution. Mr Ford mentioned the case of Portugal and the Azores at the European Court of Justice. He said that it is limiting to be a separate taxation unit and that it is necessary to have a separate devolved Government in order to be able to do that. That was only one side of the argument. The principle is quite common throughout the European Union: whether you vary the rate, you must be a taxation unit.
One remembers the time when Southern Ireland had a 0% tax rate for all exports and a 40% rate for industry at home. That was discriminatory within the taxation unit. When Ireland had to change, it simply made the rate 12·5% throughout. A tax authority has the power to do that. The definition of a separate tax authority, as I understand it from last week’s judgement, is that it can act independently. In other words, the Treasury would not be able to tell the Northern Ireland taxing authority what it could or could not do.
Mr Robert McCartney: Will my hon Friend give way?
Mr Nesbitt: Since he calls me a friend, I will give way. [Laughter.]
Mr Robert McCartney: It is your lucky day; make the most of it. [Laughter.]
Does the Member agree that since Northern Ireland is part of the United Kingdom, and since Edward Carson once said that we ask for no special privileges but simply for equality of treatment, it would not be in the interests of the Union, in real terms, for some sort of discriminatory separate tax arrangement to be put in place — helpful though it would be — that is similar to the South but different to the rest of the UK?
Mr Nesbitt: I am very grateful to the Member for North Down, and we can discuss afterwards whether he is a friend or otherwise. He is basically correct. Edward Carson also said:
“There can be no permanent resting place between complete union and total separation”.
That is a similar hybrid position. He was making the point to which I was coming: although the Stormont body could have the independence to make a taxation diktat without being controlled by London, the downside is that it could not then turn to London and expect financial assistance. We need to think this through very carefully. Do we want a financial package that would make the situation within Northern Ireland different to that in the rest of the United Kingdom?
Whenever we talk about fiscal incentives, the phrase that often comes up is “the all-island economy”. One of the economic commentators, a Dublin-based professor, said that if we had an all-Ireland economy we would be as good as the South, and that if we did not have that we would be one of the worst regions in the United Kingdom. That is, to put it bluntly, economic nonsense. It depends on the assumptions that the economist makes, and he was making some assumptions that perhaps gave him the outcome that he wished for.
To digress for a second, there is a joke about economists. An engineer, a mathematician and an economist were on a desert island, and there was only one tin of baked beans to eat. They needed those beans. The mathematician tried to find a formula. The engineer tried to work out how trees could be felled so that they would fall on the tin and open it. The economist said: “It is simple. You just assume that you have a tin opener.” One of the problems of economics is that assumptions are made in arriving at solutions. We must be conscious of that.
An all-Ireland dimension has benefits, such as in education. Co-operation with the regional technical colleges provides the skills base that is necessary for our future economy. For example, Irish chartered accountancy forged close links with Queen’s University, Belfast and University College, Dublin. Those institutions taught the same course and provided the same exemptions, and those led to an all-Ireland qualification. That was all-Ireland co-operation on an educational level and it was non-political; there was no political interference. From a unionist perspective, there is nothing to preclude co-operation where it is needed and where there are no political overtones.
In conclusion, I shall return to where I started. A recent Sinn Féin press release stated that an all-Ireland economy was necessary because the Northern Ireland economy was a “basket case”. Northern Ireland is a region of the United Kingdom, and other regions are in a similar position. They need to improve, and the structure of their economies will have to change. Northern Ireland can do that equally well inside the United Kingdom. Notwithstanding thoughts of fiscal incentives, the essential element is the basic skills of the people of Northern Ireland. That must be fundamentally addressed, and that is why I referred to the words of Dr McDonnell and Mr McCartney.
Mr Weir: When one is the eleventh or twelfth contributor in a debate such as this in which there is consensus on the recommendations at hand, there is great difficulty in finding anything new to say, because all of the issues have been covered. We have even had a lecture on negotiating techniques from Mr McNarry. If nothing else, that shows that, whatever else the Ulster Unionists have lost, they have not lost their sense of irony.
Mr McNarry: Would the Member mind repeating that?
Mr Weir: Unfortunately, Mr McNarry has not been listening for some time. I said that whatever else they have lost, the Ulster Unionists have not lost their sense of irony. We are at the stage where everything, more or less, has been said, but not everyone has had the opportunity to say it. I shall endeavour to make some remarks that deal with the report.
I had the privilege of attending several meetings of the subgroup. Dr McDonnell and others said earlier that we had truncated a great deal of work that would normally have taken several months into a narrow timeframe. Consequently, we must view the report as a work in progress. However, much hard work went into it.
We were pleased that a wide range of witnesses gave evidence to the subgroup. The Northern Ireland Manufacturing Focus Group (NIMFG) made a valuable contribution, particularly on industrial derating. The end result has been that the debate has been kept alive. The pressure exerted by the NIMFG, and the work of the political parties and the Assembly, has provided some light at the end of the tunnel for the industrial sector. I also commend the work of the Federation of Small Businesses, which focused on a wide range of topics.
Anyone who examines the problems of Northern Ireland’s economy has long ago moved away from the idea of having one big DeLorean-type salvation and towards a realisation that small and medium-sized enterprises are going to provide the backbone of the economy. Some are highlighting issues that have not previously been considered. The Federation of Small Businesses focused on business crime, a matter that others and I have raised with the Chief Constable. Those bodies provide a valuable contribution to the debate in Northern Ireland.
It was vital that the economic challenges subgroup did not simply tick the appropriate boxes and hear evidence from the usual organisations and Departments, but that it heard from leading industrialists who work at the coalface, such as a representative from Moy Park and William Wright from Wrightbus Ltd, who gave us practical examples of the way forward. While considering the economic challenges that face Northern Ireland, it would be wrong simply to present a bleak picture, as that would be deeply insulting to those who have worked at the coalface for the past 35 years.
During those years, things have been difficult for those who have been involved in economic life in Northern Ireland. It has been difficult to attract new business against the backdrop of the troubles, and the economic circumstances that have been created by that have been a major problem. Beyond the issue of image, the IRA disgracefully went a stage further by targeting businesses and by trying to destroy the economy of many town centres. It is a testament to the hard work and dedication of many business people that they did not simply pack their bags and leave. Throughout the troubles, many of them fought to provide employment and to create wealth. As a result, there has been a reduction in unemployment, in spite of the many problems. Growth in this region has exceeded that in other parts of the United Kingdom. Nevertheless, there are unseen problems with that, for example, in the growth in jobs in the value-added sector and in the greater need for a knowledge-based economy. However, not everything in the garden is black.
I take grave exception to some of the Secretary of State’s remarks. It is one thing for us to be aware of the challenges of globalisation — and I believe that there is no politician in Northern Ireland who is not aware of the challenges that we face from India, China, eastern Europe and north Africa — but it is another thing for the Secretary of State to bad-mouth, rather than sell, the economy of Northern Ireland abroad. How will that help FDI?
The Secretary of State obviously envisages himself in a more senior role than his current position. He sees himself as the next Deputy Prime Minister, but how will inappropriate comments and embarrassing gaffes qualify him to fill the shoes of John Prescott? On a serious note, the Secretary of State has done us a great disservice. We need to attract FDI. The duty of Government is at the heart of many of the recommendations in the report.
I confess to being a political anorak and to being an avid viewer of ‘The West Wing’. Some time ago, I was struck, during a dramatisation of the presidential debate, when the Republican candidate was asked how many jobs his Administration would create. His reply was “none”. That was said for effect, but what was meant behind that — and other Members have referred to it — is that the task of Government is not necessarily to create jobs, but to provide an enabling environment in which entrepreneurs can create them. That goes to the heart of our recommendations. In particular, there has been a lack of economic co-ordination in Government.
There must be an examination of how Government announcements have an impact on the economy, yet there does not appear to be any co-ordination on that, judging from the evidence from the Department of Enterprise, Trade and Investment and other Departments. An example was the recent announcement of the massive investment in roads infrastructure, but it seems that North Down and Strangford have fallen off the map, as no investment appears to be targeted there.
However, I will leave aside the issue of whether the money is being spent in the right areas. When the Department of Enterprise, Trade and Investment was asked whether it or other Departments had been consulted on whether the investment would be best for the economy as a whole, the answer was no.
Unfortunately, the structures of Government are such that economic functions are spread across various Departments. The Department of Enterprise, Trade and Investment is the lead Department on the economy, but responsibility for employment and training has been hived off to the Department for Employment and Learning. Like others, I agree that it is vital that we prepare our workforce for the future. The Department for Regional Development deals with infrastructure, and the Office of the First Minister and Deputy First Minister has an Economic Policy Unit. There is a strong feeling that there is a lack of co-ordination within Government, with the end result that it is very difficult for swift, co-ordinated decisions to be taken.
I was struck by Dermot Nesbitt’s remark that one of the roles of Government should be to not impede the growth of industry. We need look no further than the planning process. Let us leave aside our concerns about Draft Planning Policy Statement 14 and domestic planning for the moment, and compare how long the application process for industrial planning takes here with how long it takes in countries with which we are in competition. I agree with Dr McDonnell’s earlier comment that we need to learn from what happens in north America. It would be simply unthinkable for new businesses in north America to have to wait years to get planning approval from a Department or a planning service. Therefore, we must ensure that bureaucracy, at any level of government, is not an impediment.
There are question marks over whether Invest Northern Ireland is fit for purpose. Recommendation 4 of the report proposes a review of that organisation, and it is vital that it attracts the right form of FDI.
A cocktail of measures is needed. The report covers a range of issues, and I disagree with Members who described the report as a quick fix; none of the recommendations could be described as a quick fix. Any measures that are adopted as a result of the report must work towards finding at least medium-term solutions. However, we must take the first steps.
It is right that the Assembly has given such a high priority to economic matters. Most of our debates have been about the economy. That shows the concern for the Northern Ireland economy, at least among the constitutional parties. Again, I decry the absence of one party, which perhaps shows Sinn Féin’s lack of engagement on the issue and its poverty of thought on economics. It is difficult, even for Sinn Féin Members, to spend 15 minutes at a time repeatedly lecturing us on how all our economic ills are the evils of partition. If that is all that that party has to contribute to the debate, it is no wonder that the Benches opposite are vacant. Of course, I could be being harsh on Sinn Féin. [Laughter.]
I could be wrong; it may have some great contribution to make to this debate. It is clear that this debate will continue tomorrow, so let us lay down a challenge to Sinn Féin: if its Members have anything worthwhile to say on the Northern Ireland economy, let them come to the Chamber tomorrow and deal with the rest of us and with the subgroup’s positive agenda. It is a work in progress, to which we will return.
The co-operation among the constitutional parties shows that, between us, we have a strong desire to help to create that wealth-generating society. Such a society would place an emphasis on an entrepreneurial spirit, attract high-tech technology instead of relying on jobs that can be only transient, and try to re-balance the economy — not by making cuts to public expenditure, but by ensuring that the conditions exist for rapid growth in the private sector.
The Assembly, via the parties here, has shown that it is committed to a better way forward. Consequently, we will come back to this matter and examine a greater range of issues, particularly the fiscal incentives, which have already been mentioned. The report lays the foundation for much of the good work that is needed in the Northern Ireland economy over the next few years. I commend it to the Assembly.
Mr P J Bradley: I, too, pay tribute to all those who are associated with the report. I had the privilege of attending the subgroup as a deputy on a few occasions, and I enjoyed the meetings. However, I was shocked to learn that one day the report was adopted and the next day it was not. That was very difficult to follow. Those people with a yo-yo attitude to the report must answer to those whom they have offended by not debating the report.
I will commence where Mr Simpson left off on industrial derating. It is not my specific brief in the Assembly, but it is one that all Members share. Around 30,000 people involved at different levels within the manufacturing industry are living with the fears that accompany the threat to impose unrealistic rating demands on manufacturers. In fact, that figure might be fewer than 30,000, as some may be tempted to relocate for economic reasons to Dundalk, Cavan or Letterkenny. Nevertheless, the figure is significant.
All the political parties are united in opposition to the imposition of unrealistic rate demands. The Northern Ireland Manufacturing Focus Group has succeeded in setting up a working group that involves manufacturers and civil servants working towards achieving an acceptable resolution of the issue. The manufacturers are on record as stating that they are willing to contribute to a fair and accountable rating system. I welcome those developments and wish the group well in its deliberations. I speak for the many manufacturers in South Down who see the proposed quadrupling of rates as a serious threat, not only to their businesses, but to the livelihood of their employees. Putting 30,000 people on the dole does not make economic sense and would be difficult for any Minister or Administration to justify.
Government statistics show that farming and the agrifood industry make agriculture the largest, and one of the most important, assets in this part of Ireland, with almost 60,000 people employed full time. The Ulster Farmers’ Union pointed out in its evidence to the subgroup that 7·5% of total employment in Northern Ireland is directly or indirectly related to agriculture and the agrifood sector.
History has shown us that when the farming industry was thriving, the overall economy benefited, as the money that was created on the farms made its way into the coffers of the retail industry and local businesses. When farmers made money, they used it to improve their farm dwellings, stock and outbuildings, and to improve the environment. Their income was spread around.
As I have said before, it is to be regretted that the UK Government pay little or no heed to the agriculture industry and seem to ignore its contribution to the community in Northern Ireland. However, we should not be surprised. After all, within weeks of the CAP agreement being finalised, did Tony Blair not make it clear that he wished to do away with it completely?
I recall the SDLP’s first meeting with Lord Rooker. When he was asked whether he supported the farmers of Northern Ireland or the Government’s anti-CAP attitude, he replied in a short, five-word statement that he supported the Government line. However, it was easy to forgive him: we learned shortly afterwards that our new Minister of Agriculture and Rural Development knew little or nothing about Northern Ireland, let alone agriculture, and that he had never set foot on the island of Ireland prior to taking up his appointment.
Lord Rooker’s parting gift to rural Northern Ireland and its economy by way of his PPS 14 diktat in March this year will not be so easily forgiven, and it will be remembered for a long time. He managed, in a few months, to distort the rural economy by driving young rural families from the countryside and forcing them to compete with the rising house prices. Those prices have moved far and above what they should be, given the average incomes in Northern Ireland.
As this is an economic debate, I will avail of the opportunity to express my party’s total opposition to modulation.
There is no logic in reducing single farm payments for the sole purpose of directing them away from the agriculture sector. The UK Government appear determined to make farmers pay for economic ventures outside the industry. The Government should ring-fence the money for those projects. However, Members must remember that they are not an ordinary Government; they are an anti-agriculture UK Government. Earlier, references were made to Carson’s demands on the British. The only Carson of whom our present Ministers appear to have heard is Frank Carson. They treat this country as a joke.
I address the remainder of my remarks to the DUP. I call on that party to give serious consideration to its planned lack of action and the consequences that a strengthened direct rule Administration would have on the farming industry and the rural economy. The DUP can have its differences with Sinn Féin, but it should keep its political differences away from the Assembly.
Farmers in Northern Ireland are crying out for local political leadership. They want a home-based Minister of Agriculture and Rural Development, who knows the ups and downs of the business and its economics. Those Members who visit farmers on a regular basis hear their concerns about the stalemate situation and their support for the restoration of the Assembly. Often, the farmers refer to the good work of the former Minister of Agriculture and Rural Development Bríd Rogers and the Committee for Agriculture and Rural Development. They talk about how the downward slide of the industry, which commenced in the mid 1990s, was halted by our own politicians’ taking control.
I served on the Committee for Agriculture and Rural Development and I know how committed it was to dealing with the issues. When the Committee met each Friday morning, the parties left their politics at the door. Members had more important issues to deal with, and deal with them they did. Regrettably, those days are now but a memory, and, meanwhile, our farmers are deprived of participating in the success enjoyed by their counterparts in the Republic of Ireland, Scotland and Wales, where the Administrations work in conjunction with the industries and are delivering on behalf of farming communities.
The DUP must get its priorities in order and, from a farming perspective, its members must decide whether they wish to stand by idly, leaving the agricultural community without a local Administration and outside the control of local decision-makers. A simple question must be asked: is the DUP prepared to leave the fate of Northern Ireland’s farmers in the hands of couldn’t-care-less UK Ministers? I want to repeat that question: is the DUP prepared to leave the fate of Northern Ireland’s farmers in the hands of couldn’t-care-less UK Ministers? It may seem ironic, but, in this instance, I am pleading with the DUP to say no.
I conclude by expressing the views of the SDLP. The Northern Ireland economy needs a thriving agriculture industry, and the rural economy needs the support of a local Administration to ensure — [Interruption.]
Mr P Robinson: Members on this side of the House have a difficulty. We cannot hear a word of Mr Bradley’s contribution. Every now and then, he seems to refer to the DUP. I am sure that he is praising my party, but we cannot hear what he is saying. Mr Bradley seems to speak about 60 words to the second. Perhaps he could start again. [Laughter.]
Mr S Wilson: Repeat the good bits about the DUP.
Mr P J Bradley: I am sorry, but there were not too many good bits about the DUP. Perhaps I should repeat my question.
Ms Ritchie: Good man.
Mr P J Bradley: Is the DUP prepared to leave the fate of Northern Ireland’s farmers in the hands of couldn’t-care-less UK Ministers? Is that clear? The DUP Members heard me that time. Also, I remarked that it is ironic that I hope that the DUP will say no.
The Northern Ireland economy needs a vibrant, thriving agriculture industry, and the rural economy needs the support of a local Administration to ensure that farmers have somewhere to turn when difficulties arise over farming incomes. Farmers need people who know what the problems are and how to deal with them. Our experience with direct-rule Ministers has been to the contrary.
I apologise to those Members who could not hear me.
Dr Birnie: One of the most difficult questions arising out of the report is the dilemma over which fiscal incentive we should opt for. It comes down to higher tax credits versus a lower headline rate of corporation tax.
As I was considering this fairly technical matter, I was reminded of a story about President Lyndon Johnson. He once told his economic advisers that he would remove their hands so that they could not suggest one thing on one hand and something else on the other hand.
Witnesses outlined some of the arguments in favour of increasing tax credits or allowances to the economic subgroup. It has been argued in some quarters that the administration of the policy could be fairly straightforward: it could be done by adjusting the software currently used to calculate the tax liabilities of companies that would be rewarded according to their investment.
Madam Speaker: Order. Members will be more easily heard if conversations are not being conducted.
Dr Birnie: For example, the investment could be in R&D, training and design. Hence, so the argument in favour of tax credits goes, the firms that would benefit most from the incentive would be those that had proved to be the most dynamic and had the highest growth potential. That would minimise the so-called deadweight problem, whereby the benefits of an incentive are simply spread too thinly across all companies, regardless of their circumstances.
However, there are arguments against tax credits, such as the obvious loss of tax revenue. However, that argument could be countered by the claim that, over time, the revenues collected may begin to increase as the introduction of tax credits impacted on companies’ behaviour. Theoretically, a package of tax credits could be designed to have the same arithmetic effect as a reduction in the headline rate of corporation tax. However, given the complexity of any so-called cocktail of incentives — to use my colleague Mr McNarry’s phrase — it is doubtful that there would be the same psychological impact on investors and hence on investment decisions.
Studies of how tax credits work in practice — notably the Economic Research Institute of Northern Ireland’s research undertaken by Prof Richard Harris and mentioned in the report — suggest that, on balance, they simply do not provide enough encouragement to firms. Only one quarter of firms availed of R&D tax credits in Northern Ireland. A GB study of small and medium-sized enterprises (SMEs), referred to in paragraph 2211 of volume 2 of the report, similarly cast doubt on the effectiveness of tax credits.
The alternative to tax credits is a reduction in the rate of corporation tax. That policy appears radical, but, after all, many commentators have urged that a step change in economic performance is needed to begin to narrow the gap in living standards between Northern Ireland and the rest of the UK. Victor Hewitt, also from the Economic Research Institute of Northern Ireland, told the subgroup that in a global economy, to which so many Members have referred, the most powerful fiscal instruments are needed when, as he put it, “hunting big game” in relation to foreign direct investment. International companies would easily understand a reduction in the headline rate of corporation tax. The subgroup was told about research carried out by the Centre for European Economic Research in Mannheim, Germany, that provided evidence that FDI flows would be affected by such changes. Therefore, a reduction in the headline rate of corporation tax could probably sway the amount of FDI coming into Northern Ireland.
There is also some international evidence that any reductions in corporation tax would lead not only to the greater profitability of companies but to higher wages for the workforce, which is highly desirable. It is possible that, after some delay, a reduction in the rate of corporation tax may promote investment, which, in turn, would lead to greater revenues being collected.
However, there are downsides, some of which have been mentioned. There would be an immediate reduction in the amount of revenue collected, and one commentator forecast that it would decrease by £300 million per year. However, in evidence to the economic challenges subgroup, witnesses from the Department of Finance and Personnel said that the reduction might be in the order of £70 million to £90 million. They conceded that the figures were rough at this stage and, by implication, further research in that area is required.
To return to the deadweight problem: unless corporation tax reduction can be targeted at new companies, as one witness suggested, all firms would receive windfall profits. One witness pointed out that some of the largest beneficiaries would be the already profitable banks. In the light of the current controversy about banking charges, we must ask ourselves whether that would be a socially, economically and politically desirable outcome.
John Simpson was another witness, and he reminded us that corporation tax reduction is certainly not the magic bullet that will solve all problems. It might be some time before the benefits are felt. After all, the Republic of Ireland has had low rates of taxation on corporate profits since as early as 1958, and the Celtic tiger really began to roar only 30 years after the low rate of corporation tax was introduced. It must also be remembered that the Republic is now far from unique in having a low business tax regime.
Sir Reg Empey: Estonia also has a low rate of business tax.
Dr Birnie: There are now many imitators ranging from Puerto Rico to, as my party leader has just said, many of the central and eastern European economies, the Baltic states in particular.
The position with regard to EU law is disputed. My colleague Mr Nesbitt referred to that, as did David Ford. In its evidence, the Industrial Task Force said that the European Court had previously allowed for some of the Spanish islands to be treated separately. However, during the past week, there has been a much more critical judgement on Portugal and the Azores. That must be factored into consideration.
With regard to the negatives, the United States Internal Revenue Service may tire of the way in which US multinationals have, for many years, been able to “transfer price”, as accountants call it, in order to boost artificially the profitability of their branch operations in low-tax countries such as the Republic of Ireland or, conceivably, the Province in the future. I refer Members to volume 2 of the report, paragraphs 406 and 2,299.
In the subgroup’s assessment of the complexities of the situation, it is probably inevitable that it would not have put all its eggs in one fiscal basket. I refer Members to recommendation 16. The subgroup has asked for further rigorous research to be carried out in order to tease out many of the issues to which I have referred. That said, three basic facts cannot be ignored.
First, the Republic’s share of European and, indeed, total British Isles inward investment far exceeds its population share. The Industrial Task Force indicated that, in 2003, the Irish Republic, which has just two thirds of 1% the world’s population, received 5% of global FDI. That rate is 10 times greater than might be expected.
Secondly, Northern Ireland’s effective business tax rate is now well ahead of that of the Republic of Ireland. That matters a great deal when we compete with the Republic. Indeed, our rate is now much higher than in much of central and eastern Europe.
Thirdly, tax credits have been tried with R&D. Their positive effects have been limited. Therefore, given the evidence that is available at present and those important qualifications, corporation tax reductions may seem superior to increased tax credits. Crucially, we must also bear in mind that whatever is best theoretically may be distinct from the package that we are most likely to get from the Treasury in any bargaining situation.
The undoubtedly strong business case that can be made for corporate tax reductions — some of which I have endeavoured to outline, as has the report — will be tarnished if it is sold as part of a process of harmonisation towards any prospect of a 32-county economy, whether now or in the context of a so-called Plan B, post-24 November.
Recommendations 9 and 13 highlight the absence of any one Department having direction over a regional economic development strategy, a point that was well made by Mr Peter Weir. The effect of that absence is illustrated by the lengthy delay in translating the economic vision of February 2005 into a regional economic strategy. That strategy is now at least a year late.
Recommendations 8, 9, 12, 13 and 14 deal with the more general question of how well, or otherwise, the senior Civil Service delivers policy. The Business Alliance said, perhaps unkindly, that the Northern Ireland Civil Service needed to be broken with a hammer. That witness also pointed out that successive departmental strategies had failed to reach their own stated objectives. ‘Strategy 2010’ may or may not be a good recent example of that.
There must be high standards in the stewardship of public funds, but, to balance that, those conducting economic strategies must be allowed space in which to take risks, and they should be judged on their portfolio of activities rather than fear the imminent chop of the Public Accounts Committee on every occasion, because that would inhibit risk taking and autonomous action by policy makers, as highlighted in paragraph 1,869 of volume 2.
There has already been a plenary debate on derating, and all parties oppose current NIO policy. In his evidence to the subgroup, William Wright from Wrightbus Ltd emphasised that the rates hike will fall particularly heavily on those businesses that use large areas of space or ground.
The report stresses how much higher than the rest of the UK our rate of economic inactivity has become. That qualifies the success in lowering headline or claimant rate unemployment. One witness pointed out that our long-term illness inactivity rate was one and a half times that of Great Britain and four times that of the Republic of Ireland. In many cases, individuals are entitled to benefits, but in some cases it would be in the best interests of the individuals concerned if some tough love were used to coax them back into employment.
Members must also be aware of some conflicting or trading-off of social policy considerations. For instance, there may be long-term benefits to society if a parent wishes to remain out of the workforce for a time in order to care for children — particularly young children. Therefore the Ulster Unionist Party is not saying that we should always opt for the maximisation of gross domestic product at the expense of the general well-being of society.
Recommendation 15 highlights the need to take “serious action” to curb crime — especially crimes against business. A report published last week suggested that total organised crime nets £700 million annually. If the rackets of the various terrorist plcs — be they republican or loyalist — were put out of business, the total benefit to business would exceed that of reducing corporation tax to zero, because the total corporation tax yield is about £500 million to £600 million annually.
Public investment in infrastructure, public-private partnerships (PPP) and the Strategic Investment Board (SIB) are referred to in volume 2 of the report. I am concerned that too heavy a dependence on those methods of public sector finance could represent a 25-year mortgage with sometimes dubious terms — a policy much driven by the Chancellor’s quest to meet United Kingdom Government borrowing targets through an accounting exercise that, some would say, is something of a sleight of hand.
I am pleased to support the report, and I join with others in commending the hard work of the staff and witnesses.
Mr Paisley Jnr: Thank you, Madam Speaker, for calling me to speak towards the end of today’s proceedings. Members have probably glazed over by this point, but I hope that the debate will be over in a few minutes. If Members have not glazed over by now, I will finish them off. I hope that no one asks me to speak up and that Members can hear me. I will try to make myself heard and understood, unlike Mr P J Bradley.
I want to associate myself with my colleague the Deputy Speaker, Jim Wells, in paying tribute to the Committee staff, Hansard staff and those who contributed to the Committee. Those remarks should be reiterated over and over again because they did a tremendous job, and we owe them a debt of gratitude.
Some comments have been made about the activities of Sinn Féin. Indeed, that party’s approach has been very strange. On the one hand it seems to be for the report; on the other hand, it is against it. Sometimes it does not know if it is for it or agin it. The third paragraph of the report’s executive summary states clearly that it will form the basis for a debate in this Assembly in September 2006 — that was ratified by Sinn Féin, only subsequently to be pulled by that party. Sinn Féin’s confusion and state of mind may perplex a lot of people.
Some people have said that they have missed Sinn Féin in the debate — quite frankly, I do not miss it anywhere. The fact that Sinn Féin is not here indicates that it is not serious about contributing to the future, or indeed to a debate about the economic stability, of Northern Ireland.
Other comments have been made about the Secretary of State and Dermot Ahern’s contribution on Northern Ireland at the weekend. It has been reiterated again and again that the DUP is a devolutionist party. We want to see local men and women running Northern Ireland’s affairs. However, if the price of devolution is too high, it will not be paid. That does not give the Secretary of State the right to hold Northern Ireland to ransom and tell us that we will face stagnation and delay for three more years. His Government have a duty to do what is right by the people of Northern Ireland and to ensure that we have the same economic opportunities as other integral parts of the UK.
A term that comes around time and time again — and it should be the focus of every serious party in the Assembly — is “radical change”. The report calls for radical change if we are going to move both our business sector and Northern Ireland forward. What “radical change” actually consists of has been reiterated today. If there is going to be radical change, the game to be played is at the Treasury, not here in Northern Ireland. It will involve radical change to our tax regime, and it will involve headline corporation tax and other significant fiscal incentives, because without those we are only — to use common parlance — footering at the edges of the economy. We need to stop footering and get on with significant developments.
A consistent, agreed, uncompromising message must go out from the politicians and the business community to the Treasury. We still have some way to go to agree what that message is in terms of the fiscal changes that need to be brought about. That is where the work lies, and we should lend ourselves to it.
I was very interested in the little aside between those great friends Dermot Nesbitt and Bob McCartney about whether changing the tax regime would be the true unionist way forward. Changes and variations in the tax regime do not weaken the Union. Indeed, Scotland has a different tax regime from the rest of the UK. The Scottish Executive can alter income tax by plus or minus two pence in the pound, and that does not weaken Scotland’s sense of being a major component in the UK. It was quite interesting to see that Dr Birnie appeared to come out with a view quite different from that that his colleagues Dermot and Bob had agreed on earlier.
Mr S Wilson: Does the Member accept that the differences between Scotland and other parts of the UK as regards legislative arrangements and tax arrangements have created tension to the point where some English MPs are saying that Scottish MPs should not have a vote in the House of Commons on certain matters?
Mr Paisley Jnr: I am sure that that is a debate for another place — as the debate has gone forward, parts of England are seeking to have variation in various tax regimes.
As I said, I am sure that that debate will continue in another place. I hope that it does, because the Union is only as strong as its component parts, and the stronger Northern Ireland is economically, the better partner it will be in the Union.
Some recommendations deal with Northern Ireland’s political and security instability. Without doubt, that instability, which was caused by a terror campaign lasting more than 30 years, has not helped the business community. The public sector has helped to shore up the gaps made by years of terrorism, and Northern Ireland must move to a point where the business community is given the necessary incentives, and entrepreneurs are provided with the opportunity and freedom to generate a new way forward for the economy.
The threats to the economy from organised crime are significant. On 8 September, an article in the ‘News Letter’ reported that:
“Organised crime costs the Northern Ireland economy about £600 million a year”.
That is almost as much as is spent on the entire policing budget. It is significant that a massive criminal enterprise exists in Northern Ireland, which is aided and abetted by one of the parties in the Assembly. It is preposterous that, when that party suggests that it wants to sit in Government, it is aiding and abetting a massive organised crime empire. That issue must be tackled head on.
The report identifies many incentives, on which many Members have dwelt. I was particularly taken by Bob McCartney’s and Alasdair McDonnell’s contributions on the need to develop the Northern Ireland knowledge base to ensure that primary school children are given the ability to become the men and women of tomorrow’s business community. Of course, suggestions were made to free up entrepreneurs and to ensure that there is a knowledge bank and similar significant measures.
One point that is made over and over in the report is the need to tackle bureaucracy. That issue must be considered. Bureaucracy subjects the Northern Ireland economy to significant constraints. In particular, it is evident in the Planning Service. In a recent report, Diana Fitzsimons of the Royal Institute of Chartered Surveyors (RICS) said that:
“A significant obstacle to Belfast becoming a world class metropolis before now has been the culture of decision-making in the Northern Irish planning system, which was often defensive and over-cautious. We need to see a more positive approach from government decision-makers in order to obtain timely planning decisions”.
When faced with those criticisms at a meeting of the subgroup, the Under-Secretary of State Maria Eagle tried to bat them off by saying that planning is not her responsibility. Only when the Minister with responsibility for the economy recognises that planning is an integral part of business success will we start to move forward this debate. The Ministers with responsibilities for planning and for the Department of Enterprise, Trade and Investment must recognise that there is a huge strategic gap and that their roles need to be joined up.
It is important that Members ensure that Northern Ireland’s benefits are sold to the world. For too long, Secretaries of State and members of other political parties have wanted to pooh-pooh Northern Ireland’s success and opportunities. Northern Ireland was an economic success, and it has the potential to grow and to become an economic success in the future.
A list of the top 100 companies in Northern Ireland shows that, this year, 18 of the top 20 have recorded increased sales. In fact, Northern Ireland’s top 100 companies generated a total sales output of £14,370 million, which is a 31% increase on 2004. Politicians are too quick to criticise the Northern Ireland economy and to say that it is a basket case. The message from politicians should not be one of failure; it should focus on success and opportunity for entrepreneurs.
One would not hear any of our competitors telling us about their problems. People talk about India and China as places of economic opportunity. One never hears of the poor working conditions or other problems in those countries; the politicians would not dare breathe those details outside of the regime. However, the Secretary of State for Northern Ireland goes across the world, telling people of Northern Ireland’s problems. We need to play and sing a very different tune, namely that Northern Ireland has potential, people and talent and should be given the opportunity to make a go of things.
Agriculture is also an integral part of Northern Ireland’s success. Members should not let their eyes glaze over when I mention it. We take our agriculture industry and the agrifood sector for granted, yet 27% of Northern Ireland’s top 20 companies are in the agrifood industry and employ thousands of people. Of the main producers of raw material, the beef-cattle sector employs 20,000 people in Northern Ireland. We must encourage the other parts of that industry, which add value to the product, process and retail it, so that the agrifood industry — a significant success in the past — continues to be an engine room for success in the future.
Thankfully, there has been an upturn in beef prices. Beef prices are up by £100 per head of cattle since this time last year. That indicates that the lifting of the beef ban has played into the hands of farmers here. Long may that continue. I must also point out that bureaucracy in that sector cripples it. I want to see bureaucracy cut, not only at the planning level, which affects all sorts of development from tourism to business, but at the level of the agrifood sector. The sooner that happens, the better.
Finally, I hope that when the Government take this report, they read it, rather than set it on a shelf with all the other dust-gathering reports that they have received in the past. I pray that they do not come back to the Assembly and say that their response is to generate more consultation. Surely we are past the point of consultation. We have heard some hint that that is in the pipeline. The Minister told us that she has three forthcoming significant reports and consultations: the better regulation strategy; the skills expert group; and the science and technology committee. I plead with the Minister not to allow our report to go for more consultation with those others. We do not need any more consultation. We need action, and the sooner we get action on those issues, the better it will be for the entire economy, jobs, and success of Northern Ireland.
Some Members: Hear, hear.
Mr Shannon: I support the recommendations. After intensive investigation, the subgroup of the Preparation for Government Committee has very clearly outlined the economic challenges that face Northern Ireland. As my colleague Ian Paisley Jnr stated, the Assembly should take those matters on board, and we should do everything that we can to hasten the implementation of the report’s recommendations.
I wish to focus on recommendations 8 and 12. Bureaucracy must be challenged, and planning is an issue for concern. My constituency of Strangford — I am sure that Members expect me to mention it — is somewhat overlooked due to bureaucracy. It is a spot of natural beauty, of historical relevance and unexplored potential. The success of Mountstewart gardens, of Exploris, and of the Somme Heritage Centre just across the border in North Down is evident. It is important to point out that we have even more to offer with regard to tourism. The bureaucracy referred to in the recommendations must be addressed.
Ards is currently celebrating a four-hundredth anniversary celebration. We are seeking to expound the culture and heritage that those celebrations bring to light. We must capitalise on such local community events through a strong community-based tourism board, working to draw people not only to the five big attractions in Northern Ireland that make a trip here worthwhile, but to events that are steeped in positive and attractive traditions.
Incidentally, Ards Borough Council is holding a special four-hundredth anniversary celebration on September 30 at which Ronan Keating will be the star attraction. Tickets are priced at £15, which is a small price to pay for a fairly good night out.
The tourist industry in the Strangford area boasts a strong workforce. Only the tip of the iceberg has been explored: imagine the potential were visitors to be aware of and take advantage of the possibilities for short breaks and holidays in the Strangford area alone.
I want to make Members aware of a bureaucratic matter that has been brought to my attention. I understand that, at the end of the last financial year, the Department of Culture, Arts and Leisure returned £2·5 million to the Treasury. That money could have been used for the betterment of the people of this Province. Recommendation 8 of the subgroup’s report states:
“any savings that may be made from government efficiencies should be retained and used in Northern Ireland.”
It is important to underline that, as other Members have done.
The film industry falls within the remit of DCAL, which returned £2·5 million to the Treasury. The Department can do better. The ability to sustain such ventures in the Ards Borough Council area, and in the Province as a whole, is evident. The time has come for us to exploit that gap in the market.
It is a rare site that can boast beauty and character equal to that of Ards. The advantages of attracting money and jobs to the local community must be considered in the long term. We must also consider the profile of the area. On the back of successful films such as ‘Mickybo and Me’, we have a foot in the door. We must not waste time and let opportunities slide. Not only does the area benefit, but the local economy is boosted.
We must press on with boosting tourism in Northern Ireland, particularly the lesser-exploited areas of Strangford that have the uniqueness and quaintness of places such as Greyabbey, Kircubbin and Portavogie. Those are viable, industrious, modern communities that are peculiar to the Ards Peninsula and must be exploited. Providing an economic boost to Northern Ireland through this venue is an achievable goal, if we strike while the iron is hot. However, taking on board the report’s recommendations, incentives must be given to those seeking to invest in Northern Ireland.
Promoting tourism in the Province, particularly in Strangford, with its many leisure pursuits, such as walking, fishing, water sports and an abundance of quality restaurants, can do nothing but reap benefits for the local community and for Northern Ireland as a whole. The Department for Regional Development has recognised that walks around the shores of Strangford Lough and the surrounding countryside can, and must, be developed. However, the Planning Service does not recognise that potential.
That brings me to an important point. Linked to the promotion of Northern Ireland as a holiday destination is the necessary improvement in infrastructure. To entice visitors, we must have a suitable network of roads, as well as areas of interest and a local booming economy with shops and businesses to be explored.
I advocate the proposed reform of the planning sector. I agree with recommendation 12 of the report that the planning process needs to be reviewed and must be adequately resourced. Last week in Downpatrick, a senior planning officer told me that five local officers had left, leaving the office under strength. That is just one problem.
Protracted planning and development control processes are major deterrents to local communities. Strangford is facing a serious planning problem in trying to boost producers and manufacturing. In Ards, there is a serious need for more housing. That would provide construction jobs and would keep young people in their home towns for as long as they wanted. Increased housing would also keep family units together and would allow proper benefit to be made of the proximity to Belfast by commuting to work using the carriageway.
The report refers to the need to keep our tradesmen and scholars in Northern Ireland. They should not have to go to the mainland and further afield, never to return, for jobs and housing, as so many have done. Planning can play a role in allowing houses and factories to be built, where the youth of the future can live and work. That might help to end migration to greener pastures, where houses are cheaper and employment opportunities better.
Reform planning allows houses and businesses to be built in local areas, so the need to move to bigger cities would be less critical. Agricultural land on the Ards Peninsula is exceptional, which is something to be proud of. However, that means that the land cannot be built on. When business people want to expand their premises, their money can drain away as they try to find ways to address the problems with the Planning Service. As my colleague George Dawson mentioned earlier, it is much less hassle to relocate to another area in which the planning controls are not as strict. That is not to say that any, or all, applications should be passed without qualm. However, unless the planning system in my constituency and across the Province changes, there will be little growth.
The report states that the planning process should be less costly, quicker and more business friendly. It should be able to look at the big picture to see what is best for the borough and the Province. Rather than get caught up in the mud and mire of legislation, it should examine long-term solutions. Let me give you an example of where the planning process is going wrong. Last week, a businessman who wanted to invest £5 million to £6 million in the Strangford constituency told me that the planning process had taken 18 months. He was told on a Friday that everything had been sorted out, but by the following Monday morning, it was back to the drawing board.
There is a clear and crucial need to link spatial planning strategy to the development of policies in respective jurisdictions and not simply to use sweeping area code mechanisms. We are all aware that the volume of planning applications has increased significantly; in 2004-05, there were 35,000 applications. Those queues could be reduced if the process were reviewed and funding were found to manage the unnecessary delays and if there were an appropriate balance between the needs of the economy and the need for consultations. Costs would fall accordingly, encouraging small and large businesses to assess the viability of expansion or development.
I would like to mention other issues, but most points have already been raised. The economic challenges subgroup has stated that it wants to encourage small-business growth and big-business investment, and other Members may expound on that topic. Reform is imperative for growth, and growth is an imperative for a healthy economic future for Northern Ireland.
I urge the Assembly to endorse the report and the motion, which asks the Secretary of State to implement its recommendations, which should be done as quickly as possible. Without growth, there can be no life, and Northern Ireland needs, and has earned, a new surge of life.
I support the motion.
Mr Beggs: At this stage in the debate, I wanted to find a new topic for my contribution. A couple of Members raised the issue of planning, but the report refers to other aspects of the planning system on which I want to focus.
The executive summary of the report clearly states:
“Delays in planning approvals are frustrating economic opportunities and there is a growing realisation that public services need to focus more on supporting the economy.”
I concur with that statement, and I suspect that every Member will also concur. People are very frustrated, and Government bureaucracy must change to enable our economy to improve. New developments that are sensitive, timely and minimise costs to entrepreneurs must be allowed.
Recommendation 12 states:
“That the planning process is reviewed and adequately resourced and effectively managed to reduce delays and to provide an enabling culture”.
At present, one of the biggest failings in the Planning Service is that it does not seem to have an enabling culture. Planners find it much easier to block applications and give reasons why things cannot be done than to enable developments to proceed with necessary conditions, where appropriate, so that environmental concerns can be protected.
The Belfast metropolitan area plan was a trailblazing new system that was initially approved by the Planning Service. However, there is great concern that, after several years of consultation, objections to the plan have not yet been heard. I believe that that stage of the process will take place next April. Worryingly, many other area plans are following the same process. There is a great danger that it could be 10 years before those plans are eventually approved and that the decisions may not therefore reflect the realities in 10 years’ time. The process is far too protracted and must be reviewed and improved.
In its written evidence to the subgroup, the Construction Employers Federation indicated that the current planning system and the lengthy six-stage planning process has been detrimental to the Northern Ireland economy. When a number of agencies criticise the Planning Service, politicians, Ministers and Departments must take note. Those criticisms are not just from one or two individuals; there is a collective body of criticism. Ultimately, public representatives will have to take responsibility for that. Until planning decisions are returned to local government, I suspect that those difficulties will remain. There is a need to move the process forward as quickly as possible and create the right circumstances to enable sensitive decisions to be made.
Through my constituency work, I came across an example of the problems that occur. A builder complained to me that a planning application lodged with the Department had been delayed for three or four months and that he did not know what was happening. He eventually worked up the courage to press and press for an answer. It transpired that the Planning Service required a dimension of the building, which he provided within two days. However, several months were lost because of a lack of communication between the planner and the builder.
It must be remembered that various costs make up the final cost of a property. First, there is the cost of the land that a builder or developer purchases. There are also building costs and costs in developing the plan and getting it approved. Further to that is the necessary cost of borrowing between the original purchase and final sale of the property. If that lasts for two or three years — a ridiculous length of time — builders undoubtedly include that cost in the final sale price. The result is that we, the consumers, ultimately pay more for our homes. The Planning Service is adding unnecessary costs. It is essential to have an efficient planning system that can be an enabling environment, taking on board appropriate consultations and concerns, which can lay down conditions and enable sensitive development, rather than a system that causes problems and delays.
A report published last summer by Investment Belfast highlighted that £1 billion raised in Northern Ireland is invested in Great Britain. Why is that? According to Prof Alastair Adair, all the research shows that investment in regeneration areas can provide returns that are at least equal to, if not greater than, market norms. Such opportunities exist in Belfast, but they are being blocked by a lack of strategic vision and planning structures that do not promote economic competitiveness.
Disadvantaged areas in parts of Belfast are ripe for redevelopment and would be greatly enhanced were that to occur. Creating an enabling environment is necessary so that local money can be invested in Northern Ireland for the betterment of our people. There is clearly a need for change.
The report contains a comment from the International Centre for Local and Regional Development. I must admit that I had not come across that organisation before. It stated:
“There is a need for greater synergy between spatial planning, economic development, inward investment and business engagement in growing the private sector.”
Again, there is a need for planners to improve their systems in order to engage with the local economy.
In that regard I will relay another unfortunate incident involving a constituent who wished to engage in a farm diversification project. He wanted to enlarge a lake in order to create a fishing opportunity. As we all know, the need for farm diversification is growing, as more and more people have to leave the rural community to find jobs. Therefore, it is much better if other enterprises can be developed. In this case, the almost-completed planning process faced one remaining obstacle, which was the refusal of the Environment and Heritage Service to grant approval. It would not give permission to the developers. The local council became involved, and a range of civil servants made site visits and had office meetings to deal with the situation.
When I asked the environment and heritage officer about the reasons for his concerns, he said that a nearby wetland area and wildlife habitat would be affected. I asked a simple question — how long would it take for a new wetland area to be developed in a new and enlarged lake, were it to be developed in a sympathetic manner? He told me that it would take two years. He knew the answer; the problem was that he needed to put down a condition and then grant approval. Rather than do that, he recommended refusal. We need an enabling environment from the Planning Service. It must solve problems; not simply identify them.
I will take this opportunity to highlight another visionary application in my constituency. I hope that it will be successful. I refer to the LaFarge application for development of the former Blue Circle cement works at Magheramorne, which is a huge scar on the east Antrim landscape. A huge quarry remains, and there is a large spoil site in Larne Lough. There are redundant industrial premises, and several acres have been desolated by cement and lime remains. No flora grows in much of the area. Clearly, something must be done to enable its sensitive regeneration.
Lafarge has been involved in detailed consultation with local community organisations, environmental groups and the council, all of whom are unanimous in thinking that the planning application is a good idea. It would remove the scar on the landscape and build something that would add attractiveness to the area.
The proposal is to build a state-of-the-art eco-village on the site of the old cement works and use some of the money that that would generate to establish a mountain cycling centre. There are few opportunities for mountain biking in Northern Ireland, and people have to go to Scotland and other places to avail of quality tracks. There are several other proposals, including one for a wildlife centre for viewing rare birds on the wetlands.
The question is: will the Planning Service be able to examine this proposal in a sensitive manner? Will it be able to recognise that it is a good proposal that ticks all the boxes? Uniquely, everyone is in favour of it, which, in my experience of planning applications of such a scale, is an all-time first. I hope that the Planning Service and the Minister will look sympathetically at the application.
In the report, the Northern Ireland Business Alliance condemns aspects of the planning system. They have identified the EHS as being responsible for most of the delays that occur.
We have yet to find out what is being done to get rid of the delays that are costing Northern Ireland business. The Northern Ireland Tourist Board has stated that there is a need for the development of Planning Policy Statement 16, which, apparently, is still being worked on. That policy will make it easier for tourism to grow in the areas where it is needed. Without that policy, it may be more difficult to gain planning approval within the tourism sector, which is becoming more important for our economy.
Many parts of the report refer to the need to change our planning system. Departments must listen more carefully to businesses because with businesses come jobs. We will all be better off if there is a healthy economy and job opportunities are available. We must not be afraid to assist our businesses but, at the same time, we must enable that development to proceed in a sensitive manner. Conditions can be set where necessary. We do not want planners to create blockages; we want them to open up opportunities for everyone in Northern Ireland.
I thank everyone who has contributed to this worthwhile report. I contributed briefly as a substitute for one of my colleagues. The civil servants who gave their time during the summer must be thanked, as well as those who served on the Committee and worked at least two or three days a week over the summer. Like others, I acknowledge that we could go further with more time, but compliments should be passed to all those who were involved in the production of the report in such a short time.
Madam Speaker: The number of Members whose names still remain on the list of those who wish to speak means that it will be impossible for the debate to be concluded this evening. By leave of the House, I propose that proceedings be suspended, to be resumed tomorrow at 10.30 am.
The debate stood suspended.
The sitting was suspended at 5.57 pm.< previous / next >