Sub-group to Consider Economic Challenges Facing Northern Ireland continues to take evidence

The sub-group had its fourth meeting today in Parliament Buildings, Stormont.

The sub-group heard presentations from; John Simpson, DETI and Enterprise NI followed by question and answer sessions.

John Simpson (Economist) cautioned the sub-group against recommending simple single solutions and advised the sub-group that many of the economic challenges facing Northern Ireland can be met by “harnessing local talent, ambition and efficiency”.

Mr. Simpson presented a range of conventional and less conventional issues that he considered to be major impediments to the economy including location, a weak private sector and poor operational delivery through the public sector. Mr. Simpson added, “the case for fiscal incentives can only be sustained if the whole range of impediments is tackled constructively and expeditiously”. In Mr. Simpson’s view “there is no intrinsic reason why Northern Ireland should lag behind other regions in providing a better, sustainable, life style for its citizens and build away from the perception of a dependency culture.”

Stephen Quinn (Perm Sec. DETI) highlighted the recent positive developments in the NI economy including the growth in employment and the reduction in unemployment, which at 4.5% is currently lower than the UK average of 5.4% for 2006. Mr. Quinn also highlighted DETI’s view on impediments to the NI economy including structural issues such as the predominance of the public sector and the relatively high economic inactivity rate in NI compared with other UK regions. Mr. Quinn said that low corporation tax was an important element of RoI growth, particularly in respect of US FDI but that other factors were also important including the supply of skilled workers, a lower proportion of people at pension age and a high level of immigration. On the question of a potential economic package Mr. Quinn noted that through ISNI, up to £16bn will be invested to address NI’s infrastructure deficit over the period to 2015. DETI would like to see Public Expenditure allocations support greater investment in R&D, innovation, skills development, business growth and a modern infrastructure.

Enterprise Northern Ireland provided evidence on its role and success in supporting and promoting new and existing local businesses. Representatives from Enterprise NI highlighted the absence of a strong entrepreneurial culture and provision of support to encourage small businesses to expand as key impediments to economic growth. Enterprise NI recommended an economic package that included improved fiscal incentives and a more supportive planning regime for local business based on good practice in Scotland and RoI. Ann McGregor (CEO) said Enterprise NI is concerned that there is no department or body with statutory responsibility for locally focussed businesses and that in the current tight economic environment inadequate priority might be given to small businesses. In the RoI, City and County Enterprise Boards have statutory responsibility and a core delivery budget to support micro enterprises.

The Subgroup will meet again in Parliament Buildings on 3 August at 10.00am. Evidence sessions are open to the public.

BACKGROUND INFORMATION

Under the terms of the Northern Ireland Act 2006, the Secretary of State for Northern Ireland, the Rt Hon Peter Hain MP, wrote to the Deputy Speakers of the Assembly on 11 July 2006 to direct the Preparation for Government Committee to establish a sub-group to consider the economic challenges facing Northern Ireland. The Preparation for Government Committee subsequently met on 17 July 2006 and agreed to establish a sub-group.

The sub-group consists of two representatives from each of the parties represented on the Preparation for Government Committee. One of each of the two party representatives on the Sub-group shall be a member of the Preparation for Government Committee.

The sub-group will be chaired by either of the two independent chairs of the Preparation for Government Committee – Mr Francie Molloy, MLA and Mr Jim Wells, MLA. All parties were represented at today’s initial meeting. Those attending today were:

Michelle Gildernew MP
Dr Alasdair McDonnell MP
David McNarry
Sean Neeson
Esmond Birnie
John Dallat
Peter Weir
Nelson McCausland
Barry McElduff
David Ford

Jim Wells (Chair)

The Terms of Reference agreed for the sub-group is as follows:

• To identify the major impediments to the development of the economy in Northern Ireland.
• To consider fiscal incentives that may promote foreign direct investment and indigenous investment.
• To consider how other matters including an economic package/peace dividend could contribute to economic regeneration and how this might be delivered.

Information about the work of the Sub-group can be obtained from the Principal Clerk to the sub-group:

Telephone: 028 9052 1785