| Office of the Speaker |
Sub-group to Consider Economic Challenges Facing Northern Ireland concludes evidence sessions The sub-group met again today in Parliament Buildings, Stormont to conduct its final evidence sessions. The sub-group heard evidence from the Northern Ireland Tourist Board, the Economic Research Institute of Northern Ireland (ERINI) and the Northern Ireland Council for Voluntary Action (NICVA). The initial presentations were followed by extensive question and answer sessions. In his presentation the Chief Executive of the Tourist Board, Alan Clarke described the trends in tourism performance, which indicated a generally improving position in respect of visitor numbers and tourist spend. Mr. Clarke emphasised the importance of developing an effective planning processes to support sustainability in the industry. He also stressed the importance of promoting better joined-up government to provide the strategic leadership needed to grow the industry to move Northern Ireland from a “discovery destination” to a long-term brand position. NITB has identified to government the funding requirements for the 5 key signature projects and recognises the importance of securing adequate public and private sector investment in capital projects. Mr. McGrath noted the importance of avoiding further tax initiatives such as a “bed tax” that would make the Northern Ireland tourist industry uncompetitive. The strategic importance of having an effective roads infrastructure was emphasised if Northern Ireland is to take full advantage of increased visitor potential from cheaper air travel. Mr. Clarke noted the need to merge the efforts of NITB, People First and INI to ensure an adequate supply of appropriately skilled staff for the tourist industry. ERINI’s Director, Victor Hewitt noted that the NI economy has been performing quite well by some measures such as unemployment levels and Gross Value Added but that when considered against other performance measures the economy performed less well. Rates of economic inactivity are high and productivity levels low compared to UK regions and the Republic of Ireland (RoI). Mr. Hewitt said that the large trade deficit between what we export and import is financed by a fiscal transfer from the UK Exchequer of some £6bn per annum. Mr. Hewitt advised the sub-group that NI’s lower productivity rate reflected a combination of traditional structural problems with a bias towards low productivity industries, the rate of UK economic growth and a range of supply side factors that impact on productivity performance including the so-called “drivers” of innovation, enterprise and workforce skills. Mr. Hewitt said that improvements in these drivers would provide long-term benefits to the economy. Mr. Hewitt noted the low level of research and development in Northern Ireland, particularly in SMEs and said that it was important to develop closer links with universities to identify and adopt R&D opportunities for business and for businesses to collaborate more to maximise R&D activity. Mr. Hewitt noted the importance of fiscal incentives and the value of a low rate of corporation tax as part of a range of fiscal incentives and structural improvements including increased focus and investment in education to support economic growth. He emphasised the need for care to develop a corporation tax structure that maximised the return on investment to the NI economy. Mr. Hewitt recommended the need to develop a coherent vision for public sector expenditure akin to the approach adopted in the RoI that focuses on stimulating economic growth and genuine productivity gains. Seamus McAleavey and Frances McCandless represented NIVVA. Seamus McAleavey noted the importance of political stability and a devolved Assembly as an impediment to economic growth. NICVA supports the government’s Economic Vision but would like to see a wider vision developed setting out the type of society we want to create that is politically, socially and economically attractive. NICVA criticised the risk averse culture that pervades the public and private sectors and would like to see action to promote entrepreneurship. NICVA is not convinced that a reduction in corporation tax on its own will be sufficient to stimulate economic growth and regeneration. Mr. McAleavey said that we need to address the regional imbalances across Northern Ireland to encourage a wider spread of economic opportunity between urban and rural areas. NICVA argue that public expenditure on its own will not be sufficient to address the structural problems facing areas such as North Belfast and that a joint public/private sector investment package was required examples of which can be found in the USA. The sub-group will meet again in Parliament Buildings on 15 August at 10.00am to consider written evidence, before considering its report, which is to be with the Preparation for Government Committee by 25 August 2006. 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 is chaired on a rotational basis by nominees from each of the parties represented on the Preparation for Government Committee. Those attending today were: Michelle Gildernew MP The Terms of Reference agreed for the sub-group is as follows:
Information about the work of the sub-group can be obtained from the Principal Clerk to the sub-group: Telephone: 028 9052 1785 |