Is a sustainable economy in reach in Northern Ireland?

Is a sustainable economy in reach in Northern Ireland?
MAC Question Time, In Partnership with Ulster Bank
by Krisztina NAGY for Northern Ireland Foundation
1 Sep 2015

“The growth of the local economy has stalled and the Welfare Reform stalemate is holding back delivery of a reduced Corporation Tax, one of the main features of the Stormont House Agreement.”

Against that backdrop The MAC was hosting its second Question Time event, throwing a spotlight on the economy and posing the question, ‘Is a sustainable economy in reach in Northern Ireland?’

The panel featured a business commentator, an economist and importantly, local business people who are at the front end of driving the private sector economy.

The panel consisted of John Campbell, Economics and Business editor from BBC; Tina McKenzie, Chief Executive of EOS NI; Glyn Roberts, Chief Executive of Northern Ireland Independent Retail Association (NIIRTA); and Richard Ramsey, economist from Ulster Bank. The event was chaired by Jim Fitzpatrick, broadcaster, writer and presenter.

Questions were posed by members of the audience and the best ones selected online prior to the event.

The first selected question of the audience was ‘What would the single biggest policy initiative for SMEs be?’

Richard Ramsey implied there is no one single treatment to Northern Ireland’s economic problems. He highlighted that the improvement of infrastructure, especially education would be the biggest plus for SMEs.

One man from the audience agreed with Mr Ramsey, and added that it is time to gather together and promote the SME sector more strongly.

Tina McKenzie suggested that if we are passionate about Northern Ireland (being politicians or not), then we will all do something for the country’s economy. She said there are some really good people in Stormont but at the same time many citizens don’t get engaged with politics because they don’t want to be associated with one side or another. She also emphasised that business leaders have to take more responsibility.

John Campbell argued that in the longer term we need to find a way to support medium sized enterprises especially, because they have the capital to invest and are more capable to grow. He said we need to address Northern Ireland’s relatively low productivity.

Similarly, Glyn Roberts implied that the ultimate thing to do is to find a way to increase productivity. He said costs (for instance that of energy) are a significant burden. He also said that politicians need to address better the high costs of doing business in Northern Ireland.

The second question from the audience was ‘What kind of impact does Stormont crisis have on business community?’

Mr Ramsey said there has always been crises here. Northern Ireland did not take the opportunity to use the financial crisis to make unpopular decisions, unlike other parts of the UK, and chances have been wasted because the determination of other parts of the UK have been lacking here. Instead, we always blame the men of Westminster, he said. For the future, Mr Ramsey suggested that the only thing that we can do now is to keep on going!

Ms McKenzie stated that the high number of people claiming jobs, unemployment and inactivity are already huge problems. She argued that we have real problems in the society and first of all we have to solve them! But she is also optimistic that business will continue and business people are well placed to drive the wider economic and political agenda.

Mr Roberts emphasised that we have to ensure that we have a reformed Stormont, with collective responsibility in the Northern Ireland Executive.

One member of the audience asked if we are neglecting to be outspoken.

Mr Roberts answered that if we want to address the big ticket issues with one voice, then this is essential!

Mr Campbell argued that many people think, ‘If I criticise, things may get difficult for me.’, which Ms McKenzie very much disagreed.

Instead, Ms McKenzie put the emphasis on the proper representation. She said that people are brave enough to speak up, but in many cases diversity is zero — very few women and people from the working class represent their interests.

Mr Ramsey implied that if we could rewind the last couple of years, we would see that we were too kind and maybe the message couldn’t get across. In his view private and public sector are not two parallel universes, they are inextricably linked and need similar policies, even in Northern Ireland.

The next question was ‘Is a reduced corporation tax the key to economic development?’

As Ms McKenzie replied that it’s not the most important factor. According to her, some key problems are that we don’t use the Euro, we are not selling or upskilling as we should, and people should be more skilled.

Mr Ramsey also did not believe that a reduced corporation tax is the key issue. Instead, he emphasised that not enough people are working and that too many people are on Disability Living Allowance.

Mr Roberts said that lower corporation tax on its own is not going to work, it’s not enough. He argued that we need world class training and the development of the educational infrastructure. He also drew the attention of the audience to the importance of vocational training, technical courses and apprenticeships, so young people can become entrepreneurs themselves. Finally, Mr Roberts added that it’s really counterproductive that executives try to cut costs on training programmes.

Mr Campbell was more cautious with his answer; he said, ‘I don’t know.’ He suggested that ultimately it is a matter of faith that businesses will invest more due to reduced corporation tax.

Indeed, as Mr Campbell explained earlier, this Corporation Tax policy fits a political drive to reduce the proportion of Northern Ireland’s economy reliant on public sector employment towards the private sector with an enhanced capacity.

Time will tell whether faith prevails, through the current and future political crises.

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