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Draft Budget will hurt job creation, says CBI

By Clare Weir

Published 15/02/2011

Leading business body the CBI has given its first detailed response to the Draft Budget, claiming many proposals would harm development and job creation.

The hard-hitting report published today by the CBI said many of the plans - particularly those affecting the Department of Enterprise, Trade and Investment and the Department for Employment and Learning - undermine the Executive's economic strategy and show a lack of commitment to structural reform.

It calls for up to £8m to be re-allocated to Invest NI in the first two years of the four-year budget period and proposes raising the necessary cash by dropping compensation for workers affected by pleural plaques, an asbestos-related condition.

Then Finance Minister Nigel Dodds announced in 2009 that he would introduce legislation to compensate those suffering from pleural plaques.

The report quotes the remarks of one CBI member: "Twelve wasted millions for a 'symptomless condition', through legislation that no-one asked for, no-one needs and the absence of which harms nobody, during a recession and severe spending restraint."

In its report the CBI echoes issues raised by DETI on the cuts. "We are extremely concerned by DETI's budget settlement for Invest NI with statements such as 'the amount of new business will be curtailed' and 'in some cases good projects will not be able to be supported'.

"In the shorter term, we would strongly support an additional allocation of £5m to £8m over each of the first two years which we believe could make a significant impact on jobs and investment, in effect almost doubling the level of 'uncommitted funds'.

"Failure to allocate this level of funding will undermine the Executive's priority of 'promoting the growth of a dynamic, innovative economy'.

"Part of this allocation should come from delaying the introduction of the Damages Bill which is intending to compensate a benign condition, namely pleural plaques - and which will cost an estimated £12m over the Budget period."

The CBI said it is particularly worried about Invest NI's inability to convert all work-in-progress into projects because of budget cuts.

The organisation claims that this could jeopardise £183m worth of investment along with 2,500 jobs, and mean a substantial curtailment in the ability to support new projects, including a slowdown in foreign direct investment prospecting, reduced support for research and development, and less support for export activities.

There are also proposals to give an additional £8m to £10m to the Department for Employment and Learning to help maintain knowledge transfer between businesses and universities.

The Construction Employers' Federation (CEF) and the Quarry Products Association Northern Ireland also responded to the draft Budget.

CEF said the budget did not provide for the infrastructure investment vital for a private-sector led regeneration of the economy. The Quarry Products Association of Northern Ireland is "concerned the proposed cuts impede delivery of environmental projects".

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