Belfast Telegraph

Monday 22 September 2014

CBI leader signposts road to recovery

Ian Coulter believes political backing can really help the economy

Ian Coulter, chairman of the CBI in Northern Ireland, is pushing for policies by Government and the private sector to build a stronger local economy.

Initially, Mr Coulter may be best known for his strong advocacy of the merits of the devolution of corporation tax.

Reflecting on the depth of the current recession, Ian maintains a positive approach. "We are at the eye of a storm but we should not lose sight of the many positives."

He is very sensitive to the financial dependency of Northern Ireland on the funding transferred here as part of the UK arrangements, equivalent to nearly 40% of Gross Value Added (GVA). "If we get all the [local] nonsense sorted out, if we get the right things done, then that fiscal deficit should be halved. People need to fully understand that our annual budget deficit is growing and that is increasing our vulnerability. This oxygen supply is going to reduce over time and we should be preparing for that to happen."

Meanwhile he is anxious to advance the arrangements to devolve corporation tax. "We have to find a way to decouple this proposal from linkage with possible Scottish ambitions. The proposal is with David Cameron, the Prime Minister, carrying the near unanimous backing from the [Northern Ireland] political parties. We have to wait as long as it takes, possibly up to the date of the next general election. There is a political will to bring change to Northern Ireland but there is a 'real politic' problem in relation to Scotland. We have to recognise that problem."

On behalf of the CBI, Mr Coulter is anxious to demonstrate that there is a range of other policy issues under way. They include exemption from the energy carbon price floor taxation that is being introduced in Britain, changes in employment law to include the concept of 'protected conversations' with older employees, and changes to industrial tribunals. Other proposals include changes to the TUPE regulations and an amendment to the 'unfair dismissal' rules.

On the work of the Northern Ireland Executive, he applauds the value of the overarching economic strategy and gives credit to Invest NI for their results from the first period. One reservation, however: the Executive has fallen behind on its earlier commitment to publish periodic updates on the targets and achievements outlined in the Programme for Government (PfG).

To ease the problems of finding extra finance for business, Mr Coulter has a radical proposal which would offset the apparent inability of the local banks to increase their lending. "Over the next 12 months we should find a structure which would allow us to leverage much more money from the European Investment Bank for corporate customers: a fund of £0.5bn over five to eight years. Government should set up the proposal with match funding and then, later, the market could take over. Business, Government and the banks could work together to launch the idea."

In a further major effort to help job creation, Mr Coulter would like to redirect the over £200m that is used each year to subsidise Northern Ireland Water by the public sector. In England, water systems are paid for by customers, not the taxpayer. Ian Coulter suggests that, provided the public were shown that money released following the phased introduction of water charges was clearly seen to be used for job creation, the objections to charges could be eased, provided households on lowest incomes were protected.

Does the public sector need to be smaller? "If we are going to reduce the public sector, we also need a plan to grow the private sector. There are certain activities housed within Government currently that, if they were spun out, could create more jobs: for example, rate collection."

Two strands underpin the economic policy ideas expressed by Mr Coulter. First, Northern Ireland needs a continuing major push to grow the economy. Second, and critically, Northern Ireland must plan to reduce its fiscal deficit. Both are ambitious but logical.

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