Get going now ... there’s a major crisis to tackle
The Northern Ireland Executive is preparing its strategy to tackle the on-coming economic crisis.
This is a formidable challenge that could be distorted by confusing priorities.
The gathering recession is a serious threat to living standards, incomes and jobs. The problems will not be fleeting.
Redesigned economic policies are not a temporary step. The need is for a serious restatement of priorities which start as short term palliatives but become fundamental processes.
The argument that the Executive has little scope to influence the economy is incorrect.
The scope for local fiscal change is small, but not negligible. Redeploying revenue is possible if it is necessary.
In addition, the Executive has large scope for leverage through its choice of spending targets.
There is a distinction to be made between (1) changes to partly offset a fall in living standards in households where real income falls but who still have some income from employment and (2) changes to maintain employment in continuing business or alleviate unemployment.
There is a central choice to be made — protecting good jobs can be set against protecting household spending.
Households at risk of major loss of income from redundancy should have priority over those where there will be a small fall in real income as price increases erode income.
A 5% fall in spending power for a household is painful, but less painful than that for a household which looses 100% of its weekly income.
In a further refinement, a choice between propping up short-term jobs in low value added sectors and encouraging better jobs in higher value added sectors must surely favour the latter. The Northern Ireland Executive should revisit its Programme for Government (PfG) to help the economy by shifting resources from less essential budgets to allow a redistribution to re-enforce enhanced priorities.
Also, the amended PfG should exploit more of the available resources to boost capital spending, whether by taking advantage of the Treasury’s amended allocations under Barnet, adding to the permitted borrowing for the local Budget, accepting more PPP proposals or, in a general way, considering other forms of contractor finance.
The capital programme should be expanded and not allowed to fall if some projects are delayed.
In parallel, the Executive should now publish the strengthened regional economic plan. Also a high level framework for the Regional Development Strategy should be approved within three months.
Are the following proposals on the agenda?
1. Reduce housing repossessions using policies agreed with mortgage lenders along with a significant local Mortgage Rescue scheme.
2. When redundancies threaten, offer an incentive for businesses to maintain high value added jobs by an officially supported job share offer, for up to a year.
3. Implement a revised action plan for support for existing and new enterprises by refreshing the Invest NI mandate on maintaining jobs.
4. Quantify, incentivise and implement an expanded vocational skills programme.
5. Quantify and agree major university expansion in STEM subjects, if necessary, reducing other liberal subject enrolments.
6. Accelerate the grid improvements for electricity both internally and externally.
7. Accelerate the major road improvements, Randalstown to Derry and Derry to Ballygawley and the border.
8. Accelerate key economy related items in the Investment Strategy.
9. Underpin the recovery of the housing market with funds for more social housing.
10. Agree and commission investment in a major sports stadium.
11. Develop an operational plan to drive the tourist sector in a dynamic way. Heads may need to be knocked together.
12. Make the economic regeneration of Belfast a serious project with dynamic authority.
A final thought: do not fritter money away using short-term decisions based on pleas for top-up from departments as part of the December spending round.
No more ‘Mickey Mouse’ concepts!