Belfast Telegraph

Thursday 24 April 2014

'Good' economy can work, but only if it's good for business

Will Hutton addresses NICVA's conference

The Northern Ireland Council for Voluntary Action (NICVA) has opened a constructive debate on how Northern Ireland might develop a 'good economy'.

They asked "are (we) pursuing the proper goals in order to break with the status quo and create a good economy which delivers for everyone?"

The voluntary and community sector (or the third sector) was well represented in a special conference to think about answers. To NICVA's credit, this challenge was accepted with vigour and was based on a broader agenda than the potential role and merits of the third sector alone.

Describing a good economy is easier than making sure it will happen. Increased employment opportunities would be critical. So would be a catch-up with the higher productivity of other parts of the UK. In addition, the vision should have regard to the needs of people on low incomes and in need of support through new forms of employment or the encouragement of social enterprise.

These questions take on different implications if the possible answers lie in a less conventional format.

Arlene Foster, as Minister for the Economy, has high hopes for the revised economic strategy in the awaited Programme for Government. Understandably, she outlined the logic for rebuilding the economy. In her review, the focus turned to the one game changer - plans to have devolved authority for corporation tax.

Whilst support for devolution of corporation tax was not unanimous, there was a near consensus that it should happen and the Executive should plan to cope with the financial implications. The danger of treating devolution of corporation tax as 'THE ONE' solution attracted reservations.

The minister's review might be seen as incomplete unless it was supplemented with other game changing policies such as planning legislation and procedures, the massive deficiencies in the delivery of the skills agenda and the loss of coherence in infrastructure developments within a strategic investment plan.

A fundamental feature of the creation of a good economy is that it must be good for business. Joanne Stuart, a business principal in her own right, made the case for a business focused economy where "profit is good" for a good economy.

The challenge to orthodox thinking was demonstrated by David McWilliams. His assessment of a shared strength, north and south, displaced any illusions of comfort looking at one part of this island from another.

Will Hutton, principal of Hertford College, Oxford, offered a challenge to central aspects of conventional wisdom. Starting from a review of the banking sector in the recent period of 'bad capitalism', he tested the audience as he searched for 'good capitalism' including an embrace for new ideas, good ownership and governance, co-operation between public and private sectors and the development of flexicurity.

Is Northern Ireland a good place to experiment with flexicurity which allows a mutual co-operative to be the employer for people for a number of small firms so that the small firms can operate with lower overheads and greater flexibility in the access to employees?

For Will Hutton, Northern Ireland must now harness private sector dynamism and, in parallel, the development of civil society must add a unique selling point. That seems like a cue for better private sector performance and a supportive role from the third sector.