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Will our new Assembly rise to the challenges we face?

By John Simpson

Published 03/05/2016

Elections to the Assembly take place this week
Elections to the Assembly take place this week

There are two important election issues: what will a new Assembly and Executive do to secure a faster growing economy, and how will the Budget be managed? These must be achieved within the constraints of a devolved administration. Wishing for a more generous block grant from Westminster is not a reliable substitute for difficult local decisions.

Each of the political parties claim that it is giving the economy a high priority, that productivity must improve, that many more potential employees should have better skills and that the company taxation and business rating systems should incentivise a growing economy. In the election manifestos, parties make statements of aspiration. Not all of them go on to give details on implementation.

In addition, every larger party has a major let-out clause on their firm commitment to individual policy ideas. Some interviewers have tried to push them to reveal 'red line' issues. To the credit of the larger parties, they have avoided tactics which would make negotiation on a Programme for Government (PfG) more difficult.

Details have been consulted from the manifestos of Alliance, DUP, Sinn Fein, SDLP and UUP. In these selected extracts, there is no intention to select any as better or best. Specific ideas on two major topics have been reviewed. First, do the parties acknowledge that there is a serious Northern Ireland public sector budget tension? Second, what is suggested to enhance job creation plans?

Public sector budget

Alliance Party: Hopes to release funds by reducing the cost of division. Funding allocations for departments will be fundamentally re-assessed. There would be more extended delivery of services on a north-south basis and some market testing of the cost and quality of selected services. A single infrastructure plan to prioritise long-term infrastructure needs is proposed.

A moderate increase in the regional rate and the cap on rates for wealthiest properties should be removed. Fair water charges, linked to use, would be introduced. Greater borrowing powers are sought for Stormont.

DUP: Would specify an infrastructure investment plan, including investing in new roads, improving public transport, and a £1bn investment fund. It would maintain industrial derating, enhance the small business rates relief scheme, and allow local authorities to lower business rates by up to 3%.

The regional rate would be frozen in real terms. Household taxes would continue to be the lowest in the UK. Water charges are deferred for the next Assembly term.

SDLP: Seeks negotiated devolution of many more fiscal powers, including telecoms and broadcasting. It also seeks a long-term framework which will give Northern Ireland sufficient financial security to take on long-term local tax and welfare systems. It aims to raise public sector productivity to improve services. Improved prudent management rather than borrowing huge amounts to finance a job severance scheme is suggested. More investment in major roads is identified.

It opposes the imposition of water charges.

Sinn Fein: Specifies a number of spending priorities including a £6bn infrastructure programme for roads, transport and public services. The rating cap on property over £400,000 would be removed, a tax on derelict land would be introduced and rating relief for small businesses continued.

It will seek enhanced economic and fiscal powers, including control of income tax, national insurance, stamp duty, air passenger duty (APD), broadcasting and the Crown estate.

Ulster Unionist Party: Would bring forward key major capital projects. It would explore the creation of a new public sector procurement and delivery agency for major capital projects.

It aspires to be much less dependent on the block grant [from Westminster].

lMissing: none of these larger parties offers details of a fully costed budget. None of them give details of how the Budget will be managed to cope with the cost to the Block Grant when lower corporation tax is introduced.

Job creation proposals

Alliance Party: Posits a need for a new refreshed Executive economic strategy and proposes a prosperity panel for strategic advice. A targeted approach to inward investment and support for the growth of local businesses is commended. No explicit jobs target stated.

DUP: Aims for 50,000 more jobs based on work of Invest NI, action on corporation tax, an upscaling plan, a rural jobs focus and investment in skills. Development of manufacturing would be at the centre of economic strategy. Agri-food industry to bring forward supply contracts that minimise price fluctuations [to farmers]. Derating for manufacturing would continue.

SDLP: Priorities include a focus on job creation, investment in further education and skills, prioritising key economic sectors and gaining control of more economic levers. Agri-food to deliver 15,000 jobs by 2021, manufacturing strategy to create 7,000 new jobs in an expanded ICT sector and 8,000 new jobs from investment in tourism. A Fairer Farming deal proposed.

Sinn Fein: Aims to create 50,000 more jobs, an affordable and harmonised corporation tax, and tackle sub-regional inequalities in investment and job creation. The public sector would become a living wage employer. It seeks greater fairness in the prices realised for farmers from the supply chain.

Ulster Unionist Party: Would address the competitive disadvantages of doing business in NI, implement a bespoke, long-term manufacturing strategy, and support keeping the 30% cap on industrial rates. Identify new approaches for financing investment in the agri-food industry. Explore legislative options to ensure farmers receive a fair price. No specific jobs target.

Missing: Implicitly, these parties place reliance on the impact of lower corporation taxation to encourage investment. There are no radical ideas for new job creation incentives and no suggestions to make Invest NI more effective.

Both budget balancing and job creation pose challenging demands and options. No evidence is offered on whether these proposals are fully costed and do-able.

Belfast Telegraph

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