Swire: Economy must be rebalanced
Published 28/10/2010 | 18:22
Reducing Northern Ireland's reliance on public spending could take 25 years, a Government minister has said.
Hugo Swire warned it was unsustainable that three-quarters of the country's product depended on public spending.
He addressed business leaders in Northern Ireland and the Irish Republic at a meeting in Dublin.
"The Coalition is committed to tackling the long-term structural imbalances in the Northern Ireland economy," the Northern Ireland Office minister said. A Treasury paper is expected this year on rebalancing the Northern Ireland economy to encourage private sector activity.
Mr Swire added: "Working closely with the Executive we are looking at ways of turning Northern Ireland into an enterprise zone. And we are examining potential mechanisms for giving the Executive the power to set a different rate of corporation tax to attract new investment - as was done so successfully here in the Republic and we believe that IBEC (Irish Business and Employers' Confederation) and the CBI have an important role to play here. But rebalancing will take time - perhaps as long as 25 years."
Northern Ireland Secretary Owen Paterson has said he is surprised by the hostile reaction of Stormont politicians to the Government's Spending Review. The coalition has been accused of breaking promises of £18 billion funding for Northern Ireland made by Gordon Brown in 2007. Mr Paterson said the capital fund had been reduced but they were otherwise "carrying on where he left off".
Mr Swire said in Northern Ireland, departments faced making savings of 6.9% over four years.
"That's £1.70 in every £100 the Executive spends," he said. "And it compares to average reductions of more than 8% across UK departments and 25% for the Northern Ireland Office. So Northern Ireland has actually done proportionately better from the CSR (Comprehensive Spending Review) than other parts of the UK."
"It's now essential that the Executive completes the task of setting a budget so that it can deliver the services on which people rely. And as any business knows it needs an early budget in order to plan properly for the future."
The Executive has accused Mr Paterson of not doing enough to lobby the Treasury for Northern Ireland.