Belfast Telegraph

Business concerns grow as Stormont crisis poses fresh threat to economy

By John Mulgrew and Margaret Canning

Northern Ireland's top business body has expressed its dismay with politics after the resignation of Deputy First Minister Martin McGuinness triggered instability and the prospect of fresh elections.

The Chamber of Commerce said it was "deeply frustrated" at yesterday's turn of events, while the chairman of the CBI said governance in Northern Ireland faced its most momentous set of circumstances in 20 years.

Martin McGuinness's resignation, following the row over the renewable heat incentive (RHI), could have the impact of triggering new Assembly elections in March - which one expert said would leave the province deprived of strong negotiating voices as Prime Minister Theresa May prepares to trigger Article 50, starting the process of the UK leaving the EU.

Ronnie Foreman, a businessman who has advised US companies on setting up in Northern Ireland, said: "One of the things that has been high on the agenda for companies has been political stability - and that's been higher on the agenda than costs or corporation tax.

"I feel like it's only a matter of days or hours before some of the people I have been talking to are asking me, are we going to back to where things were before?"

He said the intricacies of the run-up to the resignation and the RHI controversy were not part of the picture for outsiders.

"It's not a matter of the perception of citizens here but it's about the perception of outsiders. I would be concerned that some of the US organisations that I have worked with quite recently will simply see it as a matter of the two sides falling out again," Mr Foreman said.

Mark O'Connell, the managing director of foreign direct investment (FDI) advisers OCO Global, said: "FDI likes a stable home and the prospect of new elections, the renewables scandal and the uncertain spectre of Brexit is likely to at least put decisions on hold, if not deter them."

He said there had also been a lack of proper public debate about Northern Ireland's Brexit options or position, compared to Scotland.

"Arguably we are even more exposed than Scotland and are practically silent on the subject," he said. "And in the critical weeks leading up to Article 50 trigger, we may have no coherent leadership voice at the table since everyone will be off campaigning."

He said parts of the business community were "losing faith" with the ability of politicians to put the economic agenda first.

Instead, Northern Ireland's FDI selling points were now lost in a "political sideshow".

David Gavaghan, chairman of the CBI in Northern Ireland, said: "From an Executive point of view, we are facing the most important set of circumstances in the last two decades.

"We need a functioning Executive. That's the most important thing."

Mr Gavaghan said a working government is "fundamental to the economic and social outlook" in Northern Ireland.

Economist Andrew Webb, managing director of Webb Advisory said the outstanding issues posed by the RHI and the prospect of contracts made under the RHI being rescinded were uncomfortable factors.

"Stable government and certainty over honouring contracts are two of the fundamentals that any international investor will look for," he added.

"As it stands, Northern Ireland can offer neither. I recall writing about Brexit previously and I asked 'what investor would want to come here, without access to the single market?'

"I fear we are reaching the point where the question becomes 'what investor in their right mind would give this place a second glance?'"

The current situation at Stormont will add to business uncertainty and will have "a negative impact on economic and social development", according to Nick Coburn, president of NI Chamber of Commerce and Industry.

"The NI Chamber has a track record of encouraging our politicians as they put policies in place which will facilitate and support economic and social development," he said.

"So having remained as positive as we can for as long as we can, we have the credibility to say that throughout the business community there is presently a very deep sense of frustration at the instability which now characterises our political institutions."

Angela McGowan, director of the CBI in Northern Ireland, said: "The business community is not seeking to comment on the specifics that have given rise to these events other than to underline that there has seldom been a more important time for all our citizens to have a strong well-functioning Executive.

"Ahead of triggering Article 50, expected in March, Northern Ireland urgently requires strong leadership and representation as the UK negotiates its future relationship with the EU.

"It is vital that our collective voice is heard during this crucial period to achieve the best possible outcome for all of our citizens."

Belfast Telegraph