Belfast Telegraph

Skills gap 'threatening economy'

By John Mulgrew

Northern Ireland is at "risk of making promises to inward investors that we can't keep" over corporation tax, if we don't fix key skills gaps in science, technology and maths.

That's according to senior businessman and academic Jim Stewart CBE, chair of Sentinus, the educational charity which delivers science, technology, engineering and maths (STEM) to thousands of students across Northern Ireland.

He made the comments following recent confirmation of plans to reduce corporation tax to 12.5% from April 2018.

"While the confirmation of a corporation tax reduction in the recent 'Fresh Start' agreement is welcome, Northern Ireland is at risk of making promises to inward investors that we can't keep if we don't also address the growing skills gap," he said.

Corporation tax powers are now in the hands of Stormont, with the new rate due to be introduced in less than three years.

But it's dependant on Northern Ireland's finances being on a sustainable footing.

Mr Stewart said while he welcomes "the ambition of the Northern Ireland government to make Northern Ireland more attractive to both inward and indigenous investment... we must not lose sight of the fact that skills are by far the most important thing that will attract such investment in the first place".

"With growing cuts to third level education as well as to STEM education more generally, this will have a detrimental effect on our ability to attract young people into the sector and in turn hamper the growth of the knowledge economy."

Just last week, think tank, the Nevin Economic Research Institute (Neri), said a corporation tax cut is only a "distant possibility" for Northern Ireland, with many pitfalls ahead.

Neri economist Paul MacFlynn said: "(It's) as much of a distant possibility as it was before... it wouldn't surprise me if this trips us up down the road."

The introduction of the lower rate of corporation tax has been in the works for decades. It's been argued that bringing in a rate of 12.5% would make Northern Ireland more competitive with the Republic.

And it's largely supported across the business and political worlds, with Northern Ireland Secretary Theresa Villiers saying the rate would have a "transformative" effect on trade here.

"With its land border with a low corporation tax jurisdiction, devolving rate-setting powers in Northern Ireland has the potential to have a transformative effect on investment, jobs and prosperity," she said.

In one of his last major speeches as outgoing chairman of the CBI in Northern Ireland, Colin Walsh reiterated the group's push for a low rate.

But Jim Stewart said reducing corporation tax on its own is "clearly not enough to have the desired economic effect".

And he called on Stormont to act "as soon as possible on the clear evidence presented by the recent Skills Barometer".

That pointed to gaps in the skill level for young people getting trained in STEM subjects.

Belfast Telegraph