Mervyn McCall: confidence breeds success

Institute of Directors Chairman Mervyn McCall puts forward its plans for economic progress.

“We have credit available and we want to lend. It’s our business.” The current television advert from a local bank recognises that it needs to lend in order to operate as a business: a refreshing approach, but does it breed confidence?

Although financial institutions have their part to play in rebuilding confidence among the business community, the real power lies beyond their own fiscal remit.  Regardless of the outcome of the current deliberations on devolving corporation tax varying powers, Northern Ireland needs to do more to nurture economic growth.

Could enterprise zones hold the key?

Northern Irish ears would have pricked up during the Chancellor’s last Budget when he gave passing mention to Northern Ireland as an enterprise zone.

In April, the Finance Minister, Sammy Wilson, responded with disdain to the suggestion by Secretary of State Owen Paterson that Northern Ireland should become such a zone.  As an alternative, he suggested that the Treasury should offer Northern Ireland some of the tax relief available to enterprise zones in England.

Measures currently available across the water include a business rate discount per company of approximately £275,000 over five years, while some also benefit from 100 per cent first year capital allowances for plant machinery.

Sammy Wilson’s primary reason for slamming the proposal was because of the implications of extending the relaxed planning rules that are a feature of enterprise zones across Northern Ireland as a whole; more on planning shortly.

The Northern Ireland Chamber of Commerce believes there is merit in specific enterprise zones rather than the region as a whole with benefits including: reduced rates;    access to a job fund and intensive support, including private sector mentors; a government credit guarantee scheme providing finance for growth and export; and     100 per cent relief on regional and district rate for first three years for new starts and for a three-year period for companies with expansion plans.

The IoD wholeheartedly back these proposals.

Businesses in Northern Ireland need at least to be on a par with competitors in Great Britain in accessing the options for stimulating growth that are available across the water.  This is particularly pertinent when you consider that our neighbours in the South reported that 2011 was a record year for inward investment, with 148 new investments by foreign companies creating 13,000 jobs, according to the IDA.

It’s widely acknowledged among our members and the wider public that our planning system is a Berlin Wall, not only to businesses here but also to potential inward investors.
Foreign investors looking at the current debacles and prolonged legal challenges related to our planning process must surely look twice in pure disbelief. 

What we need is a fast track planning process with strict time limits on consultations and appeals; only then can we shake off what is becoming a millstone around our necks that is damaging our reputation abroad. Just ask the Swiss owner of Belfast City Airport.

The Assembly’s Enterprise, Trade and Investment Committee report into developing the local economy through innovation, research and development is to be welcomed.

Research and development is key to realising new markets and there were encouraging words from the committee in recognising “the need for the Executive to focus on co-ordinating and integrating R&D across Government, business and academia.”

This integration and co-ordination of thinking between public and private sectors should go way beyond just R&D.

Too often in Northern Ireland the hard decisions are avoided by politicians with an eye on votes rather than what needs to be done to turn our economy into a fast growing, outward looking one that creates the wealth and jobs our citizens deserve.

Businesses in Northern Ireland and the members of the IoD are ready to play their role in rebuilding confidence.  Our latest member survey highlights that more than half were preparing for business growth and recruitment over the next 12 months. 

The American author Dale Carnegie said: “Inaction breeds doubt and fear. Action breeds confidence and courage.”

Our political leaders could do well to consider this message.