Economic policy summary
An updated overview of the Westminster and Assembly parties’ policies on economics, finance and business following the general election and June 2010 Budget.
DUP
Enterprise, Trade and Investment Minister: Arlene Foster MLA
Finance and Personnel Minister: Sammy Wilson MP MLA*
Westminster Business, Innovation and Skills Spokesman: David Simpson MP
To keep Northern Ireland “moving forward”, economic matters were the DUP 2010 manifesto’s main priorities, with a drive towards making the province’s economy “innovative, wealth generating [and] export-orientated”.
Taking a strongly pro-business line, the party called on the new UK Government to “reign back” public spending rather than increase taxes. “Greater independent scrutiny” of how the Government manages its finances would prevent future high debts. This appears to concur with the coalition’s independent Office for Budget Responsibility, set up in May.
A “substantial” reduction in UK corporation tax is proposed, with the repeated claim that Northern Ireland would especially benefit. Any lower rate in the province, though, should not mean a cut in the block grant. Other tax stances include reducing stamp duty for first-time buyers, not raising national insurance and cutting VAT on construction work to 5 per cent. Most building work is charged at the standard 17.5 per cent, rising to 20 per cent in January.
As a special economic zone, Northern Ireland would offer investors less regulation and lower taxes. Precedents include Aqaba, in Jordan, the Philippines’ Subic Bay and the London Docklands.
Legislation must be proofed for its impact on business. Large businesses should pay smaller firms within a minimum of 30 days. A single ‘economy department’ is also proposed in government. The DUP also advocates a UK-wide invention and innovation institute.
These commitments are consistent with earlier ones for the 2007 Assembly poll, which also included calls for radical planning reform and a British Isles-wide single electricity market.
*also Economic and Finance Spokesman at Westminster
Sinn Féin
Assembly Economy and Finance Spokesman: Mitchel McLaughlin MLA
Oireachtas Economy and Finance Spokesman: Arthur Morgan TD
The theory that Irish unity will lead to greater prosperity permeates Sinn Fein’s economic policy. Indeed, the party’s 2010 Westminster election states that unity is “an economic imperative.”
There must be “increased fiscal flexibility to meet the needs of the people,” according to the party’s 2007 Assembly manifesto. In 2010 the manifesto goes further and calls directly for fiscal powers, such as tax variation, to be devolved. It also advocates entry into the euro in order to establish a single all-Ireland economy. This is despite Sinn Féin’s criticism of the economic constraints caused by the single currency.
Rural regeneration and the creation of an all-Ireland rural white paper is proposed in the 2007 manifesto while in 2010 the party focuses on the sustainable dispersal of public sector jobs. It is particularly concerned with redressing regional economic inequality west of the Bann and in west Belfast.
Dealing with the economic downturn by creating a single state-owned all-island bank, possibly made up of AIB and Bank of Ireland, is proposed in 2010. The party also voices its opposition to NAMA in the South and states that the Executive should create a jobs task force, charged with retaining jobs in Northern Ireland.
In 2007 the party called for a £10 billion peace dividend from the British government for roads, rail and telecoms infrastructure. However, this looks unlikely following George Osborne’s Budget which will cut public expenditure by £40 billion for each of the next five years.
When the Republic was still booming in 2007, Sinn Fein’s Assembly manifesto claimed it would support indigenous enterprise by agreeing on an all-Ireland, cross-departmental social economy strategy. No such strategy has been agreed.
Alliance
Enterprise, Trade and Investment Spokesman: Sean Neeson MLA
Finance and Personnel Spokesman: Dr Stephen Farry MLA
A modern, dynamic economy is Alliance’s stated ambition with an end to the “over-reliance” on the public sector. The “primacy of market solutions” would be balanced by government and public “concern for social justice”. A UK-wide regional policy was also needed to regenerate poor regions such as Northern Ireland.
Alliance MPs would “work to resist reckless and rapid cuts in public spending by a future UK Government” and seek to limit block grant cuts. It does, though, accept that cutting corporation tax to 12.5 per cent would mean a £200 million cut in that block. A separation of retail and investment banking is supported, along with a local task force to promote the green new deal. Any replacement for the Barnett formula must consider Northern Ireland’s higher needs.
SDLP
Enterprise, Trade and Investment Spokesman: Dr Alasdair McDonnell MP MLA*
Finance and Personnel Spokesman: Declan O’Loan MLA
Jobs, in a word, sum up the SDLP’s economic plans. Forty-two thousand of these, it claims, could be created by harmonising corporation tax across the island (12,000) and a ‘green new deal’ budget (30,000) e.g. low-carbon house construction, renewable energy, public transport and waste management.
Public procurement was in need of reform and the party also backs continued public sector infrastructure investment, decentralisation of public sector jobs and an extended natural gas network. It agreed with the DUP on cutting VAT on construction to 5 per cent.
A single economic advisory unit would be manned by businesspeople and economists, not civil servants. An ‘open faculty for innovation’ was again proposed. There is less passion for the all-island economy than in 2005 and 2007, partly due to the Republic’s recession. North/South demands do include all-island waste and transport strategies, and co-operation rather than competition between Invest NI and its southern counterpart, the IDA.
*also Business, Innovation and Skills Spokesman at Westminster
PUP
Taking a socialist stance, the party called for selective state intervention to “retain and expand” the local economic base back in 2007. It opposed PPP and PFIs as “offering short-term solutions with unacceptable long-term consequences”. An increased minimum wage for 16-18 year olds and better employment rights for migrant workers were also supported. The party did not contest the general election and currently has no MLA.
Conservatives and Unionists
Chancellor: George Osborne MP
UUP Enterprise, Trade and Investment Spokesman: Leslie Cree MLA
With government spending at 47 per cent of GDP before the May 2010 elections, the joint UCUNF manifesto contained eight benchmarks for the duration of the current Parliament. These include making sure that the whole of the UK benefits from an increase in the private sector’s share of the economy and improving the UK’s international rankings for tax competitiveness and business regulation.
New businesses would not pay national insurance for their first 10 employees, the manifesto stated. This commitment was included in Osborne’s Budget. Northern Ireland would be turned into an enterprise zone, and a government paper would examine the mechanism for changing corporation tax in the region in order to attract significant new investment. This pledge was also included in a Conservative and Unionist contract released before the 2010 manifesto. A UCUNF government would give unemployed people apprenticeships and training courses to get them off benefits and would reduce immigration to 1990 levels, the contract said.
In the 2007 Assembly manifesto, the UUP called for on a small business relief scheme and tourism was earmarked for infrastructural investment. A knowledge bank which would bring together businesses, researchers and investors was also proposed. The Conservatives’ 2007 commitments for Northern Ireland included reviewing the entire system of local taxation.
Labour
Shadow Chancellor: Alastair Darling MP*
Shadow Business Secretary: Pat McFadden MP*
Finding itself in opposition rather than government, Labour now considers its general election manifesto invalid. The party’s priorities, until a new leader is elected, are defending its record and opposing coalition policies.
Condemning the emergency Budget, acting leader Harriet Harman predicted that this would “throw people out of work,” hold back economic growth and harm vital public services. She saw the VAT rise as a broken promise and claimed Labour could more than halve the deficit over four years.
For the record, Labour’s “future fair for all” envisaged increased spending to secure economic recovery, followed by a rapid deficit reduction, raising national insurance by 1 per cent in 2011-2012, and more employee-owned or trust-owned businesses.
*subject to change following leadership result
(25 September)
Liberal Democrats
Treasury Chief Secretary: Danny Alexander MP
Business Secretary: Vince Cable MP
In their 2010 Westminster manifesto the Lib Dems pledged to restore the link between the basic state pension and earnings, restrict tax credits and introduce a bank levy so that banks would pay for financial support they received. These policies were included in the coalition manifesto.
The party claimed that tax would not be paid on the first £10,000 earned, thereby putting £700 back into the pockets of millions of people on low and middle incomes and freeing 3.6 million people on low incomes from having to pay any income tax at all. The coalition’s Budget took 880,000 people out of income tax by increasing the personal allowance for under 65s by £1,000 next year to £7,475.
To cut the deficit the Lib Dems said they would scrap ID cards and the next generation of biometric passports, and set a £400 pay rise cap for all public sector workers. The coalition has scrapped Labour’s biometric strategy and a two-year pay freeze has been implemented in the public sector.
Green
Assembly Economy Spokesman: Brian Wilson MLA
Oireachtas Finance Spokesman: Senator Dan Boyle
In their 2007 Assembly manifesto, the Greens focused on getting investment for public transport and claimed it would legislate for favoured status to be conferred on non-profit financial institutions such as credit unions. This pledge is repeated in the party’s 2010 Westminster manifesto. In addition, green sustainable indicators of the economy should become a “cornerstone” of the annual budget process. The 2010 manifesto also called for the voice of small business to be properly considered by policymakers. A ‘Robin Hood tax’ at 0.05 per cent on financial products could raise £250 million in the UK, the manifesto also claimed.
