The Jobs Plan outlines growth

The Business Coalition demands less tax and leaner government to build an export-led recovery, but avoids putting an exact figure on cutting the block grant. Peter Cheney considers the proposals.

Creating 94,000 jobs in nine years is the Jobs Plan’s main headline figure. The first joint policy document from the Business Coalition, a group of eight private sector organisations, repeats several points made by its members in recent years but also demands more ambition from the Executive.

Business leaders are frustrated with the slow pace of reform under devolution so far. Their overall vision for the economy foresees traditional sectors (especially food and drink, engineering, construction, retail and tourism) alongside new high tech, green tech and creative industries.

Jobs

The sectors with most potential for job creation were tradable services (21,000), tourism (10,000-15,500), creative industries (over 11,700) and ICT (10,000). Speedy growth could be expected in food and drink, health tech and through implementing the Green New Deal.

To achieve this growth by 2020, exports must increase from £5.6 billion today to over £8.2 billion with tourism revenue doubling to £1 billion. High value inward investment would also be required, hence the renewed call for devolving and cutting corporation tax. The group also says that £40 million in annual government funding would be needed to keep up high levels of job creation. Private equity, venture capital and co-investment funding should also be more accessible.

Between 100 and 200 ‘growth-led’ companies would benefit from intensive support, with an aim of doubled turnover by 2015. As for the planning system, demands include publishing PPS5 for town centres, a new PPS24 on economic considerations, and pro-business ‘planning zones’.

Employment regulations, it says, should become less costly so smaller companies can create more jobs. Incentives for environment improvement and low carbon technologies could be included in the rating system.

Government

Political parties are urged to keep the economy as first priority in the post- election Programme for Government.

Two particular problems are emphasised: the lack of joined-up government and the high cost of duplicated public services for a divided society.

Ministers are therefore urged to show “collective responsibility, a new united sense of purpose and a commitment to a lean and streamlined government”. When drawing up policies, it says the key question should be: “Will this contribute to growing the Northern Ireland economy?”

Three ministers sat in the audience at the launch: Conor Murphy, Robin Newton and Sammy Wilson. In fiscal matters, the group wants to see:

• £100 million shifted from current to capital expenditure each year over 2011-2015;

• European Investment Bank loans to leverage additional finance from existing assets e.g. the public sector housing stock; and

• the continued use of public-private partnerships, including the introduction of joint ventures.

Infrastructure priorities include completing planned improvements in the strategic road network, high speed fixed line and mobile broadband across the province, and the energy, water and sewerage networks.

The education system would be based around a smaller, but modernised, schools estate.

Education, careers advice and training must therefore help all young people develop the skills needed in an export-led and technology-driven economy. Strong investment in skills is demanded with science, technology, maths and engineering (STEM) skills prioritised, especially at levels three and four. A ‘transformational programme’ would support leaders and managers in fast growth companies.

One critical goal is to ensure that 70 per cent of pupils achieve five A-C grades at GCSE level by 2014, including maths and English. In 2008-2009, 58.4 per cent achieved that standard.

“We must deliver a leaner and fitter public sector with an outcome-focused culture, prepared to manage risk and a determination to contribute to our economic prosperity,” the plan states.

Over the next four years, the coalition proposes controls on wage bills and pension costs, more extensive benchmarking, improved performance management. Reflecting the CBI’s ‘Time for action’ document, it calls for core public services to be re-structured and re- engineered, with the privatisation of some non-core services.

Responsibility

“There are lots of successful businesses in Northern Ireland, represented by our members, and we are up to the challenge of playing our part in the economic recovery,” CBI Chairman Terence Brannigan told the audience. “It is our members which will create jobs and clearly, as business leaders, we have to take responsibility for developing our own businesses.”

That said, government sets the environment in which businesses operate and invest. Regulation could be a help or a hindrance. The plan could build confidence for young people who wanted to stay and use their talents in Northern Ireland, he added.

The leaders refused to say how much should be taken off the block grant, to pay for a corporation tax cut. CBI Director Nigel Smyth said that any reduction in the block grant would be phased and the tax cut would eventually grow the tax base.

In addition, they were not alarmed by President Obama’s call for American industry to invest at home, highlighted by independent MLA Alan McFarland. They instead focused on US envoy Declan Kelly’s work on behalf of the province.

Business Coalition members

• CBI Northern Ireland
• Centre for Competitiveness
• Construction Employers Federation
• Institute of Directors
• Momentum
• Northern Ireland Chamber of Commerce
• Northern Ireland Food and Drink Association
• Northern Ireland Independent Retail Trade Association

Call for debate

The coalition sees its document as a starting point for debating the whole future of the economy. To stimulate that discussion, comments and feedback can be sent to any of its member organisations.

“Acquiring new investments and creating new jobs is not the task of government alone, though we do have a key role to play,” Peter Robinson commented as he welcomed the publication.

For Sinn Féin, Mitchel McLaughlin said: “These proposals should be examined by everyone and while some would consider them very ambitious, I nevertheless appreciate the time and thought that was put into developing them. This is exactly the type of thinking that is required to instil confidence in indigenous entrepreneurs.”

Alliance’s Stephen Farry welcomed the plan’s focus on improving skills. The SDLP’s Declan O’Loan said it echoed his party’s criticism of the budget process e.g. each department publishing its own spending plans in different formats.

Owen Paterson strongly backed the document, saying: “Our over-reliance on the public sector must be addressed and the pro-active support of the private sector is vital.”

Jobs projections
Sector	Potential new jobs
Tradable services	21,000
Tourism	10,000-15,500
Creative industries	over 11,700
ICT	10,000
Agri-food (direct)	7,500
Agri-food (supply chain)	7,500
Health tech	5,900
Green New Deal (by 2014-2015)	2,300-3,500
High value manufacturing	over 1,700
Clean tech	over 1,600
Induced and indirect*	48,000
Sub-total (using minimum figures)	128,000
Final total (minus overlaps and double-counting)	94,000

* includes 8,700 in retail, 5,600 in hotels and restaurants, 4,700 in business services and over 2,000 in construction
Sources: Oxford Economics, Northern Ireland Food and Drink Association, Momentum