Presidents Message
Mr Bro McFerran CBE
President of the Northern Ireland Chamber of Commerce
Three months ago we were wondering when the economic downturn would bottom-out; now Alistair Darling says we are facing the worst slump in 60 years. Three months ago we were congratulating the Assembly’s Executive on the success of the US/ NI Investment Conference; now they won’t even go sit in the same room as each other.
Three months is a long time in both economics – and in politics.
The chancellor’s downbeat assessment of the economy comes on the heels of the latest forecast from the British Chambers of Commerce (BCC), which warns that while firms face a difficult and risky climate, the UK is facing a full-blown recession in the next six to nine months. The BCC also predicts that UK unemployment will rise by between 250,000 and 300,000 in the next 18 months to two years. If that comes to pass, the UK jobless total will pass the two million mark, for the first time since Labour came to power in 1997.
The global credit crunch has already cost the UK economy £600 billion in falling house prices and sinking equity values alone. That’s around one per cent of UK GDP, and shrinking liquidity will impact on UK business and household spending to the tune of £12-16 billion over the next twelve to eighteen months.
The BCC’s forecasts are for the UK, and while that includes Northern Ireland, history tells us that our disproportionally large public sector tends to take the edge off the worst effects of economic downturns. Nevertheless, every day brings more bad local economic news from chamber members and from local economists. In the three months to June, company liquidations were up 50 per cent year-on-year, and with corporate failure in 2007 already the highest for a decade, businesses throughout Northern Ireland are demonstrably hurting.
Last October, as the credit crunch was starting to bite, the Executive launched the draft Budget, draft Programme for Government (PfG) and draft Investment Strategy for Northern Ireland. At the launch, Peter Robinson, then finance minister and now first minister said: “…now is the time for devolution to deliver.” Minutes later, deputy first minister, Martin McGuinness, cut the ties between the Executive and Direct Rule by saying; “… this place is under new management.”
We in the chamber, with the rest of the business community, urged the political parties to get back to Stormont, we helped brief them on the economy and, along with other business bodies, were invited to make a presentation to the Assembly on the economy on their first day back at Stormont. We welcomed the Executive’s assurance that the economy would be at the top of the political agenda and we supported the ambition of the PfG to half the productivity gap with the rest of the UK, within a decade.
Ten months later and the Executive has not managed a meeting since June and won’t meet again till mid-September. The cause - a spat over policing and justice – or was that the Irish Language Act, or the stadium, or the 11-Plus? Whatever it was, it wasn’t about the economy, or about social inclusion through wealth creation.
As the UK faces recession and the Northern Ireland business community faces its biggest economic challenge in two decades, its time for the Executive to get back to work. It’s time for the Assembly to debate how the economy is performing and for the DETI Committee to tell us about the progress thus far in meeting the objectives of the PfG. To use the words of the first minister, “…now is the time for devolution to deliver.”
[ENDS]
