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It is clear that the Northern Ireland economy is still experiencing difficulties as a result of the global recession, with unemployment continuing to rise. However, recent trends have revealed a slowdown in the rate of decline. The September increase in the unemployment claimant count was the smallest increase in the past 15 months. Additionally, output levels for the service sector stabilised in the second quarter of 2009, and revised figures for the first quarter of the year registered growth for the first time in two years.
It is also encouraging to note that forecasts that my Department commissioned suggest that the Northern Ireland economy is expected to return to marginal growth as we move into 2010. However, we must not be complacent, not least because, as the latest UK output figures indicate, the national economy continued to contract in the third quarter of 2009.
In summary, the growth prospects for the Northern Ireland economy remain subdued, and it is for that reason that I remain committed to doing all that I can to support businesses at this challenging time.
I know the matter to which the Member refers, because I have encountered it in my constituency. As I recall, at the beginning of the recession, the Chancellor of the Exchequer announced that tax offices would work with companies. I have found that one sometimes has to go back to the local tax office and push it to deal with those issues. If other Members have experienced a similar situation in their area, I am happy to take the matter up with their local tax office. Recently, I did some work with HM Revenue and Customs, which indicated that it was prepared to work with the local Administration. Therefore, I am happy to take up any specific instances with the local tax office.
Will the Minister give her opinion on the risk of a so-called double-dip recession in Northern Ireland? Given our high dependence on the public sector and the looming reality of public sector cuts, is there a possibility that we may fall back down? If we were to be at risk of a double-dip recession, would that highlight the need to tackle the structural problems in the economy, such as the high dependence on public sector employment?
The Member is correct: there is the prospect of a double-dip recession, and that concerns me. I listened carefully to the CEO of the Northern Bank’s announcement this morning of the bank’s latest results. He said that he was cautiously optimistic about the economy.
However, cuts are coming to the public sector, which makes up a third of the economy in Northern Ireland. We should be concerned about the implications that that will have, and we must remain vigilant. That is one of the reasons why Invest Northern Ireland and, indeed, the Executive in their Programme for Government stated clearly that the economy needs to move away from public sector dependence to having more private sector growth. It remains the case that we wish to grow the private sector. It is difficult to do that in the current circumstances, but we will continue to work with companies, not only to try to help them through the recession but to help them to grow.
I am glad that the Member mentioned last year’s US/NI investment conference. He will be aware of one of its very good outcomes, which was the recent announcement that the New York stock exchange is to make a considerable investment in the Northern Ireland economy. We sometimes overlook the significance of some announcements in the hubbub of politics. That was a hugely significant announcement, because other investors in that field will look at it and realise that, if an organisation that is as stellar and blue-chip as the New York stock exchange is investing in Northern Ireland, they should also be looking to Northern Ireland.
The New York stock exchange came here because NYSE Technologies had already acquired the indigenous company Wombat Financial Software. It had, therefore, seen local people’s skills and how they worked for the company. It also saw the technology that had been developed in Belfast. It saw an opportunity to grow here. It is a tremendous boost and vote of confidence in the Northern Ireland economy, which came about because of the investment conference that took place last year.
We continue to work with different prospects in the US and with other emerging economies. The Member will be aware that I visited India in September 2009. That was a profitable exchange, not only for me and the companies there, but for the 27 companies that I took with me on that occasion. I hope that there will be more foreign direct investment (FDI). Obviously, it will not be at the same rate as it was before the recession. However, the Department continues to work on the FDI pipeline.
The Member will be aware that, as with other United Kingdom regions, Northern Ireland’s unemployment rate has increased. It currently stands at 7·1%, which represents 57,000 individuals. As I always say, and as I said during the previous debate on the north-west region, we get hung up on statistics sometimes and do not look at the people behind them. The figure is strikingly large.
Although Northern Ireland has a substantially higher-than-average economically inactive population, which concerns the Executive greatly, our unemployment rate is among the lowest — joint fourth lowest, I believe — of the UK regions. Indeed, Northern Ireland’s unemployment rate is lower than the UK average of 7·9% and the Republic of Ireland’s rate, which is currently 12·5%. Therefore, although difficulties remain in the Northern Ireland economy, we should rejoice in the fact that it is certainly not among the worst. Much work needs to be done.