North/South Ministerial Council: Trade and Business Development

Ministerial Statements – in the Northern Ireland Assembly at 10:45 am on 10th September 2013.

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Photo of Arlene Foster Arlene Foster DUP 10:45 am, 10th September 2013

With your permission, Mr Speaker, I wish to make a statement in compliance with section 52 of the Northern Ireland Act 1998 regarding a meeting of the North/South Ministerial Council in trade and business development sectoral format.  The meeting was held at the offices of the North/South Ministerial Council in Armagh on Wednesday 26 June 2013.

The Executive were represented by me, in my capacity as Minister of Enterprise, Trade and Investment, and by John O’Dowd MLA, Minister of Education.  The Irish Government were represented by Richard Bruton TD, Minister for Jobs, Enterprise and Innovation.  This statement has been agreed with the Minister of Education, and I am making it on behalf of us both.

The Council received a presentation from Martin Cronin, the chairperson of InterTradeIreland and Thomas Hunter McGowan, its chief executive officer (CEO), on InterTradeIreland’s performance and business activities, including information on performance against its 2012 business plan targets, highlights from its trade and innovation programmes and business and economic research activities in 2012 and to date in 2013.  The Council noted that, during 2012, InterTradeIreland had delivered a 13:1 return on investment; assisted 92 first-time innovators; assisted 67 first-time exporters; delivered 6% efficiency savings; and delivered a total business value of £92·1 million.  The Council approved InterTradeIreland’s 2013 business plan and recommended that the 2013 budget provision for InterTradeIreland be £9,507,000.

Ministers noted InterTradeIreland’s cross-border study ‘Access to Finance for Growth in SMEs in Ireland and Northern Ireland’ and the emerging findings arising from the report.  Those findings included that the state of the wider business environment in Ireland and Northern Ireland is closely linked to the issue of finance for growth in SMEs; demand for credit has fallen substantially since 2008, although a majority, 61%, were successful in applying for new credit in the third quarter of 2012; the percentage of businesses that cite lack of finance as a constraint on growth continues to increase; and businesses with distressed property debt are three times more likely to request working capital finance than their counterparts.

The Council noted InterTradeIreland’s update paper on the FP7 and Horizon 2020 programmes.  Ministers noted that the total drawdown from FP7 projects to participants from both jurisdictions is valued at €60·7 million, distributed among 69 projects.  It also noted that four new successful projects had recently been announced.  They welcomed the measures aimed at facilitating collaboration on FP7 and Horizon 2020 between researchers, companies and relevant organisations from Ireland and Northern Ireland.

Ministers noted a presentation by officials from the Department of Enterprise, Trade and Investment and the Department of Jobs, Enterprise and Innovation that reviewed the operation of the enterprise theme of the current INTERREG IVa programme.  They welcomed the practical benefits and legacy of the programme and noted the likely shape of the successor to INTERREG IV, which is being developed.  I commend the statement to the Assembly.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party

Go raibh maith agat, a Cheann Comhairle.  Gabhaim buíochas leis an Aire chomh maith.  The Minister will be aware that the Committee has taken a lot of interest in and placed a lot of emphasis on research, innovation and development.  That is the case with FP7 but more so, potentially, with the Horizon 2020 project and the benefits that it could realise for innovation, research and development projects.  As most people know, those projects, tailored with the proper skills, are the way forward for the development of new industry on the entire island of Ireland.  Will the Minister give us some indication and maybe a wee bit of expansion as to what exactly are the measures that are "aimed at facilitating collaboration"?  How will they lead to more outreach work with the SMEs, which are so crucial to the development of our local economy?

Photo of Arlene Foster Arlene Foster DUP

I thank the Member for his question.  I assure him that the first meeting that I had with the new CEO of InterTradeIreland, Thomas Hunter McGowan, was about just that:  how we get more small and medium-sized enterprises across Northern Ireland involved in innovation and how we can facilitate them to do so, given the fact that they do not have the infrastructure of large firms to do any of that.

With regard to what InterTradeIreland has been engaged in, it had a successful 'Collaborate to Innovate' conference on 16 May, and feedback from that has been very positive. My Assembly Private Secretary (APS), Alastair Ross MLA, attended for me as I was unable to attend.

There is more structure now as regards cooperation between the higher education institutions in the Republic of Ireland and those in Northern Ireland, particularly the institutes of technologies in the Republic, to identify and build collaborations between them with regard to Horizon 2020.

To go back to the use of digital technology, InterTradeIreland is developing a Horizon 2020 app for mobile devices, and I look forward to seeing the finished product in the autumn, hopefully in October.  That will try to increase awareness of Horizon 2020 and make it accessible for small firms so that it will give them all the information and have it readily available so that it can be accessed by small and medium-sized firms, rather than them having to go to look for the information.

We are taking very practical steps to try to work with small and medium-sized firms.  We will, of course, look at holding events around Northern Ireland again as we have done in the past.

Photo of Robin Newton Robin Newton DUP 11:00 am, 10th September 2013

I thank the Minister for her statement, and I note that in it she referred to the work being done on the growth of SMEs.  She will be well aware of the fact that Northern Ireland's economy is, essentially, an SME economy.  Will the Minister expand a little bit on the work that InterTradeIreland is doing in the SME market, particularly in Northern Ireland?

Photo of Arlene Foster Arlene Foster DUP

As I indicated, when I spoke to the new CEO, Thomas Hunter McGowan, that was one of the focuses of our meeting, because I feel that InterTradeIreland can make a difference to small and medium-sized companies.  However, we do not want to duplicate what Invest Northern Ireland is doing, and duplication is always one of the things that we talk about with InterTradeIreland.  We need it to add value to what Invest Northern Ireland is engaged in.  It provides help to small and medium-sized companies through a number of its programmes and initiatives.

Acumen, which is a trade programme designed to simulate cross-border businesses for SMEs, reported a total of 76 new projects.  I do not have the target for how many it was to put in place, but the reported business value and jobs impact of that was 122 new jobs.  Although InterTradeIreland is not a job creation body — it is a trade organisation — we asked it some time ago to put in a matrix so that we could measure the number of jobs that it was creating as a consequence of helping businesses to trade in a more effective way.  The jobs impact of that single project was 122. 

Go-2-Tender, which is another very good programme — one of my favourite programmes from InterTradeIreland — tries to help small companies to tender in the opposite jurisdiction and to get work from the public sector.  Again, that was very successful and had a jobs impact of 63.  Therefore, each of the programmes is having an impact in respect of jobs, and they are also having a good and positive impact on the small and medium-sized business sector.

Photo of Phil Flanagan Phil Flanagan Sinn Féin

Go raibh maith agat, a Cheann Comhairle.  Cuirim fáilte roimh ráiteas an Aire.  I thank the Minister for her statement.  The Minister referred to InterTradeIreland's cross-border study on access to finance for growth in SMEs and talked about some of the findings arising from the report.  Can she give us any more information on the report and whether there are any recommendations in it that might be taken forward in conjunction with the recommendation in the economic advisory group's recent report?

Photo of Arlene Foster Arlene Foster DUP

I thank the Member for his question.  We had only the emerging findings at our meeting in June, and we are hoping to have the final report with us in the very near future.  The pleasing aspect is the fact that the InterTradeIreland report could use the data collected by the economic advisory group in relation to Northern Ireland and the access to finance study in relation to all of the island. 

I thank InterTrade and the economic advisory group for their effective coordination.  We look forward to receipt of the full report.  I should say, however, that the business monitor from InterTradeIreland tentatively signalled that, for quarter 2, things in the economy were getting a little better, and they stated that over 64% of businesses maintained or increased their sales over the past quarter.  That ties in with what we have been hearing from other indicators for Northern Ireland, including the Ulster Bank just yesterday.

So, although I do not want to overstate issues by talking perhaps about a turn in economic growth, I think that all the indicators seem to be pointing in the right direction for the first time.

Photo of Sandra Overend Sandra Overend UUP

I thank the Minister for her second statement.  I just want to probe a wee bit more about access to finance.  The cross-border study states:

"the state of the wider business environment in Ireland and Northern Ireland is closely linked to the issue of finance for growth for SMEs".

Does the Minister agree with that statement, and would she agree with me that many SMEs in Northern Ireland are still struggling to access finance?

Photo of Arlene Foster Arlene Foster DUP

I think that that is right.  I also think that the telling part of the emerging findings was that those small and medium-sized businesses that had been exposed to property debt during the recession are those that are finding the greatest difficulty with working capital.  I am sure that that is borne out by what Members are told by their constituents.  I regularly come across people who purchased property for investment reasons and now find that it has become a real drag on the growth of their small business.  They cannot get the working capital that they need from the banks because the security that they had has fallen away from them.

So, that continues to be an issue for us.  The Finance Minister and I had a range of meetings with the banks, which we concluded during the summer months.  I know that a ministerial advisory group has been set up in the economic pact to look at our national initiatives and at whether they are having an impact in Northern Ireland in the way that they are.  The Finance Minister is having a meeting tomorrow with the Secretary of State and the British Bankers' Association to try to get the regional data so that we can really see what is happening here in Northern Ireland.

So, I welcome InterTrade's report and look forward to the final report.  However, it is, of course, part of the wider issue of what is happening nationally with finance.

Photo of Trevor Lunn Trevor Lunn Alliance

I thank the Minister for her statement.  One of the success stories in Northern Ireland over the past few years has been the performance of the film industry.  Perhaps the biggest success story in that sector has been 'Game of Thrones', which, according to the Northern Ireland Screen report, has produced a return of 7:1, which is regarded as brilliant.  InterTradeIreland, according to this report, has delivered a more stellar return of 13:1, which, as I understand it, is absolutely unheard of.  I know that those are not the Minister's figures, so is she satisfied that they do not require a bit more investigation?

Photo of Arlene Foster Arlene Foster DUP

I am satisfied, because we probed that very issue of whether they were real and meaningful figures.  However, if you look at the budget that InterTradeIreland receives and then look at the return that has been delivered on that budget, you will see that it comes out at 13:1.  I think that that is a very good investment.  I have seen the investment through all its programmes and activities, and all that we can do is to encourage them to reach out and to try to get even more.

Photo of Gordon Dunne Gordon Dunne DUP

I thank the Minister for her statement.  I think that we all welcome InterTradeIreland's increase in public awareness initiatives.  It has been meeting elected representatives, MLAs and councillors, and that is to be welcomed.  Will the Minister advise us of the work of InterTradeIreland's Fusion programme and how Northern Ireland businesses have benefited from it?

Photo of Arlene Foster Arlene Foster DUP

Fusion is another of InterTradeIreland's programmes.  I have talked about Acumen and Go-2-Tender.  Fusion is a technology transfer programme that provides companies with new product or process-development needs.  The good thing about that programme is that it employs graduates from the other jurisdiction.Over 80% of those graduates are then offered jobs, which is a very good statistic.  In 2012, companies reported a business development value of £31·2 million and a jobs impact, excluding graduate jobs, which is an important point, of 101 new jobs.  So Fusion has worked very well.  It is at the higher end of technology transfer, but I am very pleased that some of our companies are benefiting from the programme.

Photo of Maeve McLaughlin Maeve McLaughlin Sinn Féin

I thank the Minister for her statement.  In the report over the summer on the social enterprises and third sector, one issue was that companies and social enterprises here were not trading in the Twenty-six Counties.  What is being done to address that?  Equally, there are 470-plus social enterprises in the North.  Does she intend to increase investment, particularly in the social economy sector?

Photo of Arlene Foster Arlene Foster DUP

Of course, we were not aware of the value of the social economy sector to the Northern Ireland economy.  So my colleague from the Department for Social Development, Nelson McCausland, and I started a mapping process, and we now have a social economy map.  We know the value of the social economy to Northern Ireland, and I will happily pass that information on to InterTradeIreland.

A lot of operators in the social economy are focused on the community that they work in, and there is nothing wrong with that, but if they want to grow, the natural progression is to our nearest neighbour, and I will certainly take on board what the Member has said about InterTradeIreland's engagement with the social economy.  The social economy stretches from Bryson House, which is a hugely sophisticated organisation, right down to very small social economy companies in local communities that may not want to grow.  We will look at that, and we will work with the social economy sector.

Just yesterday, at a meeting of the economic subgroup of the Executive, the value of the social economy and how we could use it to try to deal with the economically inactive in Northern Ireland came up.  We certainly value the social economy and will work with it in the future.

Photo of Alban Maginness Alban Maginness Social Democratic and Labour Party

I thank the Minister for her very thorough report and answers.  I agree with the thrust of the report:  an awful lot of work is being done by InterTradeIreland.  There is, however, one area in which InterTradeIreland could involve itself, namely public procurement, to assist businesses, North and South, in accessing the various procurement capacities of both Governments, North and South.  Is there any role, Minister, that InterTradeIreland could be involved in to assist firms in that public procurement process?

Photo of Arlene Foster Arlene Foster DUP

I am very happy to tell the Member that InterTradeIreland is involved in that process through its Go-2-Tender programme, which is specifically designed to assist small and medium-sized companies in accessing public procurement in the other jurisdiction.  I thank CPD in our Administration and its equivalent in the Dublin Government for working with InterTradeIreland and trying to make what is, let us face it, the maze of public procurement a little easier to understand.

In 2012, an independent evaluation of previous phases of Go-2-Tender reported a net business development value of £4·5 million and a job impact of 63.  There have been eight workshops specifically on Go-2-Tender during this calendar year of 2013.  So Go-2-Tender, as I said, is one of my favourite InterTradeIreland programmes because it really helps small and medium-sized companies get into the maze of public procurement, whether that is in Northern Ireland or the Republic of Ireland.

Photo of John Dallat John Dallat Social Democratic and Labour Party

I also welcome the statement and treat it as a good-news story, which the Assembly badly needs.  I am delighted that 61% of businesses that applied for credit in recent times were successful, but, without wishing to be pessimistic, that means that 39% were not successful.  The cross-border study goes on to state that the percentage of businesses citing lack of finance as a constraint on growth continues to increase.  I am sure that the Minister has been focusing on that.  Will she expand on what is being done on both sides of the border to make the banks more accountable and useful to the people whom they are supposed to serve by making finance available?

Photo of Arlene Foster Arlene Foster DUP 11:15 am, 10th September 2013

I thank the Member for his observation and question.  Part of our difficulty with the banks is that they tell us that they want to lend and have money, and that there is no problem with the supply that they can give us.  They tell us that not enough people are applying for loans.  However, when I come here and meet colleagues, they tell me that people are applying for money but cannot get any.  So, there is a disparity between the two stories.  My colleagues the current Finance Minister and, indeed, the former Finance Minister have been engaged with the British Bankers' Association to try to get data at a regional level — a Northern Ireland level — so that we can see the reality of bank lending in Northern Ireland.  As I say, the Minister has a meeting with the British Bankers' Association in London tomorrow, and hopefully we will get some clarity on the issue.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Time was spent at the meeting comparing the 2012 out-turn with the 2012 business plan targets.  Unfortunately, we cannot read the business plan for 2012 on InterTradeIreland's website because it is not there.  However, we know from the 2011-13 corporate plan that there was a target to increase the number of businesses involved in cross-border trade and innovation by 10,000 over that three-year period.  We read in this report that, in 2012, there was assistance for 92 first-time innovators and 67 first-time exporters.  So, how is the 10,000 target going if those are the figures for 2012?

Photo of Arlene Foster Arlene Foster DUP

I am sorry:  I cannot answer that.  I do not know why that plan is not on the InterTradeIreland website.  I will certainly investigate the issue for the Member and come back to him.  I will also get back to him in writing about the other target and will put a note in the Library.  I just do not have that information to hand.