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North/South Ministerial Council: Trade and Business Development

Ministerial Statements – in the Northern Ireland Assembly at 12:00 pm on 1st February 2016.

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Photo of Mitchel McLaughlin Mitchel McLaughlin Speaker 12:00 pm, 1st February 2016

That went so well that the Minister wishes to make another statement.

Photo of Jonathan Bell Jonathan Bell DUP

You are not giving me a break this afternoon, 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 NSMC) in trade and business development sectoral format. The meeting was held in the offices of the North/South Ministerial Council, Armagh, on Wednesday 2 December 2015. The Executive were represented by me, in my capacity as Minister of Enterprise, Trade and Investment, and by Carál Ní Chuilín, Minister of Culture, Arts and Leisure. The Irish Government were represented by Richard Bruton TD, Minister for Jobs, Enterprise and Innovation. This statement has been agreed with Minister Ní Chuilín, and I am making it on behalf of us both.

Ministers received a joint presentation by the Northern Ireland Independent Retail Trade Association (NIIRTA) and Retail Excellence Ireland (REI) on their joint study of the retail sector across both jurisdictions. The Council noted the summary findings of the NIIRTA/REI joint 2014 survey of the retail sector, including that the two retail agencies intend to establish a retail forum comprising representatives from both jurisdictions.

The Council received a presentation from Martin Cronin, the Chairperson, and Thomas Hunter McGowan, the CEO, on InterTradeIreland’s performance and business activity against 2015 business plan targets. Ministers noted that, during the first 10 months of 2015, InterTradeIreland had delivered the following: assistance to 65 first-time innovators; assistance to 44 first-time exporters; 4% efficiency savings; a total jobs impact of 916; and the delivery of a total business value of £67 million or €84 million.

(Mr Principal Deputy Speaker [Mr Newton] in the Chair)

Ministers were advised that there was strong demand for InterTradeIreland programmes in 2015. Business and economic research activities carried out by InterTradeIreland included continued production of the InterTradeIreland quarterly business monitor; a report on ‘SMEs, Credit Constraints and Growth', which is a cross-border study relating to access to finance; and, most recently, ‘Mapping the Potential for All-Island Sectoral Ecosystems’, which examines the opportunities for developing the potential of clusters across both jurisdictions. Ministers noted the current position of the 2016 business plan and that officials continued to engage in discussions on the plan. The Council noted InterTradeIreland’s annual report and accounts for 2014, which had been certified by the Comptrollers and Auditors General and laid before the Northern Ireland Assembly and the Houses of the Oireachtas.

Ministers received a presentation by officials from the Department of Enterprise, Trade and Investment and the Department of Jobs, Enterprise and Innovation, previewing the implementation of the research and innovation theme of the new INTERREG Va programme for the period 2015-2020.

Ministers noted a paper prepared by InterTradeIreland providing an update on the Horizon 2020 programme and the early results for the period January 2014 to May 2015. Twenty-two collaborative projects, involving 64 applicants, have been successful to date. They have secured €29·67 million in funding, and, of that total, Northern Ireland partners have secured €14·24 million and partners from Ireland have secured €15·43 million. The average award per partner is €463,500.

Ministers welcomed the wide range of activities organised by InterTradeIreland to encourage engagement to date. They included a total attendance of 486 participants at 'Focus on' events; the hosting of a range of conferences; the organisation of advisory service workshops; and the provision of financial assistance for scoping out partnerships and proposal opportunities.

Ministers also noted that InterTradeIreland had identified and will undertake additional promotional and awareness-raising activities in conjunction with the Horizon 2020 all-island steering group. That will utilise the contact point networks in each jurisdiction to drive delivery of the €175 million target. The work by InterTradeIreland with Horizon 2020 applicants to identify further resubmission opportunities was also noted.

The Council agreed that the next trade and business development meeting should be held in the spring of 2016. I commend the statement to the Assembly.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party 12:30 pm, 1st February 2016

Go raibh maith agat, a Phríomh-LeasCheann Comhairle. Mo bhuíochas leis an Aire as a ráiteas. Thanks very much, Mr Principal Deputy Speaker. I again thank the Minister. In his statement, the Minister referred to the:

"strong demand for InterTradeIreland programmes in 2015" and welcomed:

"the wide range of activities organised by InterTradeIreland to encourage engagement".

I fully endorse that. Its work has been tremendous, and its support of the SME sector in particular has been phenomenal.

Although I welcome the additional funding allocated to InterTradeIreland in January monitoring, it should be noted that the additional funding does not contribute to the baseline for future InterTradeIreland budgets, leaving it very vulnerable to further cuts in future budgets. The budget for InterTradeIreland continues to decline in the face of what the Minister rightly referred to as growing demand right across the island of Ireland. Despite increased demand for its services, the budget remains at 30% below the 2008 level. Therefore —

Photo of Robin Newton Robin Newton DUP

I ask the Chairperson to come to his question.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party

I am coming to it right now. Thank you for your indulgence.

In the face of growing demand for its services and in recognition of the very positive impact that InterTradeIreland has on economic growth and development across the island, what assurances can the Minister give that its budget will not continue to be eroded at that level?

Photo of Jonathan Bell Jonathan Bell DUP

Let me take the first part. I welcome the very positive commitment given to the work undertaken by InterTradeIreland. I will pull out some of the highlights of 2015 that I have seen. The Acumen programme stimulates cross-border business for SMEs. In 2015, there were 134 applications, resulting in 103 approvals. The Elevate programme was put together to focus on helping microenterprises to take the first steps in exporting and to explore opportunities in a new cross-border market. During 2015, the programme received 514 enquiries from SMEs and 139 applications, which resulted in 80 of those companies being approved for support. The FUSION programme is the flagship technology transfer programme that provides support to companies with new product or process development needs. There was a staggering result from that programme, with over 80% of FUSION graduates being offered jobs. The point that you initially made about the work that is going ahead was well made and is endorsed by me.

The business plan for 2016 remains subject to approval. For 2016, I decided to maintain InterTradeIreland's 2015 baseline. That is a reasonable outcome, given the current budgetary pressures across the Department. I have discussed the matter in some detail with Richard Bruton TD, and, as with Tourism Ireland and other arm's-length bodies, I have advised InterTradeIreland that it can make bids as part of the monitoring round process. In connection with that I am pleased to report, as I said to Mr Ó Muilleoir in response to a question for oral answer in recent weeks, that we were able to bid for £206,000 of additional money for 2016 as part of the January monitoring round. I am pleased to report that all parties, including the InterTradeIreland board and officials and the two co-sponsor Departments, have agreed to that additional funding. That gives an idea that I have not only maintained the budget from 2015, but, where there are specific programmes that deliver jobs and opportunities in Northern Ireland and help to take our businesses to new levels of sales, exports and graduate employment, I will do my level best to get funding where I can.

Photo of Gordon Dunne Gordon Dunne DUP

I thank the Minister for his detailed statements. We are all very aware of the need to support businesses in research and innovation, especially our SMEs. Will he give us an update, in some detail, on the progress of INTERREG Va, the programme for 2015 to 2020?

Photo of Jonathan Bell Jonathan Bell DUP

I welcome the allocation of €71 million to research and innovation activities in the 2014 to 2020 INTERREG Va programme. That investment will support increased cross-border research and development competence-building in the life and health science and renewable energy sectors. A further key objective is to grow the number of small to medium-sized enterprises across the region that engage in research and innovation activity on a cross-border, collaborative basis.

We want to establish and are establishing robust and comprehensive governance arrangements to underpin an efficient programme implementation.

That is the key focus for my Department, and we continue to liaise with our colleagues in DFP, SEUPB and the Republic of Ireland to this effect.

Calls for applications are being publicly announced and managed by the SEUPB, in its role as the programme managing authority. Following a call for projects under the "business investment in research and innovation" (R&I) priority, which closed on 21 October, successful applications were approved by the programme's steering committee at the end of November to proceed to full development of the business case. A call for projects under the "enhancing research and innovation" priority is scheduled to open on 22 February this year.

Photo of Conor Murphy Conor Murphy Sinn Féin

Go raibh maith agat, a Phríomh-LeasCheann Comhairle. I thank the Minister for his statement. He may or may not be aware, due to his travels, that the Assembly's Enterprise Committee went to Dublin last Thursday and met with its counterpart in the Oireachtas. We attended the launch of this report on the all-Ireland economy. I commend it very much to the Minister and, indeed, to his senior officials and those in Invest NI. We also had the opportunity, at a joint Committee session, to hear from InterTradeIreland. I very much welcome the fact that he secured additional funding for InterTradeIreland and that he has extolled the virtues of a lot of the work that it is doing.

The Minister mentioned in his response to our Chairperson that there is an opportunity for an in-year monitoring bid. But does he accept that, when running programmes like this with a long lead-in, it is not ideal for a body such as InterTradeIreland to have to rely on moneys that may become available and then spend that very quickly? Will he continue with his commitment to the fight to secure additional funds in the baseline budget for InterTradeIreland? Because you can see quite clearly, from this and its own report that it released recently, that, for a modest investment, there is a very significant return in business development right across the island.

Photo of Jonathan Bell Jonathan Bell DUP

What comes through clearly from the reports is that not only have hundreds of jobs that were potentially at risk been secured but new jobs and the promotion of potential further new jobs have been gained through this programme. My strategy is that anything that brings jobs to Northern Ireland will have my full and unequivocal support, and I accept the point that for this amount of money there is quite a high performance level. This is evidenced in the fact that I can give you examples where some 80% were successful, in the number of programmes that are going through and in the demand for the service.

There was big pressure on me, as Minister, and the Department. There are competing demands in the Department. Tourism will make a demand, as stated earlier. It is difficult to manage with a limited amount of resources, and when you get a plan coming through, the psychologist in me believes in B F Skinner's theory of classical conditioning: you should always try to reward good behaviour so that it is increased. In reality, the behaviour, industry and energy of InterTradeIreland in bringing jobs to Northern Ireland, securing jobs for Northern Ireland, bringing additional jobs to Northern Ireland and giving our graduates an enhanced programme, as well as its success rates, is very clearly something that I want to reward. So, I did not make the cut, as some proposals were made, to its 2015 budget. I maintained that against other competing needs, and I said that — both myself and Mr Richard Bruton — where possible, we can bid for additional resources and probably need to put additional energy into monitoring rounds. At our first go at it, we had another £206,000 into the budget. Of course, it would be better to always give people money up front, so that they can plan for the period. Given the fact that I have maintained the budget as it was from the previous year, and sought successfully to get additional money into the budget, demonstrates not only ministerial endorsement of the programme but my encouragement for them to go ahead. I will not waste any opportunity, in terms of monitoring rounds, to try to get additional finance to get more jobs into Northern Ireland.

Photo of Adrian Cochrane-Watson Adrian Cochrane-Watson UUP

I thank the Minister for his statement. Like others, I attended the joint Committee, and I fully endorse and support the work of InterTradeIreland and would be very supportive of any efforts to maintain and enhance its budget.

As outlined in the statement today, the establishment of the retail forum comes on the back of extensive surveying and research by NIIRTA and its partners. One of the main issues raised through that was the impact of rates and the instability that excessive rates bills can add to microbusinesses, particularly those in our town centres. Will the Minister work with his Finance and Personnel colleague to look at opportunities, through rates relief perhaps, to support SMEs or small businesses, particularly those in the retail sector in our town centres?

Photo of Jonathan Bell Jonathan Bell DUP 12:45 pm, 1st February 2016

There are vital points to be made about rates, and the Member has made some of them. I will certainly have further discussions with him and also Minister Storey about how we can continue to support rate relief. What we have tried to do to keep rates low, through specific initiatives, has been one of the success stories of devolved government. If the Member has additional specific proposals that he wishes to make, I am willing to hear them and take them to the Minister of Finance and Personnel.

Overall, when we look at our economic conditions, we can genuinely say that there are signs of improvement. Almost 40,000 additional jobs have been created since 2012 and, today, more than 26,000 fewer people are claiming unemployment benefits than did so in February 2013. In 2015, real earnings increased for the first time since 2009. I will discuss specific proposals that Mr Cochrane-Watson may have, to see how we can get the trajectory of additional jobs, fewer people claiming unemployment benefit, and real earnings increases, particularly in the retail sector which, I agree, has not only valiantly supported Northern Ireland through very difficult economic conditions but continues to support the lifeblood of our town centres.

Photo of Stewart Dickson Stewart Dickson Alliance

I thank the Minister for his statement. Does he agree that he, his Department and the Assembly need to send out a very clear message that Northern Ireland is better in Europe and that the development of programmes such as InterTradeIreland depend on us remaining in Europe? Will he also tell the House what contingency plans he has should the UK Government decide to withdraw from the European Union?

Photo of Jonathan Bell Jonathan Bell DUP

There are very important matters to consider when we look at the issue of Europe. My Department has sought to provide people with the most informed choice they can make in relation to Europe. We asked for the best advice that we could get; we asked Oxford Economics to give us specific advice — which will be available in the coming period — in relation to a potential exit from the European Union, the potential of the status quo, and the third potential, which we do not know about at the moment, which is whatever reforms could be given by the European Union to the British Prime Minister. We will have to look at those very carefully.

We have also asked to look at other models. There is the Norway model, the Swiss model, and the Turkish relationship in terms of customs union. The best thing we can do is look very carefully at the expert evidence and see what the British Prime Minister brings back from his negotiations with the European Union. I believe that there needs to be change and that the status quo is not an option. We will look very carefully at what the British Prime Minister brings back and we will examine it against the best evidence we have in order to make an informed decision when we know what the referendum question, which is due before the end of 2017, is going to be. When we know the question and the plan, we will examine them against the evidence and give more definitive news then.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Go raibh maith agat, a Phríomh-LeasCheann Comhairle. Buíochas arís leis an Aire. I thank the Minister for the statement on cross-border economic cooperation. I want to commend him on managing to find the £206,000 for InterTradeIreland because, of course, Minister Bruton was able to double that and put £600,000 into InterTradeIreland at this time when there is so much momentum behind the work that it is involved in.

I want to follow up on what Conor Murphy said about the visit to the Dáil last week and the report on the all-island economy. We are sometimes critical of unionist Ministers for not doing enough for the all-island economy. This is the first report on an all-island economy since the Oireachtas came into being, so the criticisms and blame can be shared.

It is very relevant to what you said today, Minister, that one of the big proposals is for one economic and enterprise agency on the island. Will you ensure that your officials work proactively, in a professional and systemic fashion, with the IDA on corporation tax harmonisation and reduction, because it has been there, done that, got the T-shirt. It has shown that it can maximise the full benefits of a reduced level of corporation tax. I would be really pleased, Minister, if you could come back at some stage and tell Members that Invest NI is having regular dealings with the IDA and ensuring that it is getting all the information and knowledge that it has, so that that is also brought to bear north of the border when corporation tax is harmonised across the island, as we hope and trust will happen if it is affordable.

Photo of Jonathan Bell Jonathan Bell DUP

The Member is right: we have an enormous opportunity in that, on 1 April 2018, our corporation tax will be at 12·5%. We will be able to compete for business across the world, as I was competing for several businesses in San Francisco and New York in the past week. I hope to see fruit flow in jobs and investment from those, given that Northern Ireland now has a unique opportunity because our business costs are estimated to be 85% of those for the rest of the United Kingdom and about 95% of those in the Republic of Ireland. You can add to that the talent of our people, a very young population and the excellent work that the Department for Employment and Learning has undertaken in bespoke training and tailor-made initiatives to support business.

Allstate said that it came to Northern Ireland for the costs but stayed for the people. Companies such as Citi came in with 369 jobs and has now created some 2,000 jobs. Here is another interesting fact: 80% of all foreign direct investment to Northern Ireland has subsequently reinvested. At Invest NI, we try to get those businesses to tell their story about why, when they come here, they subsequently reinvest. That foreign direct investment comes from companies such as Baker and McKenzie, Citigroup, Allen and Overy, Allstate — a whole list that created thousands of jobs. So we have the best foreign direct investment proposition; more foreign direct investment per head than any other part of the UK; the lowest costs; and now we can add corporation tax.

I will certainly talk to Invest Northern Ireland about ensuring, with the IDA, that all opportunities are maximised. Invest Northern Ireland has done an absolutely spectacular job. When we sat as an Executive, we set it an initial target of some 20,000 jobs. At the Programme for Government meeting in 2011, that was increased to 25,000, and, to date, it has delivered some 44,000 jobs. Before the Assembly is dissolved, I hope to make additional job announcements on the back of a programme that Invest NI has done. In many cases, it has done that in very difficult conditions against a backdrop of a falling euro, the strength of the dollar and everything else.

If the Member is asking me to ensure that we maximise every opportunity and look at maximising every opportunity to harness the economic power across the two jurisdictions to deliver jobs and success, my answer is: absolutely.

Photo of Fearghal McKinney Fearghal McKinney Social Democratic and Labour Party

I thank the Minister. Will he update the House on the status of INTERREG's EU monitoring committee? Will he assure the House that everything possible is being done to maximise the drawdown of funding across INTERREG's range of funds?

Photo of Jonathan Bell Jonathan Bell DUP

Yes, I can assure the House that we have the maximum drawdown. All my information to date is that we are on course to meet all the targets that we have set ourselves, but I will continue to keep those targets under effective scrutiny, monitoring and evaluation to ensure further success.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Briefly reverting to Mr Dickson's question, may I say that I look forward to the Minister coming off the fence on the issue of the EU and joining the ranks of those who want to liberate our great trading nation from its shackles?

His statement is clear that the 2016 business plan for InterTradeIreland has not yet been approved. Will he explain to the House how ongoing expenditure is lawful when the business plan has not been approved?

Photo of Jonathan Bell Jonathan Bell DUP

The business plan is set to be approved at the next meeting of the North/South Ministerial Council, and I am advised that no expenditure reflects what the Member says. There is no unlawful expenditure.

I say to the Member, too, that it is easy to make a point — he is a learned QC — about coming off the fence. As I stand here today, we do not know what the referendum question is.

Photo of Jonathan Bell Jonathan Bell DUP

We do not know. Through you, Mr Principal Deputy Speaker, we have not been given the terms of the referendum question. Will it simply ask whether we wish to leave the European Union? In that case, I imagine that the Member will say yes. However, if the question is whether we wish to remain in the European Union, I imagine that the answer from the Member will be no. In the absence of knowing the exact nature of the question, it is a very, very foolish person who answers it.

As I have said, there are concerns — some businesses, including international businesses, have reflected them to me — about how, were the UK to come out of the European Union, the potential loss of a market of some 500 million people would impact jobs and investment. Equally, I have been advised that, were we to come out, there is the potential for new trade agreements. The volume of trade between the EU and the UK is so significant that new trade arrangements could be put in place, and there is the possibility that we could look towards other markets in Asia, and specifically at things that we could do there that we cannot do now.

I say to the Member that the best thing that anybody in Northern Ireland can do is to take the most informed decision that they possibly can. That is why we have commissioned work from Oxford Economics to look at what a Brexit could mean and what the status quo could mean. Earlier, I said to the Member, in words as strong as I can use in the House, that I do not believe, as my parliamentary leader and our Member of the European Parliament said, that the status quo is an option.

We have to see what the Prime Minister achieves in the negotiations. It would be foolish and would not serve the people of Northern Ireland well if we made decisions when we do not know what the UK Prime Minister has negotiated. At the end of the day, it will be the decision of the people of Northern Ireland. They will look at the economic advice and at all the different models — the Norwegian, Swiss, Turkish and other models that could be followed — to get the best information on staying in or coming out. Give the people of Northern Ireland the best information, let them examine it against the reforms that the Prime Minister brings back and let them decide how to vote on the basis of facts. That is the most sensible and intelligent way to proceed.

Photo of Robin Newton Robin Newton DUP

That concludes questions —

Photo of Jim Allister Jim Allister Traditional Unionist Voice

On a point of order, Mr Principal Deputy Speaker. Should the Minister mislead the House to suggest that we do not know what the question in the referendum is? Section 1 of the European Union (Referendum Act) 2015, which already has Royal Assent, sets out the question:

“Should the United Kingdom remain a member of the European Union or leave the European Union?”

Why does the Minister pretend to the House that we do not know the question, when the law of the land states what it is? A couple of weeks ago, he did not know what the unemployment rate was. He told us that it was at a third of European and Republic of Ireland levels.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

He was wrong about that, and he is wrong about this.

Photo of Robin Newton Robin Newton DUP

Order. The Member has his point on the record. I am sure that the Speaker will note it.

Photo of Jonathan Bell Jonathan Bell DUP

May I reply, Mr Speaker

Photo of Robin Newton Robin Newton DUP

No. Time is up.

Photo of Jonathan Bell Jonathan Bell DUP

On a point of order, Mr Speaker. The latest unemployment statistics given to me were 6% in Northern Ireland, 8·9% in the Republic of Ireland and a European Union average of 9·3%. I thought that the difference between six and nine was three.

Photo of Robin Newton Robin Newton DUP

That concludes questions on the Minister's statement.