Debate contribution: Economic Vision

Debate contribution by Mr Conor Murphy on 19 February 2024.

MLA

Mr Conor Murphy

Party at the time

Sinn Féin

Date

19 February 2024

Type

Debate contribution (made as a minister)

Business

Ministerial Statement

Heading

Economic Vision

Assembly identifier

Official Report component 4222841

Read the official Assembly record

Text

The Lyons report on Invest NI did not pull any punches about the organisation, where it was at and where it needed to go, and that was a significant wake-up call. Some of the criticisms chimed with some that we have made and that I have heard in the Chamber over the past number of years. There are some very good people in Invest NI who want to move forward, try to grow the economy and develop prosperity for people. As the Member will know, Invest NI has a new chair and a new chief executive. I have met both of them. I have met the chief executive a number of times and have a strong sense of the work that the two of them have been doing in the background to try to turn the organisation around. We want to support them in doing that, because the report on Invest NI clearly indicated that the organisation needs to be reorientated. In today's statement, we have tried to give Invest NI a strategic focus, and I think that it is one that it welcomes. Yes, we need to ensure that we develop the proposition for here and that we have the certainty in the post-Brexit trading arrangements that I hope that we now have. It should be allowed to bed in and not continuously be picked at over the time ahead so that we can give people some sense of certainty by working on that proposition and taking it abroad. It is also important because 90% of people employed in the private sector here are employed by small to medium-sized enterprises. Local companies that can take advantage of those trading arrangements have more certainty about how they can grow their business and get involved in exports as well. We therefore need that focus in order to attract investment but also to grow our local economy.

As the Member says, productivity has been stubbornly low. It is the lowest in these islands, and it has been for some time. The gap between North and South has been opening up. It is now something like a 40% difference. A number of factors contribute to that, and we cannot continue to ignore them. We credit ourselves with having a world-class education system, yet its outcome is very substandard and not world class at all. It is not the be-all and end-all, but it is an important factor that has not shifted, and we have to find ways in which to get it to shift. Productivity is a complex measurement. There is a mathematical formula for it, but a lot of complex factors go into it. As part of this, we have invited in expert critical friends, if you like: people who know this work. I am not saying that people in the Department do not know it as well, but, sometimes, we can be so bogged down in the minutiae of it all that we do not see the bigger picture. Not only are we trying to set strategic targets for these things but we are trying to ensure that they have outside monitoring and assistance from people who are experts in the field. All those targets can be measured, and we recognise that we have only three years and a couple of months in which to try to make a significant change. That is the target in the time ahead, and, like the Member, I hope very much that we see a change in that particular stubborn index, which has never shifted substantially over the years.

The short answer is yes, I will. We have been engaging and will continue to engage. There is legislation in the pipeline on working conditions. We want to ensure that it takes the opportunity to address things such as conditions that create low pay and insecurity in jobs, including zero-hour contracts and other factors. Far too many young people, women and people with disabilities find themselves in that sector, and that is why we have low productivity and low wages. There are opportunities in the time ahead to introduce legislation, which has been in the pipeline. We want to get that right, and, of necessity, that will involve a dialogue with trade unions and others. I look forward to a very early dialogue and to bringing together a legislative proposition to the Assembly that addresses some of those big challenges.

Last week, I had the opportunity to visit Derry and speak to people involved in that at the chamber of commerce and at Magee, which is one of the central projects to the growth deal. I am concerned that some of the momentum has gone out of that. There is a necessity, when public money is involved and projects are put forward, to have due diligence to make sure that they work, but we also need momentum. The longer it takes to get the growth deals done, the more the cost goes up: as we have seen with all capital projects, for every year that they are delayed, the cost goes up. I want to ensure that due diligence is done but that it is not done in a way that effectively strangles the projects. We need to get them moving. There are big opportunities. I was impressed with the level of enthusiasm and the sense of opportunity that there is in Derry. I want the Department to be an enabler for that, and that means that Invest NI will have a much more proactive role with the council, the chamber, business partners and other community and voluntary sector partners in Derry and the north-west. It also means working with the Southern Government, because significant investment has come from Dublin, and there are strong linkages, particularly in the education sector, between Magee and Letterkenny. I have spoken to Minister Harris about that, and we intend to jointly visit the area to continue to promote that. There are opportunities, and we need to make sure that the system of government is not slowing that down when we should be pressing ahead with it.

I agree with the Member on skills. One of the difficulties over recent years — I know this from my previous experience in office — was that the money that we primarily had for skills was European money that ended and was not replaced by the British Government. That has left a significant hole in the Department for the Economy's budget. We managed to fill that, during COVID, with moneys from Whitehall to keep the support for skills and trying to take people into the workforce. However, that is a real challenge in the time ahead. The apprenticeship levy has not really worked for us. It was designed in Britain. We have such a high level of public-sector employment that we end up being almost a net contributor to rather than a beneficiary from it. We have to revisit that. The Department of Finance has a role, because it generally speaks to Treasury on that, but I look forward to a discussion with my colleague to find a way to change that, because it has not worked for us in the way that it has worked in Britain. We need to revisit that. We have to find creative ways, particularly in the current restrained public finance situation, to get money into skills and education, because that will get more people into the economy and that generates more income.

The thrust of what we have said on regional balance is that it has been much too Belfast-centric; the report on Invest NI recognised that. That does not mean that Belfast will not continue to get support. It is an economic hub for the entire region, but that has come at the expense of working with and supporting local areas. If we have more of a co-design process, as the Member mentioned, for Invest NI that means strengthening regional offices, working with councils, business interests and the community and voluntary sector in areas to design what is needed for them, and having the resources to support that.

Each area has a different approach and emphasis. It is about trying to make sure that we provide support for local economic growth. That will be a much more successful formula for trying to ensure that we have proper regional balance in the time ahead.

One of the first ways to do that is to provide that level of strategic focus so that businesses know what areas are getting supported. The client-company mechanism was severely criticised in the report. A lot of businesses that received support from Invest NI were content, but an awful lot of businesses were outside that tent and could not get any support. Unfortunately, we do not have the public finances to provide support for everyone — would that we had. That means that we need a strategic focus on the industries and businesses that we want to grow. We need to encourage the use of clusters so that people can feed off each other to grow their business. Small businesses, in particular, that find themselves part of clusters have proved to be much more resilient and productive. We have to do that in a way that continues to grow the economy, recognising, even though I will argue for all the money that I can get for Invest and other sections of the Department for the Economy in the time ahead, the difficult financial situation that we face. It is about giving a clearer focus and businesses understanding what that focus is. One of the criticisms was that Invest NI had a lack of strategic focus. How do you translate that into businesses understanding what the organisation is doing? I hope that, in the time ahead, we will have a much clearer picture of what Invest NI is about and how it does its business so that businesses can engage with it.

Yes, there is a real concern about that among tourism providers. It is one of the issues that have been raised with me, in the north-west in particular, before I came into office and since. When people visit the area for tourism, they visit Derry and Donegal, so Derry could be the centre of something that is much bigger than just the city itself. There is a real concern about the impact of the scheme. A lot of consequences, whether foreseen or unforeseen, of the British Government's Brexit approach are damaging to the island of Ireland. It is an issue that I would like to engage early on with the Home Office in particular and relevant authorities in Whitehall to try to get them to see sense on the damage that that scheme would do to our tourism industry in the time ahead.

The economy here is not the remit solely of the Department for the Economy; many factors feed into it. We talked about the Department of Education being one, but Finance, Infrastructure and Agriculture all have a contribution to make when it comes to the growth of our economy. There is an economic policy function in TEO. I look forward to engaging in that regard. I think that I have a meeting arranged next week with the head of the Civil Service to discuss economic policy and how the operations of the Department that is under her remit and my Department can come together more closely. All Ministers across the Executive have key priorities to bring to the table, such as childcare and economic growth, in the time ahead, and it is incumbent on us all to make sure that we act cohesively rather than contradicting each other in the approaches that we take.

The Member makes a fair point in that there has been investment in a lot of our college infrastructure, including in the south-west. We have a good product and good infrastructure there. We need to make sure that the opportunities that that can create for local young people and other people who return to education can be availed of. Those colleges are underutilised, in terms of the attendance at them, and I would like to see those figures go up and more people availing themselves of the opportunities that our colleges provide. On promotion, as I said in the statement, there are things that Invest NI can do. Other development agencies put stronger conditions on people about where they want them to go and whom they want them to employ in terms of their net zero contribution, so we have an opportunity to look at how Invest NI does that. It is not simply about saying, "Come here, and we'll give you whatever support we can". We want to see investment go to areas where it has not been so frequently before. We can use the levers that we have in Invest NI to achieve more regional balance, including for the south-west.

I am conscious of the time frame that we are working with. I wish that it were a five-year mandate; we are dealing with a three-year mandate now. The choice is that either I get on with reorientating Invest NI — the delivery mechanism for this is Invest NI, which has not had this orientation in its past — try to get more regional work done with the partners in those areas who have told us how they want things to work and get that going now or I go out and start to consult on legislation, which would probably take, in a best-case scenario, a year to 18 months to get in place. I am not averse to legislating, and, if legislation is required in the future, I would be happy to do that. My focus today is on trying to get the policy changed, trying to get the implementation arm orientated to match the new policy and delivering on the ground.

I envision one that the Executive can agree on. There was a discussion about it last week at the Executive, and I was struck by the cohesion across all Ministers about getting the right policy for here. There are other policies out there that may work. It is a bit like the apprenticeship levy that was referred to: it worked in Britain, but it does not necessarily fit the circumstances that we have here. There was a useful conversation and a strong sense that this is a collective Executive priority. It is primarily led by the Minister of Education — everyone understands that — but he was at pains to point out that we want a collective approach to make sure that we are all comfortable with the policy that emerges, that it fits what is needed for this area and that we get that agreed level of support for it across the Executive. The policy that I would like to see is one that matches our needs and one that the Executive as a whole can buy into, and I think that that is the intention.

Many other business development agencies use more levers than Invest NI uses to encourage people to other areas. It is not the case that, if somebody is refusing to go somewhere, you say, "Well, don't come". You can certainly use those levers. I am not certain that that has been deployed to any great extent prior to this. The record of levels of investment clearly show that other areas across the region have been suffering as a consequence of a very Belfast-centric approach. That is not to say that Belfast will not continue to be the economic driver for the entire area, but there are opportunities to create for other places. The infrastructure is improving. Our roads network is improving. Our Wi-Fi infrastructure is improving. This is not a big place. People come here from other countries. This is almost a little city region compared with what people who come from the United States or other areas are used to. We have levers with which we can try to develop regional balance to the best of our ability, and we will use those. However, we want to see investment. We want to see local companies growing and expanding into areas and make sure that the prosperity that comes from that is shared around the individuals involved but also the geographical areas involved.

There is general agreement that a childcare strategy does not involve just the provision of support for parents, although I know that that is an important issue for many people who have young kids. It also involves those who work in that sector, the vast majority of whom are women, who have been underpaid and have little job security. We will not get an effective childcare sector if we do not look after the people who work in it as well as the people who need the provision. That will be the challenge. I am happy to work with the Education Minister and other Executive colleagues. As I said in response to a previous question, I get a strong sense at Executive meetings of a collective ambition in this regard. It is a policy that, before we managed to come back, the parties who were going to make up the Executive set as a priority. It is something that we will be judged on over the course of the mandate, so I want to see the most effective policy delivered.

I thank the Member. Yes. I had the opportunity to speak to people there on a couple of occasions over the past six to nine months. I concur with her view that there is an excellence in manufacturing there that plays a leading role on the world stage in terms of some of the products produced. One of the issues that we refer to is the availability of land. We were told that Invest NI does not have any land left in mid-Ulster. That is not a tenable situation, given the manufacturing sector there, which is internationally recognised and has the potential to grow much bigger. Some of the levers that have been available to us now need to be put in place and deployed. We need to make sure that land is available where we find growing clusters like that. We need to make sure that everyone is linked in. We need to ensure that the skills are there, particularly for young people, as the local colleges have already been doing, so that a workforce can be provided to meet the ambition in that area. There are many levers with which we can assist and enable continued growth. My sense from talking to the people involved in manufacturing down there is that they want to go further and to create more jobs and prosperity in the area. They have deep roots in the area that they come from, which is important, and they want to create economic success there. I see our job and that of Invest NI as enabling that to happen.

I was pleased to be up there with the Infrastructure Minister last week and to provide support to City of Derry Airport. That connector to Heathrow — one of the busiest airports in the world — is critical to the airport. Also critical to it, as I have said many times, is the connection with Dublin and the potential to grow the business of the airport through that connection. I am pleased, now that the Executive and this institution are up and functioning, that the North/South Ministerial Council will also be functioning. I have already been in touch with my counterparts in Dublin, and those are some of the issues that we want to progress in the time ahead.

As the Member will know, Economy is a vast Department. I have been getting to grips with all the issues there. The Department is looking at legislation on that, and I will bring forward propositions in the not-too-distant future.

When we talked to people in the north-west and other areas, we found that they want to have their own input into Invest NI. That is what I envisage. Every area in the north-west has its own particular interests in this regard. We are looking for co-design, with Invest NI having a stronger resourced regional presence, working in conjunction with councils, businesses, the community and voluntary sector, trade unions and other interests, so that we agree a plan. That is the measurable part of it: the plan that an area wants delivered to kick-start and support growth will be unique to that area. That will be the measurement. I have heard many of the criticisms that the Member has made. I have a sense that Invest NI wants to change the way that it does things. I have had good conversations with senior people in Invest NI. We want to see a quick turnaround and a different approach to this, and we want to measure the outcomes accordingly.

I would say, in the first instance, that I believe that Brexit was a bad idea, even for those of you who supported it, and that any alteration to the trading arrangements between Britain and Europe was going to have an impact. The outcome is that we are not where we were, and we have been trying ever since to make the best of a bad idea by trying to improve those relationships.

I see the opportunity. It is not about whether I think it makes things easier; the statistics show that trade has grown North-South and South-North. That has happened organically because people have been doing business together. That is good. It is good for people in the Member's constituency in the same way as it is good for people in mine. Making east-west links as frictionless as possible is good for people in his constituency in the same way as it is good for people in mine. We want to see the economic prosperity of the region change. It has been left in the doldrums for far too long, with low productivity, low pay and no real sense of economic opportunity. It is the responsibility of all of us to change the dial on that, and that is what I intend to do through the strategy that I have laid out.

There are opportunities. As the Member knows, we have a limited Budget. Departments are not being asked to submit new bids; they are being asked to find out how they can not spend rather than spend money. There are opportunities, however; other funding streams are available. It is incumbent on us to put the renewable heat incentive (RHI) situation to bed finally, and I hope to do so quickly. That will open up opportunities to support green projects. I want us to get to a situation in which we can take advantage of other supports. We will have to work through what that looks like, but we are legally and morally obliged to move to a situation where we produce more green energy. Given the island that we are on, we will have, over the years ahead, a significant opportunity to become not only self-sufficient but perhaps even an exporter of energy, which would be very beneficial to us. We have to harbour those ambitions and then try to work the strategy in order to get there. There is limited resource available in our budgets, but additional resource may be available elsewhere. We need to be in a position to do that, and part of it is to conclude the RHI experiment, which is a sorry tale for all of us.

The Member will know that fiscal matters such as insurance and the control and regulation of them lie in London. That is unfortunate, because there is an inherent unfairness in the way in which insurance companies treat people, particularly in the area that we represent. We saw how inadequate the insurance arrangements for flooding were. It is a big challenge, and the difficulty is that it is regulated in London. As part of my engagement with the Government and Departments in Whitehall, I will be happy to pursue all those issues, just as we pursued the travel restrictions that are proposed. Yes, we absolutely want to see businesses supported and continuing to grow. That is why a regional strategy will benefit Newry and south Armagh and south Down as much as it will benefit the north-west. Having clarity of arrangements between North and South will grow the all-island economy, which, we know, will be beneficial to the people whom we collectively represent. Insurance is a significant challenge, however, and one for which, unfortunately, we do not have direct responsibility here. We can make representation, and we will do so in the time ahead.

I could tell the Member that he missed all the best bits of my statement. I said this when I had the Finance portfolio, and the Economy Minister at the time agreed with me: it is not something that we are rushing into. The difficulty for us is that the Treasury's approach to the devolution of taxation, particularly corporation tax, is that it wants the money up front that, it thinks, it would yield. That money comes directly from our public services. Our public services are so underfunded, and we are so underfunded in relation to our level of need, that it would not be conscionable to denude them of any more finance in order to hope for the benefit that a lower rate of corporation tax might bring. There are no guarantees, so we would have to hope for what it would bring back to us. We have economic levers in our approach to business, with policies that we can set, and we have to use them as best we can in the time ahead to try to grow the economy. I do not see corporation tax playing any part in that any time soon.

4,330 words. Text as published by the Northern Ireland Assembly.

Assessment

Not qualifying

Jev’s structured answers

Assessed 21 October 2026 at 09:36 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reviews every challenge, and any change is recorded publicly above with its reason.

Challenge this classification