23 June 2009
Economic Debate
Mr. Speaker I would like to thank the Chairman of the Committee for securing the debate today and for steering the Committee during this investigative process. Mr. Speaker Northern Ireland’s economy like the rest of the United Kingdom and the Republic of Ireland has been hit hard by the credit crunch and resultant recession. Despite some reports of green shoots of recovery, we are still very much in the grips of the downturn. The most recent quarterly review confirms this fact, as unemployment now sits at 6.2% for the period from February to April of this year, and the most recent claimant count measure of unemployment stands at 48,000 in May with the number of claimants continuing to rise significantly. Mr. Speaker in light of the mountain of debt that the Labour Government has placed the United Kingdom in, there is an ever present danger that further squeezes on public spending will result in job losses in the public sector which Northern Ireland relies on so heavily.

The conclusions that can be drawn from the Committee’s research is that the Department for Enterprise Trade and Investment, and much of the Executive, contrary to what the Minister said in January of this year, can and should be doing more to help businesses in Northern Ireland.

There are two areas that we should be focusing on with more energy. The first is what we are doing to help our small and medium seized businesses to stay afloat now, and the second is helping to lay the foundations so that they, and emerging businesses, can take advantage of up-and-coming opportunities.

The single biggest problem facing small businesses in Northern Ireland is cash flow. However, despite the unprecedented re-capitalisation of our banking system, by the tax-payer, banks in Northern Ireland are largely failing to adequately facilitate our local businesses and therefore our economy. Failure in this area is costing jobs.

Mr. Speaker interest rates are down but banking costs are not. The Federation of Small Businesses has stated that 33% of their members said that their banks are imposing a change in their financial arrangements which have made them less well off. Additionally credit insurers are often refusing to cover, forcing otherwise good businesses to go back to banks because they cannot get credit; allowing banks to increase their margins and squeeze the margins of our businesses. On top of this there are significant reports to suggest that whilst credit is easing in Great Britain there are differences in the approach taken by banks here. Mr. Speaker it is a disgrace that it can even be suggested that banks are taking advantage of a situation that they and their parent companies, were responsible for making. I urge the Minister to outline the steps that she has taken to ensure that this does not remain the position of our banking sector in Northern Ireland.

The second area the Minister should be focusing on is facilitating businesses to make the most of emerging opportunities. The main vehicle for this process is Invest Northern Ireland. Mr. Speaker the evidence we accumulated confirmed what many of us have known for too long, that invest Northern Ireland is too formulaic, too process heavy, too risk averse and too biased towards large organisations. The review that the Minister is currently undertaking of Invest NI and her Department, is perhaps too little too late for many businesses and its remit is, I believe, too narrow to adequately address the problems inherent in this body. However, I ask the Minister to give an update on progress so far.

Mr. Speaker there are many other aspects that I have not had time to address, most notably the problems of public procurement and the limitations of the Northern Ireland Tourist Board, but I welcome the Committee’s work and commend it to the House and look forward to the Minister’s response.