MINUTES OF THE ECONOMIC ADVISORY GROUP MEETING WITH MINISTER 27 SEPTEMBER 2010, PARLIAMENT BUILDINGS Present: See Annex A. Apologies: Mark Nodder, Wrightbus (Minister Foster left the meeting from 12.00 to 12.20 to attend to Assembly Business) 1 WELCOME AND INTRODUCTIONS 1.1 Kate Barker welcomed Members to the meeting and noted apologies from Mark Nodder. On behalf of the Group she welcomed the opportunity to meet again with Minister Foster. 1.2 Kate Barker provided a short update on a number of work themes which had been taken forward since the Group last met Minister Foster in May 2010. She advised that, as part of the meeting, the Group would present their initial thoughts on the economic priorities for NI, its proposed work programme until the end of December 2010 and its plans for engagement with key economic stakeholders. 2 MINUTES OF LAST MEETING/ PROGRESS ON ACTION POINTS 2.1 Members noted that the minutes of the 28 May 2010 meeting had been agreed via email and had been posted to the EAG website. Members noted progress on each of the action points arising from that meeting. 3 DISCUSSION ON NI ECONOMIC PRIORITIES 3.1 Kate Barker advised the Minister that the Group had initiated work on an EAG paper on the Economic Priorities for NI. She highlighted that the Group recognised the tension that policy makers have to contend with in terms of ensuring value-added productivity for the medium to longerterm and creating employment, as well as the significant pressures on resources. 3.2 Over the coming months, she advised that EAG will be focusing its attention on a number of policy areas, including Innovation and Research & Development (R&D), Skills, Entrepreneurship, Infrastructure/ Investment and Planning, to explore how these can further grow the NI economy.
3.3 She highlighted that this work will be developed further, based on research that the Group has now commissioned, with a view to publishing a report on the NI economy in early 2011. In addition, she noted the plethora of work already being taken forward by other groups/ organisations in relation to these policy areas, and suggested EAG could add value by bringing these work streams together. 3.4 Referring to the HM Treasury exercise on rebalancing the Northern Ireland (NI) economy, Kate Barker said that the Group welcomed this exercise and had sought a meeting with the Secretary of State to contribute to the review. She advised that while it was imperative that the review gave a clear indication of the full costs and benefits of any change to tax rates in NI, the Group believed that a lower and more competitive corporation tax rate for NI would be beneficial in terms of attracting value-added FDI flows. The Group also recommended that other fiscal incentives, in addition to corporation tax, should be considered, such as research and development (R&D) tax credits, training tax credits and marketing credits. 3.5 Minister Foster welcomed the update from the EAG. She advised that, at the Executive, the debate concerning value-added productivity for the medium to longer-term and creating employment in the short term was ongoing, as rising unemployment figures can damage confidence in the NI economy. She highlighted that work was ongoing between DEL and Invest NI to look at measures to rebuild the economy in the short term and suggested both an economic and a political need for these measures. 3.6 Recognising that a number of important work streams on the economy are currently underway, including the HM Treasury exercise on rebalancing the NI economy, development of a new economic strategy, new Programme for Government and new Budget, Minister Foster stressed it was important for EAG to be informed of, and consulted on, these work streams. 3.7 Minister Foster welcomed EAG engagement with the Secretary of State. She too stressed the importance of having the full facts and figures concerning the costs and benefits, an issue that had been raised at the and DFP Ministers meeting with David Gaulke, (Exchequer Secretary to the Treasury), Owen Paterson (Secretary of State for NI) and Hugo Swire (Minister of State for NI) in August. Bill McGinnis suggested it would be useful to do some analysis on the proposed benefits, particularly in terms of what jobs Invest NI could create if Corporation Tax was reduced. Alastair Hamilton indicated that work is underway in relation to this in Invest NI which, once complete, could be shared with EAG. ACTION 1: Invest NI to share findings of analysis on the potential impact of reduced Corporation Tax on job creation.
3.8 Frances Ruane stressed the need to manage expectations in relation to the Treasury Paper, and to ensure all cost calculations are future proofed. 3.9 Minister Foster registered some concerns about the lack of progress to date on the timetable for the paper and how it will be taken forward. She welcomed any influence EAG could bring to bear in relation to ensuring that Treasury worked alongside the devolved administration in the preparation of the paper. She also welcomed the EAG suggestion that other fiscal incentives, in addition to corporation tax, should be considered. 3.10 David Sterling emphasised the need for firm proposals in the Treasury Paper, and suggested EAG could also reinforce this in their discussions with the Secretary of State. ACTION 2: In their discussion with the Secretary of State on the HM Treasury exercise to rebalance the NI economy, EAG Members to highlight the need for Treasury to work with the devolved administration, and that firm proposals are needed as part of the review. 3.11 In relation to the first EAG Report on the Economy, Minister Foster was content to receive the report in early 2011, given that the completion of several work streams on the economy could impact upon the shape and direction of the EAG report. 3.12 Michael Ryan advised that EAG had looked at a number of policy levers and would be making recommendations on how actions on these levers could be taken forward to grow the NI economy. Members discussed planning issues and the importance of external perceptions of NI. 3.13 Minister Foster advised that access to finance remained a major issue for many NI firms and welcomed any advice/ recommendations EAG could offer on this matter. 3.14 Speaking in relation to Northern Bank, Gerry Mallon indicated that the issue was finding viable businesses to lend to and that it was also natural for the banking sector s appetite for risk to contract during a recession. He also suggested there may be further problems ahead, such as the cost of credit as the economy comes out of recession. Michael Ryan suggested the Group s role may be limited in this area, given their lack of influence in relation to banks. ACTION 3: EAG to include an analysis into access to finance in NI as part of its work programme. 3.15 In relation to planning issues, Minister Foster highlighted that she and Minister Poots (Department of the Environment) had met with the Attorney General to discuss judicial reviews and the impact of European directives, both of which were slowing the planning process down. She
advised that Minister Poots will be bringing forward planning reforms in due course. 3.16 Frances Ruane stated that it was essential that the Planning System in NI was fit for purpose. 3.17 Bill McGinnis suggested the need for EAG to consider recommendations to address short term employment pressures. Frances Rune stressed any short term measures should be aligned with the medium to long term priorities to ensure cohesion. Stephen Kingon suggested the sustainability of jobs in the short term would also need to be considered to ensure cohesion. 3.18 Members discussed the importance of getting graduates into employment and recognised that engagement with the Private Sector was deemed vital for this. Promoting internships and/ or work placements to avoid long term structural employment problems was also advocated. 4 EAG WORK PROGRAMME 4.1 Kate Barker presented the work programme being proposed by the Group for the period up to end December 2010. 4.2 Minister Foster welcomed the direction of the work programme, and indicated she was keen to work collaboratively with EAG. She also welcomed EAG plans to engage with the Strategic Investment Board on investment priorities and the Secretary of State in relation to the HM Treasury exercise. 5 ENGAGEMENT WITH STAKEHOLDERS 5.1 Kate Barker advised that the Group was keen to meet with a range of economic stakeholders to take on board their views and to help inform the development of economic policy advice which EAG will provide to Minister Foster. 5.2 She set out details of planned meetings between the Group and other bodies/ stakeholders up to end December 2010, including: Meeting with the Secretary of State to discuss the HMT exercise on rebalancing the NI economy: Meeting with the SIB to request that future investment strategies more fully reflect economic infrastructure: and Holding stakeholder events/ focus groups with a range of economic stakeholders, including representatives from trade unions, voluntary and community sector, Business Alliance bodies and Further and
Higher Education in Autumn 2010, to coincide with the next EAG meeting on 22 November. 5.3 Minister Foster welcomed EAG plans to engage with key economic stakeholders. She also suggested that other stakeholders, such as the Industry Advisory Panel for Agri-food and the NI Independent Retail Trade Association (NIIRTA) should be invited to the stakeholder events. ACTION 4: Secretariat to circulate Food Strategy paper to EAG Members in advance of stakeholder events. 5.4 Gerry Mallon suggested independent NI economists should also be invited to the stakeholder events. 6 AOB : Press Release/ Media Engagement 6.1 Given the considerable amount of work done since the Group s first meeting, Kate Barker suggested that a press release should issue to outline the agreed work programme and EAG s initial views on the economic priorities for NI. Members agreed to this. ACTION 5: Secretariat to draft press release and clear with EAG Chair. 6.2 Kate Barker also advised that she was conducting a number of media interviews in the afternoon of 27 September. Members stressed the need to appropriately manage expectations. 7 DATE OF NEXT MEETING 7.1 The next meeting has been scheduled for 22 November 2010, Parliament Buildings. (List of Action Points agreed at 27 September meeting attached at Annex B) Yvonne Curran September 2010
ANNEX A EAG MEMBERS MEETING 27 SEPTEMBER 2010 LIST OF ATTENDEES REPRESENTATIVE Kate Barker Michael Ryan Alan Armstrong Stephen Kingon Lorraine Hall Frances Ruane Gerry Mallon Bill McGinnis Alastair Hamilton Arlene Foster Andrew Crawford David Sterling David Thomson Graeme Hutchinson Fiona McCausland Aidan McMahon Yvonne Curran ORGANISATION Chair of EAG Bombardier Aerospace Almac Invest NI Board Kestrel Foods Economic and Social Research Institute Northern Bank NI Adviser on Employment and Skills Invest NI Minister Special Adviser to Minister
ANNEX B ACTION POINTS AGREED AT 27 SEPTEMBER 2010 EAG MEETING WITH MINISTER NO. ISSUE ACTIONS ARISING LEAD RESPONSIBILITY TIMESCALE 1 Corporation Tax Invest NI to share findings of analysis on the potential impact of reduced Corporation Tax on job creation. Invest NI TBC 2 HMT Exercise on Rebalancing the NI economy In their discussion with the Secretary of State on the HM Treasury exercise to rebalance the NI economy, EAG Members to highlight the need for Treasury to work with the devolved administration, and that firm proposals are needed as part of the review. EAG Members By November 2010 3 Access to Finance EAG to include an analysis into access to finance in NI as part of its work programme. EAG Members TBC 3 Food Strategy Secretariat to circulate Food Strategy paper to EAG Members in advance of stakeholder events. 4 Press Release Secretariat to draft press release and clear with EAG Chair. Secretariat By 22 November 2010 Secretariat By 27 September 2010