Mayor Bloomberg's backing of conference is a big plus
The recent decision by New York Mayor, Michael Bloomberg, and City Council Speaker, Christine Quinn, to back the forthcoming US-Northern Ireland investment conference in Belfast is a major endorsement of an event that could bring both long and short-term benefits to the local economy.
Bloomberg is a heavy hitter with an impressive track record as an entrepreneur and as a politician, who has had a substantial impact on the development of small business in the city.
Bloomberg’s endorsement of the conference will help other business leaders in New York to set aside concerns over the looming economic recession and to take a long hard look at what Northern Ireland has to offer business investors. We’ll need to be really clear and forthright about the advantages we offer potential investors.
Mayor Bloomberg’s statement that “the future of Northern Ireland has never been brighter, because the commitment to peace has never been stronger” will have been noted by other businesspeople in the world’s financial capital.
The conference will not only give business leaders here an opportunity to showcase the region’s economic potential, it will also provide scope for networking with key decision makers from New York and other US regions.
Bloomberg correctly identified the contribution that good jobs and economic development can play in moving the peace forward.
In reviving the New York economy, Bloomberg used tax incentives to stimulate smaller manufacturing businesses in particular, including the concept of industrial business zones.
Special financial and tax incentives were also created to encourage companies to relocate to New York.
Huge investment is under way in helping industrial projects grow faster. He set out to make post 9/11 New York a really attractive place again in which to do business.
While the conference will provide a unique opportunity to highlight the dramatic transformation Northern Ireland has seen, particularly in the past 12 months, imaginative measures are called for from Gordon Brown to help jumpstart investment from the US.
We await the publication of a second study by Sir David Varney on the future of the local economy. His previous report was deeply disappointing in his rejection of calls for a substantial reduction of corporation tax, a rejection shaped by the possibility of a 300 million ‘hit’ in tax receipts to the Treasury and likelihood of demands from other UK regions for the same concession.
Varney, however, did not adequately consider any benefits likely to flow from a significant rise in inward investment. Nor was there any recognition of the distortion in Northern Ireland’s economic development caused by our close proximity to the Republic of Ireland.
Varney’s suggestions that Northern Ireland needs to improve skills, tackle the unacceptably high level of economic inactivity, a sharper focus on innovation and R&D, and reducing the size of the public sector, just won’t provide the stimulus the economy needs.
Gordon Brown is also known to favour greater tax credits for R&D and may endeavour to use the conference to launch these. He’ll need to do better if Northern Ireland is to move ahead faster, particularly in terms of the higher value added jobs that are required to drive productivity up at least to match the overall UK average.
The need for action on corporation tax was also reinforced in the most recent Northern Ireland Business Confidence and Economic Trends Survey, which found that 64 per cent of local businesses favour a substantial cut. They agreed with the statement that ‘Northern Ireland loses FDI as a result of the corporation tax rate in the Republic of Ireland’. More than one third of those interviewed said the Executive should make a reduction in corporation tax a priority.
The message is as clear as it was last year. It is that if Mayor Bloomberg and other US business leaders are to be persuaded to back Northern Ireland with quality employment projects, the UK government has either got to backtrack on corporation tax or come up with a package that enables us to match the Republic as a really attractive business location.
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Thursday 24 May 2012
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