We have a desire to build back better

This past year has been a whirlwind for business and the last fortnight has been no exception.
Adrian Doran, CBI Northern Ireland ChairAdrian Doran, CBI Northern Ireland Chair
Adrian Doran, CBI Northern Ireland Chair

This past year has been a whirlwind for business and the last fortnight has been no exception.

A slew of key announcements have been set out by policymakers - from the Executive’s Pathway to Recovery, Economic Recovery Action Plan, to the Chancellor’s Budget.

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As companies continue to battle against major headwinds, I believe each of these interventions provide an important reminder that a more hopeful future lies ahead.

From my discussions with CBI members, I know that firms across Northern Ireland were buoyed by the Economic Recovery Action Plan’s commitment to creating jobs, investing in skills, and boosting investment. In terms of outlining a detailed plan to drive green and inclusive economic growth, the plan hits all the right notes for the business community. What’s needed now is for the Executive to rally behind it.

Businesses also looked to the Budget for the UK Government to take decisive action. The Chancellor delivered by setting out a vision to protect the economy now, get firms through to the other side and kickstart recovery. Companies were also glad to see an eye cast to the future to ensure finances are sustainable and put in place measures like super deduction to boost long-term investment. But there was one significant sting in the tail.

The decision to move Corporation Tax to 25% in one leap caused a sharp intake of breath for many companies and sends a worrying signal to those planning to invest across the UK. This is particularly acute in Northern Ireland. Firms have for many years now been keen to have a Corporation Tax rate that matches that in the Republic of Ireland, as this would ensure that the region can compete for investment on a level playing field across the island. The Fresh Start Agreement has committed the NI Executive to reducing the Corporation Tax Rate to 12.5%, so this is an issue that will need much more attention as we think about long term economic growth at the regional level.

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To make the most of the unprecedented, much-needed business support and deliver an ambitious, forward-looking vision for Northern Ireland’s economy, we also need to do more heavy lifting in the short-term - by proposing a clearer direction of travel for reopening the economy which society can get behind.

Unfortunately, when we judge the Pathway to Recovery roadmap by that measure, it does fall somewhat short. Because while it’s a good starting point, it was ultimately disappointing for businesses and the public alike to see it include neither milestones based on health data nor an indicative table for businesses emerging out of lockdown.

Many people will have been sorely disappointed to not receive any hint of when they might be able to see friends and family again. And though business backs the Executive’s broader vision for economic recovery from the crisis, clarity on when companies might be able to reopen their doors again is the missing piece of the puzzle to match policy and fiscal commitments made by policymakers.

After months of closure and stilted demand, detail on the sequencing of lifting restrictions would have made a world of a difference. Crucially, it would have given firms an understanding of when they might be able to get trading again and a jumpstart at planning their operations.

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Of course, companies know the importance of avoiding further restrictions and are well aware of the scale of the challenge facing the Executive. They aren’t under any illusions that a quick fix can magic away the complexities that come with reopening. It is right that caution remains the watchword and that decisions are driven by data, not dates.

But without any sense of timeline, sectors like hospitality, retail and tourism will find the road back to reopening a long and uncertain one. Others, like aviation, face yet another prolonged period of hibernation. And supply chains for these sectors will continue to wrangle with significantly decreased demand with little knowledge of when more normal levels of trading may return.

Business and the Executive share a desire to build back better from the pandemic and bring the vision of a greener, jobs-rich Northern Ireland to fruition. So let’s lay the groundwork for a safe and effective economic restart that gets businesses and individuals back to work as soon as safe to do. A step-by-step approach would help get business on firmer footing in the short-term while also meeting the Executive’s aim of ending stop-start restrictions.

The Executive’s commitment to engaging with sectors when it comes reopening is hugely welcome. Working together, we can make the most of both the Economic Recovery Action Plan and the Budget.

With hard work, preparation and government collaboration with NI’s business community, we can get the economy firing once again.