24 June 2020
CBI Director-General Carolyn Fairbairn and NI Director Angela McGowan have written a letter to the First and Deputy First Minister outlining an ambitious recovery plan for Northern Ireland's economy.
The letter reads:
Dear First Minister and Deputy First Minister,
Build back better: CBI medium term proposals for a jobs-rich economic recovery
The Covid-19 crisis has created an unprecedented challenge and rightly led to a relentless focus on health. Business recognises that this situation will remain the case for some time and we will all need to adapt to new ways of living with Covid-19, at least until a vaccine is found. But this must not stop all of us from implementing an ambitious recovery plan for Northern Ireland’s economy.
Amidst all the uncertainty, one thing is clear: Northern Ireland can only build back better through a market-driven plan that supports sustainable growth. Dynamic enterprise is the only way to fulfil our potential and raise living standards at the regional level. It is also our opportunity to get ahead in an increasingly competitive global economy.
While we live with the virus, any economic renewal plan must continue to prioritise health. The CBI has valued its recent partnership with both the Northern Ireland Executive and other stakeholders on the NI Engagement Forum to ensure that Northern Ireland is a safe place to work, visit, study and indeed a great place to invest. The forum has clearly demonstrated that by working together we can find solutions to achieve our common goals.
We also warmly welcome last week’s publication by the Department for the Economy ‘Rebuilding a Stronger Economy – the Medium-Term Recovery Towards A More Competitive, Inclusive and Greener Economy’. The focus of that plan is on Northern Ireland’s structural weaknesses in terms of jobs, skills and the reducing the regional imbalance – all of which are consistent with the CBI’s build-back-better proposals for a jobs-rich economic recovery.
Jobs and Investment
In CBI’s letter to the Prime Minister last week, we noted that after health, the two priorities that stand out are jobs, especially for young people, and investment.
In recent weeks we have witnessed a rise in the number of proposed redundancies in Northern Ireland and the numbers will no doubt rise further as support schemes wind down. Past recessions show the impact of joblessness is deeply uneven. Without immediate intervention pre-crisis inequalities will worsen. Long term unemployment leaves generational scars.
The CBI strongly welcomes the emphasis that the Department for the Economy has placed on skills within its Medium-Term Recovery Plan. We are also extremely pleased to see the swift action by the Executive to invest in digital skills, with the provision of extra funding for digital courses in local universities and further education colleges. These measures respond well to the CBI’s call for more digital skills in our recent publication “Opportunities Available: Towards a Digital Skills Action Plan for Northern Ireland”.
Furthermore, the Department’s emphasis on Life-long Learning, Apprenticeships and reducing the current skills imbalance are all important aspects of improving Northern Ireland’s labour market offering and reducing inequalities.
Dynamic markets will over time create new jobs, but smart, fast policy is needed now to accelerate the process and minimise the human cost. Together with our members and in consultation with stakeholders, the CBI has developed some simple, implementable proposals that can be acted on now to help create the best possible recovery:
1. Make jobs, skill-building, and opportunities for young people the top priority
• Transform Jobs and Benefits Offices into Jobs and Skills Hubs to support young people into new jobs and training: By harnessing the expertise of colleges, universities, unions and businesses, local resources can be directed where they are most needed. The Jobs and Skills Hubs should have two roles: providing rapid matching of people to new job opportunities; and sourcing high quality training in areas of future demand in the local labour market.
• Back this up with a Future Skills Fund: This funding should be ring-fenced money and expenditure should be industry and evidence led. The fund could be used for targeting our current skills deficit and addressing future skill priorities. A centralised skills fund should help to reduce the current silo approach to skills delivery in Northern Ireland and would allow for agility in a dynamic economic environment. Additional funding should be targeted at the skills for tomorrow where there will be greatest future demand, such as digital, low carbon, health, construction, and advanced manufacturing.
• Increase flexibility in the Apprenticeship Levy by enabling it to be used to pay a contribution to wages: Maximise the chances of school and college leavers going into work by supporting employers to take on apprenticeships. Allow the levy monies to be drawn down through the newly created Skills Growth Fund giving NI employers the opportunity to use the levy to contribute to apprentice salaries and/or business investment in skills.
2. Stimulate Investment – Invest in the green economy to create new jobs, investment, and a more sustainable future
Business investment has historically been weak in Northern Ireland relative to other UK regions, and it is now at historic lows. Action is urgently needed to stimulate both private and public sector investment and create the jobs of the future.
The CBI recognises that there is much to do over the next few months to make the NI Protocol work for business and investors. In addition, to increase Northern Ireland’s overall investment levels during the recovery period, the region urgently needs a long-term investment strategy and budgeting must also shift from a one-year plan to a long-term approach.
• Provide certainty to energy and infrastructure investors in the private sector: delivering the Executive’s long-term Investment Strategy. Move rapidly to deliver major projects such as the North-South Interconnector and key strategic capital projects.
Now is also the time to fast forward progress on delivering Northern Ireland’s net zero target. The Executive’s Medium-term Recovery Plan correctly asserts that “Clean energy is an area where investment is likely to increase globally in the short and medium term”. By investing in green growth – through both proven and new technologies – government can create jobs now and build a sustainable future. Northern Ireland can use this moment to identify its areas of global competitive advantage and enable investment behind them.
• Accelerate the next generation of green infrastructure: Build on existing work with the private sector to expand the electric vehicle charging network and speed up its deployment through fast-track planning and funding. Support further business investment in low carbon infrastructure projects and investment in a flexible energy system. Work with the UK Government to secure funding in nascent technology, for example in the delivery of hydrogen vehicles.
• Make every home a green home: Accelerate the existing energy efficiency commitment by retrofitting Northern Ireland homes with a high standard of energy efficiency and lay the foundations for low-carbon heat.
• Supercharge the rollout of Digital Infrastructure: Progress the delivery of Project Stratum across Northern Ireland with added urgency as strong digital infrastructure is vital to a green recovery.
3. Kick-start demand and unleash competitiveness
Alongside targeted action to set the country on the path to a brighter, more prosperous future, immediate stimulus will also be needed to kick-start the recovery. To do this the CBI are encouraging government across the UK to:
• Target support at those sectors and places hardest hit by the crisis: Introduce a time-limited scrappage scheme to incentivise the take up of electric vehicles. Provide a more extensive system of grants for SMEs to weather the crisis, help businesses to press ahead with paused innovation projects, and support sectors vital to future productive capacity, such as higher education. Accelerate shovel-ready construction projects, including across housebuilding, renewables infrastructure and local road and rail networks.
• Enhance competitiveness in the key growth industries of the future: Provide a competitiveness boost by using the net zero momentum to roll out low carbon solutions, accelerate the pace of digital transformation of user-friendly public services directed at businesses, continue long-term reform of business rates and learn lessons on agile public procurement from this crisis to drive forward innovation.
• Capitalise on recent increases in appetite for technology: Leverage the uplift in R&D funding announced in the UK Budget to make sure Northern Ireland is an ideal place to test, develop and bring to market the new products and technologies of the future, with a strong research-base from Northern Ireland’s higher education sector and a range of cutting-edge companies, including across manufacturing and engineering.
• Support dynamic scale-ups: Encourage economic dynamism and create a culture of growth investment by using providing funding to back scale-up businesses, so vital for future job creation.
Taken together, these initiatives will support the recovery in the short and medium term and lay the foundations for a more competitive and sustainable future for Northern Ireland’s economy. Above all, the recommendations outlined above provide for a new, collaborative, and innovative way of working between business and government. Good collaboration will ensure that Northern Ireland truly builds back better.
I would welcome the chance to discuss any of these proposals with you. The CBI looks forward to continuing to build a strong partnership between business and the NI Executive to deliver for the communities of Northern Ireland.
Dame Carolyn Fairbairn (CBI Director-General) and Angela McGowan (CBI Northern Ireland Director)