Industrial De-Rating

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Speech to NI Assembly

Confidence within the local manufacturing sector was last year so low that an official government report urged a programme of action that includes promoting the message that ‘manufacturing has a future’.

‘The Future role of Manufacturing in Northern Ireland’ which the Department of Enterprise, Trade and Investment (DETI) commissioned from PriceWaterhouseCoopers last summer was produced because of the hemorrhaging of manufacturing jobs and the movement of companies to overseas low cost countries. The report is impressive, but urgent action on the impressive words is now called for.

There is a need for some positive movement on the various issues identified. My concerns were once again raised following the announcement by Adria to stop manufacturing in the northwest plus the high profile campaign against industrial de-rating organized by local companies. And the employers do deserve support in their campaign. The favorable rates position has been a small feature in helping make NI an attractive manufacturing base for inward investment.

Despite these difficulties I want to point to the fact that rumours of the complete demise of the manufacturing industry here have been greatly exaggerated with those that can adapt and diversify in the face of global competition excelling. However, global competition is ever increasing.

How much has been due to the application of government policy remains to be seen however and I feel there is as yet little evidence of action rather than words.

I have indicated previously my agreement with the report’s findings that innovation is key to success and have asked that the DETI place more emphasis on research and development activities. At meeting recently with leading Senior Executives at Invest Northern Ireland I urged the promotion of a better take up of existing R&D grant schemes to help local firms.

I have already called for an immediate reduction in corporate tax to spark a business culture, which is infused by the spirit of innovation, much more easily achieved with a reduction to at least 12.5%, or better – to 10%. I am now pleased that Tony Blair has announced a study is to be carried out on the potential for tax breaks to boost the province’s economy.

We are at the very edge of the European Community, and therefore the most remote from the emerging markets of Eastern Europe where success in building a future for local manufacturers lies.

To get a stronger private sector manufacturing base a fairer rate of corporate taxation is required so that we can compete on a fair and equitable basis with the rest of the EU manufacturers.

It is the survival of the fittest’ in the fast-paced local industrial world, and manufacturing really does have a future but the need encouragement, not penalties such as industrial de-rating.  Local firms are slimmed down, leaner, and more competitively placed than ever before.

Now they need the government agencies to deliver on the promises and suggested remedies made in last year’s DETI report’s ‘action’ summaries to allow them to continue to survive, develop and hopefully expand.