McLaughlin - Federation of Small Businesses AGM
Sinn Féín Assembly member for South Antrim Mitchel McLaughlin today spoke at the Federation of Small Businesses AGM in the Waterfront Hall. As part of wide ranging address Mr McLaughlin said ‘Sinn Féin is ready for the next step. We are ready for government. The Assembly and Executive are scheduled for restoration with full powers next Monday. The parties who are mandated to form that Executive administration need to immediately knuckle down to the task of planning for the future. We are ready to share power with the DUP and the other parties on the basis of equality and to use our strengthened democratic mandate to press for maximum social change.’
Below is a text of Mr McLaughlin’s address:
Can I say, first of all, that I am delighted to be here speaking at the Federation of Small Business Annual Conference. To one and all, especially those of you who have travelled to Ireland for this conference, I would like to wish you a ‘cead míle failte’ to Belfast.
I want first of all to turn to the headline issues that arise from the ongoing Peace process.The peace process has transformed Irish society. Problems that only a decade ago seemed intractable are now being addressed one by one.
In the post-Good Friday Agreement period, increased all-Ireland co-operation is creating huge opportunities for everyone. As an island and a relatively small one at that, duplication and replication of vital areas of economic, public services and administration make no sense whatsoever. In today’s reality of global economics and increasing competition, any refusal to accept this imperative is courting economic melt down.
Sinn Féin is ready for the next step. We are ready for government. The Assembly and Executive are scheduled for restoration with full powers next Monday. The parties who are mandated to form that Executive administration need to immediately knuckle down to the task of planning for the future. We are ready to share power with the DUP and the other parties on the basis of equality and to use our strengthened democratic mandate to press for maximum social change.
Of course, some rejectionist voices, especially within the DUP, are mounting last-ditch efforts to frustrate the timeline established at St Andrews. I hope they do not succeed and that the DUP leadership will reflect that those who oppose the establishment of the Assembly and Executive were roundly rejected and rebuked by the electorate in this month’s elections.
May I now address the subject matter of this important Conference and speak to Sinn Féin’s economic policy priorities. They are:
An All-Ireland Economy for Sustainable Growth
A Peace Dividend for Investment in Infrastructure
Increased Fiscal Flexibility to Meet the Needs of our People
A Radical Overhaul of the Rates System
Support for local Enterprise including Social Economy
A Strategic and policy driven program to Redress Regional Economic Inequality
All Ireland Economy
Sinn Féin believes that the all-Ireland economy should be developed with a harmonised tax regime, a single currency and integrated economic strategies that benefit the island as a whole. The 6 county economy has been retarded through its dependence upon and domination by, the British economy. The economy in the North has suffered because of the absence of fiscal flexibility and has been cut off from the economic expansion that has characterised the rest of Ireland over the period of the ‘Celtic Tiger’. The 6 counties are over-dependent on the public sector; where expenditure is 61% compared to 42% in Britain. In the Northern economy it is estimated that one third of males and one half of females are employed in the public sector.
Business formation rates – indicative of economic activity and growth - are excessively low in the 6 counties. R & D expenditure, often a reliable and key barometer of future economic growth, is at an all time low (0.7% of GDP). It is estimated that 75% of all graduates leave and do not return.
Decisions in London inevitably have reflected the economic needs of the Southeast of England, as I’m sure many of you who are from various regions can appreciate. A one-size fit all policy might work for a small number of regions but it creates disadvantage for most. The North has never been central to strategic economic planning ‘within a UK context’ and will always be peripheral. Across every economic indicator, household income, wealth, GVA, the north of Ireland is consistently at the bottom of the league. This inevitably has generated greater poverty levels, greater levels of social need, of welfare dependency, high economic inactivity rates and an unacceptable failure rate of indigenous businesses.
The admission by British Secretary of State, Peter Hain, that the 6 county economy is unsustainable on its own is the first such public admission by any British government minister. It reflects what they have been thinking and saying privately for a long time. The north’s Department of Enterprise Trade & Investment (DETI) has already conceded that the key problem facing the economy in the north of Ireland is that fiscal policy, taxes and public expenditure, and the regulatory framework are set in Whitehall.
A key example of this, and an issue, on which there is an unprecedented level of political consensus, is that of corporation tax rates. There is a very clear consensus across the political and economic spectrum that corporation tax rates need to be harmonised across Ireland if the north is not to suffer further economic decline. A key obstacle to this lobby for harmonisation is the British Treasury. This spells continuing economic difficulties for the 6 counties.
When the Assembly and Executive meet on Monday – and it is my hope that they do - and we begin to get down to business the most crucial problem that will face us as politicians is that we are hamstrung by a lack of fiscal independence. We cannot set overall budgets or tax rates and we have limited borrowing powers. Sinn Féin supports a package of fiscal flexibility measures including tax-varying powers for the Assembly and an end to borrowing restrictions.
The Sinn Féin preferred option is for the rates system to be made transparent and fair, with a clear relationship between rates, income, value for money and quality of services provided.
The issue of industrial de-rating cannot be resolved in isolation from the significant infrastructure deficit in the Six Counties, the higher costs for businesses here and the progressive squeezing of resources by the British Treasury. Therefore business rating is one aspect of a much wider problem that requires general reform.
Along with all the parties in the previous Assembly, Sinn Féin supported the ending of industrial de-rating in the context of introducing measures that would best support local businesses and their vital role in the economy. Sinn Féin advocates a progressive relief scheme to achieve specific economic and social objectives such as nurturing indigenous small businesses, protecting the farming sector and encouraging social investment in areas of objective need.
We believe that a system of progressive and targeted rates relief for businesses, and small businesses in particular, linked to specific economic and social objectives should be established.
Supporting Indigenous Enterprise and the Social Economy
Sinn Féin supports the development of locally owned enterprise, especially small and medium-sized businesses. Developing indigenous enterprise requires active government support and practical encouragement, and in the Executive Sinn Féin Ministers will actively work to deliver that commitment. Local businesses are crucial to the growth of the economy as they are generally more permanently embedded and source proportionately more material and services from domestic suppliers than their overseas counterparts.
Locally owned enterprise is more geographically dispersed and regionally balanced than foreign-owned enterprise and is therefore essential to the achievement of a more balanced local and regional development. Indigenous SME’s provide the majority of employment in our economy, thus playing a crucial role in creating and sustaining income and employment as well as helping to maintain a balanced enterprise base. As they are more reliable for job creation and economic stability, Sinn Féin’s economic policy emphasises the development of indigenous enterprise whilst acknowledging the benefits of Foreign Direct Investment (FDI).
Sinn Féin also strongly supports the further development of the ‘social economy’. The social economy includes co-operatively owned and managed businesses and community run projects for example in the agricultural, transport, renewable energy, recycling, housing, childcare and social service sectors. It is increasingly recognised throughout the EU that the social economy has an vitally important role to play in society, particularly by enhancing the economy within economically excluded communities.
Sinn Féin wants to see:
Increased financial support for locally owned small and medium enterprises and for social economy projects.
Increased financial support for R&D and for island-wide networking and clustering to boost innovation.
An integrated Skills and Education Strategy to support competitiveness.
Gordon Brown meeting (update)
The costs of redressing the infrastructure deficit in water and roads cannot be met within the existing levels of economic inactivity, low incomes and child poverty. People cannot afford to pay the taxes that are being proposed.
Direct intervention is needed to meet the burden of paying for the infrastructure deficit and to aid economic recovery and increase income levels so that we can increase the tax base in the long term and become economically self-sustaining.
We are keen to work with all the political parties to deliver political stability. We want to take responsibility for the economic and financial decisions facing us, some of which we know are going to be hard decisions. However, the Assembly and Executive will fail if it operates from the current economic baseline. Getting it right now will have a return in the long term; it is in no-one’s interest to be hamstrung by a weak economy.
Yesterday’s funding package, only available if the parties agree to share power and form an executive on Monday, has left Sinn Féin, and I imagine, the other party representatives unimpressed. It is clearly inadequate, the British Government cannot deny that they have presided over decades of under-investment in vital infrastructure. Despite that, they are seeking to walk away and leave this legacy of neglect that amounts to billions to a fledgling Executive at Stormont. The question arises, is the British Government actually setting the Assembly up to fail?
The government said it was providing an additional £1bn over the next four years to meet the economic and political priorities of an incoming executive. The extra money would be spent on new roads, delaying the introduction of contentious water charges and attracting private-sector investment.
But the Irish government is actually providing £400m of the extra money. The package also includes cash from a fund of unspent money, which the devolved administration would have had access to anyway.
So the question remains, is the British government prepared to meet it’s obligations and invest in political stability and economic regeneration?
We will know the answers to some of the questions that I identified by Tuesday next. If we are successful then the financial and fiscal matters will be a constant negotiating issue between the Assembly team and the British Government until they too are resolved.” ENDS