Joint Business Council of CBINI and the IBEC in Dublin
A speech given by the Minister of State Hugo Swire MP.
It is an honour to be invited to address you this evening.
The Joint Business Council is an important organisation for both the economies of Ireland - even more so in these extremely challenging times. And despite these challenging times it is worth reminding ourselves that trade between Northern Ireland and the Republic of Ireland has doubled in the past 10 years - with a 12.6% increase per annum from North to South and a 7.4% increase per annum from South to North.
And of course the Republic of Ireland remains the UK ‘s 5th largest trading partner. We exported £15.3 billion to Ireland and Irish exports to the UK were worth £12.6 billion in 2009. So Ireland ‘s prosperity is as you can imagine of considerable interest and importance to British politicians. It was therefore with considerable interest that I was able to sit in on a debate this afternoon in the Dail and I wish you the best of luck in navigating your economy out of these choppy waters. We are facing our own challenges.
Last week the Coalition Government acted decisively to take the UK back from the brink of bankruptcy and bring our record deficit under control.
It has involved taking some very difficult decisions but unfortunately we had no choice given the complete financial mess we inherited.
The national debt doubled; the largest deficit in the G20.
The UK cannot go on borrowing £270,000 a minute or paying £120 million a day in debt interest.
That interest is dead money that will never be invested in a single school, hospital or police officer.
Tackling the deficit is essential to restoring confidence in the UK economy, placing the public finances back on a sustainable path and securing long-term growth.
And all parts of the UK have to contribute.
In Northern Ireland we are asking departments to make savings of 6.9% over four years.
That’s £1.70 in every £100 the Executive spends.
And it compares to average reductions of more than 8% across UK departments and 25% for the Northern Ireland Office.
So Northern Ireland has actually done proportionately better from the CSR than other parts of the UK .
It’s now essential that the Executive completes the task of setting a budget so that it can deliver the services on which people rely. And as any business knows it needs an early budget in order to plan properly for the future.
But we understand some of the specific concerns, particularly over the reductions in capital spend and the potential impact on construction.
That’s why we’ve been in close discussions with the Treasury and are confident that we remain on course to deliver the £18 billion for capital investment promised by the previous government.
Over the period of the spending review Northern Ireland will have considerable resources to invest in capital projects.
The UK economy is growing and at a higher rate than expected.
This week we had the welcome news that we grew at the fastest rate for a third quarter in a decade - and at double the rate expected by the markets.
It is our belief that economic recovery has to be private sector led.
And the Coalition Government is committed to creating the conditions in which private enterprise - the engine of prosperity - can grow.
In Northern Ireland we are of course heavily reliant on the public sector.
Some studies estimate that as much as 77.6 per cent of GDP depends on public spending.
That’s simply unsustainable.
So the Coalition is committed to tackling the long term structural imbalances in the Northern Ireland economy.
The Conservative manifesto, the Coalition Programme for Government and the Budget in June all promised a Treasury paper this year on rebalancing the Northern Ireland economy.
Working closely with the Executive we are looking at ways of turning Northern Ireland into an enterprise zone.
And we are examining potential mechanisms for giving the Executive the power to set a different rate of corporation tax to attract new investment - as was done so successfully here in the Republic and we believe that IBEC and the CBI have an important role to play here.
But rebalancing will take time - perhaps as long as 25 years.
But we are determined to succeed.
It’s a team effort between Westminster , Stormont and the business community.
It is a central element in our plan to secure a peaceful, stable and prosperous Northern Ireland to the benefit of everybody in these islands.
And it’s a key priority for the Coalition Government.