Thank you for that kind introduction. I would also like to thank the Idox Group for sponsoring today’s event.
It is a great pleasure for me to speak to the Londonderry Chamber of Commerce on my very first visit to this great city.
You have a long and very distinguished history. You helped to ensure that even through the long years of the Troubles Derry retained its position as an important commercial centre. And in what is now an era of greater peace and stability I know that you will maintain your leading role in the economy of the North West.
I am acutely aware that the most pressing issue facing the overwhelming majority of people here in the North West is the economy and, more specifically, how we can create the conditions to encourage enterprise, job creation and prosperity.
Of course many responsibilities for economic development rightly now rest with Stormont Ministers. Issues like labour market reform, planning, business rates, transport and infrastructure, education and training and enterprise zones are dealt with by the Executive.
I’m happy to support the Executive and work with them on these matters while respecting devolution boundaries. But Northern Ireland is also greatly affected by the decisions we take in Westminster. So I would like to take a few moments to set out what it is we are doing to set the country back on the path of sustainable economic recovery and growth.
As you are aware the Coalition Government that was formed in May 2010 inherited the largest structural deficit in the UK’s peacetime history. For a decade before the crash in 2008 spending had been allowed to rise at unsustainable rates over and above our ability to afford it. As a country … we were living way beyond our means well before the banking crisis came along to make the situation immeasurably worse.
As a result, we have had to pay around £120 million a day to service the debt we inherited. To put that in some perspective … the annual interest on our debt is more than double the whole of public expenditure here in Northern Ireland.
So our first and overriding objective has been to deal with the deficit.
The alternative risked spiralling interest rates and the kind of debt crisis that has engulfed some of our European neighbours … not to mention burdening future generations with debts that they would spend decades paying off.
As a result of the measures taken by the George Osborne we have cleared a quarter of the deficit Labour left us and maintained the confidence of the international markets.
This has kept interest rates at near record lows which helps everyone in Northern Ireland who runs a business or who pays a mortgage.
And the Government has used its very limited room for fiscal manoeuvre to cut UK Corporation Tax.
By the end of this Parliament we’ll have the lowest corporate tax rates in the G7.
We’ve also introduced initiatives like the Enterprise Finance Guarantee Scheme and the Funding for Lending Scheme to help get much needed credit flowing again for hard pressed businesses.
I’m acutely aware of the difficulties faced by businesses here because of continuing problems in the banking system both north and south and the toxic impact of the property crash both north and south.
That’s why I want to work closely with colleagues in London … with the NI Finance Minister … and with the banks … to try and ensure that Northern Ireland businesses benefit from these lending schemes.
To further assist Northern Ireland, the Government has devolved long haul air passenger duty to preserve the crucial direct flight to the United States. We’ve provided £4.4 billion for superfast broadband. And our decisions on the block grant have continued to recognise the special circumstances faced by Northern Ireland with public spending levels here some 25% higher per head than in England.
Of course some people say we should let up a little, or perhaps even borrow a little more in order to spend more. But everyone knows you can’t borrow your way out of a debt crisis. And those who advocate cuts to VAT in order to stimulate growth need to answer the question of how they would make up the £15 billion a year shortfall in revenue it would create.
The fact is that today we are in a global race. And to succeed in that race we must deal with the deficit so we pay our way in the world and make ours a country of aspiration…where people who work hard can get on in life.
It’s undoubtedly true that we’ve had to make some difficult choices. That was inevitable given the situation we inherited. But at long last there are the first tentative signs that the UK economy is healing. The last quarter saw us return to growth. And the private sector has created over a million new jobs across the UK since the Coalition Government took office.
There’s been some good news in Northern Ireland too. For its size Northern Ireland is the best performing region of the UK for foreign direct investment. We have so much to offer here:
- a highly trained workforce.
- significantly better education results than England and Wales
- 2 world-class universities … including Magee Campus here in Derry … both of whom are geared to working closely with business
- excellent transport connections to Great Britain, Europe and the wider world
- a very competitive cost base.
- and a great quality of life…as everyone who invests here quickly comes to appreciate.
Not for nothing was Northern Ireland rated earlier this year as the happiest place in the UK in which to live.
We also have some truly world class businesses. Only this week one of them, Bombardier, announced a new order for up 142 new business jets worth £4.8 billion…the largest such order in its history.
But there’s no denying the gravity of the economic challenge faced by Northern Ireland.
We’ve been hit by some significant private sector job losses… devastating for those directly affected and their families.
And the economy remains too dependent on public spending.
In addition, when it comes to attracting inward investment, it is hard to compete with the Republic of Ireland with its 12.5 per cent corporation tax. I know that’s a big issue for places like Derry Londonderry and other areas close to the border. So I share the commitment of the Executive to rebalance the economy and create the conditions in which the private sector can grow.
The Government is continuing to look at the case for devolving corporation tax. The Ministerial Working Group that the Government and the Executive set up last year finished its work in October. Last week, it delivered its report to the Prime Minister. That set out areas of agreement, for example over what the structure of a devolved CT regime might look like.
It also outlined areas where there are still differences, such as how we make adjustments to the block grant … which we would have to do to be compliant with European law. The Prime Minister is now studying the report. And he has said that he will want to discuss it with colleagues in London and also with the First and deputy First Ministers, before the Government decides on the way forward.
I fully appreciate the strength of feeling on this issue within the business community. So be assured that the Prime Minister is looking at it with the greatest care and seriousness … as he made clear to Peter Robinson and Martin McGuinness during his visit last week.
And of course during his visit he also made an announcement that will project Northern Ireland on to the global stage. Bringing the G8 to Fermanagh will demonstrate what a great place Northern Ireland is for tourism and investment.
We’ll be able to show a modern, confident, forward looking Northern Ireland that’s open for business. And I know that here in Derry-Londonderry you’ll be on the national and international map next year as the first ever UK City of Culture. With the All-Ireland Fleadh to host as well … I can well understand why Lonely Planet recently named you as the world’s fourth best city to visit in 2013.
Both of these two major events will be great showcases for Derry-Londonderry, for Northern Ireland and for the UK and Ireland. People visiting the city in 2013 will be able to choose from a rich and varied agenda of cultural events. They’ll also be able to see some of the many great visitor attractions here… from your world famous city walls … to the fantastic Peace Bridge that I saw this morning.
But I also hope that they’ll use the city as a base to explore further afield. Because you are perfectly placed as a location for people to step into some breathtaking scenery like the Sperrin’s, Donegal or the Causeway Coast. So I’m in no doubt that 2013 will be Derry-Londonderry’s year and a visit should be high on anybody’s list of priorities.
No one can deny that this City has had a tumultuous history. It has witnessed events that have not only helped to shape the history of these islands, but also of Europe as whole. There have been periods of great progress and of course times of deep tragedy and bitterness. Yet throughout … Derry-Londonderry has always retained its pride, its optimism and its vibrancy.
And it is on that note that I look forward to working with all of you to promote Londonderry and Northern Ireland in pursuit of our shared objectives of building a more prosperous society for all.