One serious sting in the tail and missed opportunity in Budget
THE last two weeks have seen a welcome abundance of announcements - from the Executive's Pathway to Recovery, Economic Recovery Action Plan, to the Chancellor's Budget. And as companies continue to grapple with the impact of the pandemic each intervention provides cause for hope.
CBI members are full square behind the Economic Recovery Action Plan. Investing in skills, creating employment opportunities, as well as stimulating investment and demand are strongly aligned with our vision for an inclusive, jobs-rich and green economic recovery. The plan hits all the right notes for the business community, so what's needed now is for the Executive to back it.
Businesses also took heart from the Budget. The Chancellor outlined action to protect the economy in the short-term, help companies weather the effects of the pandemic and jumpstart the recovery. Firms were also pleased to see a nod to the future – ensuring sustainable finances are put in place through measures like super deduction to boost long-term investment.
But there was one serious sting in the tail and one missed opportunity – both of which will be acutely felt here.
Firstly, the decision to move corporation tax to 25 per cent by 2023 in one go caused a sharp intake of breath for many companies and sends a worrying signal to those planning to invest across the UK. Firms have for some time now been keen to have a corporation tax rate that matches the Republic, ensuring the region can compete for investment on a level playing field across the island.
The Fresh Start Agreement committed the Executive to reducing the corporation tax rate to 12.5 per cent, so this is an issue needing greater attention as we think about long-term economic growth at the regional level.
Secondly, skills support was conspicuous by its absence in the Chancellor's Budget. The world of work has been changing at breakneck speed. The pandemic has accelerated company action to employ new methods, evolve fresh products and services, and seek innovative routes to market, simply to survive.
A pre-pandemic CBI report – 'Learning For Life', with McKinsey & Company analysis – revealed that nine out of every 10 people across the UK will have to reskill over the coming decade.
The majority will need new skills in digital, science, technology, engineering and maths, plus leadership and interpersonal skills. Such a huge level of upskilling will be a mammoth undertaking – costed at an additional £13 billion a year across the UK.
Action is needed now to invest more in lifetime learning and upskilling. Business, government, the education sector and individuals must come together to make NI's adult education system fit for the future. Laudable first steps have been set out by in Northern Ireland's Economic Recovery Action Plan, which asks for a flexible skills fund, widening the access for apprenticeships etc. But there will be sufficient funding available from Westminster to allow these much-needed initiatives to unfold?
If we are to deliver an ambitious, forward-looking vision for Northern Ireland's economy, we also need to bring our gaze back to the here and now - by proposing a clearer direction of travel for reopening the economy which society can get behind.
That means clarifying an indicative timetable or public health milestones for easing out of lockdown. For firms, knowing when they can reopen their doors again after being shut for so long and dealing with sharp fall in demand will get them on the front foot in planning their future operations.
Of course, we must not throw caution to the wind. Firms know that reopening will be complex. Public health must remain paramount. It is right that as a guiding principle, decisions are driven by data and not dates. That's also important to end the damaging cycle of stop-start restrictions.
However, without any semblance of a timetable, companies in the hospitality, aviation, retail and tourism sectors will have to overcome a long and uncertain road to recovery. The same goes for supply chains which are dealing with stilted demand without clarity on when normal trading levels might return.
The business community shares the government's ambition of building back better from the pandemic and securing a greener, skills and jobs-rich future for Northern Ireland.
But we must now do the crucial groundwork in forging a path to the other side of lockdown. Firms were pleased to hear the Executive's commitment to engaging with them on the next stages of the roadmap. Now more than ever, close cooperation is vital to develop a safe, step-by-step plan which can get businesses and individuals back to work again.
:: Angela McGowan is CBI Northern Ireland director