Business

Angela McGowan: Put Protocol in perspective and get on with prioritising real economic issues

CBI Director-General Tony Danker
CBI Director-General Tony Danker CBI Director-General Tony Danker

IT was pleasure to host CBI Director-General Tony Danker in Northern Ireland last week, where we met 40 businesses at our regional council and visited many more firms across Belfast too. Unsurprisingly, we found ourselves talking repeatedly about the lack of skills, the surging cost of living, rapid rises in inflation, and political instability here.

Historic squeezes on family household incomes are felt more acutely in Northern Ireland, with many people spending a greater proportion of their disposable income on energy and food. Worryingly, we know those facing real hardship is only set to grow in weeks and months to come.

Businesses are feeling the heat too. Anecdotally, firms are telling me that they are facing energy bill rises of around 300 per cent. Energy intensive industries are feeling it further still. Labour shortages continue to bite incredibly hard. Global supply chain shortages continue to truly test their mettle.

With inflation standing at an eye-watering 9 per cent and expectations set for it to inch higher still, it’s clear is that the cost of living and cost of doing business are going to wreak havoc on the economy.

It was a big relief to see the government announcing financial support to help those households facing real hardship. It couldn’t have come a moment too soon. Putting money in people’s pockets should help alleviate some of the worst effects. Ensuring that support gets to Northern Ireland households should be a top priority for every politician.

Business also want to support people with the cost of living – whether that’s their customers or employees via wage rises; but keeping costs down amidst a global inflation rally is not an easy task. For example, some employers have opted for temporary one-off payments to support employees through this year, and fingers are crossed for these pressures to lessen in 2023.

But as the Chancellor said himself when announcing the cost-of-living support package, the government cannot solve all economic problems at a time when so much is out of our control and at the mercy of the global conditions. International supply chains, container prices and even the weaker pound are all pushing inflation upwards.

Tackling this particular challenge requires building long-lasting resilience, not just relying on temporary measures. It demands fixing the fundamentals of our economy. Unleashing business investment and confidence, unlocking infrastructure, investing in people, driving green growth and jobs. These are the main levers that must be pulled to put us back on a path to prosperity.

The current economic headwinds require government to offer cashflow support for firms via the Recovery Loan Scheme and Time to Pay. But ultimately business and government must work together on strengthening the tailwinds for growth. By stimulating growth and chasing the competitive chances we have here in Northern Ireland, we can try to ensure today’s current downturn is short-lived.

Despite the challenging outlook I describe, Tony’s visit reinforced to me how local companies are by no means all doom and gloom. They are up and ready for realising our economic strengths. There are healthy levels of optimism out there amongst local business leaders who, at this point, have built up endless reserves of resilience. Demand is still relatively strong; opportunities are still presenting and there is plenty to be done.

Just take one example, decarbonisation. Firms want to get on with the long-awaited “Path to Net Zero” Energy Strategy and the Climate Change Bill. Not only because it will give real focus on the region getting to net zero; it’s essential to tackling energy affordability too. The same is true if we unleash the possibility of infrastructure projects and implement the 10x Skills Plan. These polices, and many more besides, are all capable of helping the local economy roar and raise people’s living standards.

In short, we need delivery on those policies now. They are strategies and plans crucial to Northern Ireland’s future economic growth, written and ready to roll. But once again, they are stalled by a lack of Executive. Hampered by political grandstanding on the Protocol.

The instability simply must stop. A functioning Executive and smoothed Protocol are our strongest sources of competitive advantage. It’s time to put the economy first.

Business wants the Protocol to work. And for the majority it does. But for some importing goods into Northern Ireland, they still experience complexity and high costs. So rather than brinksmanship from all politicians, they need to dial down the rhetoric and work to build back trust and cooperation.

To coincide with his visit, Tony spoke with the major political parties last week. What’s clear is that there are eminently doable solutions – a landing zone from which we can all move forward. If we can get a technical working group around the table to work potential solutions through the Protocol, real progress can be made.

At the CBI, we will continue work behind scenes, alongside other business groups, to provide that united business voice. Living standards and political stability should be at the top of politician’s minds. Nothing is achieved without compromise. There is no doubt that we can reach consensus on the Protocol – smoothing trade flows with business solutions is essential – as it the restoration of a power-sharing government at Stormont.

By putting the Protocol in perspective, we can get on with prioritising the real economic issues. We have a duty to create an economic future for all communities, support the most vulnerable in society through one of the worst dents to living standards for decades – it’s time to focus on economic growth.

:: Angela McGowan is CBI Northern Ireland director