Gary McDonald looks at how Northern Ireland could capitalise further on investment from the US and India.

Either side of the millennium, Northern Ireland indisputably punched above its weight in terms of attracting foreign direct investment (FDI), especially from the US and more recently India.

From 1997-1998 to 2006-2007, for instance, North American client companies of Invest NI (and previously IDB) made 100 investment announcements, pumping £1.174 billion into the local economy which in turn created 13,660 new jobs and safeguarded a further 9,397.

Those figures don’t even include non-client companies of Invest NI such as retail giant Wal-Mart, which has invested tens of millions of pounds in opening a chain of Asda stores in the north. Among the major US investors in Northern Ireland have been Seagate, Caterpillar, Du Pont, Nacco, Perfecseal, Copeland, Northbrook, Liberty IT and CitiGroup.

Since 2006, India global business process outsourcing giant FirstSource has also pumped in tens of millions of pounds in a series of investments in centres in Belfast and Derry, where its payroll is more than 1,400.

FirstSource’s latest investment last November – helped by another sizeable support package from Invest NI – further enhances the strong links between Northern Ireland and India, which has led to a string of inward investments from large Indian companies such as HCL, Polaris and Tech Mahindra. To further cultivate these links, Invest NI even opened an office in Mumbai in 2008.

Historically, however, such investments here depended largely on selective financial assistance rather than the underlying competitiveness of the Northern Ireland economy. And while the nature of foreign investments has had a significant impact on employment levels, in general terms it hasn’t had an impact on productivity levels and closing the gap with the rest of the UK.

Now the well could be running dry, with access to selective financial assistance likely to be limited in the near future due to changes in EU state aid rules.

There are also emerging fears that the opportunity has not been taken to address the underlying structural problems of the Northern Ireland economy.

However, Stormont Economy Minister Arlene Foster and her DETI and Invest NI cohorts would vehemently argue with that. They insist Northern Ireland has developed a growing reputation for developing software for telecoms, to locate financial services and business applications and increasingly to undertake sophisticated financial processing, including funds management.

The economy, they also tell us, is transitioning successfully towards tradeable services and niche manufacturing and continues to be “a prime location” for international investment.

Global reach

FirstSource is a leading business process outsourcing (BPO) company, headquartered in Mumbai, and provides customised business process management services to FTSE 100 and Fortune 500-listed global leaders across a number of sectors including financial services, telecoms, media and healthcare.

It has 34 centres worldwide and employs nearly 20,000 employees across five countries in four continents.

“Investment and repeat investment announcements by companies of the calibre of FirstSource clearly demonstrate the competitiveness of the Northern Ireland proposition and the confidence it has in this region,” the Minister said.

“Having forged a strong partnership with Invest Northern Ireland, FirstSource has become a major business services employer, strengthening the sector locally and contributing towards the further development of transferable skills, a trend which I believe will continue.”

FirstSource President Matthew Vallance says the company’s Belfast and Derry centres provide high-end business processing services that have achieved very high levels of customer satisfaction. “We expand here because we want to build on that success and create another European centre of excellence that will help to advance FirstSource Solutions’ global reach,” he says.

Northern Ireland’s growing links with the sub-continent complement its many longer-standing relationships with US investors.

Foundations

Drogheda-born but Washington domiciled Dr George Moore is chairman of Erne Heritage Holdings, owners of the Belleek Pottery Group, which it purchased in 1990.

Although Belleek has operated for more than 150 years as Northern Ireland’s leading manufacturer of porcelain giftware, he and his management team have successfully steered it through the choppy waters of the last decade.

The business has not only been rescued, but has been reinvigorated since the launch of its Belleek Living range. The group now controls Galway Crystal, Aynsley China and Donegal China, turns over more than £35 million annually and employs close to 600 people.

Dr Moore says: “America, like most of the world, is still picking itself up from the worst recession most people can remember. But don’t let anyone tell you Northern Ireland isn’t on its radar as far as foreign direct investment is concerned.

“Yes, you are competing head-on with Eastern Europe and Asia for our dollars, but people in Washington can see just how far Northern Ireland come in the past 10 years – economically, socially and politically – as the foundations of a more prosperous and confident region are laid.”

On the US Economic Advisory Board to the Taoiseach, Dr Moore has been a consistent advocate for championing trans-Atlantic economic ties, and insists: “US business people simply love dealing with the Irish.”

He is Chief Executive of Virginia-based consumer and business information database company TARGUSinfo, which he co-founded in 1993 to develop a new generation of information products using intelligent call processing. It means he has now founded three separate IT companies on radical patented innovations, each of which has exceeded revenues of $100 million.

Two Christmases ago his unstinting work in aiding the Northern Ireland economy was recognised by the Queen. That award of an honorary CBE was formally announced to Dr Moore by the then-First Minister Dr Ian Paisley – fittingly, perhaps, during a dinner of key business leaders in Washington DC.

“Twelve years after the Good Friday Agreement,” the Economic Reform Group states, “Northern Ireland still remains the UK’s poorest region.” With the smallest private sector in the UK, it claims the most effective way to turn the economy here round quickly is a low rate of corporation tax.

At present, Northern Ireland relies heavily on a significant grant from the Treasury, to the extent that half of all government spend in Northern Ireland is financed by GB-based taxpayers. Taxation is not a devolved matter and thus is common across the board.

This is not the first time the call for a cut in the rate has been made. In December 2007, when the Varney Review was being conducted, all the parties on the hill made the request. It was not, however, among the recommendations made by Sir David.

Given that most businesses, especially those with export potential do receive “generous” grants or subsidies, the group believes that the local economy will be difficult to turn round. It also warns that from 2013 those investment grants may not be permitted at all after EU plans, which will reduce grants’ ceiling, will come into play.

By way of comparison, the Republic reduced its rate in 2003 and experienced a mass influx on foreign direct investment. The report points out, however, that a lower rate here would also benefit local companies as they would be encouraged to grow.

The decrease, it is argued, would create “at least 90,000 jobs” in the province, most of which would have a salary above the average wage here.

While not actively encouraged by the European Commission, reduced tax rates were declared legal in 2006 in the Azores and Gibraltar judgements in the European Court, so long as the void was shouldered by the region and not the national government. The group cites the reduction in revenue for the Executive to be around 2 per cent, though Varney estimated 1-1.5 per cent. That 2 per cent figure could, it argues, be smaller if the tax base expands as fast as it has in other regions following a reduction.

Adjustmentsm

The drop to 12.5 per cent would mean Northern Ireland having the joint-lowest rate in the EU. This, it says, could be achieved simply by devolving corporation tax revenues to the Executive in return for annual adjustments in the block grant which reflect the fact that those revenues will be handed over to the Executive by the Treasury. So while an agreed figure would then be deducted from the block grant, Northern Ireland would gain the corporate tax revenue raised in the province.

Allowing for further fiscal autonomy, the Executive could then adjust its own expenditure according to its change in income.

Only when the Executive reduced the rate, would its income be reduced. That amount is “uncertain” and depends very much on what rate the Executive decides on (though the group recommends 12.5 per cent).

Assuming any initial reduction in corporation tax does lead to a loss of income, the report says the Executive would need to make an equivalent reduction in spending, adding that “some short to medium pain” could be necessary for longer-term gains. Indeed data used by the group shows that there would be a cumulative loss for 11 years, before revenue would become “increasingly positive”.

Interestingly, the report does say by way of an example that if the loss in corporate tax income hit £200 million, it could actually equate to two-thirds of the Fiscal imbalances (tax revenues less expenditure) in UK regions annual under-spend by the government departments, which range from £210 million to £382 million.

Taking a step away from the purely local angle, it is likely that there would be a loss of revenue to the UK as a whole as firms would likely relocate to Northern Ireland to take advantage of the rate. Indeed the report also states that the Treasury could, rightly, argue that the deduction from the block grant should be increased each year to take account of rising corporate tax revenues.

Sir David Varney warned back in 2007 that the move could lead to brass plating, whereby a company will set up in a region but have no real activity in it and yet shift profits to its office there, thus benefitting from the lower rate. However the group says that HMRC already has a process in place to police such behaviour simply by monitoring companies.

Enterprise Committee Chair and SDLP spokesman Alban Maginness said: “The SDLP supports, in its manifesto, a cut in corporation tax in order to boost economy and create jobs in the longterm. We welcome [the] announcement by the Northern Ireland Economic Reform Group and welcome a strong debate on the issues that relate to the strengthening of our local economy.”

A DFP spokeswoman told agendaNi that any change to the corporation tax rate here would require legislation to be passed in Westminster, along with the approval both the Assembly and Executive but importantly, also the European Commission.

Even if the policy were agreed by those four parties, the department expects that it would then be subject to various legal challenges from the other UK regions.

TG Eakin

Being prepared to go where the squeamish will not has paid off in spades for Comber-based TG Eakin, which is arguably Northern Ireland’s most profitable yet media under-exposed business.

Northern Ireland has a raft of home-grown and foreign-owned companies punching above their weight in global markets. agendaNi features three of the province’s star companies.

For it operates in a niche area most people would rather not know about – manufacturing medical devices such as colostomy bags and skin glues for use in stoma and wound care.

Today the company exports 99.5 per cent of its products to countries outside Northern Ireland and is a glowing example of how even the smallest enterprises can compete in the global economy if they are innovative, niche and competitive.

In the year to the end of March 2009, TG Eakin, which has fewer than 50 staff, revealed that its turnover was up 20 per cent at £15.5 million as global demand for its products soared. Significantly, more than half – £8.6 million – was retained as after-tax profit.

And the company expects even further growth in 2010, because despite medical breakthroughs and improvements in surgical techniques, Eakin believes the global niche markets in which it operates to “continue to be sustained in the long term”.

Success didn’t come instantly for TG Eakin. It had begun life as a pharmacy, but moved into manufacturing its own products in 1974 after founder Tom Eakin discovered that customers were often dissatisfied with products they obtained from him.

They were particularly critical of the dressings used to deal with the human waste discharged via surgically-created openings in the bowels and elsewhere, leading him to spot a gap in the market for colostomy bags and skin glues.

Sales grew steadily in the UK, but the breakthrough didn’t come until the early 1990s, when TG Eakin began exporting to the United States, Australia and New Zealand. It has since cracked markets in South America, Africa and Asia.

Perhaps the anonymity of the Eakin name comes from the fact that its products are sold under its own name around the world, in the UK they are branded under distributors’ names.

In 2007 TG Eakin acquired Pelican Healthcare, a Cardiff-based supplier and manufacturer of specialist stoma and feminine health products, in a multimillion pound transaction which presented clear opportunities for both companies.

Eakin was keen to exploit worldwide markets by including a broader range of products in its portfolio while Pelican’s complementary product range offered the prospect of diversifying.

Research and development teams within the two companies united to ensure the production of innovative, quality products, and as a result, TG Eakin has significantly expanded its international product range with Pelican Pouches.

Still a family owned and run business (control has now passed to the founder’s sons), the Eakin name regularly features in the Sunday Times Rich List (the paper puts the family’s net worth at more than £90 million).

In such as specialist business within pharmaceuticals, quality is of the utmost importance, and TG Eakin says it always ensures that patient needs are incorporated into its product design, providing comfort, protection and ease of use.

CyberSource

California-based CyberSource used the platform of the May 2008 US-NI Investment Conference to dip its toe into the Northern Ireland water by announcing a £3 million investment to establish a research and development centre in Belfast, creating jobs for 56 software development professionals.

The company is a world leader in the development of secure electronic payment and risk management solutions, with approximately 290,000 customers worldwide, with its technology used to process orders for goods and services over the internet.

It was a bold move by a company which, in the previous year processed more than 1.2 billion online transactions valued at more than $54 billion, but one which was seen as reinforcing the strength of the local skills base, which CyberSource felt could boost its competitiveness in global markets.

And clearly the Americans liked what they saw, for in February this year CyberSource came back for more.

This time it is pumping in another £2.8 million to its local operations at Victoria House in Belfast, where this time its team will design and develop cutting edge technologies based on Java software to enhance its payment platforms.

It’s high value-added stuff, and with Invest NI having first pitched in £840,000 to offset costs of starting the new R&D centre and then £625,000 in the most recent round (although this contribution included part funding from the European Regional Development Fund), economy watchers see it as money well spent.

Mike Walsh, Chief Executive of CyberSource, said: “The level of talent and energy our Belfast team has brought to the organisation has exceeded our expectations. As the team grows, it will play a central role in achieving the strategic objectives of the company.”

CyberSource posted a 22 per cent rise in fourth quarter revenues to $76.1 million and a 29 per cent increase in billable transactions. For the whole of 2009 it saw a 16 per cent increase in revenue, 31 per cent hike increase in transaction volumes, and added 138,000 new customers.

He added: “Our development lab in Belfast played a significant role in these outcomes, delivering several key products in 2009 that not only brought in new customers but also contributed to record customer satisfaction.

“And as we grow our team in Belfast, we look forward to even greater contributions from this vital element of CyberSource innovation.”

Enterprise Minister Arlene Foster couldn’t hide her delight, adding: “This further investment by a world-leading technology company such as CyberSource underlines the confidence it must have in the Northern Ireland skills base.

“We hope their endorsement of this region will encourage other companies from high value growth sectors such as ICT, business services and financial services to consider Northern Ireland as an investment location.”

Andor Technology

Andor Technology will “come of age” this year with what most economic analysts expect to be the most stellar trading performance in its 21-year history.

It was established in 1989 as a spin-out from Queen’s University in Belfast. Today it employs 200-plus people in 15 offices worldwide and distributes its products to more than 10,000 customers in 55 countries. And its stock – which is listed on exchanges in London and Dublin – is trading at historic highs.

Headquartered at Springvale in west Belfast, Andor is at the forefront of developing and manufacturing high-end digital cameras (example pictured) for spectroscopy and scientific imaging applications. It sells into academia, industry and government the world over, and its customers include Nasa, no less.

Its most recent results in the year to September 2009 showed how it is defying the global downturn. It increased turnover for the 12th successive year, growing sales by 34 per cent to £33.1 million, and also recorded its largest ever full-year growth in operating profit – up 63 per cent to £3.4 million.

No wonder “extraordinary” was among the superlatives trotted out by chief executive Conor Walsh.

Further underlining just how far Andor has come, in August last year octogenarian US financier and businessman Jim Slater ploughed more than £1 million of his family’s fortune into acquiring a 3 per cent stake in the company.

One of the most famous UK investors of the last 40 years, he said the move “ticked all the right boxes”, and not only was he wooed by Andor’s impressive balance sheet and excellent cash-flow, but by its “hugely encouraging” growth rate in regions like China.

Then in January Andor paid more than £7 million to buy Zurich software company Bitplane, an interactive microscopy image analysis software company selling into the medical and life sciences sector.

It had always looked like the perfect fit, and Andor duly raised £3 million through institutional investors to part-fund the acquisition, which was venture-financed and is majority-owned by a single investor Endeavour LP in Guernsey.

Investors attending Andor’s annual meeting in February will have been tickled by the litany of positivity – strong growth in all markets, new products in the systems division about to launch as planned by April; and a compound revenue growth of 25 per cent following Bitplane’s integration.

Given its exposure to currency volatility and ever-increasing competition for business, Andor is understandably remaining cautious about the economic outlook for 2010, but says it is “optimistic” going forward, buoyed by the strength of its brand and business and the technology it plans to deliver over the coming year.

Gary McDonald takes stock of the current state of banking and weighs up how much influence the local banks have amid the blame game.

The financial services sector, above all others, has faced the most scathing attacks from business and the public for its role in causing the deepest recession in generations.

Senior executives in the City were accused of mismanagement on a grand scale, and few outside the banking industry could fathom the economic justification for the exponential rises in their rates of pay over the past 20 years.

Their actions were viewed as the modern day equivalent of Nero fiddling while Rome burnt.

The entire banking system came close to collapse in October 2008 until the British Government stepped in with a £600 billion rescue package, and many of the key high street banks still remain partnationalised.

That crisis underlined the danger of having too many eggs in one basket and served as a reminder of the urgent need to regenerate other sectors to make a more significant contribution to the economy.

For the four main banks in Northern Ireland – Northern Bank, Ulster Bank, First Trust and Bank of Ireland – in the eyes of the public it was “guilt by association”. The heads of those four banks have already had to face the wrath of Stormont’s Finance Committee in a series of meetings with local politicians to discuss the global economic downturn’s effects on Northern Ireland.

As if they could make a significant difference. They can only pay lip service to the elected representatives, because ultimately the control of their organisations lies outside Northern Ireland – two of the four “local” banks are headquartered in Dublin, one in Edinburgh and the other in Copenhagen.

“Nevertheless, the banks, like politicians and business leaders in Northern Ireland, are committed to working together to steer the economy through these stormy economic waters,” says Eric Leenders, executive director of the British Bankers’ Association.

“They are committed to supporting their customers, whether personal or business, throughout the downturn and sheltering the economy as far as possible from the global financial pressures coming to bear on us all. They are continuing to make money available to borrowers and recognise their responsibility to the economy in these difficult market conditions.”

Worthy words or weasel words? It’s the latter if you believe a February survey commissioned by the Better Banking Campaign, a coalition of charities and community organisations aiming to tackle financial exclusion by increasing access to mainstream financial services for people and businesses who most need it.

Its spokesman Steve Wyler said: “Considering how much public money has propped up the financial institutions, it’s deplorable that they aren’t currently supporting the people and businesses most in need.

“Most people believe access to bank accounts and affordable credit are basic rights, so we want to see this as a priority for all the political parties.”

“We are not talking about lending for lending’s sake, but about responsible lending to people and businesses who want to get on, who come from communities who would benefit greatly from better access to mainstream financial services.”

The “quadopoly” of the four big banks in Northern Ireland was challenged about 20 years ago with the arrival of a raft of rivals, initially with a “name plate” presence only, but latterly with a growing visibility on the high street.

Several major international financial services companies have also established operations in Northern Ireland, including US-based Citi, Allstate Corporation, Liberty Mutual and Wombat Financial Software in addition to Halifax and Santander.

Indeed today the financial services industry in Northern Ireland employs 20,000 people in more than 1,200 firms and has a rapidly developing cluster of leaders covering investment banking, administration, retail and insurance services.

Many of the newcomers have flexed their muscles and have secured significant slices of business in niche areas. Barclays, for example, claims bank finance is under-utilised by Northern Ireland third-level institutions as a funding source, and its corporate banking team has completed term loan agreements of £70 million to Queen’s University in Belfast over the last four years.

Chris Hearn, head of education banking at Barclays, said: “We’re finding universities in Northern Ireland increasingly looking to private sources of funding as traditional streams of revenue dry up.

“Traditionally the financing model of the typical university was based on four main income streams: state funding, fees from foreign students, donations and philanthropy, and research. But with budget cuts and donors feeling the squeeze, these previously guaranteed lines of finance have dried up and universities need to look at other ways of raising funds, which is where we can come in.”

Local retailing stays dynamic but new opportunities are limited after a decade of growth.

Few things illustrate the recent transformations in Northern Ireland’s fortunes better than retailing. Following 25 years of stunted growth, and coinciding with gathering momentum in the peace process, the sector expanded rapidly from the mid-1990s onwards with many of Britain and Europe’s biggest retailing names opening stores across the region.

From a standing start, the three main multiples – Tesco, Sainsbury’s and Asda – now have more than 50 stores between them and are keen to extend their presence further. German discount supermarket Lidl also has a significant slice of the grocery market.

But after more than a decade of continual growth, and against a background of economic uncertainty, new opportunities are limited. Nevertheless, Northern Ireland retailing remains dynamic, largely buoyant, and a major source of employment in the region.

While high street spending among Northern Ireland’s citizens inevitably slowed as the recession took hold, the retail sector has remained stronger than in the Republic or the rest of the UK.

“The retail sector has been insulated from the recession more so than any other service sector, outside of the public sector,” says Ulster Bank economist Richard Ramsey. “In terms of employment growth, it has significantly outperformed the wider Northern Ireland economy over the last decade and following the downturn, the level of job losses has been less marked than in other sectors.”

A large public sector with a degree of recession immunity and cross-border shopping have helped insulate Northern Ireland from the worst ravages of the downturn, but these factors are expected to change, though not necessarily in the immediate future.

It was the comparatively high cost of groceries in the Republic, coupled with a weakened pound, which drove the surge of southern shoppers north, enabling towns and cities such as Newry, Enniskillen and Strabane to enjoy something close to a bonanza.

Cross-border shopping was estimated to be worth around £700 million to Northern Ireland economy in 2009. However, Richard Ramsey warns that the flood of southern shoppers may soon ease thanks to a weakening euro and fiscal changes on both sides of the border.

“Northern Ireland’s retail sector will once again become more reliant on the beleaguered domestic consumer, who is facing an increasing number of headwinds in the form of domestic rate rises, pay freezes or cuts, a probable VAT increase and inflation on the rise again,” he says. “Essentially, its retail sector has become larger than its economic fundamentals can support in recent years, therefore a notable re-adjustment is set to occur over the next couple of years.”

Brian Lavery, managing director with commercial property agents CB Richard Ellis, also forecasts a slowdown in the number of shoppers from the Republic.

“There’s no doubt that for a number of reasons, including the Dublin Government’s lowering of duty on alcohol and the UK Treasury’s VAT increase, Northern Ireland is likely to become less enticing to southern shoppers,” he says.

A notable attraction for shoppers on both sides of the border has been Belfast’s £320 million flagship shopping centre Victoria Square. The 800,000 square foot complex, which opened in March 2008, is anchored by department store House of Fraser and features a host of other names new to Northern Ireland.

Another development in retailing that is expected to prove popular with shoppers north and south is the opening of a John Lewis store at Sprucefield near Lisburn. However, since first announced in 2004, this project has continually stalled and will be the subject of a public inquiry in June. Nevertheless, the upmarket retailer, which ranks as Britain’s favourite department store, remains fully committed to opening at Sprucefield and creating 700 jobs.

According to Glyn Roberts of the Northern Ireland Independent Retail Trade Association (NIIRTA), the problems John Lewis is encountering stem from the lack of a clear retail planning framework. After more than a decade of drafting, PPS5, the regional retail planning blueprint, has yet to be published and remains at the centre of an ongoing High Court case.

“The continued absence of proper retailing planning policy creates ambiguity and is of no use to anyone,” says Roberts, who is keen to see the legislation provide safeguards for town centres.

NIIRTA’s cause has been boosted by the rejection of plans for Ireland’s largest supermarket at an out-of-town site near Banbridge, County Down, but again it may be another planning wrangle that ends up in the courts.

Perhaps on a brighter note, outlook among consumers in Northern Ireland is improving for the first time since the height of the credit crunch, according to Northern Bank’s consumer confidence index. Whatever the future holds, it certainly looks interesting.

Downward financial trends for print and broadcast outlets do not cancel out some good news. Gary McDonald gives a survey of the state of Northern Ireland’s media after a tough year for the sector.

The last 12 months have been the most challenging for the media sector in Northern Ireland for decades. Radio, TV and newspapers have had to cope with falling advertising revenues, down by more than a third in some cases, and the rise of digital media and the increasing choice and competition that brings.

Belfast-headquartered UTV Media is a bellwether for the sector, operating across all regions, the internet and all the traditional media, except newspapers. In its own words the group suffered an “unprecedented slump in advertising” in the first half of 2009 contributing to a 30 per cent fall in profits.

UTV, the group’s TV arm, fared worst with radio doing better while new media, which includes the group’s internet operations, increased profits.

The results further underlined the strength of radio and its growing importance to UTV Media. The company was originally founded to run the North’s third channel ITV franchise. And for most of its life, TV has been the company’s dominant source of revenues and profits.

However it has diversified away from TV, acquiring and setting up radio stations in Britain, the Republic, and Northern Ireland in recent years. Radio now accounts for three quarters of profits compared to just 17 per cent from TV.

While the TV station remains a favourite with local viewers, the proliferation of rival channels has diluted advertising revenues. Cost-cutting during the year saw a number of well-known faces leave the station to be replaced by new and less well-paid cross-platform journalists.

On air

In terms of reach, radio has proved the most robust of the traditional media, according to Tony Axon, media director at advertising agency Navigator Blue.

“The local commercial radio sector has proved extremely resilient despite a huge well-funded BBC sector. This is an amazing performance,” he says. “In revenue terms the last year has been tough but the sector is in good shape to prosper when the economy recovers.”

When it comes to what people are listening to, Bauer Media-controlled Downtown and Cool FM ended the year on a high while U105, owned by UTV Media, leapfrogged Belfast-based Citybeat in the ratings.

The Northern Media Group, in which the Irish News has a stake, also continued to increase its presence with its portfolio of local stations: Five, Six, and Seven FM, as well as the Q network.

BBC Radio Ulster remains the most popular station by a distance with close to half a million weekly listeners. The next most popular is Cool with 344,000 listeners. The wide ranging presence and continued dominance of the BBC, not just in radio but across all media, has become a common cause of complaint for private sector operators.

Online

The Beeb’s free news provision poses an enormous challenge for regional newspapers in particular.

Over the last decade, newspaper publishers have poured resources into online news in the belief this medium will increasingly complement their print editions and, in time, replace them. However, advertising revenues haven’t been sufficient to cover the costs of the service while consumers have proved understandably resistant to the notion of paying for online content when the BBC is giving it away for free.

Tony Axon says it’s a problem for papers around the world and papers in Northern Ireland are no different. The issue is all the more acute given the recession and continuing declines in newspaper circulation.

“Traditional media have been investing heavily in online offerings and new sites have been emerging on a regular basis but the take up of online by the local market has been slow and the developments and site improvements we have seen have not been rewarded by new revenues,” he says.

“The challenge for local online remains the same as elsewhere and that is monetising the sites and attracting revenue.”

Newspapers won a victory of sorts in late 2008 when the BBC Trust, the body responsible for regulating the BBC, rejected plans for the corporation to launch a series of local websites carrying video content. However, the perceived threat of unfair competition remains. Many in the newspaper sector are hopeful the Tories will, if they win the next general election, rein in the BBC still further.

On the presses

In the meantime, newspapers have their hands full coping with falling sales. The North’s three indigenous dailies – the Belfast Telegraph, Irish News and News Letter – have lost readers in recent years.

The decline of the Belfast Telegraph, which as recently as 1998 had daily sales of 125,000, has been most dramatic. Latest ABC figures for the second half of 2009 put the Tele below 70,000 (66,242). Chiefs at parent company Independent News & Media haven’t been slow to ring the changes. The paper has repositioned itself from an evening broadsheet to a morning tabloid with later day editions, while a new editor arrived last year, tasked with stemming the sales decline.

The News Letter decline hasn’t been so dramatic but with daily sales at 24,555 (July-December), the paper remains a small player with an ageing readership.

The Irish News, which had held its own for most of the Noughties, has also seen its sales dip in recent years (45,667) but appears stronger than rivals thanks to a loyal readership and the paper’s popular coverage of GAA.

Amid the trials, newspapers got their biggest fillip in many years with the Iris Robinson story. In some cases, sales jumped by a third and more in those few days, proving the medium isn’t finished yet. This, says Tony Axon, gives the sector reason for optimism. “The Adams and Robinson stories have been sensational in their effect on sales, a great reminder that content sells papers.”

A man of many talents, Peter Quinn shares his thoughts on business, economics and sport with Meadhbh Monahan.

Growing up in “relative poverty” in south Fermanagh didn’t hinder Peter Quinn, who has taken on prominent roles in education, business, sport and the media over the years.

An admirer of Seán Lemass and Barack Obama, Quinn is a chartered accountant and financial consultant with his own consultancy agency in Enniskillen. He is Director of the Quinn Group and a number of other organisations in the Republic, and is also Chairman of Irish language television station TG4.

Quinn was reported to be a member of Fianna Fáil amid stories about the party moving into the North, but he denies this.

“I’m not a member of Fianna Fáil or any political party but it’s very well recognised that I’ve been appointed to prominent positions by a Fianna Fáil-led government,” Quinn states.

“I was appointed for business reasons but there is no doubt that when you are appointed by a government minister, it is at least a semi-political appointment.”

Referring to the possibility of Fianna Fáil becoming all-island, Quinn says: “There was the view down through the years that Fianna Fáil shouldn’t mobilise in the North; it was deValera’s view and it was carried on by others. I’m not sure that view is still carried today.”

Family business

One of the most notable ventures in which Quinn is involved is his brother Sean’s conglomerate. Indeed, given that “family is the most important thing” in Quinn’s life, it is no surprise that he is at his brother’s side as Director. With its headquarters in Derrylin, County Fermanagh, the Quinn Group has interests in cement and concrete products; container glass; general and health insurance; radiators; plastics; hospitality; energy; and real estate. They employ approximately 5,000 staff throughout Ireland with a total of 8,000 employees in various countries across Europe and Asia, including Russia.

Commenting on how the group is performing during the recession, Quinn criticises what he sees as the excessive negativity of some commentators.

“There have been one or two prominent figures [in the media] who have been talking down the economy. If someone goes off to New York and says ‘Ireland is bankrupt’ and then within an hour the rate that the Irish Government has to pay for finance increases, that’s a very telling relationship and I don’t think it should happen. If the private sector operated like that we’d all be in far bigger difficulty than we are.”

He reports that the manufacturing side of the business has been doing “far better than could be expected” during a recession.

“We are very optimistic for the manufacturing side,” he says. What the Quinn Group are most proud of is that at a time when the manufacturing industry is reportedly “on its knees,” its profits for 2009 “were almost a record,” with only one year in the past topping that year’s statistics.

“That’s a consolation to us and to our employees,” Quinn states. “Some of our employees have suffered [and] would not be earning what they were earning in the past, but they accept that and are happy to take that on the basis that there will be better years to come in the future.”

The insurance side of the business is not so positive with rising prices and an increase in bogus claims.

“The problem about a recession is that it provides a lot of inducements for people to make claims for injuries which are not justified or are exaggerated. That makes the provision of any sort of financial services, but insurance services in particular, very difficult,” Quinn concedes.

He claims that reports about a downturn in the hotel side of the business – particularly the Slieve Russell in Ballyconnell – are “rubbish”.

“I’m not saying the hotel sector is making a fortune. It isn’t. But it’s not doing badly, it’s profitable.”

He reveals that the Quinn Group is recruiting again and is pleased that it can offer job prospects to so many young people in the country, north and south.

“If there is one thing that I am positive about at the present time is Ireland’s young people,” Quinn states. The former Queen’s University lecturer’s “biggest worry” during this recession is also for the same group.

“People graduating from university, those leaving secondary school and newly married couples who depend on the stability of employment for high mortgages are the people who will really suffer.

“The last thing I would want to see is a lost half of a generation who would never know economic prosperity or a full-time job.” He refers to this prospect as “a tragedy” that would affect generations down the line.

Quinn says that the “fantastic cohort of young people” are “our greatest hope.”

Economy

After working on both sides of the border for 25 years, Quinn has witnessed recessions in the past, but none have been as bad as the current situation.

“I grew up in the 1950s when things weren’t great and there was a huge period of economic difficulty in the 1970s with massive levels of inflation and interest rates in excess of 20 per cent,” Quinn reflects.

“We’ve had a recession every year since and one of the reasons this is different is that it comes on the back of a decade of phenomenal economic growth.”

Quinn says the continuous upward growth from 2004 with a population and construction boom created “a bit of a false economy.”

He adds that the “massive amounts of prosperity” that were created “have not been used very well.”

Media

A fan of the Irish language, Quinn says it was not his grasp of the language that led to him being chosen for the role of Chairman of TG4.

“The reason I was selected was because it was a new business and they wanted to get it off on a good business-like footing,” he explains.

TG4 became an independent organisation in April 2007. Prior to that it was part of RTÉ. According to Quinn, the Irish language is as important as ever in the 21st century. “In a situation where we are all part of the European Union it’s very easy to get lost in such a cosmopolitan body. With so many people, so many languages and so many different cultures, it is very important that an Irish sense of identity is preserved,” he states.

TG4 became an independent organisation in April 2007. Prior to that it was part of RTÉ. According to Quinn, the Irish language is as important as ever in the 21st century. “In a situation where we are all part of the European Union it’s very easy to get lost in such a cosmopolitan body. With so many people, so many languages and so many different cultures, it is very important that an Irish sense of identity is preserved,” he states.

Quinn says there is an assumption that TG4 is a station for Irish speakers but he adds that the station gets a lot of viewership from people who are dependent on subtitles, in the North and the South. Its strongest feature at the moment is its sports coverage.

Commenting on the future of the media in Ireland, Quinn reflects: “I’ve been involved in a number of media ventures and clearly the present time is the most difficult that I’ve encountered, and that goes back to the 1990s.”

Advertising revenues are “significantly down” on both sides of the border and Quinn again points a finger of blame to sections of the media for their “huge level of negativity.”

“The business sector is getting fed up with that and that’s not encouraging them to increase their advertising.”

According to Quinn, local media will “always be strong” and will get advertising because it “creates a sense of identity.” This will leave the national media to face the brunt of the problems.

Sport

Captaining Teemore to championship victory in 1969 cemented Quinn’s passion for Gaelic football. A medical scare at age seven, which resulted in penicillin injections every day for 20 years, did not deter him from playing his favourite game.

“I suffered from ill-health and nearly died when I was young. I never played a game that wasn’t contrary to doctor’s orders.”

As a young footballer in County Fermanagh, Quinn never imagined that he would go on to be Chairman of the Gaelic Athletic Association. In 1991 Quinn took up this role after being President of the Ulster Council in the late 1980s.

The prestigious position was sweetened for Quinn when Down won the All-Ireland in 1991, becoming the first Ulster team to win since they had previously taken the title in 1968.

“I was lucky enough to present the Sam Maguire to three separate Ulster captains in three separate years,” Quinn recalls.

“The 1991 success was the big thing because Down had won the All-Ireland in 1968 and the Troubles started the next year, and no Ulster team won it until Down won it again in 1991. Then Donegal and Derry won it the following two years.” Quinn says that was the start of a “golden-era” in Ulster football.

Referring to the changes in the GAA rule book, on-and-off the pitch over the past 20 years, Quinn comments: “The GAA had suffered, certainly in Ulster, but nationally too, as a result of the Troubles.”

He said that when the peace process became “confident”, the GAA deemed it was time to recognise that.

Rule 21, which prohibited members of the security forces from playing Gaelic games was repealed in 2001.

“This came as a reaction to the peace process,” Quinn reflects.

“The GAA has become a more open organisation, and that’s only right because our games can stand in comparison to any other games in the world.”

He says that what “galvanised” change in the GAA was the Croke Park project.

“The re-building of Croke Park represented a vote of confidence in our future. That confidence had a cathartic effect on the association and made them more amenable to change and development.”

He admits there was opposition to the plan from people who thought the GAA was being “fool-hardy.” But, according to Quinn, the finished product is “the finest stadium of its kind and the best stadium owned by any amateur organisation in the world.”

A further rule change occurred in 2005 when rule 42, which banned any sports other than Gaelic games being played at Croke Park, was repealed.

These changes were a “result of increased confidence and the opening up of the association.” The subsequent rugby and soccer matches “generated a fair bit of revenue for the association.”

With the new Aviva Stadium almost complete, Quinn explains that the GAA has been prepared for this move.

“Clearly most of the soccer and rugby matches will now be played at the Aviva stadium at Lansdowne Road but we were always aware of that and that’s why the funding that came from the games that were played in Croke Park were distributed to clubs and counties. The association isn’t dependant on those funds.”

Milestones

Quinn cites starting an academic career as “an event that changed my life.”

“For someone who came from relative poverty in Fermanagh to be appointed lecturer at Queen’s was a big thing. It gave me a level of confidence I didn’t have prior to that and I’m still eternally grateful to Queen’s for that opportunity.”

His cites his other milestones as captaining Teemore to the championship final in 1969 and becoming Chairman of the GAA.

“But I don’t remember any satisfaction greater than the satisfaction on the day my first son was born,” the father of five contends.

Quinn says his greatest influence was his father, an illiterate farmer who taught him to “learn by doing.”

“He was a very intelligent man and was very good at mental arithmetic,” Quinn says. A “pragmatic” man, Quinn’s father always encouraged his children. “Even when we played badly he always put a good spin on it.”

When Quinn was 13 his father sent him out to “buy and sell cattle” in order to get experience. “Even though I spent much of my life in the academic world, I never forgot the lesson from my father that you learn better by doing than you learn anywhere else.”

Outside his family, Quinn admires former Taoiseach Seán Lemass for his attempt “to make the Irish economy a genuine economy, get rid of protectionism, start exporting, and become more international.”

He continues: “I am a big admirer of Barack Obama even though at the start of the election campaign I supported John Edwards.” He believes Obama has been great for the world and for America and points to his “positive impact” on American standing internationally.

In conclusion Quinn says that “like many Irish people,” he was influenced by John F Kennedy. “He brought a lot of hope and he was the first major statesman to emphasise the importance of young people.”

Profile: Peter Quinn

Educated in St Michael’s College, Enniskillen, Quinn completed his BA degree in Latin and economics at Queen’s University Belfast in 1964.

“If I was starting again, I wouldn’t do an arts degree, I would do a management degree,” he reflects.

In 1967 he became an associate in the Institute of Chartered Accountants and in 1977 he became a fellow.

In 1968 he became a lecturer of accounting in Queen’s and in 1972 he achieved an MBA by thesis from Queen’s.

From Queen’s he received a secondment to Manchester Business School in 1972 where he lectured on finance, economics and management.

From 1977 to 1979 he worked with his brother Sean Quinn in Quinn quarries.

He then spent 15 years working as a financial and economic consultant to various international banks before returning to Fermanagh in 1994 and setting up his consultancy service.

Quinn is married with two sons and three daughters and lives in Enniskillen.

As well as being passionate about Gaelic sports, he enjoys athletics, cricket, rugby league and American football. He would “love to go to a Super Bowl some day.”

He also reads “non-stop” and has recently begun reading biographies.

If there’s one thing Northern Ireland’s construction industry longs for as it enters a new decade it’s stability.

The last few years have been a proverbial rollercoaster ride for the sector. First there was the unprecedented property boom, then the sudden crash, the financial crisis, and the tightening of the public purse strings. The inevitable rapid contraction has left the sector reeling, but it’s determined to emerge stronger when fortunes pick up.

“We’ve certainly had a couple of turbulent years,” says Construction Employers Federation managing director John Armstrong. “The industry did very well until 2007 but house prices were getting way out of line with long-term trends.”

The fall-out from the property downturn has led to major upheaval in the construction sector, illustrated most starkly in the number of job losses over recent years. Armstrong estimates that employment numbers have fallen by as much as a quarter from a high mark of 84,000 three years ago.

“If this was from one company there’d be an outcry, but because it happens to smaller firms in dribs and drabs, its true magnitude tends to go unnoticed,” he says.

With building projects curtailed, the downturn is being acutely felt on the supply side. Companies that produce cement, concrete, asphalt, pre-cast concrete and aggregates have all been severely impacted.

“Aggregates and cement markets have dropped steeply since mid 2008, and the industry job losses are a graphic illustration of how the construction sector has been hit by the recession,” says Gordon Best, regional director of the Quarry Products Association NI. “Although job losses are finally levelling off, there is real fear that things will remain as they are for some considerable time to come.”

It’s only a small consolation but glimpses of a return to normality are evident in the most recent surveys of the residential property market. The University of Ulster and Bank of Ireland research published in February pointed to signs, albeit modest, of recovery in the final three months of 2009.

Despite average prices falling for the first time since March 2009, commentators said increased sales, which reached a two-year high, were a sign that the housing market is on the way to recovery. The Royal Institution of Chartered Surveyors (RICS) Housing Market Survey for January 2010 showed similarly encouraging signs. However, Bank of Ireland economist Alan Bridle sounded a cautionary note.

“Steady progress in activity levels may be the most likely and desirable scenario for this year but in my view we should not expect much of a re-bound in average prices and there is still a risk of them slipping further,” he said.

It appears the tentative signs of recovery in the housing market have yet to translate into sectoral confidence. The RICS Construction Market Survey for Q4 2009 found levels of pessimism among property professionals in Northern Ireland were notably higher than in the rest of the UK. With the region mired in severe recession, chartered surveyors believe that the situation will only get worse.

RICS Northern Ireland spokesman Jim Sammon says: “There clearly remains a significant amount of pressure on the Northern Ireland construction industry.

“Investment in private sector construction has been significantly curtailed and, with economic growth this year likely to be weak at best, there is unlikely to be any kind of notable rebound.”

Sammon believes public sector work provides a lifeline for the industry, but concedes that budgetary pressures are constraining capital expenditure projects.

John Armstrong says the industry had high expectations of the Stormont Executive’s investment strategy but that the planned expansion of infrastructure has failed to materialize.

“Initially we were encouraged as the public capital expenditure budget grew from £700 million to £1.6 billion in a matter of years,” he says. “However, work envisaged under the Investment Strategy is slow coming to market.”

While there’s an obvious self-interest in promoting government-led construction projects, Armstrong believes major investment in building hospitals and schools will have wider economic benefits. He points to a recent report commissioned by the UK Contractors Group, which highlights how construction is one of the best ways of stimulating economic activity.

“In terms of economic recovery, investment in construction is more productive than many other sectors,” he says. “Every £1 spent on construction output generates a total of £2.84 in economic activity.”

The CEF managing director’s sentiments are echoed by Gordon Best: “It’s vital that the Executive and Assembly members identify and focus on key future spending priorities that will provide a real stimulus to the economy and have the widest possible economic multiplier effect across the community.

“Public investment through the revenue route into the maintenance of our schools, hospitals, roads and particularly the social housing sector in which there is a huge historic under-spend are examples where effective spending can have significant benefits within the economy.”

Randox Laboratories founder Dr Peter FitzGerald talks to Gary McDonald about innovation’s importance and its application in the business he started from scratch.

“An established company which, in an age demanding innovation, is unable to innovate, is doomed to decline and extinction.”

Dr Peter FitzGerald can’t, nor won’t, lay claim to that quote (in fact, it’s attributable to a namesake, the acclaimed business thinker Peter Drucker) but it’s a mantra the founder and managing director of Randox Laboratories obdurately adheres to as his company continues to pioneer the development of revolutionary diagnostic tests. Its revolutionary products include checks for heart problems, a range of cancers including ovarian, breast and colorectal, thyroid problems, diabetes, liver disease and renal disease, and they are sold hospitals, research laboratories and pharmaceutical companies the world over.

Randox, with its modest headquarters tucked away almost anonymously along the back roads around Crumlin, considers innovation – and the successful exploitation of new ideas – as an overwhelming imperative.

“We never stand still here. Our mission is to transform healthcare by continuously improving diagnostic solutions which, for us, ultimately means saving lives,” says Dr FitzGerald, who has nursed a passion for medical research since childhood.

Having studied biochemistry at the University of Strathclyde in Glasgow and then taking a PhD at the National Institute for Medical Research in London, it was while working as a researcher at Queen’s University in Belfast that his yearning to help cure or solve illnesses drove him to set up his own company.

Based then (1982) in a converted henhouse at the back of his parents’ house, the business rapidly outgrew that early laboratory, so he relocated five miles away to an old apple farm that had cold storage rooms, the genesis of the modern-day Randox Laboratories.

Edge

One constant during the company’s 28- year history in the global clinic diagnostics industry has been innovation. Dr FitzGerald accepts that businesses which fail to adapt by applying innovative thinking to all aspects of their organisation will be left in others’ slipstreams.

“Our competitiveness and prosperity has always depended on our ability to move further up the value chain. Innovation has been absolutely essential to safeguard and deliver high-quality jobs, a successful business and, most importantly for us, better products with the potential to save lives. Our future economic success will spring from continued investment in innovation, which is at the very core of what gives companies like our a competitive edge in the global marketplace.”

The Randox boss, who is married with a grown-up family of two, insists that today is among the most exciting periods ever for medicine.

“Decisions are still being taken which are not based on solid scientific or objective evidence, so the more we can do to help give clinicians facts and objective information, the more we can help identify what the disease malfunction or the condition is.

“We have now developed the first commercially marketed protein biochip and assay system, which can be employed to process thousands of biological materials in seconds. No bigger than a postage stamp, this unique technology enables clinicians to present a more accurate –and earlier – diagnosis.”

Randox claims its tests can ultimately lead to life expectancy improving by 20 per cent – as well as saving vital financial resources for the Health Service.

Today Randox ranks in the world’s top 20 largest diagnostics company, manufacturing 2.5 billion of the 100 billion tests carried out worldwide, and produces seven per cent in volume of all clinical chemistry tests carried out in the world – or about 3 per cent of the value of the market.

The company has also grown to one employing 800 people (about 600 of them in Northern Ireland), generating revenues of close to £60 million a year and selling to 30,000 customers in130 countries (just 6 per cent of its business is in the UK and Ireland).

Since its inception Randox has amassed a surfeit of international recognition, including five Queen’s Awards (a record for a Northern Ireland company), and last year alone it claimed the Product Innovation Award at the UK Manufacturing Excellence Awards and was Innovator of the Year at Invest NI’s Innovation and Export Awards.

Research

Central to this is the company’s ongoing investment in research and development, which currently runs to more that £10 million a year, putting it in the 10 biggest R&D spenders in Northern Ireland.

“By investing in R&D we are investing in our future and equipping ourselves to innovate,” says Dr FitzGerald.

While he won’t say it, it must have been with some personal disquiet for him to learn that total R&D spend in Northern Ireland last year, at £344 million, was the first drop in real terms in five years. More than half of the expenditure (£184 million) was by the businesses, £144 million by education and just £16 million by government.

Indeed R&D expenditure by indigenous companies slumped by more than nine per cent (£7.3 million) in cash terms between 2008 and 2009 while that by externally-owned firms increased by nearly 6 per cent (£6.1 million).

In addition to the more traditional clinical diagnostic products Randox has further extended its product range to include human recombinant proteins, polyclonal and monoclonal antibodies as well as drug conjugates specific to a comprehensive list of target groups including bio-chemical markers, growth promoters, drugs of abuse, anti-parasitic drugs, anti-inflammatory drugs and antimicrobial drugs.

Expansion

Randox’s extensive range consists of more than 1,000 products all manufactured at its ISO 13485 accredited Crumlin manufacturing plant.

“Our product range is set to expand even further with more than 200 new products currently in development,” said Dr FitzGerald. “As a recognised primary manufacturer of life science products with more than 185 research scientists we can guarantee customers receive high quality, reliable and efficient products and services.”

Due to ongoing expansion plans within Randox – in February the company unveiled a £30 million funding package secured through Northern Bank to assist with its future growth – the company is frequently seeking individuals with the drive and commitment to join one of the many teams within its global organisation.

And it will be commencing another major recruitment drive in the spring, when it will be seeking out enthusiastic individuals across a number of disciplines, ranging from high-end R&D, laboratory science and instrument engineering through to marketing, sales administration and human resources.

The global success of Randox has, of course, catapulted Dr FitzGerald into the top half dozen richest individuals in Northern Ireland, with a personal fortune running into tens of millions of pounds.

But outwardly he displays none of the trappings of that wealth. One of the key things for him is that he has always had the right colleagues working with him and has consistently reinvested profits back into the business.

“We rarely take dividends out of the business. It’s essential to re-invest in the product and the market. Businesses have to make a profit, but if it becomes an obsession about personal profit, that backfires – you must have a broader aim.”

He believes Randox has achieved the success it enjoys today by following an almost exact formula.

“We don’t like to call ourselves a family business. We are an independent company but have a distinct culture and like to think of ourselves as being part of a Randox family. People in Northern Ireland respond to being included, and to issues being discussed with them, and as long as you don’t ask people to do anything you wouldn’t do yourself then it works.”

The passing earlier this year of Sir Allen McClay, one of Northern Ireland’s great innovators, might have prompted his close friend and confidant Peter FitzGerald to perhaps rethink his own future in business, given that he’s now approaching 60.

Remarkably though, the Randox boss insists these are still “early days” for his company, and his drive remains undiminished.

He says: “There is still so much I want to do to improve the field of diagnostics, and huge opportunities remain in healthcare, so long as our competitors aren’t catching up – which they aren’t. I’m proud of the achievements of Randox, because there aren’t many British diagnostic companies that can have achieved internationally what we have. For the sake of the health of future generations the world over, we have to keep going.”

Ahead of the spring Budget and the general election, which is expected in May, four major business organisations in Northern Ireland were asked these two pertinent questions.

If you were Alistair Darling, what single initiative would you implement in the Budget as a major economic stimulus for Northern Ireland?

FSB

What is needed urgently is an incentive that will make it possible for small businesses to recruit new staff, innovate and grow. This could all be achieved by cutting employers’ national insurance and in turn would provide the entire economy with a much needed boost. Mr Darling’s decision in November to go ahead with a further 0.5 per cent increase in employers’ national insurance contributions has had a far reaching and detrimental effect on the economy with more than three in 10 (31 per cent) of respondents to the recent FSB/ICM survey saying a cut in employers’ national insurance would improve their economic prospects in the recession.

NICVA

We don’t expect to see much from a spring Budget before an election. It’s what happens after the election that will most affect us. As for now, why can’t Alastair Darling just move ahead on a big idea like the Green New Deal, where most of the levers we need are already within Northern Ireland? The proposed Green New Deal package, supported by the voluntary and community sector, employers, trade unions, economists and many others, offers us the opportunity to act to create local employment, decrease our dependence on imported energy, reduce bills and tackle fuel poverty. We don’t need the Chancellor for this one, although some good news in the Budget on renewables, energy feed-in tariffs and the parallel carbon budget would help. We also know that childcare provision is a major stumbling block to economic participation for many families – a Barnett consequential on this one would be a big help, as long as the Stormont Executive followed through with a proper strategy and services here.

CBI

At the front of our wish list in the spring Budget is for the Chancellor to create the conditions to deliver more robust and sustainable growth. Hence tax policy must be adjusted to help achieve this goal. Firstly, there is a need to reconsider the increase in employers’ national insurance, which is due to rise by 1 per cent in April 2011, adding £120 million to business costs in Northern Ireland. This will damage growth and employment prospects. Secondly, he must reconsider the decision to reduce the climate change levy relief from 80 per cent to 65 per cent for companies participating in climate change agreements. And the Chancellor must also review his decisions to increase taxes on fuel duty, air passenger duty and increase landfill tax on inert wastes, all of which have a disproportionate impact on Northern Ireland businesses.

NIIRTA

The key challenge for the incoming UK government is to urgently address the huge budget deficit facing the economy and the threat to our international credit rating. The Chancellor needs a clear and credible plan for bringing the structural deficit down, and I would also urge him to give serious consideration to the Economic Reform Group report on the need to reduce Northern Ireland’s rate of corporation tax. If our economy is to stand any chance of being fit for purpose we need some new radical thinking. Other measures such as a national insurance holiday for small businesses for one year also deserve examination by the Treasury.

What would your preferred make-up be for the new Westminster Government after the May general election and why?

FSB

As a national organisation we work with all political parties, both locally and nationally. The important thing is that a strong government is elected with a declared commitment to work with small businesses, which represent 98 per cent of businesses in the UK. Importantly, the new government must take on board how small businesses will play a role in rebuilding the economy after the worst recession for decades and address concerns such as access to finance, which have been so damaging to date. The FSB will be campaigning hard in the coming weeks to ensure its message is heard, and loud – and no politician will be in any doubt of where the small business stands.

NICVA

What Northern Ireland and the UK needs in terms of their economic futures is stability and some degree of predictability. A hung parliament would be unlikely to contribute to that. We expect stiff cuts to public expenditure of more than three per cent a year in real terms, regardless of who wins the election, and these cuts will ultimately work their way through the Northern Ireland economy, first hitting the public, private and voluntary and community sectors and then the public at large.

NIIRTA

The key question for the next parliament is not who is in power, but what their policy agenda is. We should not forget that Westminster still bankrolls Northern Ireland and has all the major fiscal levers which could have a real impact on the fortunes of our economy. We are launching our own policy manifesto Programme for Prosperity which sets out our priorities for every one of our government departments. That said, it would be interesting if the Northern Ireland political parties held the balance of power in a hung parliament. Could they use this situation effectively to argue for measures such as reduced corporation tax?

Contributors

• Seamus McAleavey
• Wilfred Mitchell
• Nigel Smyth
• Glyn Roberts