Issues

Economic Pact linked to sharing

economic pact press conference june 2013 Westminster will expect Stormont to deliver on a shared future in return for further economic support. Peter Cheney reports.

With the official title of ‘Building a Prosperous and United Community’, the Economic Pact was signed at 10 Downing Street on 14 June. It follows on from OFMDFM’s shared future strategy – ‘Building a United Community’ – which was published on 9 May.

The Government will allow the Executive to borrow up to £100 million over the next two years for shared housing and shared education projects. This is, though, conditional on a “clear link between specific projects and the promotion of a shared society.”

€150 million has already been allocated for a Peace IV funding programme, to cover 2014-2020. The Government will provide an extra €50 million to fund cross-community placements.

EU structural funds support competitiveness and economic growth. Northern Ireland’s allocation for 2014-2020 will rise from €276 million to €457 million, subject to approval by the European Commission and European Parliament.

A decision on devolving corporation tax will be made no later than the 2014 Autumn Statement. In the meantime, the Government and Executive will examine the potential for devolving other fiscal powers. These negotiations will conclude by autumn 2014.

Northern Ireland’s 100 per cent assisted area status will continue until at least 2016, thus allowing Invest NI to keep providing grants to business.

The Executive will consider potential sites for enterprise zones. However, in April, Peter Robinson expressed his scepticism about the zones. Past experience suggested that they “displace business from one area to another and often provide for unfair competition between businesses.”

The Executive will also review business regulation (working to a deadline of December 2013), propose a regional export tax credit, and consider how to raise revenue from the Port of Belfast and other assets (including potential sales to the private sector).

Northern Ireland will also benefit from the Infrastructure Guarantee Scheme, which is currently reserved for nationally significant projects. The Executive is now satisfied that the Government will provide £18 billion in capital investment over the 2005-2017 period.

The UK and Irish governments will monitor the local impact of their bank support programmes more closely and consider how to improve access to finance.

The two governments are also working towards a reciprocal visa arrangement, which would allow more tourists to visit both countries with the same visa.

In one of the most eye-catching proposals, the Government backs a plan to rest rocket engines in Northern Ireland – as part of the National Space Technology Programme. £20 million in grants is earmarked for Bombardier, to reward its achievements in aerospace R&D.

A feasibility study will look at whether pre-clearance facilities could be introduced at Belfast International Airport for flights to the USA. This was originally a CBI proposal and follows on from the success of pre-clearance at Dublin and Shannon airports.

Following up on the Lough Erne summit, David Cameron will return to Northern Ireland on 11 October for the G8 Investment Conference. The first progress report on the Economic Pact will be published at that time and subsequent progress will be monitored at annual summits, also involving the Prime Minister.

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