Sir David Varney Publishes NI Competitiveness Review

by Jason Gorringe, Tax-News.com, London

02 May 2008

Sir David Varney on Wednesday published his Review of the Competitiveness of Northern Ireland, which follows on from the conclusions of his Review of Tax Policy in Northern Ireland published in December 2007.

Sir David's Review identified a number of core strengths that make Northern Ireland a good place to do business, and attractive to a wide range of investors.

These strengths included a young population, an excellent education system, macroeconomic stability, strong transport links with the rest of the UK, Ireland and Europe, and ambitious plans for further infrastructure investment.

These strengths - alongside a range of investment incentives - have already attracted notable inward investment, and Northern Ireland has seen some of the strongest growth in output of any UK region.

The Review makes the case that increasing globalisation will bring a number of new challenges to the Northern Ireland economy in the years ahead, as emerging economies compete increasingly in a range of sectors.

To succeed in the face of this growing competition, Northern Ireland will need to continue to raise its relatively low productivity and employment rates, and reduce the number of low-skilled workers in the economy, it suggested.

Sir David found that the Northern Ireland Executive has responded well to many of these challenges, and welcomed the priority given to the economy in Northern Ireland's Programme for Government, and the strategies developed to support economic development.

The Review concluded that the Executive should now focus on the rapid and effective implementation of those strategies.

To boost the competitiveness of the Northern Ireland economy further, the Review recommended action in a number of areas, including:

• Deepening and intensifying public sector reform, in particular increasing the role of the private sector in the delivery of core public services and transferring non-core services to the private sector in order to help stimulate its growth;
• Ambitious labour market and welfare reform, aimed at increasing the employment rate and reducing the number of people on Incapacity Benefit;
• More employer-led skills training to help tackle weaknesses in the stock of skills in the labour market, which is a legacy from the past;
• Ensuring a joined up approach between Invest Northern Ireland, UK Trade & Investment and the Irish Industrial Development Agency (IDA) to market Northern Ireland to the full; and
• Continuing development of the all-island economy with the Irish Government, supported by the UK Government, including increased trade, movement of labour and capital, tourism, energy markets and financial services as well as many other sectors.

Sir David commented:

"I believe that Northern Ireland has the potential to be a 21st century economic success story. My findings suggest that Northern Ireland has a number of substantial competitive advantages and is already a very good place to do business with a young and skilled workforce."

"The Northern Ireland Executive has already made excellent progress, putting economic development at the heart of its programme, and setting out a range of programmes to create a vibrant and prosperous economy."

"This commitment to economic growth is shared by political parties, the public and private sectors and the Irish and UK Governments."

"The next stage of Northern Ireland's progress should be the rapid and effective implementation of the Executive's ambitious economic strategy and the widening and deepening of existing reform."

He concluded: "My recommendations for the Northern Ireland Executive and the UK Government are intended to assist the Executive and the UK Government, supported by the Irish government, in delivering their central economic objectives for Northern Ireland The forthcoming US investment conference will be an important staging post in Northern Ireland's transformation."

Recommended