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12 June 2018

The View from the Chair - June 2018

We must embrace our unique position

Throughout its history, Northern Ireland has often been referred to as ‘a place apart’ but often it hasn’t been intended as a compliment; however, there is no doubting the uniqueness of this place. Our form of power-sharing government (when it is up and running) is different from other parts of the UK and Ireland, allowing both communities a say in decision making. The right of people born here, safeguarded by the Belfast/Good Friday Agreement, to hold British, Irish or indeed dual citizenship is not enjoyed by people in other parts of these islands. I view these particular quirks as strengths; as factors that make this place more attractive place to live, work in and run a business.

We have some specific challenges, too. The legacy of the past still looms large and our society is still more divided than many of us would hope. Economic inactivity - people of working age not in work or seeking employment - is higher than in any other part of the UK and, at 28 percent, is well above the UK average. This is something which, as a society, we need to address to ensure those who are able to work are given a pathway back into the labour market.

It’s not just politically and socially that we are different from elsewhere. The structure of our economy is also different, with small businesses making much more of a contribution. Northern Ireland is frequently characterised by having an oversized public sector, however small businesses employ more people than that public sector and all larger businesses combined. Another important difference is characterised by our agriculture sector, which is much more important here than elsewhere, and tends to operate on an all-island basis. Indeed, there are more farms on the island of Ireland than in England and Scotland put together. This highlights why it is so important that the local agriculture sector is protected after Brexit.

Our proximity to the Republic of Ireland, as well as sharing a land border, brings advantages - including enabling all-Ireland trade and movement of people throughout the island. However, this also brings challenges such as different currencies and tax rates, which has sometimes disadvantaged Northern Ireland businesses. FSB has lobbied to address some of these issues, such as campaigning for Corporation Tax devolution and reduction which gained cross-party support, but is yet to be delivered. Recently, in response to a UK Government consultation, we have also argued for a reduction in tourism-related VAT, to allow our tourism industry to compete on a more level playing field with the industry south of the border, and have supported the removal of short-haul APD to allow our airports to become more attractive for consumers. Importantly, we have argued for this to be implemented as a 3 year initial pilot to build a better evidence base, ascertain value for money, and assess the overall benefit for the Northern Ireland economy.

It is obvious that Northern Ireland has unique strengths and challenges, which require bespoke solutions and initiatives. We continue to be high on the Brexit agenda and, in recent weeks, saw a new proposal emerge to allow Northern Ireland to align with both EU and UK regulations after the UK leaves the EU. The exact nature of the ‘backstop’ to prevent a hard border continues to be a source of friction in Brexit negotiations. Northern Ireland’s position is also unique, located on the island of Ireland while within the UK, something which is still without a remedy in Brexit negotiations. FSB recently hosted Brexit focus groups which attempted to drill into practical solutions to the Brexit conundrum. What was clear from those discussions was that, regarding Brexit, as on so many other issues, Northern Ireland is different. Our uniqueness, while presently a source of difficulty, should potentially be an advantage as we move forward. Businesses will always seek to maximise the opportunity of any change in circumstances, therefore it is crucial that flexibility and pragmatism is demonstrated which allows Northern Ireland to prosper in our own unique way after we leave the EU.