Speaking after the debate, Alliance Party Finance Spokesperson, Stephen Farry stated:
“During this economic downturn, the Executive and the Assembly should be focusing on two different aspects of the economy. The first is to help to encourage demand through for example bringing forward major capital projects. The second is to re-balance and modernise the Northern Ireland economy to best take advantage of the recovery when it comes.
“Despite the economy rightly being made the top priority within the Programme for Government, there is an absence of a detailed economy strategy for Northern Ireland.
“The Varney I Report into tax policy essentially ruled out a differential rate of corporation tax for Northern Ireland. For many economists and business leaders, this would have provided an opportunity to spark a step-change in the Northern Ireland economy, and believed that there was a strong case given the nature of competition for foreign direct investment on the island of Ireland.
“The Varney II report analyses the competitiveness of Northern Ireland within the context of the framework set by London. Its recommendations take the powers that lie in the hands of the Assembly to their logical conclusion. But a considerable number of economic and business organisations are critical of the scope of the recommendations and the persistence of the same formula based around five key drivers of the economy: skills; enterprise; infrastructure; R&D; and competition.
“Alliance would make four broad criticisms.
“First, despite the considerable improvements in our economy over the past ten years, Sir David Varney himself recognises that, even with the full implementation of his recommendations, there is unlikely to be any meaningful convergence between the economic performance of Northern Ireland and the UK average. There are major deficiencies in UK regional policy that has only 3 out of 12 regions being net contributors to the Treasury.
“Second, plenty of comparisons are drawn by Varney between Northern Ireland and the Republic of Ireland, and advocacy of the lessons that can be learnt from the latter (with the exception of course of corporation tax!), but there is little appreciation of the opportunities and challenges of an increasingly integrated all-island economy.
“Third, Varney also neglects any appreciation of the economic and financial consequences of a divided society. These include inefficiencies in labour market mobility, deterrence to investment, and opportunity costs from the diversion of financial resources towards separate provision of goods, services and facilities for different sections of the community.
“Finally, there is little mention of potential growth sectors. One obvious opportunity lies with the marriage between the economy and environmental protection. Northern Ireland could have major opportunities from the green economy. The incoming Obama Administration’s ‘Green New Deal’ may point the way.
“The Varney II recommendations will eventually form the basis of a new Regional Economic Strategy. But there is a clear sense from a number of quarters in the Assembly that the current advice is now sufficiently innovative and imaginative.”