MNI launch call to action for manufacturing
“CORPORATION TAX ONLY PART OF WHAT’S NEEDED”
INDUSTRY ISSUES A CALL TO ACTION ON ENERGY COSTS, RATES AND SKILLS TO GROW THE MANUFACTURING SECTOR
An overarching Manufacturing Strategy aimed at reindustrialising Northern Ireland is required to maximise the benefits of reducing Corporation Tax says Manufacturing Northern Ireland. The umbrella body which represents over 500 of Northern Ireland’s leading manufacturing companies has called on the Executive to work closely with it to create the conditions in which thousands of new jobs can be realised by investing in the sector.
MNI spent the last 9 months meeting with and gauging the opinion of the sector. They say that whilst moves on Corporation Tax are hugely important and welcomed, the opportunity offered by its arrival must be supplemented by an overarching manufacturing strategy which deals with the issues of rates, energy prices, skills and infrastructure.
Speaking after presenting the organisations’ findings at the Enterprise, Trade and Investment Committee at Stormont, Chief Executive Stephen Kelly said that the manufacturing sector is in good shape, and ready for the challenges of the future. He added that it’s essential that industrial rates remain at current levels, that high energy costs are addressed and the skills agenda developed and deepened.
“Despite coming through the worst economic downturn in a century, manufacturing generates annual sales of over £19 billion, and directly employs some eighty thousand people, an average of over 4,400 per constituency or around 1 in 5 families relying on a manufacturing wage. Our manufacturing should be cherished and celebrated.
MNI’s engagement with the Northern Ireland Executive has been generally positive, with the moves on corporation tax to be hugely welcomed. However it’s only part of what’s needed. By drawing a coherent manufacturing strategy together, which sets a target for competitive energy prices, secures industrial de-rating in long term legislation and cements a skilled qualified workforce and careers service we can build on the good work done on Corporation tax and really set Northern Ireland PLC on the path to sustainable prosperity.”
The document was arrived at after a series of meetings with manufacturing companies across Northern Ireland, which were also attended by members of the NI Assembly, a number of Ministers, representatives of trade s and other organisations. MNI members clearly indicated that while much of what the Executive has delivered, the cost of doing business needs to be looked at.
“The NI Executive seems set to grasp the chance to set the local rate of corporate tax. This is hugely important and the Executive should be congratulated on this achievement. However, as articulated by all parties, it must be seen as one of a number of levers which will help rebalance the economy. Given Northern Ireland’s position at the end (and indeed beginning) of the supply chain and our interface with the Eurozone, the success of NIs manufacturers is very sensitive to price. So, fundamentally, we must get to grips with the costs of doing businesses here. Manufacturers have control over much of their operations – production, supplies, raw materials – however there is little control over fixed costs in particular which are defined largely by government policy.”
Manufacturing NI was born from the drive to cap industrial rates, and Stephen Kelly added that this issue remains at the heart of membership interests.
“Rates are a tax on space. Manufacturing by necessity requires more space than all other business groups and as such deserves special recognition in this regard, particularly as they do not receive services for the rates investments they make. The rates cap for manufacturing must remain beyond the current 2015-16 commitment. The lack of certainty is holding back investment. Therefore industrial de-rating needs to be secured for the long term through legislation – this will bring confidence to hold or expand manufacturing operations. The manufacturing rates cap is one of very few pre EU accession relief enjoyed by the local administration.”
Stephen Kelly said that one of the biggest issues which arose in the meetings held across Northern Ireland in preparation for the release of the manifesto was the high cost of energy.
“Energy is the third largest input cost for business after labour and materials costs. Many NI manufacturers suffers the 2nd most expensive electricity in Europe. Indeed, even though we share a Single Electricity Market with the Republic of Ireland, our electricity is up to 20% more expensive. There are fundamental issues which need immediately addressed – the allocation of network charges; how the market operated leading to excessive profits for generators and the SEM Operator; the cost of making connections; and, ‘add-on’ costs from NI government policy. As such setting a policy target on competitive price for all consumers, not just sustainable and secure supply is a priority. Furthermore, while we support the development of “Gas to the West”, this needs to be done in the most cost efficient way for all customers – business should not be propping up the domestic consumer.”
Finally, Mr Kelly said that the real difficulties which many manufacturers find in filling posts with skilled workers was a recurring theme in meetings with members. He pointed out that there should be greater availability of quality manufacturing leadership and management training and apprenticeships.
“While there is undoubtedly good work going on, and DEL is to be praised for the hands on way which it is looking to develop the skills agenda, it is also clear that schools and colleges should work more closely with employers to have a greater understanding of careers within manufacturing, to match supply with demand for certain skills and developing new business opportunities. Engagement with employers should be bolstered to ensure needs are matched and opportunities for employers and employees are achieved. We call on DEL to establish an expert panel made up of employers who would advise on training needs right throughout manufacturing sector. The profile of apprenticeships should be enhanced and make it an acceptable career path for a wider range of manufacturing jobs and professions including those which require graduate entry.”