MNI Response to Briefing on Northern Ireland Budgetary Outlook 2018-2020
Manufacturing NI have published our response to the Briefing on the NI Budgetary Outlook 2018-2020.
It is our view is that there needs to be a focus on creating the environment in which private sector jobs are protected and created.
Business is being asked to provide increased employment, both in actual headcount terms and also as a percentage of the overall employment mix to counter the decline in headcount within the Public Sector. In order to do this, business needs a competitive environment. This environment is created by businesses investing in themselves – facilities, production capacity, skills, market development – but also through government action in policy areas, efficient and effective public services, a tax environment and investments.
As we respond to this consultation, our manufacturing sector faces an existential threat. Brexit impacts on broad manufacturing sector more than any other part of the economy with the critical agri-food, exporting and importing firms particularly exposed. No other part of the economy must deal with the uncertainty about borders; customs costs and delays and trade policy; other sectors do not have the same reliance on skilled and semi-skilled migrant workers; and, the manufacturing sector is uniquely subject to a raft of non-tariff barriers which mean their products may or may not have market access from 2019 onwards.
We are deeply concerned that the Department’s document contains a series of loaded questions. Threatening to withdrawn services, increase costs (income generation) and emotively asking the reader to make the choice between paying more or funding the health service. This approach is unhelpful. For us, we believe the Department should insist that it’s resources are used effectively and efficiently first. Collecting small additional sums will not make a jot of a difference to service provision when there are failures within the system which is wasteful.
- The cost of doing business in NI is growing faster than the rest of the UK, Ireland and globally.
- The cost of Brexit will disproportionately fall on local manufacturing firms – up to 10%, over £500m.
- 38% of firms surveyed said they were shifting production out of NI and the UK – this is not the time to give them additional reasons to move jobs.
- Business rates are growing 3x faster than the rest of the UK without some of the policy benefits available elsewhere in the UK.
- No revenue raising options will make any significant difference to the budgetary challenges being faced.
- Only public-sector reform – delivering effective and efficient services – can have a positive impact.
- With profit margins usual ranging from 1% in agri-food to 10%, any increase to rates costs would jeopardise the sustainability of some firms.
To read our whole response, see below