Speech by the Shadow Chancellor, Ed Balls MP, to CBI Northern Ireland Members 10 October 2012 Introduction It is a great honour to be in Belfast

today with my good friend and the Shadow Northern Ireland Secretary, Vernon Coaker… … to speak to you today about the vital importance of kick-starting the Northern Ireland economy out of recession and delivering the jobs and long-term investment which are vital to securing the economic and political future of Northern Ireland… … and to make this unequivocal commitment: that we in the Labour Party are determined to work closely with you to make that happen, to secure a prosperous future for Northern Ireland and help you ensure that all citizens can share in that rising prosperity. And I can’t think of a better place to make that commitment and discuss with you the challenges ahead than here at the CBI – the voice of business here in Northern Ireland. And thank you to your Chairman, Ian Coulter, for hosting this discussion today and to Bill Coyle from ESB Coolkeragh for sponsoring the event. The Good Friday legacy Friends, let me start by saying this: The Good Friday Agreement in 1998 was one of Labour's most important achievements in government. When we took office in 1997, we committed to putting the issue of securing peace in Northern Ireland at the top of our agenda. And with our partners in the Irish government, and the courage and forward thinking of political leaders in Northern Ireland, and building on the work of our predecessors, we achieved together something that eluded generations before. We will never be afraid to say how proud we are of that and how strongly we feel about protecting its legacy. But that doesn’t mean that we think the job is finished. We aren’t complacent about the work that still needs to be done. That is why the next Labour government will put securing Northern Ireland's economic future at the top of our agenda. Because we know the next stage in Northern Ireland’s development will be centred on the economy.

Labour stands by that commitment .since the bad old days of conflict. Over the past two years. Tough times That is why we are so worried by what is happening in Northern Ireland's economy today. The Good Friday Agreement promised a generation in Northern Ireland that theirs would be a better future. The economy here recouped £4.000 jobs have been lost in the construction sector alone . And private businesses in Northern Ireland have also been hard-hit.80 for every £1 that was invested in bringing film production to Northern Ireland.we gave it then and we hold to it now. Unemployment has risen to over 8% in Northern Ireland. Business confidence is down. Unemployment is high across the UK – but it is higher here. Almost half of those without work have been unemployed for over a year. the recession has been deeper and – according to PWC – the recovery is expected to take longer. Now I know you will be expecting me to highlight my differences today with the Tory-led government in Westminster. we’ve seen the spectacular success of Titanic Belfast.a fall of more than 15 per cent.and changed for the better .but the Northern Irish economy has been hit harder. Nearly one in four young people are without a job. Together we must deliver. the longest since the Second World War . And with Derry looking forward to its status as City of Culture next year. one in six local businesses have ceased trading. But I know too that the most important things businesses need are stability and predictability government decisions made and then stuck to so that you can plan ahead: .It is striking to me visiting again this week how much Northern Ireland has changed . The top tourist attraction on the island of Ireland that has had over half a million visitors in its first six months. And over 5. This story speaks to an important truth – but also sets us a vital challenge. And that tragic story of the past is helping to build a better future. and it is still rising. violence and isolation. with the Titanic Quarter fast becoming a home to creative industries and Northern Ireland providing a sought after film location that is the envy of the world. arts. In this city. And I will. Too many investment decisions have been postponed or even gone elsewhere. creative industries. culture and film – and the associated tourism that brings – are a big part of Northern Ireland’s economic future. The UK is stuck in a double-dip recession. doing long-term damage to our economy.

. as well huge frustration about the ways the banks are now behaving. First. I first want to set out where. For a country like the UK. The question is how we ensure that it doesn’t happen again. and equally by the failure of Anglo Irish Bank in Ireland. So. We agree this must never happen again. after the global financial crisis. The global financial crisis started with the reckless lending practices of American financial institutions. Let me take each of these three areas in turn. in the spirit of consensus. like RBS which owns Ulster Bank. including in the UK and Ireland. And the third thing George Osborne and I agree on is that a credible deficit reduction plan is a necessary condition but it is not by itself a credible plan for jobs and growth. dependent on the support of international investors. but it exposed risky behaviour by banks and inadequate regulation in every major country of the world. we agree that. on banking reform. The question is what form that plan for growth and jobs should take. open to trade and commerce. I know how frustrated many of you are that credit is hard to find and more expensive to access. we politicians should seek consensus where we can in the interests of long-term economic development. the Chancellor George Osborne and I agree on the strategic goals even if we disagree on how to get there. Second. a credible deficit reduction plan is now vital – just as a credible independent monetary policy was one of the most important reforms I was involved in delivering in the last Labour government.That it is the clear view of business that. we do need a credible plan for deficit reduction. I know there will be no disagreement here about the need for radical reform. Banking reform First. Businesses in Northern Ireland were hard hit by the crisis in our commercial banks in the UK. As your Finance Minister Sammy Wilson said recently: “business is increasingly frustrated at the lack of availability of credit on reasonable terms and that low rates of lending are affecting Northern Ireland’s economic recovery”. where possible. on each of the three big questions of our time. we agree on the need for banking reform. And speaking to the CBI here today.

to promote economic growth – we will hold them to this when amendments are brought forward to the Bill.including in staffing and corporate governance. . That means reforming banks’ culture. And its complexity drove jobs and tax revenues out of the US year by year. we need a radical culture change in the banking industry. But a lurch to regulatory risk aversion would be disastrous for the UK economy. In regulation. But it didn’t work. the banks have to deliver change. It did not stop the financial crisis which started in the US. we must take a careful and balanced approach Too soft: and we risk again leaving taxpayers and businesses exposed. alongside financial stability and consumer protection. Carrying on as they are will not be an option. The US Congress reacted with a heavy-handed piece of rules-based legislation – Sarbanes-Oxley. The easiest way to avoid any financial risks at all would be to have no transactions at all. especially in business lending. in the run up to the 2015 election. Too heavy-handed: and we risk throwing the baby out with the bath water and ignoring the needs of businesses small and large. we need to have in our minds the US response to the World Com and Enron accounting scandals a decade ago. the government has conceded that the permanent Financial Policy Committee of the Bank of England should have a clear objective.We have supported the radical proposals from the Vickers Commission on banking reform. workable and robust firewalls – as well as stronger competition. Vickers is right to argue that to protect customers and taxpayers we need much tougher accountability and transparency and clear. where the Government is taking much too long to make progress. But all the signs are that the government is now watering down the Vickers proposals. under pressure from us. If that doesn’t happen. That is why in Westminster. So yes. the next Labour government will break them up by legislating to split high street from casino banks. as banking regulation is centralised at the Bank of England. showing that high street banks will operate in a genuinely independent fashion from their casino arms and will focus on supporting UK business. as well as implementing the letter and spirit of the Vickers Report to provide real separation . But we must also make sure. that banking regulation does not lurch too far. In my view. That is why Ed Miliband said last week at out conference in Manchester: Over the next two years.

part of that package. it’s going up – up by 22 per cent so far this year. a million young people out of work. of course. But over two years ago. their plan has not worked. billions wasted on a soaring benefits bill. But we also need jobs and growth to get the deficit down. a credible plan will need to be tough in order to command confidence. the deficit is now not going down. they took a radically different path. and that small and medium-sized businesses desperate for much needed risk capital and fair terms are likely to be the losers if regulation is too heavy-handed. the emphasis of their plan took a sharp turn from increasing jobs and growth to immediate and steep spending cuts and the VAT rise. Deficit reduction The second area where George Osborne and I agree on the task ahead is on the economy and the need for a credible deficit reduction plan. thousands of businesses bust. Second. But the fact is the UK is now just one of only two G20 countries in recession – the longest double-dip recession since the Second World War. But the question is what makes for a credible plan? Yes. But it has also got to work – and that means pulling all the levers required to deliver deficit reduction. And. Thank goodness the Olympics has given us a short-term shot in the arm. especially here in Northern Ireland.This audience doesn’t need telling that rigid rules-based regulation is often not the answer. In office. Yes the Euro crisis has made things harder. and borrowing going up not down. when the Coalition was formed. But that is no substitute for a long-term strategy. and then beginning the difficult task of cutting spending and raising taxes where necessary. First. Spending cuts and tax rises are. sustainable growth. Labour’s plan was based on restoring strong. as is now widely acknowledged. The fact is that there is nothing credible about a plan that leads to a double-dip recession. And because we are in recession. . getting people back into work. they decided that the speed of deficit reduction had to be substantially increased. This week we again saw evidence of this when the IMF further downgraded the UK’s growth forecast. that might just be enough to take us out of recession this quarter.

We are clear . Before the general election the Tories raised the prospect of a cut in corporation tax. there is still no agreement about whether it should happen and what it would cost.000 new affordable homes and create tens of thousands of construction jobs. With over 26. Without action now to support growth and jobs and reform our economy for the future. Northern Ireland's businesses need help now. Yet George Osborne has refused to act to kick-start growth and support new business investment. Northern Ireland’s economy needs action now . . and proposals to introduce regional pay – leaving workers in Northern Ireland worse off – our nurses.000 jobs set to go in the public sector.000 jobs in the last two years Northern Ireland’s construction industry needs that help. After shedding 5. Our plans would allocate £70m to Northern Ireland over the next two years. And changing the Tory face at the Northern Ireland Office isn’t going to get Northern Ireland the help it needs. Last week we urged the government to use the proceeds of the sale of the 4G mobile phone spectrum to build new homes and kick-start a construction-led recovery.whether or not a corporation tax cut is the best way forward. We would enable the Executive to bring forward long-term investment projects to get people back to work and strengthen our economy for the future. teachers and police officers are right to be anxious about their futures.a Plan B for jobs and growth. Rising unemployment and the recent announcements of major job losses show that Northern Ireland’s economy can’t wait while the Treasury dithers.We consistently warned going too far. But after two years of talking about devolving corporation tax powers to Northern Ireland. We would give a one-year national insurance tax break to every small firm that takes on extra workers. And it is no surprise that the Northern Ireland economy has been hard hit by the rapid public sector jobs and spending cuts imposed by the Tory-led government in Westminster. And if the Northern Ireland Executive were to take the same decisions as England. they could use those funds to build 3. too fast with spending cuts and tax rises would choke off economic recovery and lead to more borrowing and not less. I fear we are in for a lost decade of slow growth and high unemployment which will leave a permanent dent in our nation’s prosperity. helping to create jobs and grow local businesses that make up over 90% of Northern Ireland’s private sector. That’s why Labour is calling for a real plan for jobs and growth in Northern Ireland.

a renaissance in apprenticeships. We would reduce VAT on home improvements. Young people in Northern Ireland are ambitious for themselves and their communities. But many of our most successful economic policies: .CGT for entrepreneurs cut to 10% .faster business planning decisions. towns and villages across Northern Ireland. and adults in Brazil already twice as likely to be running their own business as here in the UK – I believe here we need a long-term plan for growth to support and back your leadership and innovation and risk-taking. planning. No job. repairs and maintenance to 5 per cent. We need to build skills through apprenticeships and training that will equip our young people for the future. But that won’t do. Long-term plan for jobs and growth Which brings me to my third area of agreement .000 young people in Northern Ireland back to work. strategic industrial support – government has a vital role to play and cannot just walk away. . helping to create work for our young tradesmen and women and stop them having to move away. But they can’t realise those ambitions if they aren’t given the chance to get on. skills.the car scrappage scheme.on transport. Our young people deserve better.We are urging the government to reverse its damaging VAT rise for a temporary period to give immediate help to high streets and struggling families and pensioners in cities. They are needed at home. the Government lacks "a compelling vision of where the country is heading beyond sorting out the fiscal mess" He is right and .the need for a long-term plan for jobs and growth.an expansion of higher education and science. let’s levy a £2 billion tax on bank bonuses to fund a real jobs guarantee that could help 2. With China currently producing more graduates a year than the whole population of Scotland. And because we know that young people will be the driving force behind further progress in Northern Ireland. It was the Business Secretary himself who wrote in his famous leaked letter. I am not going to claim to you that Labour got everything right in government – let alone that you all agreed with what we did. no hope and no future are no choices at all. . . But what form should that plan for growth take? All the evidence over the past two years suggests to me that the Treasury now thinks that the only thing government needs to do for business is just to get out of the way. .

And nowhere is such a consensus more essential than on our infrastructure. innovation and industrial policy what can we do together across the UK and Ireland. So the question we must ask is – on taxation. and the Executive. education.000 new jobs in their subsidiaries. And here too we need to capitalise on the benefits of cross-border economic co-operation in areas like tourism. film and television creating nearly 12. roads and business parks that benefitted from record investment… … these projects were successful because we had moved beyond the old-style British debate – public bad. investing in infrastructure and promoting innovation and new investment for the future. public good? – and recognised that partnership between business and Government is vital if we are to rise to the competitive challenge.and here in Northern Ireland. business & professional services. allowing short-term politics to come first. reforming our banks. And I highlighted a series of areas where if we put off major decisions for another generation. R&D and exports. Life & Health Sciences. how can we work together and what more must we do to build a long-term consensus about what needs to be done. the schools. and Advanced Engineering. energy. regulation. I discussed today with the First Minister and Deputy First Minister how committed they are to delivering new jobs in investment in areas as diverse as Telecommunications & ICT. hospitals. But I also said that successive governments – including our own – have ducked or delayed vital decisions on our infrastructure. . you have great strengths in innovation. Just look at the success you have achieved in foreign direct investment over the past decade. in sharing health and education services.. to build and develop the economy. with Invest Northern Ireland assisting over 120 foreign companies to invest in greenfield FDI projects in Northern Ireland since 2006 . And at a time like this. it will be our children and grand-children who will face the consequences. where we. I said last week at the Labour Party Conference that the lesson of the Olympics is that if we approach major long-term infrastructure projects by building a cross-party sense of purpose then we can deliver. on infrastructure projects. the finance you need. and also in air connectivity. remain unconvinced that the Treasury has done enough to understand the special challenges you face in Northern Ireland at a time when Belfast International Airport is losing 1 million passengers per year. Here in Northern Ireland. But I know too the real challenges that currently face the Northern Ireland economy: in accessing the skills you need. like you. private good? private bad. when we need to rebuild our economy for the future and support long-term investment in innovation and skills. the high cost of energy. Northern Ireland That is why I am so committed to supporting the First and Deputy First Ministers.software & IT. and also in manufacturing where you continue to out-perform the rest of the UK. that partnership is needed more than ever.

raising the proportion of electricity consumption from renewable sources. let us together draw up a comprehensive long-term plan to rebuild our infrastructure for the 21st century. That is why – issue by issue .I am committed to working with you and listening to you on all issues which affect your businesses and our economic future. but especially in manufacturing. In all sectors. transport or energy. alongside vital decisions on road and rail and airport capacity. And securing such a long-term consensus to put jobs and growth first and make the investments we need is particularly vital here in Northern Ireland. to consider how long-term infrastructure decision-making. Conclusion Let me conclude by saying this. delivery and finance can be radically improved. that can assess and make proposals on the long term infrastructure needs of our country over the coming decades and help build that consensus. and a broad and cross-party consensus to deliver it. I know that there are key challenges that the Executive has already highlighted: upgrading of key road projects to reduce journey times. The Good Friday Agreement in 1998 was one of Labour's most important achievements in government. as well as improving the landscape in public areas to promote private sector investment in towns and cities across Northern Ireland. de-carbonised energy and green jobs. But nor is headline-grabbing change for the sake of it. the chair of the Olympic Delivery Authority. we must think innovatively about how we can finance these vital projects over the coming decades. planning. And at a time when Government budgets are tight. that is the only way to ensure businesses can invest.whether we agree or disagree – working alongside the Northern Ireland Executive . how we draw up a clear plan to invest in power generation. Here in Northern Ireland. Sir John is going to draw up plans for a commission or process. I said at the beginning of my speech that it is the clear view of business that you need stability and predictability and. That is why Ed Miliband and I have asked Sir John Armitt. And I am pleased that the Northern Ireland Executive has agreed to work closely with Sir John on his review. So I say.how we deliver super-fast broadband across the whole of the UK and in particular here in Northern Ireland. . we politicians should seek consensus where we can in all our interests. independent of government. where possible. including renewables so we can lead the world in delivering clean. Consensus is not always a good thing. drawing on the private sector and long-term pension savings.

to make it unthinkable we could return to the conflicts of the past So this is my commitment to you today.It promised a generation in Northern Ireland that theirs would be a better future. That’s our promise of 2012. And that will be the promise of the next Labour government ENDS . Together let's build an economy that allows the ambition and potential of Northern Ireland and its people to be realised. Together we set ourselves the shared task of forging a lasting peace by cementing it with rising prosperity shared by all .

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