Preparing for Government - Speech to the Northern Ireland Chamber of Commerce, Culloden Hotel, Belfast, 5th February 1999

I am grateful for the chance to be with you today. The distance which formerly existed between the business community and NI’s elected politicians is being steadily narrowed, and events like the NI Chamber of Commerce lunches are a further significant chance for us to get to know each other better and to better understand each others view point.

Unfortunately the lingering problems of establishing a new and peaceful NI are preventing many of us from spending enough time on social and economic policy, but I hope this will soon change.

I would like to take today’s opportunity to talk frankly about the progress which has been made towards devolution, and also the remaining difficulties. I also want to look beyond devolution, difficult though that seems at times, and give you a feel for how I hope the new Administration will approach economic matters.

For our part, we have done everything required by the Belfast Agreement to get into a position where devolution is possible in March.

The detailed form of the new administration and cross border bodies were agreed in December. Progress is being made on the Civic Forum, and the British Irish Council and NSMC. The final legal mechanisms which include some nine Orders in Council must be ready for devolution by the Secretary of State’s target date of March 10th.

Meanwhile half of the 450 terrorist prisoners are out, the Policing Commission is due to report later this year and the new Equality arrangements are well advanced.

We have applied ourselves diligently and honestly. The only remaining difficulty stems from Sinn Fein and the Loyalist paramilitary Parties who have so far refused to honour their part of a generous bargain by giving up their weapons.

Sinn Fein claims there is no commitment to decommission in the Belfast Agreement.

This is wrong. The Agreement is clear. Its preamble commits all participants to ‘exclusively peaceful means’. To any reasonable person that means no arms, no armies, no killings and no beatings.

But the Agreement is even more emphatic. The section devoted to decommissioning says that ‘all participants ….. reaffirm their commitment to the total disarmament of all paramilitary organisations’.

What could be clearer? But rather than implement this commitment Sinn Fein refuse to confirm when arms will be handed over or indeed whether they will ever be handed over.

Obviously my Party cannot allow Sinn Fein Ministers into the new Administration until the Agreement is honoured by them as it has been by us.

By March 10th, all the legal requirements for devolution will be in place. If Sinn Fein begin decommissioning they can join the administration at that point. If they cannot accept this invitation we will have to find some way of going forward without them.

This will not be my choice. It is an inclusive settlement. But no one group can be allowed to block progress through intransigence. Too much is at stake, and expectations have been raised too high. – We need to be realistic.

My hope is that all of these difficulties will be overcome before too long, and we can proceed for I am conscious of the Agreement’s potential to transform our society. Through it instead of repeating our history, we can change it.

As you know we have devised an administration consisting of 10 separate Departments, in place of the 6 existing departments, plus a central office of the First and Deputy First Ministers. The 10 Ministers plus the First Minister and Deputy First Minister will form the NI Executive.

In addition we have agreed 6 north-south implementation bodies plus a further 6 areas for enhanced cross-border co-operation between existing bodies.

Two of the 10 departments will be concerned with business and finance. Both will be familiar to you. The new Department of Enterprise, Trade and Investment is basically the familiar DED. The DFP remains but will share its functions with the new Economic Policy Unit located in the Office of the First Minister and Deputy First Minister.

The Economic Policy Unit is perhaps the chief innovation in the new administration. Its role will be to co-ordinate the administration’s economic policies, to ensure that these are fully reflected in the allocation of public expenditure, and to maximise the effectiveness of government in delivering public services. In delivering these responsibilities the Economic Policy Unit will work in conjunction with DFP in the all important issue of budgetary matters.

Co-ordination and innovation will be essential aspects of the new Administration. As a coalition of perhaps 4 Parties with little direct experience of working together, the new Administration faces formidable difficulties which lie outside the experience of most regional administrations anywhere in Europe.

The checks and balances in the Agreement are necessary as a basis for building trust, but they cannot be described as a guarantee of good government because good government involves change and development rather than stasis.

Good government will depend on personalities and goodwill, but it must be led by a well developed central administration in which a Unionist First Minister and Nationalist Deputy First Minister will work together.

The Economic Policy Unit will play a vital role in assisting the FM and DFM to ensure that the Departments work well together for the good of NI and its economy. It will do so by spreading the responsibility for economic and financial management across more than one department. This is in line with a widely used practice in coalition governments in Europe where economic policy and financial responsibilities are usually shared between different coalition partners.

Of course economic success depends on vastly more than government. Some argue that the less the government the better. But this misses much of the reality of complex modern economies. Under modern conditions economic success clearly relies on many parts of society playing a role in concert with each other.

Economic success is a team game, not a set of unconnected individuals. A vibrant, enterprising and competitive private sector is at the core of success, but this must be supported among other things by first class education and training systems, by world class transport and communications infrastructures and by efficient energy, water and waste disposal systems.

Francis Fukuyama of MIT summed it up in his book simply titled ‘Trust’. Societies in which the public and private sectors trust one another and work well together, and in which individuals are trusting enough to build large successful organisations, tend to flourish.

Whether we succeed as a region will depend on our determination. We have success to build upon: 37,000 jobs created in the last 6 years. One of the most dynamic small firm sectors anywhere in the British Isles, unemployment now well below the European average.

But much remains to be done. Our productivity, and hence wage levels remains too low. We are an unequal society, and too many are in low paying traditional industries which other regions have long since abandoned. Tackling poverty will first and foremost need full employment in high paying jobs.

Let us also be honest, much of what we do in NI is heavily subsidised and supported from outside. The UK and other European governments have been willing to support us through the terrible past which we now hope we are leaving.

In a more peaceful world we will have to learn increasingly to support ourselves.

Our aim must be to become one of the richer European regions, with everyone in work, free of dependence or external subsidies. This is far from our current position. We are setting out on such a long journey.

I offer this challenge to the business community. Join us to create a better NI. You have supported our efforts in securing political agreement. Let us now work together to build an economic achievement on the foundation of our political agreement.

More than anything it depends on a willingness to change and improve.

The difficulty as Harvards’ Michael Porter expressed it is that “change is an unnatural act”. We become comfortable at our existing levels and resist disruption. Those who have prospered under existing conditions have little incentive to change. But unless we change, and change faster than others we can never catch up.

We must welcome change for we will all gain from it. We must question our current regime of grants. £150m a year in grants to private industry is a precious resource. Are we using it to best effect? Could we do better?

There are many other questions which remain to be answered. I hope we will answer them together, trusting that a more competitive NI economy will be a better place for all of us.

Perhaps I can finish by looking not at ourselves, but across the fence at our nearest neighbour. The Republic of Ireland remained in the economic doldrums for decades because it looked backwards not forwards. In the last few decades it has looked outwards, with all parts of society working increasingly in partnership. That change has paid off.

We can easily accept the economic challenge which their recent success offers us. I believe we can do more than merely emulate, like the European Rugby final last week, let us show that Ulster can achieve the highest standards in Europe.

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