North's political agenda gives way to business

The Federation of Small Businesses is urging people to vote according to business issues in the UK elections, writes Una McCaffrey

It is a funny thing to listen to the North's politicians setting out their stall on the economy.

They make promises and pledges just like an electoral candidate in any jurisdiction, sounding enthusiastic or realistic where appropriate, but at the bottom of it all, they face a problem.

In reality, their power over the North's economy is so limited (at least under direct rule) that any promises they make must be based not on acting themselves but on asking others to act according to their wishes.

The trouble is that when the group of people you're asking to act on your behalf is a Labour government with a very comfortable majority, your influence will be unlikely to run deep.

One northern business insider summed it up this week by observing that voters are being asked to "elect a bunch of lobbyists" to Westminster on May 5th.

The comment came at the end of an electoral event organised earlier this week in Belfast by small business lobby, the Federation of Small Businesses in Northern Ireland (FSB).

Similar to the Small Firms' Association in the Republic, the FSB's cause in life is the championing of small business interests. This mission has a particular resonance in the North, where almost all commercial activity can be classified as "small" and privately owned.

With this in mind, the FSB is calling on business people to "vote business, not politics" next week. It is an optimistic goal in the context of the North's political situation, but perhaps not in light of the potential that a period of stability there can bring. The Minister for Finance, Brian Cowen, said this week that British and Irish spending worth up to £100 million could flow into cross-Border projects if the conditions were right.

The FSB is valiantly trying to encourage "business not politics" by organising its electoral debates, at which business people are invited to press their candidates on their business policies.

The candidates meanwhile are given the opportunity to outline exactly why they would work hardest for business goals. In Belfast on Monday, this honour went to Peter Weir of the DUP, Dr David Alderdice of Alliance, Dr Alisdair McDonnell of the SDLP, and John O'Dowd from Sinn Féin. The UUP was not represented, although Sir Reg Empey had been scheduled to appear.

Their approaches to business issues were not exactly uniform during the debate, but there were common themes, such as the need to reduce insurance costs for business and, in line with the business organisations, the need to get rid of red tape.

Both the DUP and the SDLP made reference to Dublin bankers, the former boasting about meeting them with a view to boosting investment in the North and the latter quoting from a speech delivered by Bank of Ireland governor Laurence Crowley to an SDLP breakfast.

In this speech, Mr Crowley wondered why a joint North/South approach could not be taken to labour requirements. Dr McDonnell wondered the same, although Mr Weir later described this all-Ireland approach as "naval gazing" in another context. Much better to look to the considerably larger market in Britain than a mere market of five million people, he advised.

Sinn Féin's Mr O'Dowd meanwhile was most realistic (or perhaps pessimistic) on the potential for any Northern party to get things done for business in Westminster. In any case, he says, most new legislation comes from the EU and not London these days.

Political point-scoring aside, the issues that mattered to the business people and social representatives present at the debate were simple enough. One attendee asked the candidates how they would simplify taxation, quoting from an article on flat taxes that recently appeared in The Economist.

The party representatives did not hesitate to reply but, in doing so, said little, probably because they have precisely no power over the matter. This would be the case even if they were being elected to an operational Northern Ireland Assembly, with the London government retaining power over taxation and security at all times.

Business taxation is a particular problem for the North because of its proximity to the Republic, where a 12.5 per cent corporation tax rate compares with the considerably less competitive 30 per cent that applies across the UK. The obvious parallel with this in the Republic is the system whereby Irish interest rates are set in Frankfurt.

Imagine though, this lack of control extending beyond interest rates to taxation and spending. It would perhaps make sense if a certain disconnection developed between the amount paid in taxes or charges and the public services consumed.

One issue along these lines that is high on many northern agendas in this election is water charges. Until now, domestic residences have not been charged directly for water but this is about to change as part of an infrastructural investment deal agreed with the London government.

Under the new rules, each household will pay at least £350 for water each year. The FSB says this amounts to double taxation for businesses, since they will have to pay for water both at work and at home.

In another question, a private transport operator complains about the years it took him to obtain a licence to operate one particular route at a time the public transport company is getting a fleet of new vehicles from the state. There is little sense of outrage at the mismatch or the competition issues that his problem throws up.

More accepted however is the northern economy's overdependence on the public sector. This is a topical issue, with a review of public administration expected to advise a reduction in the number of councils, among other cutbacks.

It is acknowledged that public money is at the root of two-thirds of the North's economic output, but it is hard to imagine any of the parties having the appetite to cut jobs in a sector with notoriously strong unions. Instead, we have somewhat woolly aspirations on growing the private sector.

Again though, it is hard for the northern parties to make firm promises when they stand in such shifting political sands.

Business issues are perhaps hardest for the parties that aspire to changing the status quo on the North's constitutional position.

The SDLP's manifesto illustrates the problem - it is heavily peppered with references to "all-Ireland" structures that have a distinctly theoretical look to them.

Sinn Féin has a similar, and perhaps deeper, difficulty. In pursuing a united Ireland with all its heart, the party can not be seen suggesting major policy departures that relate only to the North.

This may not be a problem for the main unionist parties or the Alliance, but the lack of real policymaking power they will have, even if elected, remains the bothersome elephant in their political rooms.