End of Session Report 12 May 2011 – 31 August 2012

Remit:

The Committee for Enterprise, Trade and Investment (ETI) is a Statutory Committee established in accordance with paragraph 8 and 9 of the Belfast Agreement, Section 29 of the Northern Ireland Act 1998 and under Assembly Standing Order 48.  The Committee has scrutiny, policy development and consultation role with respect to the Department for Enterprise, Trade and Investment (DETI or the “Department”) and has a role in the initiation of legislation.

The Committee has power to:

• Consider and advise on Departmental Budgets and Annual Plans in the context of the overall budget allocation;
• Approve relevant secondary legislation and take the Committee state of relevant primary legislation;
• Call for persons and papers;
• Initiate inquiries and make reports; and
• Consider and advise on matters brought to the Committee by the Minister for Enterprise, Trade and Investment

Membership:

DUP: - Mr Gordon Dunne, Mr Paul Frew[1], Mr Stephen Moutray, Mr Robin Newton[2]

Green: - Mr Steven Agnew 

SDLP: - Mr Alban Maginness (Chairperson), Mr Patsy McGlone

Sinn Fein: - Mr Phil Flanagan (Deputy Chairperson[3]), Ms Jennifer McCann[4]

UUP: - Mrs Sandra Overend[5]

End of Session Report 12 May 2011 -31 August 2012

1. This report covers the work of the Committee during the Assembly year 2011-2012, from 12 May 2011 to 31 August 2012.

2. During the Assembly year session the Committee met 41 times including 12 times in partly closed session.  The reason for most of the closed sessions was to consider the draft report on the Committee’s inquiry into Developing the Northern Ireland Economy through Innovation, Research and Development.

Inquiries

Inquiry into Innovation, Research and Development

3. In November 2011 the Committee initiated an inquiry into Research & Development (R&D). The main aim of the inquiry was to understand the barriers faced by local businesses and academic institutions when considering investing in R&D and to identify actions to support and encourage investment in R&D. 

4. Approximately 33 substantive written responses were received and 36 witnesses gave oral evidence covering a range of issues of concern by businesses, public sector bodies, other statutory committees of the Assembly, MEPs and individuals.  The Inquiry made recommendations for actions to be taken by the UK Government, Northern Ireland Executive, DETI, other NI departments, Invest NI, InterTradeIreland, universities, businesses and business support organisations and local councils.  The Committee published the report and findings on 24 May 2012.  The report was debated in plenary session of the Assembly on 11 June 2012.

5. Key conclusions and recommendations highlighted the importance of R&D, both now and in the future, as a key economic driver.  The opportunity exists to make more of support programmes for R&D to help drive the economy and develop the high value, high paid jobs needed to rebalance and rebuild the economy.  A clear and holistic vision is needed for innovation and R&D.  This must be developed and implemented along with appropriate policies, strategies, structures, systems and process required to drive R&D.

6. The Committee Report can be found here.

Members took evidence fromAlmac for R&D inquiry on a visit to the site

Rapporteur Approach

7. The Committee agreed to include provision for the use of a Rapporteur to lead the collection and analysis of evidence and to oversee the drafting of the Inquiry report. The Rapporteur role included taking evidence at informal meetings with key stakeholders. This approach enabled the Committee to widen the range of stakeholders from whom evidence was taken without significantly increasing the duration of the Inquiry or the workload of the Committee.  This was the first time that a rapporteur was appointed by any Committee of the Northern Ireland Assembly.

Renewable Energy Inquiry Follow-Up

8. Following the completion of the previous Committee’s Inquiry into Barriers to the Development of Renewable Energy and its associated contribution to the Northern Ireland economy, the current committee considered the Department response at its meeting on 30 June 2011.  Of the 25 recommendations in the report 15 were accepted in full by the Department and five were partially accepted.   The Department agreed to provide a biannual update on the progress towards implementation of the inquiry recommendations.  Progress has been made on a number of issues including a Sustainable Energy Action Plan (SEAP) approved by the Executive on 5 April 2012.  Interim targets for the percentage of renewable electricity consumption and percentage of renewable heat have been included in the Executive’s Programme for Government and have been incorporated into the Strategic Energy Framework Implementation Plan.  A Renewable Heat Incentive is also scheduled to be launched in the autumn.

9. The Committee Report can be found here.

Budget Scrutiny

10. In the October 2011 monitoring round the key areas of scrutiny by the Committee included Invest NI’s reduced requirements, the current economic climate and financial assistance to small and medium-sized enterprises (SMEs). 

11. In the January 2012 monitoring round the Committee considered financial information relating to spending on the Jobs Fund and the number of jobs that it has created.  The Committee also undertook further scrutiny of Invest NI’s reduced requirements, especially regarding Invest NI capital projects with risks.

12. In the June 2012 monitoring round the Committee considered the further adjustments to Invest NI’s budget.   The Committee wrote to both the Minister and the Minister for Finance & Personnel to highlight the need for some form of end of year budget flexibility in the Invest NI budget.

13. The Committee received correspondence from the Department regarding 2011/12 Provisional Outturn figures in May and the figures demonstrate compliance with targets for Departmental Expenditure Limits.  The Committee raised concerns with the Minister during the year regarding the lateness of papers for monitoring rounds which provided the Committee with inadequate opportunity to fully scrutinise and comment on monitoring returns prior to their submission, by DETI, to DFP.

Policy Scrutiny

The Economy

Industrial Development Act Consultation and NI Assisted Area Status

14. The Committee responded to the consultation by the Department for Business, Innovation and Skills (BIS) which was held between July 2011 and November 2011 on modernising the Industrial Development Act.  The main issue raised by the Committee was that the removal of automatic Assisted Area status would significantly harm efforts to attract business to Northern Ireland, especially business from high productivity sectors; remove a key tool from Invest NI and cause significant damage to efforts to attract FDI and to compete with the Republic of Ireland; and cause major damage to efforts to rebalance the Northern Ireland economy through growing the private sector.  Despite considerable opposition locally, BIS announced in June 2012, the UK Government’s intention to proceed with the removal of Northern Ireland’s automatic 100% coverage as an Assisted Area.

15. The Committee response can be found at: Response to the Consultation on the Revision of the Industrial Development Act 1982

Rebalancing the NI Economy – Corporation Tax Response to Consultation

16. In June 2011 the Committee agreed to consider the Treasury’s consultation on “Rebalancing the NI Economy” and a response to the Government request for views on key questions and issues was submitted.  This at present is being considered and response is expected in the near future.  Key issues addressed the need for economic growth including attracting foreign direct investment and growing indigenous businesses; competing with other economies; and the costs and risks associated with devolution of corporation tax varying powers.

17. The Committee response can be found at: Response to the Treasury's Consultation on Rebalancing the NI Economy

Air Passenger Duty Response to CFP Consultation

18. The Committee welcomed the opportunity to respond to the Committee for Finance and Personnel consultation on Air Passenger Duty (APD) in May 2012 as it believed that high levels of APD have had a negative impact on business and on tourism.  Furthermore, high APD has the potential to place Northern Ireland at a competitive disadvantage compared to the Republic of Ireland.  The Assembly debated and agreed on the 28 May to support the clause in the Finance Bill dealing with the devolution of Northern Ireland long haul rates of air passenger duty, should be considered by the UK Parliament

19. The Committee response can be found at: Enterprise-Trade-and-Investment-committee-submission.pdf 

Economic Strategy Response to Consultation

20. In 16 February 2012 the Committee responded to the Department’s draft Economic Strategy and Comprehensive Action Plan.  The Committee also gauged the views of key stakeholders and co-ordinated responses from other Statutory Committees on the draft Action Plan and those views were reflected in the Committee’s response. The Committee informed the Department it would concentrate its efforts on scrutinising and advising on the development and implementation of the Comprehensive Action Plan.  The Committee welcomed the strategy and recommended the inclusion of specific, outcome based measurable targets within implementation plans.  The Committee called for assurances that delays will not occur in the implementation of the strategy. 

Energy

Carbon Levy

21. Following a meeting on 17 April 2010 between the Chair and representatives from an energy company regarding the Carbon Revenue Levy it was agreed to receive an oral briefing from Manufacturing Northern Ireland (MNI).  Contact was made with the Department and the Utility Regulator to obtain their views on the matter.  Furthermore, during a visit from the Oireachtas Joint Committee on Jobs, Enterprise and Innovation the issue was raised with a view to encouraging that committee to make the relevant RoI Minister aware of the impact of the levy on business in Northern Ireland.   Subsequently, in May 2012 the RoI Minister took steps to reduce the levy to 0%.

Strategic Energy Framework

22. The Strategic Energy Framework (SEF) is the Executive’s key policy for Northern Ireland’s energy future.  On the 15 September 2011 the Committee considered the Department’s plan for the implementation.   The Committee also scrutinised the implementation plan for the years 2012-2015 to ensure that Northern Ireland is compliant with EU electricity model by 2016. It was agreed that updates on the SEF Implementation Plan would be provided every six months by the Department to the Committee.

Committee members meeting with the Systems Operator NI (SONI)

Tourism

PPS16

23. The purpose of Planning Policy Statement 16 (PPS16) is to support tourism development in Northern Ireland. The Committee considered a written briefing from NITB on draft PPS16 at its meeting on 30^th June 2011 and expressed concern in relation to the potential impact of some of the proposals on future tourism development and on the potential of the proposals to deter or inhibit development in rural areas.  The Committee was informed in June 2011 the policy was being amended to take into account the response from the consultation. 

Ni2012 Our Time, Our Place

24. The Committee received a presentation on NI 2012: Our Time, Our Place on 22 September 2011.  The presentation included the five tourism signature projects  - Titanic area, the Giant’s Causeway and Costal Route, the Walled City, St. Patrick’s and the Mourne mountains.   The Committee has closely scrutinised the development and implementation of the projects, received regular updates and visited a number of the project as they progressed including the new Titantic Signature building and the new tourist centre at the Giant’s Causeway.

Committee Members visit to the building site of the new Titanic Signature Building

Credit Union Reform

25. In 2009 Committee published the report on its Inquiry into the role and potential of credit unions in Northern Ireland.  The report’s recommendations formed the basis for taking forward the reform of Northern Ireland credit unions to enable them to provide the same range of services as their counterparts in England, Scotland and Wales. The Committee proceeded to respond to the Financial Services Authority (FSA) consultation in August 2011 and raised concern with the Department on resources for transition needs.  A draft Legislative Consent Motion was presented to the House in May 2012 seeking changes to the Financial Services Bill.  The Bill included a clause to facilitate the transfer of responsibility for NI credit union registration to the appropriate GB authority.

26. The Committee report on the Legislative Consent Motion can be found at: Report on the Transfer of Responsibility for Northern Ireland Credit Union Registration to the Appropriate GB Authority

Payday Lending

27. Following the issue of a press release from Trading Standards Service (TSS) on the matter in March 2012, the Committee agreed to receive an oral briefing from the TSS on the practice of payday lending and written evidence from Advice NI, Citizens Advice (NI), the Irish League of Credit Unions and the Ulster Federation of Credit Unions on the 25 June 2012.  The Committee has commissioned Assembly Research and will follow up during the 2012-2013 session. 

Engagement – Informal meetings/events

SME Envoy Event

28. Following an oral briefing on the new network of SME envoys in the European Union which included the objectives of the network and envoys and proposals for ways in which the envoys will work, an event was held in the Long Gallery in November 2011.  A total of 39 stakeholders were invited to attend to engage with representatives from the office of the UK SME EU Envoy.

Oireachtas Visits

29. The Committee attended an informal meeting between the Oireachtas Joint Committee for Communications, Natural Resources and Agriculture and in the House of the Oireachtas in November 2011.  Included in the discussions were hydraulic fracturing, electricity, natural gas and renewable energy.

30. The Committee, in collaboration with the Education Committee, welcomed a visit by Members of the House of the Oireachtas Select Committee on Jobs, Social Protection and Education Parliament Buildings in May 2012.  Key areas discussed were banking loan schemes, carbon revenue levy, social economy and collaboration.  Following this meeting the carbon revenue levy was reduced to zero and a formal letter of thanks was received from Manufacturing NI for the collaborative approach by the two committees.

Visits and meetings outside Parliament Buildings

31. The Committee undertook 11 visits outside Parliament Buildings between May 2011 and August 2012.  Nine of these included formal Committee meetings.

Committee motions

32. The Motion for Plenary debate on 11 June 2012 on the Inquiry into Developing the Northern Ireland Economy through Innovation, Research and Development.

33. The Official Report on the debate can be found at: http://www.niassembly.gov.uk/Assembly-Business/Official-Report/Reports-11-12/11-June-2012/#a12

Subordinate Legislation

34. The Committee has responsibility to consider subordinate legislation that originates from the Department.  The purpose of the legislation varies from business legislation (e.g. insolvency, administration, employment) to energy (electricity and natural gas), tourism and health & safety.  The Committee considered and supported the approval of 17 items of subordinate legislation in the aforementioned categories.

Likely key priorities for the next session

35. The likely priorities for the next session include contribution to the development and scrutiny of primary legislation including the Energy Bill, the Insolvency Bill; subordinate legislation including the Northern Ireland Renewable Obligations; the implementation of renewable energy inquiry recommendations, the R&D inquiry recommendations; the Single Electricity Framework Implementation; monitoring the Department’s Programme for Government Delivery Plans; and a follow-up on the full impact of the Ulster Bank crisis.

ANNEX A 

Committee for Enterprise, Trade and Investment

Expenditure for the period 12 May 2011 – 31 August 2012