WIREDGOV

Sir David Varney launches his Review of the Competitiveness of Northern Ireland

HM TREASURY News Release (PN Varney) issued by The Government News Network on 30 April 2008

Sir David Varney today published his Review of the Competitiveness of Northern Ireland, which follows on from the conclusions of his Review of Tax Policy in Northern Ireland published in December 2007. Sir David's Review identifies a number of core strengths that make Northern Ireland a good place to do business and attractive to a wide range of investors. These strengths include a young population, an excellent education system, macroeconomic stability, strong transport links with the rest of the UK, Ireland and Europe and ambitious plans for further infrastructure investment. These strengths - alongside a range of investment incentives - have already attracted notable inward investment, and seen some of the strongest growth in output of any UK region.

The Review makes the case that increasing globalisation will bring a number of new challenges to the Northern Ireland economy in the years ahead, as emerging economies compete increasingly in a range of sectors. To succeed in the face of this growing competition, Northern Ireland will need to continue to raise its relatively low productivity and employment rates and reduce the number of low-skilled workers in the economy. Sir David found that the Northern Ireland Executive has responded well to many of these challenges, and welcomes the priority given to the economy in Northern Ireland's Programme for Government and the strategies developed to support economic development. The Review concludes that the Executive should now focus on the rapid and effective implementation of those strategies.

To boost the competitiveness of the Northern Ireland economy further, the Review recommends action in a number of areas, including:

* deepening and intensifying public sector reform, in particular increasing the role of the private sector in the delivery of core public services and transferring non-core services to the private sector in order to help stimulate its growth;

* ambitious labour market and welfare reform, aimed at increasing the employment rate and reducing the number of people on Incapacity Benefit;

* more employer-led skills training to help tackle weaknesses in the stock of skills in the labour market, which is a legacy from the past;

* ensuring a joined up approach between Invest Northern Ireland, UK Trade & Investment and the Irish Industrial Development Agency (IDA) to market Northern Ireland to the full; and

* continuing development of the all-island economy with the Irish Government, supported by the UK Government, including increased trade, movement of labour and capital, tourism, energy markets and financial services as well as many other sectors.

Sir David said today:

"I believe that Northern Ireland has the potential to be a 21st century economic success story. My findings suggest that Northern Ireland has a number of substantial competitive advantages and is already a very good place to do business with a young and skilled workforce. The Northern Ireland Executive has already made excellent progress, putting economic development at the heart of its programme, and setting out a range of programmes to create a vibrant and prosperous economy. This commitment to economic growth is shared by political parties, the public and private sectors and the Irish and UK Governments.

The next stage of Northern Ireland's progress should be the rapid and effective implementation of the Executive's ambitious economic strategy and the widening and deepening of existing reform. My recommendations for the Northern Ireland Executive and the UK Government are intended to assist the Executive and the UK Government, supported by the Irish government, in delivering their central economic objectives for Northern Ireland The forthcoming US investment conference will be an important staging post in Northern Ireland's transformation."

Notes for Editors

1. Following representations by political parties in Northern Ireland, the Government commissioned Sir David Varney, in March 2007, to carry out a review of tax policy in Northern Ireland. The review was published in December 2007 (http://www.hm-treasury.gov.uk/media/1/3/varney171207.pdf). He concluded that the best way forward for building a strong investment strategy for Northern Ireland was a strategy based on maximising the benefits of the competitive advantages that already exist in Northern Ireland, including current financial investment incentives, and realising the potential further to improve this competitive advantage rather than a policy of a preferential corporation tax rate for Northern Ireland, as compared to the rest of the UK.

2. The report identified Northern Ireland's key competitive advantages, which make Northern Ireland an attractive and competitive location for investment. However, Sir David's review noted that the Northern Ireland economy still faced some demanding challenges. So the Government asked Sir David to undertake a second review of competitiveness in Northern Ireland. The Review commenced in January 2008.

3. The terms of reference were: "Building on Sir David's earlier analysis and agreement from all parties about the unique circumstances of Northern Ireland (in relation to the opportunities provided by the peace process, the need to strengthen the private sector, to create increased employment opportunities and to reform the public sector) this review will explore in more detail how to expand the private sector and to enhance Northern Ireland's competitiveness."

4. The full report can be found at: http://www.hm-treasury.gov.uk/independent_reviews/varney_review/varney_competitiveness_index.cfm

5. Sir David Varney (born 1946) was the chairman of HM Revenue and Customs from its establishment in April 2005 to the end of August 2006. After graduating in Chemistry from the University of Surrey, David Varney joined Shell in 1968. In 1990 he was appointed Head of Marketing, Branding and Product Development for Shell International Petroleum and in 1991 was appointed a Managing Director of Shell UK with responsibility for downstream activities. He was appointed a Director of Shell International Petroleum in 1996. In June 1996 Varney joined BG (formerly British Gas), as Chief Executive designate of the proposed BG plc and was appointed Chief Executive the following year, overseeing the successful demerger of Lattice plc. He was Chairman of mobile phone operator mmO2 between 2001 and 2004. He was also Chairman of Business in the Community and is president of the Chartered Management Institute. Since leaving HM Revenue and Customs, Sir David has advised the Prime Minister on public service transformation and chairs the cross-Whitehall service delivery council.

6. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558, or by e-mail to public.enquiries@hm-treasury.gov.uk.

7. This press release and other Treasury publications and information are available on the Treasury website. If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website