2017 must be the year we get to grips with our infrastructure investment
by Sinead McLaughlin, chief executive, Londonderry Chamber of Commerce
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hancellor Philip Hammond was spoton in his choice of words in his Autumn Statement.“ We choose to invest in our economic infrastructure because it can transform the growth potential of our economy, as well as improving the quality of people’ s lives,” he said.
His focus, he explained, was to improve the economy’ s productivity.“ So we choose in this Autumn Statement to prioritise additional high value investment, specifically in infrastructure and innovation, that will directly contribute to raising Britain’ s productivity.”
Hammond’ s reasoning was compelling.“ The productivity gap is well known, but shocking nonetheless. We lag the US and Germany by some 30 percentage points. But we also lag France by over 20 and Italy by eight. Which means in the real world, it takes a German worker four days to produce what we make in five; which means, in turn, that too many British workers work longer hours for lower pay than their counterparts.”
There is also a productivity gap within the UK.“ London is one of the highestproductivity cities in the world and we should celebrate that fact,” explained the Chancellor.“ But no other major developed economy has such a gap between the productivity of its capital city and its second and third cities. So we must drive up the performance of our regional cities.”
That productivity gap also exists within Northern Ireland – and must also be addressed. Northern Ireland’ s productivity level, according to the latest official statistics, was a mere 82.5 per cent of the UK’ s.
That means that Northern Ireland lags German productivity levels by a horrible 42.25 per cent. This makes Northern Ireland the least productive nation within the UK and gives us an awful competitiveness challenge.
Parts of Northern Ireland – specifically the North West – dramatically underperform the productivity levels achieved in Belfast. Just as London as a capital city outperforms other parts of England, so our capital city dominates the Northern Ireland economy. This does not mean that Belfast should be held back, merely that as we strive to improve productivity for Northern Ireland, we must strengthen all parts of Northern Ireland – especially those that are currently lagging because of their poor infrastructure.
It is worth examining the steps that Chancellor Hammond outlined for attention in England as part of the productivity drive.
The areas highlighted are research, development and innovation, plus the economically productive infrastructure that directly benefits businesses, but which also supports the lives of our people. These are roads, rail, telecoms and housing. Those are also the priorities for Northern Ireland, which our Executive must focus on.
Indeed, many commentators believe that the funds allocated by the Chancellor are insufficient to properly address the infrastructure deficit within England. The result of the spending boost in England is an extra £ 250m for Northern Ireland through the Barnett Formula. That certainly is insufficient to deal with our infrastructure needs.
The most recent CBI survey of its members captured the situation perfectly. Some 87 per cent of respondents said that the most important priority in Northern Ireland is the construction of a new North / South electricity interconnector, to secure energy resilience, which should also bring down electricity costs. The second demand was more domestic flights. The third priority – cited as critical to 51 per cent of respondents and probably 100 per cent to those in the North West – is the dualling of the Belfast to Derry road. The overall infrastructure priorities were named as roads, followed by digital and then energy.
For the North West, those priorities are slightly different. We certainly share the anxiety about energy security and the need for greater competition in the market, which is why our Chamber is strongly supportive of the proposed additional North / South interconnector. By contrast, Derry already has superb digital infrastructure, though the rural areas are poorly served.
Where our infrastructure is seriously inadequate is in our transport connectivity. The latest delays to one section of the Derry / Belfast A6 road upgrade are frustrating. But it is worth remembering that the immediate plans are to upgrade two sections of the road, to dual the rest of the connection between the end of the M22 and Castledawson.
There are two further sections of road between Castledawson and Derry that are below modern standards. One section begins at Derry and bypasses the bottleneck at Dungiven. This may begin before the end of the decade. It does, though, face serious and expensive challenges with regard to the remediation of some badly polluted land on the route.
Yet even when this road is built, we will be
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That means that Northern Ireland lags German productivity levels by a horrible 42.25 per cent. This makes Northern Ireland the least productive nation within the UK and gives us an awful competitiveness challenge
left with poor quality undualled road across the Glenshane Pass. More than 50 years after a plan was published to build a motorway between Belfast and Derry, there is no indication of when there will be a dual carriageway for the entire route between Northern Ireland’ s two major cities.
As well as this, the plans for an improved road connection between Derry and Dublin have also hit planning and financial problems. Just one section – between Derry and Strabane – has a clear timetable for construction.
Traffic delays on the road in the area of Omagh may therefore persist for some years. A spate of recent fatal and other serious accidents on the Derry to Belfast and Dublin roads has emphasised the need for improvement of both these routes.
Meanwhile, we also need more flights from our airport and more frequency and higher speeds on our trains from Derry to Belfast.
Productivity is not just about transport, but it is an important element. Transport weaknesses are seriously holding back the North West.
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