Invest NI is no panacea for the NW

Late last week, the SDLP’s Colum Eastwood turned up some interesting figures on Invest NI’s assistance to Derry. The government agency offered only £2.58m to Derry businesses, a mere 2.4% of its total spend.

This obviously led to some disgust in Derry. As businesses suffer from rising costs and unhelpful banks, an entity like Invest NI is expected to step in and assist. What’s more puzzling is the drop from the previous year’s total of £18m: surely the Executive should be increasing life support to the North West’s businesses as the economy edges closer and closer to a double dip recession?

While Invest NI assistance is important, and Eastwood and others are right to keep up the pressure to see a fair share of it delivered locally, it can only ever act as a patchwork, stopgap measure.

Private business needs, in the long run, to be viable on its own terms, without large amounts of state support. The media and MLA obsession with the work of Invest NI distracts from the great contradiction of our representatives’ efforts to develop the local economy.

Citing ‘realism’ and ‘practicality’, politicians from across the political spectrum advocate huge, unfunded cuts in corporation tax as a way of attracting foreign direct investment, mixed with periodic, cap-in-hand trade missions to Wall Street. It’s important to repeat that there is no credible evidence that corporation tax cuts lead to significant job creation.

The crown jewel in this half-baked plan seems to be the Titanic Quarter, where companies involved in speculation and financial engineering (a good example is Citigroup, beneficiary of the world’s biggest bailout) are portrayed as the drivers of our growing ‘knowledge economy.’

This volatile sector, still unreformed after the 2008 crash, destroyed, and continues to destroy more Irish jobs than it can possibly create. The Titanic Quarter itself is a pretty sad expression of our lack of collective ambition: the authorities continue to mine a very narrow seam of maritime-disaster nostalgia while striving to emulate the glitzy, thoroughly bust folly of the Dublin Docklands financial centre. I don’t accept that this reflects ‘reality’ or ‘practicality’.

The logic behind these developments is from the era before the bust. This line of thinking says that the North can do no better than join a global race to the bottom in tax and working standards, and should prostrate itself before the major (mostly financial) corporations of the world) in exchange for a measly trickle of jobs.

When some other benighted little place decides to copy our plan, but goes one jot further down the state-dignity scale, all those happily announced jobs are enormously vulnerable to outsourcing. Then, at great cost, we are back to square one on job creation.

At this point, we return to Invest NI. The economic strategy we’re pursuing is fundamentally neoliberal, but our appeal to outsiders is too weak to succeed on those terms alone. So, while our public services are left to wither, and public sector workers are treated with contempt, a government agency must step in time and time again to heavily subsidise our supposedly cutting-edge business sector. We could almost call this socialism for business. The glaring contradiction illustrates the complete dearth of imagination of our politicians, senior civil servants and business lobby.

Rather than concentrate on stretching the stopgap, patchwork role of Invest NI ever further, we could have a more thoughtful discussion about what Northern Ireland can actually produce, not merely sell to credit-dependent consumers or regurgitate for discredited foreign banks.

We should think especially about the work that needs to be done and can’t be outsourced, particularly in building desperately needed new social housing, creating an indigenous, renewable energies industry, and massively improving our social care provision for the elderly.

I think we can do better than a half-baked, late-era Celtic Tiger tribute act, whose meagre benefits will not likely extend across the River Bann from Belfast.