Mr. Stephen Kelly:

I might take the questions posed by Deputy Conway-Walsh first, and then come back around to those from Senator Blaney. I do not want her to feel like I was not answering her questions. On the stability piece, we absolutely need a Northern Ireland Executive back. There is no doubt about it at all. I recall the time we were dealing with Theresa May's No. 10 and the efforts she was making to try to get the backstop through Parliament. The question was asked of what that looked and felt like. I described it as that scene in "Wallace and Gromit", where Gromit, the little dog, is in front of the train, frantically laying down bits of track to try to avert disaster. If there was a picture portraying how that British Government operated, that is what it looked like to me, staring in and sometimes being in and around the middle of it.

That was not a very stable British Government and we do not need a Northern Ireland Executive to come back and have that "Wallace and Gromit" train analogy as the way it does government as well. Mr. Roberts is correct. This is not just about having the Executive back or about having the stability in that regard. It is also about having resilience around that, which is why the conversations this week in Hillsborough are so important. It is because we have been starved of cash for too long to run public services. To get any Executive back with any hope at all of sustaining itself, we need that cash injection. This might, perhaps, include support from the Irish Government, which has been kind, including, for example, by investing in the university in my home city. The shared island funds have been incredibly welcome, not just by the university but by other projects happening too. EU funding is now coming in as well, etc. Stability, therefore, takes a number of forms. It is not just being present in government. It means having a government that can be sustainable and this takes the funding needed.

This leads us to the point concerning the Fiscal Council report. A bit like Mr. Roberts and his organisation, my members say the easiest bill they have to pay is the corporation tax bill. This is because if a company owes money for corporation tax, then it has made a profit. If a company has made a profit, then it does not mind spending some of it on paying the state, whichever state it is in terms of paying corporation tax, because it has done well. It is, therefore, the easiest bill for all my members to pay. A number of other potential levers were identified in the report from the Fiscal Council, as was said. There is probably a lack of confidence in the business community that Stormont, in its entirety, including the public services and the public sector bodies themselves, can manage that money effectively.

We had a review of our public administration. Mr. Roberts and Mr. Neill were very focused on business reach for obvious reasons. Reducing the 26 councils down to 11 was based on a promise that the outcome would be more efficient and that public services would be more efficient and cost less money. The reality was that the very first action taken was to give a £2 million pay rise to all the councillors. The new system, then, actually cost more from day one. What is promised, therefore, and what is delivered often do not bear much resemblance. When it comes to Stormont potentially having other taxation powers, this is seen by my members as a means of just gathering more money to waste. Alongside any new taxation powers, then, there needs to be a reform agenda, an efficiency agenda and an agenda that says we are going to use this public money in the most efficient and effective way possible. If this is in place, with a government and with the taxation powers, then we will have a much more stable place. I do not deny that at all.

It should all be focused on driving productivity.

In the report I shared with the committee earlier this week, the North's productivity between 2011 and 2021 grew by 13.5%, which was much faster and stronger than other parts of the UK. However, in the middle of that was the pandemic. Northern Ireland came to the response to the pandemic in terms of testing, drugs, etc., so our productivity growth on the face of it is very good but it is actually distorted because of that pandemic period. What has distorted it are the things we have made with our hands in the North so if we are serious about growing, and comments were made earlier about how important manufacturing could and should be for the island and I accept that we have looked at other types of industries, the most stable and successful economies in the world are the ones that are based on making things with our hands. We are good at it, we are from a largely rural background, we make, mend and do, and we get on and find those solutions. If our productivity gain is to be really analysed as to the cause of that, it is caused by people making things, not digital technologies, so we need to get on and make more things on this island. That is the fair answer.

The comment on perpetuity relates to the UK. What the UK looks like is for the people of the UK to decide, be that the people in the North, Scotland or Wales. Even England may leave. We do not know. It is their choice.

Regarding migration, I go back to that initial comment from a member of ours who said we need labour to grow and if we do not grow, we are dead. We do not have the people. If we gave the North's labour market as a quick example of what this looks like, because of Brexit, we lost one third of our EU migrants and because we do not have freedom of movement, we cannot replace those EU migrants. The UK's migration regime has effectively been shut down to us so we cannot bring people in that way. There are people on this island who do not benefit from the common travel area so we lose access to those people as well. During Covid, lots of people retired earlier and did not return so they have not stayed on but, more fundamentally, in the seventies, eighties, nineties and noughties, on average, about 80,000 people of working age, net, came into the workforce in the North. In the current decade, it is less than 2,000 so it is fewer than 200 new people per year, net, and it goes flat and below zero in the decades beyond that.

We do not have enough people to do the jobs we have, never mind the jobs we will have in the future, so we have been recommending to businesses that they should assume from this day forward that they will never be able to recruit anyone ever again. It is a pretty extreme piece of advice but it is to lift and shake them and get them into a different place strategically within their organisation. Before, they would have jumped on an aeroplane and gone to Lithuania or Hungary and come back with 12 welders or whatever the case may be. You cannot do that anymore so if you cannot recruit anyone, what do you do to retain the people you have and invest in their well-being and their "stickiness" within the workplace? It is about wages but it is also about working conditions, the job they are doing and increasing their training and the value and contribution they make to the workplace. Equally, it is about automating, robots and digitisation. It is about doing more with fewer people where we possibly can. We are trying to shift the mindset of our industrial leaders in the North to a place where if you cannot recruit anyone, make the people you have as sticky as you possibly can because you are not going to be able to replace them. It is then about what you are doing to drive that productivity improvement through investing in digitisation and automation.

We have a plan in the North in terms of achieving net zero by 2050 and there is a stage post in 2030. The sad thing is that the numbers in this plan are designed based on technologies that do not exist so we are already going to fail to meet the 2030 target. The choice then is whether to push it out to 2035 but I think that would be the wrong thing to do. I think targets are incredibly powerful. If we can just push out a date by which we have to achieve something, as we all have done in our daily lives, it is a case of saying, sure we can do that next week and then we procrastinate. The times and targets are critically important because they will drive the innovation.

There is a massive opportunity for the island of Ireland in offshore wind and even onshore wind. The problem is the lack of interconnection across the island. I am not that old yet but I might be retired by the time the north-south interconnector is visible. The cost of it may be prohibitive by the time some wires are put across. There is that lack of interconnection between North and South but the Celtic interconnector into continental Europe is more critical. To give a practical example, Scotland has lots of onshore wind but the UK does not always need it. There is an interconnector between Galloway and County Antrim. That wind is blowing hard in Scotland but when it gets as far as there, there is congestion. The national grid in the UK pushes that electricity to Northern Ireland even though we are generating our own through our own wind generators but because it has a glut of supply. We are switching off our own generators because it is selling electricity at a price that is cheaper than what we generate for here. We are not taking the power from the wind generators we have because we have to take this power from Great Britain on the basis that it is cheaper. That is the right choice because it is cheaper for consumers but if we had that interconnection and it connected further out into Europe, we would have a market for that energy. That is what I said at the start. The market design of the wholesale market on the island of Ireland has been developed for really strongly interconnected markets in central Europe. Germany is connected left, right and centre. We do not have that. That single investment in the Celtic interconnector, expensive as it is, is vitally important for the future, not just of net zero and energy security but also the cost of energy on the island of Ireland. The sooner we can get that done, the better.

I am not just saying this because I live right by it but the ideal location on these islands for servicing that offshore wind off the west coast of Ireland, and off Donegal, north Donegal, the west of Scotland, the north coast of Northern Ireland and the Irish Sea, is Foyle Port. Foyle Port is a cross-Border port so that is of particular interest to both jurisdictions.