Speech to City Deal event, Derry, 30 October, 2015

Posted on October 30, 2015 · Posted in Speech

Economic policy challenges can be represented as coming in one of three kinds.

The first is where, essentially, no one really knows what to do. The continuing economic crisis in Japan is a case in point.

The second is where there are two competing ideologies at work. The specific circumstances in Greece were an example. The same might be said about the eurozone: austerity or investment.

The third happens when there is a clear and agreed solution, but either there is a lack of resources or political will to provide the solution. This is where we come to Derry.

I did some work for one of the major English cities a few years ago, interviewing key investment decision-makers, asking why they chose one location rather than another.

All, pretty well, gave the same answer. That answer was also found in research undertaken by the British think-tank, the Centre for Cities.

It comes down to this short list: transport links, skills and access to research and development.

To put this another way: one, fast road and rail links; two, an airport with efficient national and international connections; three, high performing schools that provide a labour market with adults living locally with strong vocational and professional skills; and four, a local university producing graduates with relevant skills and also providing research and development that can feed into local businesses and the labour market.

Those are the raw materials for a modern city with a strong economy. It is also, unfortunately, a list of the factors Derry aspires to have, yet where at present we are weak. This applies particularly to skills. While university places have risen significantly in England in response to the recession, here they have been cut because of austerity.

David Willetts, a Conservative, said while universities minister: “A university can be the heart that pumps new life into a town or city. Lincoln University is a wonderful example. As one newspaper put it when it opened in 1996, the university was ‘the best thing to happen to Lincoln since the Romans’. The university has doubled the size of the local economy, and created 3,000 new jobs. Plus their ethos is that it is all about turning out graduates with the skills employers really want.”

Incidentally, it is the University of Lincoln that has been the model for the University for Derry group’s proposals for the expansion of Magee here in Derry.

Willetts went on: “Our message is clear. There are no barriers to setting up a higher education campus. If this is your town’s dream we want you to pursue it.” Except, of course, that only applies to England, not to Northern Ireland. For England, the message was that local communities should do “everything possible to encourage new higher education institutions in obvious ‘cold spots’”. They don’t get much colder than Derry.

Derry knows what it needs to be successful. It is road improvement, airport routes, every school an excellent school, and the expansion of Magee. But the decision-makers have failed to provide the ingredients for us to be successful.

Without these factors enabling us to improve our situation, there are two outcomes. We remain a benefits-dependent society, with essentially a low waged economy. One problem with that outcome is that benefits are being cut, as those whom the system has failed are increasingly punished for that systems failure. The other problem is that with a higher minimum wage – which I fully support – the opportunity to compete through low costs disappears.

That gives us the alternative outcome. It is the traditional Irish outcome. Emigration. There is a modern variant. It is commuting to Belfast and getting stuck in the A6 at Moneynick every day.

So we come to the concept of the City Deal.

Make no mistake, while I support the concept of devolution, we need to recognise its limitations. Devolving decision-making while reducing the total spend is likely to simply devolve the blame for cuts. That is the background to the welfare crisis at Stormont.

And the idea of a City Deal that lumps Belfast and Derry together as, supposedly, one city, merely reconfirms the existing structures of discrimination that have done Derry so badly for so long.

Derry has been failed by existing decision making processes. We know what needs to be done.

But while we know what needs to be done, generations of politicians in Westminster and Stormont have failed to deliver it to us. Either for reasons of not caring, or of conscious discrimination. The modern face of discrimination is arguably no longer about religion, but instead about geography. The result is much the same.

So there is a very strong argument in favour of the City Deal for Derry. But the decision-making must take place here. And it needs to come with adequate resources and access to additional resources. Those resources need to recognise and compensate for the generations of past discrimination and under-investment – some of which came from a Stormont that failed to govern for all and much of it from a Westminster which often did much the same.

With sufficient resources in place, City Deal could turn around the fortunes of Derry.