Ballymena economist'sstark warning

THE Ballymena man charged with commenting on the local economy by finance strategists PricewaterhouseCooper, has painted a gloomy picture of the commercial future for Northern Ireland.

After attending Ballymena Primary School and Ballymena Academy, Dr Esmond Birnie became a graduate of Gonville and Caius College, Cambridge in Economics. He completed a PhD in Economics at Queens University Belfast before becoming a senior lecturer.

He has appeared as an expert economics witness in the House of Commons and is a leading critic of the euro.

And he believes that last week’s Comprehensive Spending Review (CSR) could put around 16,000 jobs in Northern Ireland's private sector at risk.

The PricewaterhouseCooper (PwC) report, published on Wednesday, said reduced public sector spending is likely to have a knock-on affect on private sector jobs.

The report predicts 20,000 public sector jobs could be under threat. This could lead to 16,000 job losses in the private sector.

Nothern Ireland is particularly vulnerable due to its high dependence on the public sector.

Nearly 30% of employment is in the public sector, the highest in the UK.

Dr. Birnie, PwC's chief economist in Northern Ireland, said that there are opportunities for NI if both the Executive and the private sector are willing to grasp them.

"The coalition government has said it is willing to give the Northern Ireland Executive new powers to rebalance the economy," Mr Birnie said.

"These include enterprise zone status and the authority to set differential levels of corporation tax, and possibly vary other business taxes to attract and stimulate new investment."

Mr Birnie said departments and ministers need to find new ways to fund capital projects and new ways of generating income, while at the same time introducing more efficient systems, which would reduce the size and cost of the public sector.

He also said this was not just a matter for the Executive, but also an opportunity for the private sector to modernise its own approach to innovation, productivity, exports and wealth creation.

The PwC report is based on estimates from the new Office of Budget Responsibility (OBR) which forecasts that around half a million public sector jobs will be lost by 2014/15.

In Northern Ireland, the OBR forecasts are equivalent to 20,000 public sector jobs.

The PwC report predicts that this could put a further 16,000 private sector jobs at risk, particularly if there had been no new and innovative approaches to economic reform.

"It is clear from the government's own estimates that the cuts are likely to be equivalent to 20,000 public sector jobs here in Northern Ireland," Mr Birnie said.

"To compensate for those kind of cutbacks, the private sector would have to grow by more than 1% per annum.

"In the current circumstances, this level of growth is virtually impossible.

"Finding new ways of driving private sector growth must now be our overriding priority and embracing the government's proposed tax incentives will help lure overseas investment and stimulate new and profitable exporters."