Official Report: Minutes of Evidence

The Chairperson (Mr Brett): I welcome Minister Murphy, Ian Snowden, Johanna Park — my eyesight is terrible, Johanna, you are welcome back — and Sharon Hetherington. Thank you all very much indeed for attending. We are delighted to have you here, Minister. I know that you have a busy schedule. It has been a while since we have had you here, but your officials have been here on a number of occasions, and, despite my best efforts, they have represented you and the Department well. They are doing important work in that regard. Minister, you have been a Chairperson before, so you will know that we are keen to get as many members in as possible. Thank you for being so generous with your time. I will hand over to you.

Mr C Murphy (The Minister for the Economy): OK. I thank you and the Committee very much for having us this morning. The primary focus is around finances and the Budget, but I am sure that we will be able to have a discussion on any aspect of the Department's work that Committee members are interested in. As you say, I am joined by Ian Snowden, the permanent secretary, with whom you will be familiar, along with Sharon Hetherington and Johanna Park, who deal with finance. They will answer any of the difficult questions about money.

In general, we have made significant progress across a range of areas over the last 10 months, which I am pleased about. There is significant momentum in some of the things that we are trying to do. Committee members will know, however, that, in order to do the things that we want to do over the next couple of years, the big challenge will be around finance and getting sufficient budgets. The budgetary system remains challenging, despite the best efforts of the Finance Minister, the First Minister and the deputy First Minister to impress on London the need to bring us back to a level of funding that can support public services. Nevertheless, our objective is to argue for as much financial support as we can get and to use that as wisely as we can. In that regard, of course, the work of the Committee is important in scrutinising what we do and offering its observations on and challenges to it.

We have been working through plans that the Committee will be familiar with, having had officials in to speak about them. We have launched a subregional economic plan, and local economic partnerships (LEPs) are being developed at pace, the intention being to have those in place in the new financial year. City deals have been signed and are proceeding. One of our first objectives was to resolve the further education lecturers' pay award situation and to move lecturers on to the trajectory on which teaching staff find themselves. The good jobs Bill consultation is complete, and proposals to be brought to the Executive are being developed. Of course, the Committee will remain engaged on that. The SME productivity booster was launched, and access to tuition fee loans for medical students has been progressed with Department of Health support. A ban on onshore oil and gas exploration was recently approved by the Executive. We have been involved in cross-departmental work with the Department for Communities in community wealth building; with the Department of Education in careers; with the Department of Education, the Department of Health and the Department for Communities in special educational needs (SEN) post 16; and we are working closely with the Department of Agriculture, Environment and Rural Affairs on carbon reduction targets. We have consultations out on smart meters and support for low-carbon heating, and work is being progressed on support for the City of Derry Airport. There has been co-design and agreed action plans for social enterprise for seven high-potential sectors in the economy and digital skills. The Magee task force report is due to be published next week. A tourism action plan will come in the new year — I had hoped to have it this year, but it will be into the new year.

We have made a range of funding announcements. You will be familiar with them, so I do not propose to go through them. It is better to take the opportunity to have dialogue with members, but there has been a range of funding announcements over the past 10 months.

There has been broader all-island and international activity. The Canadian Advisory Council and the US Net Zero Advisory Board have been launched. There has also been promotion of dual market access in Germany, and that will continue across Europe in the new year. We have visits planned to Brussels and Amsterdam — or certainly the Netherlands; it could be Rotterdam.

The Chairperson (Mr Brett): "Or Anywhere", given that Members were quoting song lyrics yesterday. [Laughter.]

Mr C Murphy: Liverpool or Rome. That cultural reference was lost on a lot of people.

You will be aware that we have had successful trade missions to Singapore, New York, Chicago, Washington and Toronto. The new Invest NI hub has opened in Dublin, and the strategic tourism group involving both Departments, North and South, and the three agencies across the island has been up and working. We intend to pick up with the new Administration when they are formed in Dublin. Work will be progressed around the economy, businesses and trade, which is the formal North/South sectoral arrangement, and tourism, which is another formal arrangement. There are areas of cooperation. Significant work will be done with the Department in the South on further and higher education, and, of course, with the relevant Department on green energy, where we have shared ambitions on renewables and a self-sustaining energy supply for the island as a whole. Work will also continue on interconnection and the single electricity market. We will pick up that work again if and when — hopefully, soon — the Administration is put together in Dublin. The North/South arrangements will pick up again in the future.

There is an error in one of the projections in the budgetary outcomes. Sharon wants to correct that. We will resubmit that paper to you, but she wants to correct it before we get started, in case members are working off a wrong script.

Ms Sharon Hetherington (Department for the Economy): It relates to the information provided to the Committee on the equality impact assessments (EIAs). We discovered this just last night, so apologies for not contacting you in advance.

The equality impact assessments with baselines of 3% and 6% are fine, but there was an admin error when copying some information from the 6% into the 9% and 12%, so there is an error in the 9% and 12% baselines. Therefore the impact of 9% and 12% is not as significant as the papers that you have suggest, but we will correct that and provide those two sets to you. It will not prevent any questions being asked here today. You have probably gathered that the essence of the purpose of that is going from no increase through to where we might get 12%, which, I think, is not realistic. It is a journey, and, clearly, the more money you get, the better it gets. Hopefully, that is OK.

The Chairperson (Mr Brett): Of course it is; no problem.

Minister, thank you for that. Where are the Executive with the Budget-setting process?

Mr C Murphy: We have been in dialogue with the Department of Finance, as all of the Departments will have been. I know that from my experience on the other side over the past couple of years. We have been presenting our case. The bulk of our money is spent on further and higher education and on skills. If we are talking about trying to grow the economy, which is an Executive priority, the biggest challenge that we face is that we need more people with more skills and more education. That is the biggest challenge in every sector at every level. Everybody has the same request in that regard. We can make a strong argument to the Executive as a whole. Growing the economy is an Executive priority, and that is a key part of growing the economy, so we will argue for support for it.

We come from a low position over the past number of years. Previously, we had European funding, which provided for quite of lot of that. That went post Brexit and was not replaced in full. When I was the Finance Minister, we were able to supplement that with COVID money to make sure that the Department for the Economy continued to get the support that it needed for skills, but that stopped. We then had the hiatus when there was no Executive, which meant that the Secretary of State provided a Budget. That left us about £50 million short in our budget, unlike any other Department. I do not know why that was, but it left us about £50 million short. There was some British Government funding through initiatives such as the Shared Prosperity Fund, which was used to supplement provision for skills. Again, that is not likely to be repeated. If it were, it would be at a much lower level.

We have a lot to make up to get to the baseline. That is the debate and discussion that we have been having with the Finance Department and will have with the Executive when the Budget paper is eventually brought to them for discussion and decision. My understanding is that there is an intention to have that this side of Christmas. An Executive meeting is scheduled for next Thursday. From being on the other side, I know that a lot of horse-trading goes on, with people pressing cases, and it is obvious that there is not enough money to go around.

The Chairperson (Mr Brett): Where do you expect to land among the scenarios — 0%, 3% and 6% etc — that were given to the Committee?

Mr C Murphy: Sharon is probably correct in her analysis that 12% is unlikely, but we will continue to make the argument. I do not want to concede any ground publicly here. We have been making a strong case and will continue to make the case for the best-case scenario. Needless to say, we made a strong argument for more money in October monitoring. We did not get as much as we argued for, and we continue to press that case strongly. We hope for a decent outcome relative to where we are, but, as I said, we are starting from a long way back. We have a long way to catch up.

We understand that, when you make an argument for these matters, you will, of course, face Health issues, Education issues and all the other acute demands from Departments, but, from our perspective — you would expect me to say this — growing the economy is an Executive priority. The Executive lifted the economic policy that we crafted and put it into the first chapter of the Programme for Government (PFG). It is about growing the economy and recognising all the challenges that we laid out.

We will make a strong argument. As I said, Sharon is correct that 12% is probably unrealistic, given the money that we have and are projected to have, but we will continue to make an argument to try to get the best outcome.

The Chairperson (Mr Brett): I will take us back to the October monitoring round. The business community was in real shock and reeling from the Labour Government's decision to increase National Insurance employers' contributions and lower the threshold. This week, the Finance Minister made a statement on her assessment and ongoing review of rates. Her assessment was that the rating system was not the best and most reactive way to provide business support to those in need. Will you outline any bids that you made in the October monitoring round that would have allowed you to provide direct business support during this difficult time?

Mr C Murphy: We already provide business support through Invest NI with a view to the longer-term support and sustainability of business. We support green energy transition and other initiatives to reduce the cost of energy for businesses and support them to invest in the longer term and to reduce and stabilise their energy costs.

The difficulty is that this is not like the COVID experience, when we got money and channelled it out quickly in business support. There was blanket support for businesses, and we said, "Here is a grant. Spend it in whatever way you want". October monitoring happens halfway through the year. You have to do some work to devise a scheme, target it to where it is most needed and have it on the ground and the money spent by the end of the financial year. It was probably unrealistic that we would have been able to come in quickly with a scheme that reacted specifically to the budget pressures that had, effectively, come in the same month.

We need to continue to try to invest in supporting business. Rates are the only thing that we have control over, so, when you meet businesses, people will always argue that our rates are too high. Ian was in Land and Property Services (LPS) when we were both in a different Department, and we reduced business rates by 18% in the first year that I was there. They were then suspended during the COVID period, so, in many ways, the full impact was not really felt. I know that Caoimhe wants to make sure that we support businesses and recognise the real challenges that they face, so, while I would have welcomed increases in base levels of wages, the increase in the National Insurance contribution was almost a double whammy for businesses. The Government in London should have recognised that, while they were adding a cost pressure, they should have relieved that in some other way for businesses, and they did not do that. It was probably impossible for us to react in October to devise and target specific measures for the types of businesses that needed those in the areas that they needed them, which might be wages or other bills.

The Chairperson (Mr Brett): Have you anything, Minister, in your bid for next year's Budget, given that the Finance Minister's rates review will not be in place for the next financial year, meaning that businesses' rates bills next April will be at the same level as they were this year? Do you have any bids in for direct business support?

Mr C Murphy: The question is this: where exactly is that support needed? The Committee might have a view on that. We had the Budget only a month ago. Is a level of wage support needed? Is it needed for the energy schemes through which we try to support businesses not just in paying their bills but in transitioning to greener energy that gives them more stability and security? Businesses will tell you that one of the biggest challenges that they have are the fluctuations and unexpected rises in energy costs. We are targeting support in that area, and we will continue to argue for support on that.

I am not sure that we can devise a scheme or realistically put together a scheme to support wages and businesses. At what level do you put it, and what intervention do you make? As I said, COVID was a different experience, in that you could basically say to businesses that you were giving them £10,000 or £50,000 to spend in whatever way they chose in order to stay open and keep themselves afloat. We are now in a space where we have to give much more targeted support in interventions. Recognising that our budget next year will be as challenging as this year's, what Invest NI does — supporting businesses and helping and advising them on how to grow — and what InterTradeIreland does — trying to get people into a better space — is, in the longer term, a more sustainable approach, because they are building businesses and building their resilience. If we get into a three-year budgetary cycle, hopefully with a better outcome, it will still not enable us to provide all the support that we want to provide.

The Chairperson (Mr Brett): Finally from me, Minister, you rightly talked about a double whammy for businesses from the impact of the National Insurance rise. Last week, we had representation from the business community, and it is hugely concerned about the impact of the decisions made by the Labour Government. Minister, they are also concerned about some of your proposals, particularly the good jobs Bill. The representations that we received as a Committee last week were that businesses are concerned about the costs that that will pass on to them. How do you alleviate their concerns? They have a decision by the UK Government to increase their costs, and their fear is that our devolved Minister is about to introduce legislation that will also increase their costs.

Mr C Murphy: There has been significant consultation with them. Even before we launched the consultation document, there was a working group in the Department that I met a number of times. It involved business organisations and trade unions. It was an opportunity for dialogue to explain what we mean when we talk about workforce representation in a business. It was a way of demystifying some of the debate around all of that and getting a clearer understanding from a union and employee perspective as opposed to a business and employer perspective. That was a useful dialogue, and quite a lot of the issues that might have caused angst in relation to what we needed to do were addressed in that. Of course, we will continue to consult. We are out for formal consultation over the autumn to assess the outcome of that. Dialogue has continued and will continue. There is the opportunity to talk to you, as the Committee that will have the scrutiny role on legislation that comes forward. While the formal consultation took place in the autumn, consultation predated it and will post-date it through dialogue.

A big challenge for a lot of businesses is retention. They want to retain employees. We have a challenge, in that about 67% of the jobs that we have are considered to be good jobs when it comes to the territory covered by the legislation. There is not a huge number of people in situations where they are not getting paid properly, not getting guaranteed hours or not getting a level of support or where there is perceived or considered exploitation. The legislation is not aimed at the entirety of business. Most businesses provide decent employment, steady hours, union representation and decent wages. All those factors contribute to a good job, and it is not just about wages. We are in a decent place overall in that regard, but there are people who are not. We have a responsibility, because there has not been significant employment legislation for, I think, more than two decades. We have a responsibility to bring legislation up to that standard. We also have a responsibility to continue to engage with businesses and business organisations to support them in meeting any challenges that the legislation might present to them. That is the dialogue that we have been in with them.

Ms McLaughlin: Thank you, Minister, and thank you for the presentation and the papers. The papers suggest that, if the budget baseline remains the same in 2025, there would be a loss of 600 higher education places. That is a hint that the expansion of the Magee campus might not occur. Will you clarify the scenarios in which the Magee expansion will proceed? Will it proceed if there is a 3%, 9% or 12% increase in the budget baseline?

I also note the ranking of capital bids. The Magee expansion is number 23. Why is it so far down the rankings when that expansion is such a priority? The action plan will be announced on Monday, and I spoke to Steven yesterday. Have the needs in the action plan been factored into financial planning? Will you give us some certainty around that on the basis of my question about the baseline and percentage increases?

Mr C Murphy: As I said at the outset, the financial challenges in the Department are substantial. Other Departments were kept at or near their baseline, but we are coming from a place where we ended up losing money from our baseline when the Secretary of State did his Budget. We are not a big-spending Department. We are one of the lowest-spending Departments, and £50 million is a big amount. For the Department of Health, £50 million is not huge in the overall scheme of things, but, for us, it is hugely challenging. We are in a difficult position.

The expansion of Magee is a Programme for Government priority. I do not argue that it is part of the general run of support that the Department gets; I argue the case that it is a New Decade, New Approach (NDNA) commitment and an agreed Programme for Government priority. We have the responsibility for leading on it, but the entirety of the scheme is not our responsibility. That is why the task force correctly invited representatives from the Department for Infrastructure in and talked to the Department of Health and the Department for Communities. It has recognised that a range of Departments have an interest in it. We intend to make sure that the expansion receives the prioritisation that the entire Executive gave to it and that the cost is met through the funding that was made available for it.

As with most schemes like this, the capital spend in the early years is not at the highest level. It is when you get all the prep and groundwork done that you end up getting into significant capital spend. For instance, we gave the Magee project more capital this year than it was able to spend, and some capital was returned that we are having to reallocate. Our intention is to ensure that we meet the requirements that are outlined by the task force, whatever they are, because it is an Executive priority, and, therefore, we intend to meet those. The position in which it appears on the list does not reflect my prioritisation; it reflects the fact that the project is not a run-of-the-mill Department project. It is an Executive priority, and it needs to be met as such.

Ms Hetherington: I will come in on the priority on the list. Magee is our top priority for things that are not pre-committed or inescapable. It is about how you have to go about capital bids. If you are already in the middle of a build, it has to continue. There are inescapable and pre-committed things, and they come first. I think that I am right in saying that Magee is the first priority beneath those. The next category for new things is those that are a high priority, and we have Magee there.

Ms McLaughlin: That is the capital piece, but, when it comes to the baseline, there is concern that, if you do not get an increase in budget, you will have to look at higher education places and make cuts. The suggestion is that 600 places could be cut next year, if you remain at that baseline.

It is not just the capital spend for Magee that we are really concerned about; it is the baseline too.

Mr C Murphy: We have outlined the scenarios from the worst case to the best case, so it is clearly not our intention to end up in a worst-case scenario in our discussions with the Department of Finance and the Executive generally. Last year, we were able to increase the numbers for Magee in line with the commitment to grow the student population there, but we were not able to do that for other universities. We do not consider it to be part of the run-of-the-mill approach to student numbers. We will continue to support Magee. We established the task force and responded to the initial report. We are ready to receive the full report of the task force, and we will continue to engage with it and respond to that. In Magee, it is about growing the numbers incrementally because the infrastructure needs to be there to support any additional provision. It is a matter of pursuing all of those things and progressing them at the same levels, so we will provide the support that is needed.

Ms McLaughlin: That is brilliant. Thank you.

Mr C Murphy: Sorry, Sharon. Did you want to say something?

Ms Hetherington: I was going to add something about student numbers more generally. We have a gap in our budget, and it goes back to what the Minister said about the Secretary of State's budget, which took £50 million out. There was two years of his budget, and that money was not put in again for the second year. As a result, we have an historic issue with higher education and a funding gap of about £7 million that we have been managing on a year-by-year basis.

Ms McLaughlin: Thank you, Sharon. I welcome the target for 65% of investment to take place outside the Belfast metropolitan area (BMA). I appreciate that, and welcome the subregional target. However, for a long time, I have been making the case for a specific target for the Derry city region. We need to recognise that it is the second city and that it should have a specific target for regional growth. Have you given that consideration?

Mr C Murphy: We did, of course, give all of that consideration when we were setting targets. We had a discussion with Invest NI about what was achievable. We had put a focus on the north-west ahead of the target being set. We have to recognise that there are a range of areas outside the Belfast area that are suffering. I represent a border constituency as well. We might happen to be in a strategically more advantageous place, but we have received little, if any, investment, and certainly no foreign direct investment.

That is an experience that is shared beyond the north-west. I understand the historic legacy argument in relation to the north-west and that those who represent the north-west will make that argument most vociferously. However, there is a target to increase investment there and restructure the entirety of Invest NI. That has not been done before. Regional balance has been a feature of Programmes for Government for well over a decade, but it has not been grasped, and no strategy or plan has been put around it. We now have a strategy and a plan, we have Invest NI and the Department reorientating their approaches, and we have a target for what to achieve outside the Belfast area. That is a much more advantageous place than where we have been, and we will continue to work.

When I am in the north-west, people identify the Magee expansion as the catalyst for economic growth in the area, so we will continue to push that project. We will also continue to work with the Government in Dublin, who have a strong interest in Derry, Donegal and the north-west generally, to ensure that we can attract support from the incoming Administration there.

Ms McLaughlin: The budget for local economic partnerships is modest. Your paper states that "funding is not the answer" to everything and that it will not, in isolation, "close disparities". The paper continues:

support. How can that be managed with every Department? Is the local economic partnership the vehicle to do that, with buy-in from the Department for Infrastructure, the Department for Communities and the Department of Health? Can those partnerships be the vehicle for delivery?

Mr C Murphy: We are not suggesting that local economic partnerships are the vehicle for delivery. Departments deliver their own spend. I said that the budget for the partnerships would not plug all the gaps, but that is not even the totality of what the Department for the Economy will spend in each area. We are already having a conversation about what we are spending on Magee. That is not part of that budget; it is above and beyond it. The interventions that Invest NI put into supporting businesses in that area are not part of that budget; they are beyond it. That is just our Department. We see a local economic partnership as having a modest amount of money to get its work going and to advocate on behalf of its area — Derry already has the One Plan, so it is well down the road — and have the strength to pull together all the Departments and state its priority.

In Derry, there is a conversation about housebuilding and water and sewerage infrastructure, so the partnership there might say, "That is our priority, and we want to engage on that. We have some money to spend on that". That will not solve that problem, but it will allow the partnership to engage with other Departments. It will act a bit like a larger version of the Magee task force, which has had the Department for Infrastructure and other Departments in to converse with it. It has also sent a series of questions to other Departments and to the Government in Dublin to which it has received responses. It is about providing a platform for more focused economic intervention and ensuring that Departments respond to that.

Ms McLaughlin: I am afraid about the conversation on regional growth not being separated from the conversation on regional balance. They are completely different conversations. They have synergy, but they are different. An investment may be required in one place in order to bring about regional balance. For example, in David's constituency of Lagan Valley, investment might be about regional growth, whereas, in Derry, it is about regional balance, so that has to be a greater priority when it comes to meeting needs. That conversation sometimes gets lost. Regional growth is not regional balance.

Mr C Murphy: Invest NI is responsible for providing a lot of the engine work for that. It sets the target for regional balance and is responsible for regional growth. It will be closely engaged and intertwined with the local economic partnerships; that is part of its job. Its offices are being reorientated and refocused to meet those objectives. Of course we want to see how the situation develops. We have a plan for how we want it to work. We want to see regional growth and regional balance being, essentially, two sides of the same coin, because growth is what delivers balance. Invest NI is in that space now, but it arguably was not in that space until this year and nor was the Department.

We want to drive ahead with this. Let us make the best of it and see it deliver.

Mr McGuigan: Thanks for your responses so far. You answered the Chair's question about businesses by talking about the importance of the cost of energy and the transition to green energy. The Executive have their targets for that, and the Climate Change Act 2022 plays a crucial role, going beyond businesses to general society and consumers. The petroleum licensing decision that was announced the other day is welcome. I have had a lot of contact recently from representatives of the onshore and offshore wind energy sectors. What do we need to do to generate more onshore and offshore wind energy to help us reach our energy targets?

Mr C Murphy: We have said repeatedly — it is not just a cliché — that the net zero ambition is a whole-Executive commitment. We will not achieve the targets unless all of the Executive are involved. We have a close working relationship with DAERA, and we have close engagement with the Department for Infrastructure. That will be key for planning and things like that. We had been engaging and will have to engage again with the Ministry of Defence (MoD) on some of the sites that might be identified for offshore generation.

We have to move at pace with all those things.

There are challenges. One is planning, and grid connectivity is another. Interestingly, in conversation at the British-Irish Council in Edinburgh last Friday morning, everybody, including the British Prime Minister, was talking about grid connectivity. We all have challenges with grid connectivity. There has to be investment in that if we are to create all the renewables that we want. Moving on that will give us energy sustainability, contribute to doing business and meet our net zero challenges, so that is what we have to do. It has to be a whole-Executive approach. We are heavily engaged, and we have energy strategies. The Executive are engaged on the steps that we need to take, but we have to move at pace, and we have to have all the Departments moving in the same direction.

There are enormous opportunities and benefits not just for the planet and our contribution to net zero but, in getting involved in that work, for our businesses on the manufacturing side and our universities on the innovation side. There are also benefits from energy security and the stability of energy prices. There are big challenges, especially if we do not approach it in a whole-Executive way. It is the same for the South and for Britain, including the Scottish and Welsh Governments, as we know from the conversations that we had last week. We all face the same challenges and know that the solutions are in the same area. That means moving at pace across a range of areas and making sure that we equip all the necessary parts — regulators and all the rest — for everybody to pull in the same direction.

Mr McGuigan: Moving at pace is, as you said, crucial. When groups from the sector are in front of the Committee, they are critical about the fact that, up to this point, we have probably not been moving at pace. You mentioned planning, and one of their criticisms has been about the time it takes for projects to get through the planning system. Groups have also outlined the levels of investment in the South in comparison with those here. What conversations have you had with the Infrastructure Minister, and when will we see decisions that allow the pace to be lifted?

Mr C Murphy: I know that he has bid for support from the transformation fund. Some of the parties here will be aware — I am not sure whether all the parties were around the same table — that, when parties got together last year before the Executive came back and had a conversation about Executive priorities, planning was one of them. People recognised that the planning system, along with investment in water and sewerage infrastructure, has the potential to trip up our ambitions for the development of green energy and for development generally. All parties recognised that as a priority for any incoming Executive. As with Magee, we lead on that, but it is an Executive priority. I know that John has bid for transformation funding to assist him in reshaping the planning system to speed it up and make sure that is more efficient and delivers quicker results. We fully support him in that, and the Executive are fully supportive. We recognise that not resolving that could trip up all our ambitions for our departmental objectives.

We will continue to work at that and to achieve change as quickly as possible. There is a range of areas where we have to work at pace, and, of course, you are right about that. We had a conversation with people involved in the pathfinder projects who said that conversations were going on everywhere. We need a way of knitting those together to turn them into a project action plan for all the areas that we need to cover: biomethane, geothermal, solar and offshore and onshore wind. All those areas need to move at pace together.

Mr McGuigan: OK. I will change tack. The electronic travel authorisation (ETA) has been raised with you in the Assembly numerous times. Has there been any movement or development on that? We have heard the Labour Government at Westminster talk about a reset with Europe. From your discussions about that issue, is there any light at the end of that tunnel?

Mr C Murphy: In broad terms, you would hope that the immigration angst that the Conservatives had — the card that they wanted to play on immigration — is not a part of the new Administration. The relationship with Europe is much better. It has been reset, according to the Government's description, so there is much more scope for a decent working relationship. I met the Home Office Minister with responsibility for that. We had not had an engagement with her predecessor in the last days of the previous Administration, so we had a meeting in Whitehall about a month ago. We undertook to provide her with additional material on the impact on tourism and the fact that 70% of our international visitors arrive through Dublin Airport before coming North. We outlined all of that and undertook to provide more information and more evidence in that regard. We do not have a commitment to change or to do anything with it, but we are making the argument and providing the supporting evidence for it.

Mr McGuigan: Yesterday, we had the debate and vote on the continuation of our relationship with the EU, which ended with an important result. During that debate, some of us spoke longer than others —

Mr C Murphy: At length.

Mr McGuigan: — on the importance of our view on dual market access. There was a lot of discussion about what the chief executive of Invest NI said when he was here and all the rest of it. I listened back to what he said, and I am pretty clear about what he said. In your introduction, you talked about dual market access being important in the Department and your promotion of it in Europe and further afield: what is your assessment of how important dual market access can be to businesses?

Mr C Murphy: I heard what Kieran Donoghue said. There was no big flash on the other side of the protocol being agreed, and nor would one have been expected. Business does not move in that way; it does not take investment decisions overnight. International business, in particular, does not, when there is a lot of global uncertainty, including war in Ukraine and the Middle East, a change of Administration in Britain and a change of Administration happening in the States. All of those things have impacts on international investment decisions. You must recognise that this is a small place, even though that is an important factor for us. Yes, there is significant interest.

From my perspective and, I presume, that of the majority of people who were voting last night, Brexit was and still is a bad idea. It will continue to create problems for us. The conversation about electronic travel authorisation flows directly from Brexit. The conversations we are having about access to labour and all of the challenges that that presents flow directly from Brexit.

Through dual market access, which is an outcome of the protocol, we have an opportunity to undo some of that damage. First, we have to make sure that our businesses understand the opportunities available to them. Businesses exporting to Europe tell us that they see no change. That is the benefit, because businesses in Britain that are in that game are seeing change. They now see barriers and obstacles in how they do business, whereas the businesses here do not.

We will have ongoing east-west challenges that we need to continue to work at and resolve to make sure that we have the smoothest possible arrangements from east to west as well as from North to South and into Europe. I am not ascribing all of this to our dual market access, but exports are up, which bucks the trend. We are usually at the lower end of any economic trend. Our exports were up, whereas exports from Britain were down.

In the first instance, we want to make sure that our companies understand the opportunities that exist for them. Invest NI has done research into which of the areas or sectors would benefit most from that, so that people understand. Dual market access does not apply to services, so it will not be of benefit to people in that business, but it applies to goods, so we have done that.

Internationally, we have been in the States and in Canada and spoken about dual market access. There is an interest in it: people know that we have that unique feature. They want to know more about it, how it works and what it will mean for their business. We have also done that in Europe. There is a programme to continue that in Europe. We continue to generate interest around dual market access.

I never saw it happening in an overnight flash. It will be a slower burner, but, out of a bad Brexit situation, it gives us an advantage that we need to take. That is why InterTradeIreland, Invest NI and the Department are trying to provide as much information as possible to our firms and to potential international investors.

The Chairperson (Mr Brett): Minister, were the remarks by the chief executive of Invest NI — that there has not been a single new investment in Northern Ireland as a result of dual market access — correct?

Mr C Murphy: Well, colleagues in Invest NI have the statistics for investments, but I have travelled with them and we know that there is significant interest. When that materialises as investment, other decisions will also have been involved. However, there is an interest. People see dual market access as something that is unique to this part the world, which is an advantage and makes them consider investing here. In an era where we have almost full employment, FDI is still important, but we need to spend on an awful lot on our folks to grow our firms. We have seen increased export activity by our firms.

If you ask a specific question about one part of the economy, the answer might suit your particular narrative. However, if you take an overarching look at the economy, we might have a different picture.

The Chairperson (Mr Brett): I want to make it to clear, because there was some challenge in the House on whether he had said that. That is what a debating chamber is for, but you have no examples that contradict the remarks made by the chief executive.

Mr C Murphy: To be clear, Chair, I do not wish to contradict the remarks made by the chief executive. What I am saying is that that is a particular narrative, and he is correct. However, the chief executive knows, as do I, the interest that is there and how Invest NI works for years to develop foreign direct investment interest. It starts conversations, which are worked through for a number of years until you get the result. That is how it works. There is no contradiction in that.

The Chairperson (Mr Brett): The protocol that Members voted to extend yesterday has been in place since 2019. We are now nearly six years on.

Ms Nicholl: That leads nicely on to my question.

The Chairperson (Mr Brett): Perfect.

Ms Nicholl: Thanks, Chair.

It is nice to see you, Minister. When we look at the chief executive's comments, I think — I may be wrong — that there is an implication that FDI would follow that assumption. The protocol may well have been in place since 2019, but the collapse of the Assembly undoubtedly impacted on its provisions. You talked about international investment decisions: how important will reform of the institutions be to give that certainty to businesses?

Mr C Murphy: What we find when dealing with businesses is that, even in an uncertain world, most people want certainty and stability. You are right: the fact that the institutions were down for two years had an impact. During that time, we travelled across the States and talked to businesses, not in an official capacity but as elected representatives. We were in Washington for St Patrick's Day. When we were there, people asked, "Who do we speak to when we go over there? How do we access government?". One of the selling points of Invest NI is that our Government are accessible. That does not happen in a lot of other places, surprisingly. Our Government are very accessible. If we have important investors coming over here, we can tap into the First Minister and deputy First Minister to meet them, host them up here and have a conversation with them. That all creates an impression, which is all-important to people, because they want to know that, if they invest a lot of their money in a place and something goes awry, they will have ready access to government. That is not exclusive, and it is not that they have an advantage over everybody else, but it is a way of supporting access.

Our ability to remain in a stable place here is good. I agree that we need reform of the institutions, where that is necessary, agreed and consistent with the Good Friday Agreement. That will help to enhance our stability, which, in turn, will impact positively on people considering investment opportunities.

Ms Nicholl: Thank you. Obviously, we have different views on Brexit and its impact, but one thing that we can all agree on — I was struck by this during yesterday's debate — is the need for Northern Ireland to work and prosper. Obviously, it would have been better if we had not left the EU, but we have an opportunity with dual market access. How optimistic are you that all your Executive colleagues will be able to get together to sell that as an opportunity? Some people, including you, are pushing it, but, if we are to sell Northern Ireland as a place to invest, we really need all those voices.

Mr C Murphy: All my Executive colleagues want to see this place prosper, so there is no difference between us on any of that. We want to see growth, people getting good jobs and sufficient funding to support our public services. We are all agreed on those issues. That is why we collectively continue to fight for them.

Maybe it is more comfortable for me to go out and sell dual market access than it is for somebody who has issues with the protocol. It is no issue for me to do that. We talk to potential investors and people who are interested in investing. We have particular challenges with some sectors that are in a bit of a state of flux at the moment, but the First Minister and deputy First Minister will always step in to offer support and meet people. We provide the information to the potential investors on whom they are meeting. They will always present a united front and argue, as we do collectively, for economic prosperity.

People may have different views. It is a four-party Executive, so there are a lot of different political views on that. Perhaps, we are more enthusiastically selling dual market access than others would be comfortable doing. As for the outworking of that, there is no issue across the Executive on engagement with businesses.

Ms Nicholl: That is really positive.

You will not be surprised that I want to ask about paid carers' leave. I was disappointed that that was not an outright commitment in the good jobs Bill.

Carers NI has done excellent work on the benefit of it. With that in mind, what assurances can you provide to carers that the review of paid carers' leave will be done on a genuine cost analysis basis and not just on the initial outlay that is outlined?

Mr C Murphy: Listen, we are happy to look at all the information. As I say, this is a lengthy consultation process, so there will be lots of further opportunities for the Committee and other interested parties to engage with it. The Bill will be a broad piece of legislation. There are lots of issues in there. I have said that I would like to see us in a position to offer paid carers' leave, but that obviously depends on the funds that we have available. I cannot decide that from within my Department; that has to be an Executive decision. We want to get the best analysis possible on that, so that, if we get to the point where we can take a decision on that, it is based on accurate information.

Ms Nicholl: Is there a time frame for the Ulster University research into that? When do you expect feedback on that?

Mr C Murphy: I do not know. I do not know whether Ian knows that. We will ask Colin Jack and his team to provide you with some information on that.

Mr Ian Snowden (Department for the Economy): The aim is to bring the legislation to the Executive before the summer recess, so the policy will need to be decided by that point. It will have to be within that kind of time frame.

Mr C Murphy: Within the first half of next year. We will ask Colin to provide you with specific information.

The Chairperson (Mr Brett): Is that the good jobs Bill?

Mr C Murphy: Yes.

The Chairperson (Mr Brett): OK, so that is a change. We were previously advised that it would be January.

Mr Snowden: We were hoping to get it in the early part of the year, but the consultation was quite extensive. There is a lot of information, and it will be a big Bill. We need to develop the full amount of policy in it and get that agreed by the Executive. Parties have expressed differing views on it, so there is quite a bit of work to be done to get it into the shape to get it through.

Mr C Murphy: It may be that some parts of it are brought through by different means. We could tack them onto other provisions that are coming through. The entirety of it may not be in the one Bill, but the intention is to try to get that through and start the legislative process before the year is out, because we are obviously timing this back from the end of the mandate to get it completed.

Mr Delargy: Thank you for your responses so far, Minister. I want to touch on three areas that have been developing since you have taken office. The first is around Magee, the second is the airport and the third is business development.

Since you have taken over, we have seen 500 new students at Magee, commitment to PhD research places, £15 million of capital funding from your Department and £45 million from the Southern Government. Those are all really positive, good announcements. What engagement has there been with the Southern Government to date, and what engagement will there be in the incoming year?

Mr C Murphy: We are obviously between Administrations at the moment. Our last formal North/South stuff ended around a month ago. We will pick that up with whomever is appointed; both formally with whomever becomes Taoiseach, because the Department of the Taoiseach is where a lot of the Shared Island Fund emanates from, and with whomever is appointed to deal with further and higher education. There was great enthusiasm for initiatives in the north-west under the previous Administration. We want to capitalise on that and get support there. The task force itself set a number of questions to the Government in the South. They were answered. It was during the time of the election, so it was probably more of a Civil Service response than a ministerial response. Nonetheless, the questions were answered, and they remain supportive of the expansion of Magee project. We will continue to engage with them in the time ahead on that.

Mr Delargy: It is really positive to hear that, when there is a change of Government — similarly with regard to regional balance and other commitments here — it is enshrined in policy rather than being a commitment from Minister to Minister.

On Derry airport, since your announcement in October, there are now more than 130 flights per month going out of Derry. We have new routes to Edinburgh and Liverpool. We have the extension of an existing route to Birmingham. Again, it is really positive in that space. How do you intend and how can your Department work to continue that sustainability and continue the growth trajectory that we have seen so far?

Mr C Murphy: The difficulty that we have — it became more evident during COVID when we were trying to find ways to support the airports, which had to close down — is that, because we are an island, airports are critical to us. We have three significant commercial ones here. We were trying to find a way to support them, and we found that Infrastructure had responsibility for some parts of that and Economy and Finance had responsibility for other parts, so it was a bit of a mishmash. From our perspective — we have agreements with other Departments on this — the airports are a significant economic contributor, because they create connectivity from the island to Britain and internationally and North/South as well. We want to ensure that we have a policy that supports the development of the airports and recognises their economic contribution. We moved to take policy on airports and aviation into the Department for the Economy, because we had two or three Departments having some input, and that is just a mess when you are trying to deal with all of the related issues.

Part of that responsibility, then, is to take responsibility for City of Derry Airport. One of its economic instabilities was that it was consistently reliant on Derry City and Strabane District Council ratepayers to contribute to the airport. The airport serves more than Derry city and Strabane; it serves the Causeway Coast and Glens Borough Council area as well as, arguably, parts of the Fermanagh and Omagh District Council area and Donegal, so there was an unfair burden on Derry ratepayers, plus that did not lend itself to the stability that you would want in terms of investment in the airport and making sure that it continues to grow more routes and become a stronger part of an economic hub in the north-west. Having a functioning airport is a catalyst for and a vital part of the economic growth opportunity in the north-west. It cannot constantly have a threat hanging over it as to whether it will survive into next year or the year after that or whether it has a long-term future.

In that regard, we undertook to take that responsibility. That is a challenge, because we have been through all the other challenges that we have in the Department. We did that as part of the regional balance approach and to try to grow the economy in a regionally balanced way. The airport is a very important asset in the north-west that makes a contribution to that. We have undertaken to find the money to support that going forward. We are working on business cases with the Department for Infrastructure to sort out the vires for doing that. As a policy approach, we are taking as much responsibility for the airports as we can. Some aviation responsibilities are, obviously, reserved matters in Britain, but we are taking those other responsibilities onto ourselves and trying to find the finances to support City of Derry Airport. We have committed to doing that, and that is what we will do in the time ahead.

Mr Delargy: From a local perspective, that has been welcome because it has allowed ratepayers in Derry and Strabane to focus on projects that are specific to the area, such as commitments to develop Templemore sports complex. The funding is now available to plan that into the future, so that has lifted a huge burden and made sure that the sustainability model is there, so that is welcome.

My last point is about business support. You have already mentioned businesses that are starting out or attempting to grow in the SME sector. There have been discussions about trying to get industrial spaces; that is something that David Honeyford touches on a lot as well. When it comes to incubating and supporting businesses, do the Department and Invest have any plans to support a strategy to develop industrial estates and specific land for that?

Mr C Murphy: We met Invest a couple of weeks back about that. It is developing a land strategy because, although achieving regional balance and regional growth is a fine theory, in a practical sense you have to have readily available and serviced land for people to grow onto. I have visited some incubator hubs in Derry, but, when people get to a certain point, the hubs want to move them out and get them into a larger space to allow them to grow. They go beyond that and into larger spaces again. Land is available in the Derry City and Strabane District Council area as it stands, but Invest NI is working on a land strategy that will look at strategic locations and the prioritisation of land to support its and the Department's priorities for regional balance and economic growth. Invest NI is working on that, and I am sure that, at some stage, it will be able to present some of the outworkings of that. We met Invest NI about a month ago to talk through that and what its approach to that is.

Mr Snowden: The Committee may have had some briefing on that. Obviously, we do not want to give precise sites away, because that starts to affect the price that people will demand for the land. However, Invest NI will have provided some information about the regional property strategy.

Mr C Murphy: In many ways, that becomes a facilitator for regional growth. If you have ambition that Invest NI will encourage people to go to certain areas and, perhaps, incentivise them to do so but you do not have somewhere for them to go, you are contradicting yourself or preventing the outcome that you want. We need to ensure that there is a regional land strategy to provide and support the facilities for regional growth.

Mr Delargy: Tied into that is the Skeoge hub in Derry, which is positive. Research and development will be a key element for the businesses learning from other businesses that have gone through similar experiences. Maybe they can utilise that engagement and their experience as well. Will that be factored into the overarching project of business support?

Mr C Murphy: Yes, absolutely. There is grant support for research and development. Another of the priorities is around productivity. We want companies to innovate more, benefit more from skills and upskill their people. That makes them more productive and starts to turn the dial. That will be a slow process; it will not happen overnight, because, traditionally, we have suffered for many decades with the worst productivity levels on these islands. If we want to do that, we have to encourage people to innovate. We also need to strengthen the linkages between our universities, colleges, business, agencies and relevant Departments to make sure that we have synergy and link-up between them. Quite a lot of our businesses are spin-outs from our universities, so they start off with an innovation and R&D basis to them, then they move out. Quite a lot of successful businesses have done that. We want to ensure that the universities are linked to support business development.

The Chairperson (Mr Brett): Ian, as accounting officer, have you been presented with a business case for the City of Derry Airport at this stage?

Mr Snowden: Not for the funding that will take place from the start of April 2025. The only one that I have been presented with so far is for the public service obligation joint funding for the current financial year. The business cases for the subvention support and the public service obligation are still being worked on.

Mr Middleton: Minister, one of the areas in which we are missing an opportunity is tourism support for major international events. We know their benefits, because, when they are broadcast onto screens across the world, that is the best advertisement that we can get for Northern Ireland. From the perspective of the north-west or, as my colleague Maurice Bradley says, the north of Northern Ireland, we have the Causeway, the International Airshow, the Open, the North West 200 and, at a local level, the Foyle Cup. Those events bring thousands of tourists to the area, and a lot of them get a good experience and want to come back. What do you plan to do to provide further support? A lot of them feel that they are not getting their fair share and rightly so. Priority 34 on your list relates to Tourism NI's next phase growth fund. How big a priority is it for you to support those events?

Mr C Murphy: Tourism is a priority. Perhaps it was not necessarily given sufficient priority over the years; I certainly get that from the tourism sector. From an outside perspective, it looked to me as though tourism and social enterprise were the poor relations in the Department. I get that there is a funding challenge. If we could give Tourism NI twice the amount of money that it has been receiving, it would support twice as much activity. That is always the challenge.

People feel that they do not get enough. I happened to have a conversation yesterday with the North West 200 people, who are really committed and provide an excellent event. They wondered whether we could give them more support. Causeway Coast and Glens Borough Council is linked in with them as well. We give them support, and we will continue to try to improve that. That is the challenge.

Tourism is important. That is why we put together the tourism task force — to bring people together. I had hoped that it would report before the year was out, but it looks as if it will probably be early in the new year before it provides a report. Of course, the challenge is to match the financial commitments with what it would like to do. I get and have always got that events-based tourism is a critical part of the industry. We have all of the ability to create spectacular and wonderful events here, from small community things up to the Open, and, in that way, to attract visitors to the area. Tourism Ireland can link into that with regard to international promotion. As we saw when the Irish Open was in Newcastle earlier this year, it gets TV coverage, but there are also specific tourism interventions. The adverts highlighted tourism across the North and the island generally and tried to attract and encourage more visitors. It got a big international audience. That will be done with the Open at Portrush next year to maximise the international exposure and channel that in a way that is beneficial to business but also that we encourage how that is delivered. For example, using local firms, which, in turn, build skills in how to work with events and competitions like that so that we get a much more skilled, receptive and responsive business ecosystem that can benefit from them.

Mr Middleton: I welcome that. We just need to focus on providing that funding. I know that there are a lot of priorities, but that does not just bring a tourism benefit. We also hear from the hospitality sector, which needs support, and this is one way to support it. If it was not for such events, many of those businesses would be closing their doors, particularly with regard to the importance of the events on the north coast.

The Chair asked about the airport. I think that the council has the money spent already —

Mr C Murphy: As I said, we have given a commitment. It is not —.

Mr Middleton: — yet has not received it, so that is an important clarification of where it is. I declare an interest, which I do regularly, in that my wife is a member of the board at the airport.

My question is about new routes. I will advocate for the local airport, but of course we need to support all the airports. With regard to new routes, one of the recommendations in the York Aviation report was about looking at risk-sharing arrangements and the potential for the Department to underwrite the losses on new routes until they were profitable. What are you looking at in bringing new routes to Northern Ireland?

Mr C Murphy: One of the key ones — we had dialogue about it in the States on the couple of times that we visited over the course of the year — is the linkage to the States. We have no direct link to the United States from here other than through Dublin Airport. There was a direct link at one stage through Newark Airport, just for business purposes; it did not survive. It was over the COVID period as well, I think, so that was obviously challenging for any airline. We are continuously trying to see who might be in the market for providing a connection there. That would be critical with regard to international visitors.

We are a small island, and it is not a huge distance across. We view it from our own perspective in terms of distance, travel time and all of that once you are here, but it is relatively small when you look at other countries. Still, I think it is recognised in terms of our tourism. When I talk to tour operators, which I have done in the States and in Canada a couple of times and in London, they say that connectivity is important. We are continuously looking at ways, but, of course, those are commercial decisions that people will take. We have the air passenger duty support but have not been able to use it because we have not had someone willing to come in commercially and provide that for long-haul routes.

Mr Middleton: Are the risk-sharing arrangements that the York Aviation report referred to something that you are looking at?

Mr C Murphy: That report was useful in pointing up things that we knew about developing that. There will be renewed discussions in relation to City of Derry Airport about the Derry-Dublin and Belfast-Cork routes that we raised with the previous Administration there, so we will pick those up as well. Those can be useful sources of income and business for Derry airport. The focus and discussion here has been on Derry airport, but we engage with and provide support to the International and City airports as well.

Mr Middleton: I have two brief points, and they are short answers, hopefully. The launch of the Magee task force report is on Monday. Have you seen the report, and have you had any input? I take it that the report that will be published on Monday is the full report that has been created by the task force and has not been changed in any way by the Department.

Mr C Murphy: It is not our objective to change it: it is our objective to support it. We now have officials working full time with the Magee task force, which they very much value and welcome because it gives them a level of support. It also demonstrates the commitment of the Department. We had somebody employed to assist them in the writing of the report, but it is the Magee task force report. I have seen a draft, but the finished report is decided by them. We will offer whatever support, they think, they need, but it is certainly their report. I am very much looking forward to getting the opportunity to fully accept the final version and then beginning the process of supporting them and the university in the implementation of the report.

Mr Middleton: And you do not sign off the final report. It is signed off by the Magee task force.

Mr C Murphy: No, I do not.

Mr Middleton: I have a very final question.

Mr Snowden: Can I just clarify that point? You specifically asked whether the Department changed anything in the report. The report came to us for factual corrections and checks, and we have requested changes to some factual things. I want to make sure that the Committee is entirely clear that we have asked for some things to be changed. As the Minister said, however, the task force's conclusions and recommendations are entirely its own to make; they are not the Department's.

Mr C Murphy: As I say, it is in the spirit of assisting to make sure that the facts are absolutely correct. Of course, the university will have provided some factual information as well, and other Departments fed into the task force's conclusions. As Ian said, its conclusions are its own.

The Chairperson (Mr Brett): What do you mean when you say "factual"?

Mr Snowden: Numbers being wrong or that kind of thing.

Mr Middleton: I have a final point. We received a reply to our SEN provision query only this morning. It is a brief one. You met Alma White, which is really welcome. You mentioned that one of the areas was the time frame, but it does not say. You talk about the need to scope out whether we need new or amended legislation, but, given the short time left in the mandate, that needs to be done as a matter of urgency. What is the time frame for that?

Mr C Murphy: A cross-departmental group will be put together. Senior officials will head it up in our Department. It involves bringing together Health, Education and Communities. It is, again, one of the areas that people have talked about, but there has not been a specific focus. Nobody has taken up the ball to run with it in that regard. We have done that in our conversation with Alma and the campaign group. We are examining areas of provision and seeing where there are gaps. There is already a lot of statutory provision, but the question is whether it functions properly and delivers what it needs to deliver. We want to make sure that we can do that.

We are not yet in a space where we know what legislation is required to fill gaps that might be there. That will probably be cross-departmental work. I answered a question on that in the Chamber last week, and I will be upfront: the chances of our having that work done and legislation drafted, consulted on and passed in this mandate are probably very tight. Nonetheless, I am committed to legislating, if we find that that is required. We want to work at pace throughout the rest of the mandate, fix the provision where we can and make sure that the things that should be working are working. Where other provision is required, we will try to provide that. If the outcome is that more legislation is required to make sure that there is delivery in other areas, I want to commit to delivering that in the incoming mandate.

We will leave a piece of work that should be picked up. There is a broad interest in this across the Assembly, so I see no reason why, should legislation be required, those in the next mandate could not pick it up and run with it. It would be unfair to promise it in this mandate but then not deliver it. Those people are passionate about what they do. They are, understandably, impatient, because young people need the provision. I accept that entirely, but I do not want to make false promises about something that I cannot deliver. We will work on provision and identifying the gaps. If it requires legislation, as it may well do, we are committed to making sure that that happens in the future.

Ms D Armstrong: Thank you, Minister. It has been a broad-ranging morning. Thank you for your responses.

I want to ask you about the renewable heat incentive (RHI) scheme. Where is the Department with terminating the RHI non-domestic scheme, particularly the buyout? There seems to be a differential between what the Department is offering and what the Renewable Heat Association is seeking. Can you confirm whether it is in the region of £200 million?

Mr C Murphy: I cannot really get into it, because, as you will understand, there is a negotiation going on about what, people consider, they want and feel entitled to and what is affordable for the public purse and justifiable. That needs to be fixed. It is a mess that I inherited, as I have said several times. We did not create the mess, and it should have been fixed in the previous mandate by the previous Executive. Sufficient papers were not brought in time in order to allow the Executive to take a decision on it. We are now picking it up and trying to move it on.

There is a clear commitment to closing the scheme down. In the interim, we wanted to work on the tariffs, but it was not the Assembly's view that we should go forward with our proposals, which was unfortunate. I get that some people felt that they did not have sufficient information to make a decision in that regard. We need to make sure that we have all the information when the matter comes back to the Committee.

We are now moving to the closure of the scheme. We want to do that in a way that is fair. We recognise that an awful lot of people invested in the scheme on the basis of a fair proposition and were encouraged to do so by the Department at that time. They invested money in it, so we need to make sure that the closure is fair. We also need to get the scheme closed down, because it does not do what it intends to do. It does not make the contribution to carbon reduction that it was intended to, and we are forgoing opportunities to do other schemes while we try to complete it and close it off.

There is money, not from our block grant but from annually managed expenditure (AME), that is available to us but that we cannot access because we have not come to a decision. The sooner we get to a decision, get those negotiations concluded, get a fair closure to the scheme, get moving forward with it and then look to other schemes that can contribute to carbon reduction, the better. This should have been done years ago, but we are trying to pick it up now.

Mr Snowden: You mentioned the figure of £200 million. It is not a number that I recognise or anywhere close to that in any part of the discussions that we have had inside the Department. I am not sure where that figure has come from, but it is certainly not one that we are working with.

Ms D Armstrong: Ultimately, will the Treasury pay the settlement and settle this?

Mr C Murphy: As long as what we do is satisfactory and does what was agreed by all of the parties, which was to close the scheme. We have to use the Treasury's money to do that, so it has to be satisfactory to Treasury, but we also want to be in a position where we can access other money to do other schemes. In that regard, a lot of plates are being juggled at the same time.

As Ian said, figures will be bandied about that do not reflect reality. When we get to a position where we have a proposition to bring to the Executive to go through and then discuss with you as a Committee, we will get moving on that as quickly as we can. We will try to make sure that people have all of the information available to them. As I said, the principle of this is that we get to a point of closure and do it in a way that is fair to those who genuinely engage with it, but we need to bring this to a close.

Mr Honeyford: Minister, a lot of what businesses come to us about is, as you have said, within the remit of other Departments. Kate has already brought up stability and reform. The second one is planning, and you spoke a little about that. Can you talk us through exactly what the Department is doing to lobby or work with DFI to effect the changes that we need to see for businesses in the energy market and inward investment that will allow them to grow?

Mr C Murphy: You will be familiar with Richard Rodgers, who, I am sure, has been in front of you a number of times. Ian can maybe expand on this. The broad point is that we recognise that, if we are going to do what we need to do on renewable energy and meet targets, we cannot do it under the current planning system. That is not to set aside planning policy, because the policy area of it is not that problematic; the processes are the challenge. Richard will be in dialogue — we have had conversations with John O'Dowd as well — about the need to ensure a whole-of-Executive approach. DAERA, working with us, is putting forward projects that will, as I said, help to reduce our carbon emissions and give us energy security and stability, which is, obviously, beneficial to us. We then need to make sure that the other Departments all face in the same direction. That is an ongoing conversation.

Mr Snowden: I will meet the permanent secretary of DFI and some of his senior officials tomorrow afternoon to talk specifically about planning issues in relation to renewable energy. There are three strands to that. One is the planning policy statement that needs to be ratified in relation to that, because, under the current rules, there is little space in Northern Ireland in which you can erect a wind turbine. Those rules need to be updated to reflect more closely the position in Scotland and the Republic. The second item is what we can do on speeding up the applications that go through the process. There is some work that we potentially can do with statutory consultees, and that will require a bit of cross-departmental work. The third item is for applications that are in the appeals process and where the Planning Appeals Commission (PAC) is taking a long time to get around to the casework. In fact, there is one significant wind farm application that will meet about 3% of our energy requirements, and that is awaiting Planning Appeals Commission consideration and will not be heard until 2026. We need to see what we can do to move some of those cases along a bit faster, so I will be discussing practical measures that we can take around that.

DFI — certainly its arm's-length bodies — is a substantial landowner in Northern Ireland. Around a sixth of the land surface area of Northern Ireland is owned by Executive Departments or their arm's-length bodies, and we are not really making use of that for renewable energy generation. NI Water and Forest Service are significant landowners in locations that are at the right elevation to be useful for wind generation. We will talk to DFI about what we can do to work on all those things.

With regard to the constraint that the planning system has placed on economic development, the Department for Infrastructure has grasped that issue, and its permanent secretary has been talking to me about what can be done to improve the efficiency and performance of the planning system. There is wide variation in the performance of councils in terms of their delivery time frames. If some performance improvement work could be done across the whole system, it would speed up a lot of those applications.

After that, you get into the issues with infrastructure. As I mentioned, we are doing the work on the grid connection policy. The Utility Regulator has agreed the new price control period: it will run for seven years from 1 April next year. That will see £2·2 billion invested in the electricity network infrastructure. That is one aspect. Then there is water and sewerage. As part of the regional property strategy, Invest NI is talking to NI Water about where it can get the connections it needs, which sites will be suitable for that purpose and what else we in the Department for the Economy might be able to do to support the development of potential industrial development land.

Mr Honeyford: Thank you for that comprehensive answer.

Last week, we took evidence from the Federation of Small Businesses, Hospitality Ulster and Retail NI. The other things that we hear about from businesses are taxation and rates. In the case of businesses, it was specifically about rates and not getting the rates relief; in a lot of cases, they are being taxed almost to the point of closure. I appreciate that this is to do with the Department of Finance, but what work is the Department for the Economy doing to look at how to get a progressive tax system that is fair across our economy?

Mr C Murphy: Rates and any engagement with Treasury is for the Department of Finance; I know that from my previous experience. As I said, we reduced rates. That is a constant conversation. I get that tourism and hospitality operate within fine margins and then energy costs hit them. My Department can do more work on energy and on trying to support people to get into a more stable energy environment than it can on taxation.

When I was Finance Minister, I made representations on VAT levels for tourism and the differential between North and South, which puts the tourism industry at a competitive disadvantage here. We have made those cases, but there has been no real sense of movement from Treasury.

Rates bring in a certain amount of money for us that helps to support health, education and all the other public services that we want to spend money on. There is always a fine balance between making sure that we get some return from rates and not doing so in a way that crucifies businesses. When you talk to people who are struggling, they point to those issues, but other taxation issues are the responsibility of Treasury. I do not doubt that the Finance Minister makes regular representations to Treasury. I did that when I was in the Department of Finance, because, in that position, you are regularly asked to raise those issues. I do not know whether there is any more scope for movement on that under the new Administration, because I have not had that level of engagement with them.

From our perspective, my Department supports people through energy support. We promote areas for tourism and promote businesses. We engaged with Food NI the other day and are working collaboratively with DAERA to promote our food industry that is involved in the hospitality sector. There was a successful Year of Food and Drink campaign eight or 10 years ago, and they are aiming to run that again in 2026. That had a significant benefit for our hospitality industry, and a lot of people reported a significant outcome from that. We are supporting putting that together and taking initiatives to promote and encourage businesses, but direct taxation is not in the gift of my Department.

The Chairperson (Mr Brett): You can ask a final question, if you have one.

Mr Honeyford: Is any work being done on corporation tax here?

Mr C Murphy: Again, it is a matter for the Department of Finance to engage on that. I will say this quickly, because I have said it a number of times: from my perspective, if Treasury's formula remains as it is and it does not come up with a different formula, we will calculate what the loss will be for us. We would take that up front from the block grant, and you would have to try to get the benefit of it over subsequent years. That will leave our public services holed below the waterline.

The way that it is presented to us, I get the differential. When we do international visits and engage with potential international investors, things such as skills and people are much more important to them than the level of corporation tax. The way in which it has been presented by Treasury over the past 10 years is not affordable for the Executive.

Mr Buckley: Thank you everybody. Good morning. It is still the morning at this stage.

My first question is on green energy. I know that the Minister believes in the significant potential of biomethane, particularly in Northern Ireland. When will we have a biomethane strategy?

Mr C Murphy: A call for evidence is out. I am not sure of the time frame, but it has been out for a couple of months.

Mr Snowden: I think that it has just finished.

Mr C Murphy: Has it? Right.

Mr Buckley: When do we anticipate having a strategy?

Mr C Murphy: Do you have any idea when that might be?

Mr Snowden: We had a positive response to the call, but the responses are detailed, so we are working through what they told us about the sector. We are working closely with local businesses to design something that will work effectively for us.

Mr Buckley: It is not a trap question. Do we have a rough timescale for when we expect the strategy?

Mr Snowden: I cannot commit to one. As the Chair noted, I have a tendency to be a bit optimistic about when such things will be finished, so I will decline to commit to that.

Mr C Murphy: We will get the people on the energy side who are dealing with that to correspond with the Committee to give you an update.

Mr Buckley: Is the Minister aware of the pathfinder programme?

Mr C Murphy: Yes. I met representatives on Monday.

Mr Buckley: What is the Minister's view of that programme?

Mr C Murphy: There is potential there, and they have pulled together a good team. It is due to meet early in the new year. It is looking at the possibility in specific area projects. Of course, the challenge will always be to get biomethane to an affordable level that is comparable to current gas provision. That will be an ongoing challenge. We have people from the academic side, the business side, the community and Departments involved in the pathfinder group, so the sooner they get down to work, the better. We announced its formation earlier in the year, but it has taken some time to get into the space where it will meet. It is to meet early in the new year. I met some of the people involved on Monday to reassure them and encourage them to continue with that work.

Mr Buckley: It is encouraging to hear that that is a priority.

Listening to other members' questions, I am glad that they looked back at my comments to the chief executive of Invest NI, because I place a lot of importance on the weight of Invest NI and, indeed, its significance as an organisation for growing our economy. That leads me to my next question. I am led to believe that four senior directors under the CEO of Invest NI, with approximately 80 years of experience between them, have resigned and will leave the organisation over the next three and a half months, having been asked to reapply for their jobs. Is that the Minister's understanding?

Mr C Murphy: No, it is not.

Mr Buckley: OK.

Mr C Murphy: The Lyons review, of which you will be aware, was very critical of Invest NI. It was probably one of the most critical reports that I have seen in my time in public life. It recommended restructuring at a very senior level. Where there were four people at that level who were doing a number of jobs, Invest NI has created three posts.

Mr Snowden: The posts are chief operating officer, who looks after the organisation; chief development officer, who will mostly cover the work in Northern Ireland; and chief commercial officer, who will look after external trade.

Mr C Murphy: The four senior posts that had been there no longer existed. People were offered the opportunity to apply for the new posts that had been created. It seems that a number of people took the opportunity to leave the organisation. The reconfiguration matches the recommendations of the Lyons report, and people had the opportunity to apply for those posts.

Mr Buckley: We do not deny that four senior directors in Invest NI have resigned and are leaving the organisation. It might be because of restructuring, but those four people are leaving.

Mr C Murphy: Yes, and that turnover is a constant in all organisations.

Mr Buckley: Absolutely.

Mr C Murphy: People leave and move on. That is a challenge. We have had many discussions with the chief executive, the chairman and the board of Invest NI about moving the process to recruit new people as quickly as possible and making sure that the organisation stays stable and able to deliver what it needs to do.

Mr Buckley: Oscar Wilde once wrote:

That is four out of four. Is there something that we, as a Committee, do not understand? We constantly hear Invest NI telling businesses about the importance of succession planning. It is crucial to business success., but here we have a period of restructuring and a Minister who has set out a vision for Invest NI. How do you expect that organisation to deliver on your objectives in the short term with such significant gaps in experience at the top of the organisation?

Mr C Murphy: I am assured by Invest NI and its board that it will continue to do that. The organisation is not in the space of natural succession planning. It was the subject of an extensive review — a critical review — that pointed out serious gaps in its approach to doing business that had developed over many years. The majority of the recommendations have been implemented or are well on the way to being implemented. Part of that was a restructuring of the senior executive team. That is what has happened, and it will create a challenge.

It was, of course, as I said, an option for the people whose posts were discontinued to apply for the new posts. We cannot force people to stay on and work if they choose to leave. They chose to take retirement packages or to go elsewhere and move on. Invest NI will work very quickly to ensure that the three posts at senior executive level are filled by people of competence who can meet the challenge and continue to do the work that we have set for Invest.

Mr Buckley: Is the Minister aware of the Product Regulation and Metrology Bill that is passing through Parliament?

Mr C Murphy: Yes.

Mr Buckley: Has the Minister been asked to seek a legislative consent motion for that Bill?

Mr C Murphy: I have engaged with the Minister responsible for that in Whitehall. We have gone back and forth on it over the past number of months on the issues relating to new trading arrangements that it has thrown up.

Have we to do legislative consent for it?

Mr Snowden: There is a technical question about whether that is necessary. We are still resolving that in the context of what the content of the English legislation will be.

Mr Buckley: When do you anticipate having further detail on that?

Mr C Murphy: The intention is to get it done fairly sharpish.

Mr Snowden: We are working to the timing of whatever the UK Government are doing.

Mr C Murphy: The pace is dictated from Whitehall. We are responding to what its impact on us might be and what consent might be required for it. I know that we have been back and forth a few times on what might be necessary, but the pace at which that is developing is being set in London. My understanding is that Whitehall wants to move at pace and legislate on the issue.

Mr Snowden: Weights and measures here always mirror what happens in Britain. It is not a divergence point but more a question of how the two things align.

Mr Buckley: It is interesting [Inaudible.]

Finally from me, members have mentioned air connectivity. How does the Minister's air route development policy differ from the previous Minister's Northern Ireland route development scheme?

Mr C Murphy: The challenge was this: you have responsibility for aviation and other aspects of airports, and you have responsibility for air route development, but those things are not connected and joined up. That is why, from our COVID experience and from ongoing dialogue with the airports, we were of the view that it would be much better to house as much airport policy under one roof as we could. That is the difference. We are trying to make sure that it is a joined-up approach.

When it comes to the development of air routes, of course, the decisions are commercial, and what you try to do is to encourage, support and engage with people. If people are considering investing in routes here, we will engage with them and whomever they want to talk to, and we will make sure that the airports are geared up to consider all that. Those are, essentially, commercial decisions. The difference is a joined-up rather than a disparate approach. If somebody were considering an air route engagement or investment in an airport, instead of having to talk to three Ministers about three aspects, they could talk to one Minister.

Mr Buckley: City of Derry Airport has received a lot of attention at the Committee. The Department has not received the business plan. Is that what you confirmed earlier, Ian?

Mr Snowden: Yes. It is being worked on by the Department.

Mr Buckley: Is it the expectation of the Department and the Minister that the plan will contain significant detail on the catchment area?

Mr C Murphy: I assume that it will. I have not seen the business plan yet, but it will look at the sustainability of the business and very much at the sustainability of Derry airport. Its customer base is a large part of it, as I understand it. My north-west colleagues might know better, but my understanding is that a lot of its business emanates from Donegal.

Mr Buckley: Are we expecting an assessment of its impact on other airports, such as Belfast International?

Mr C Murphy: Through all the times that we have provided support to airports, people have not challenged it on that point. They recognise that Derry is in a particular location. If we receive representations from the other airports, we will certainly consider them.

Mr Buckley: OK. Thank you.

The Chairperson (Mr Brett): OK. That leads me on to my final question, Minister. Since taking office, have you issued any ministerial directions to your permanent secretary?

Mr C Murphy: Have I ever told you to do anything?

Mr Snowden: Yes and no. [Laughter.]

In February, larger sums of money were required for the flooding scheme. The advice that I got from the economist was that the only way of knowing whether that scheme would represent value for money was to run the scheme and see whether it represented value for money. I was not able to get a statement to satisfy him on the value-for-money point at the time it was set, so I had to put that to the Minister for approval.

The Chairperson (Mr Brett): Are you currently considering any other ministerial directions to your permanent secretary?

Mr Snowden: No.

Mr C Murphy: No.

The Chairperson (Mr Brett): OK. Thank you very much for your time. I know that it was much harder to ask finance questions of the officials because we have not got a settlement. Once we have a settlement, the Committee will be keen to have a discussion with you.

Mr C Murphy: There are a couple of pieces of information that we have undertaken to send on to you.

The Chairperson (Mr Brett): Yes, we will follow that up in correspondence.

I thank the officials for all your work since the return of the institutions. Your dedication to the Northern Ireland economy has been really excellent. Thank you very much for that. Minister, the Committee is, hopefully, your fifth critical friend, but we will support you in everything that you continue to do.

Mr C Murphy: I am glad to hear that.

The Chairperson (Mr Brett): Thank you for your work, and I wish you and your family an enjoyable Christmas.

Mr C Murphy: Thank you very much. Thanks for having us.