Business Month January 2015

January 2015 • ISSUE 50 PRICE £2.50 (Where sold)

How Invest NI has to change its game to keep the jobs coming after its bumper 2014

• ANGELA AND RICHARD WATCH THE ECONOMY • PAUL GOSLING ON CORPORATION TAX • DAY IN THE LIFE TAKES TO THE SKIES 1 3 November 2014 BUSINESS MONTH

CONTENTS

48 37

THE BIG STORY CREATING JOBS Invest NI announced its best ever jobs performance making 2014 its most successful year - page 18

Editor’s note Margaret Canning

FEATURES

mcanning@belfasttelegraph.co.uk

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10 Corporation Tax: Economist Andrew Webb says cutting corporation tax is an economic development solution 16 The year ahead: Economists offer their predictions for 2015 48 A day in the life: We meet Brenda Morgan, Partnership manager for Northern Ireland at British Airways

FOCUS

12 Office space: Brian Lavery, managing director CBRE Belfast looks at prospects for the city’s rentals 22 Lend us a tenner: Alan Watts explores whether the crowdfunding boom is here to stay 64 Why? John Sherrocks asks more than 40 years after the Equal Pay Act, are women still paid less than men?

OFFLINE

46 Out to Lunch: Joris Minne heads out to lunch at Bennett’s with Bobby Willis, director of Circuit of Ireland

46

54 Off Piste: Nick Boulos improves his technique on the slopes - and enjoys his first taste of a black run during a visit to Verbier in the Swiss Alps

48 Business Month 124-144 Royal Avenue, Belfast, BT1 1EB Editor - Margaret Canning

Sales manager - Jackie Reid Contact: +44 2890 264070 or email: j.reid@belfasttelegraph.co.uk

58 Design and production: RE&D Business Month is an imprint of Independent News and Media (NI)

ELCOME to the first issue of Business Month for 2015, which promises to be an interesting year for Northern Ireland plc.

The Chancellor’s positive noises on corporation tax at the start of December paved the way for devolution of the levy - and politicians kept their side of the bargain by reaching a political and economic accord in the Stormont House Agreement just before Christmas.

But there have been plenty of warnings about banana skins along the way, especially the potential cuts to education contained in the draft budget.

Angela McGowan - who joins Richard Ramsey in Economy Watch - called out the Executive on the reality of their proposed cuts. And there’s no question that we do need our politicians to avoid sugarcoating the impact proposals for DEL cuts in particular will have on areas like apprenticeships and training.

Invest NI is also facing a very different 2015 after the successes of 2014 - our cover story looks at just how much tougher life is going to get on Bedford Street.

Paul Gosling’s Inside Report reminds us of the hard work which comes with a change to corporation tax...and we are also delighted to present a new column from Young Enterprise’s Aoidin Gormley on running a business.

And before I forget - Happy New Year!

12 January 2015 BUSINESS MONTH 3

NEWS BITES

£7.9bn

Average weekly retail spend in November 2014

4.3%

Size of increase in amount spent in November 2014 compared to a year earlier

20

Number of successive months of growth in amount bought in retail

1.6%

Increase in quantity bought between October and November

Source: Office for National Statistics Retail Sales November 2014

2%

Amount of fall in average store prices in November this year compared to a year earlier

NI Science Park set to expand as profits rise THE Northern Ireland Science Park is to expand in the new year after turnover hit £4m.

Pre-tax profit increased from £226,039 to £612,083 in the year to March 2014 and occupancy is at 100%, ahead of a move into the Concourse III development in 2015.

The Science Park (NISP) is home to companies of all sizes and from all sectors, from major banking firm Citi, which runs a training centre in White Star House, to two-man renewables firm Pure Marine.

Plans are being laid out to build on the remaining land bank in Belfast in support of sectors including bioscience and advanced manufacturing.

As well as physical expansion, NISP is also aiming to attract further private investment and will launch a global marketing campaign.

‘Black Friday’ brings boost to retail sales RETAIL sales climbed at their strongest pace for 11 months in November as the high street was boosted by the ‘Black Friday’ surge, official figures have shown Sales volumes grew by 1.6% month-on-month as retailers stepped up their pre-Christmas offers, the biggest increase since a 2.7% boom in December last year.

There was growth in all types of stores for the first time since last December, according to the Office for National Statistics.

Year-on-year growth of 6.4% was the best since May 2004, although last year’s November figures did not include Black Friday trading.

Customers were attracted by average store prices which were down 2% compared with the same month last year.

This was mainly driven by petrol stations, although prices in food stores showed their largest decrease since June 2002 — down by 1%.

High-achieving businesses have been urged to enter the 2015 Belfast Telegraph Business Awards in association with British Airways. Entries close at 12noon on March 19 ahead of a glittering ceremony at the Culloden Hotel on April 30. Business editor Margaret Canning (r) joined Brenda Morgan of British Airways to launch the prestigious awards programme. To enter, go to www.belfasttelegraph.co.uk/business-awards

Mining sector hit as production levels fall

Tyrone firm in £28m deal for London hotel

Hotel project facing £500k cash shortage

PRODUCTION levels among firms in Northern Ireland fell by 1.4% during the third quarter of the year, figures have shown.

The production index from the Northern Ireland Statistics and Research Agency said output from all four major production sectors decreased in the quarter, with manufacturing suffering a slump of 1.2%.

The worst decline was felt by the mining and quarrying sector, which was down by 7.6%.

However, output had grown by 1.6% over the year, even though it was down on the quarter before.

And Northern Ireland’s yearon-year growth was healthier than in the UK as a whole, where it grew by just 1.2%.

Ulster Bank chief economist Richard Ramsey said output for mining and quarrying was now at levels previously seen in 2002, despite a recent rebound.

CO Tyrone construction firm McAleer & Rushe has signed a £28m deal to build a hotel development in south east London.

The deal is the latest in a series of London contracts for the firm, which has looked further afield for work given the muted state of building at home.

The firm will build a 14,500 square metre mixed-use development anchored by a hotel for Marlin Apartments.

McAleer & Rushe — which famously built the W Hotel in Leicester Square — will also demolish a 1950s office block under the terms of the contract.

Martin Magee, construction managing director at McAleer & Rushe, said: “This is a very handsome, well-located scheme which we are very proud to deliver.”

It will consist of a 218-room apart-hotel, six office suites, a restaurant and shops.

A £12m project to turn the listed Scottish Mutual building in Belfast into a luxury hotel is facing a funding shortfall of around £500,000 for key restoration work amid a government grant freeze, it can be revealed.

Plans are under way to turn the six-storey building behind Belfast City Hall into a 40-bedroom hotel.

The building was bought by the Ballymena-based Hill family, who also own the Galgorm Resort & Spa. But it could now be one of the first of several key redevelopments to suffer from a Northern Ireland Environment Agency grant freeze during the current budget impasse at Stormont.

Although the Department for the Environment claimed no grant had been officially offered, it’s thought the firm was well progressed in discussions to secure in excess of £500,000.

4 BUSINESS MONTH 12 January 2015

NEWS BITES

Belfast rates highly as business city PAUL GOSLING

▲ STERLING The pound has risen against the euro from €1.18 a year ago to around €1.26. Sterling has strengthened against 42 of the world’s 74 major currencies

▲ MANUFACTURING

Northern Ireland manufacturing sales rose in the last year 4% to £18.1bn. Sales outside Northern Ireland rose by 5.4%, to £14.3bn.

▲ INCOMES

Average weekly household incomes rose slightly in 2012/13 in cash terms. They increased by 2% to £395 in 2012/13 - and by 3% to £358, after housing costs

t JOBLESSNESS

Northern Ireland’s unemployment rate was down to 6.3% in the quarter ending October, according to the Labour Force Survey.

t DOLE CLAIMANTS

Claimant count unemployment also dropped, falling by 700 in November to 51,200.

t INACTIVITY

The number of economically inactive people fell by 1,000 in the last quarter, though at 27.1% NI still has the highest in the UK

t INFLATION

BELFAST has been highly rated as a business city in two studies examining its culture and quality of life.

Northern Ireland’s capital is classed as the world’s most business friendly city in the small to medium sized city category and one of the 10 top cities of any size. The study was conducted by the fDi intelligence division of the Financial Times, drawing on analysis from 130 global cities.

Belfast Lord Mayor Nichola Mallon said: “We believe Belfast offers an attractive package of cost-competitive business infrastructure, alongside a highly skilled workforce and great quality of life, all in one compact and connected city.”

The city was also highly ranked in the 2014 Good Growth for Cities index compiled by PwC and the Demos think-tank. Belfast was considered to be the most improved UK city since the end of the recession. It was rated as the UK’s sixth best city in which to work and live, three places higher than last year. Assessments were made on the basis of jobs, health, income, skills, work-life balance, house prices, travel-to-work times and pollution.

One of the factors benefiting Belfast has been the sharp fall in property prices and big jump in affordability since the onset of the recession. As a consequence, there has been a rise in the number of owner occupiers.

Dr Esmond Birnie, PwC chief economist, said: “Many of the

Belfast is classed as the world’s most business-friendly city larger English cities that boast exceptional economic success pay a steep price in terms of traffic congestion, pollution, income inequality, high house prices and challenging travel-to-work treks for workers living in outlying city catchments. The index shows that people are looking for a package of attractions in their preferred

city, ranging from available jobs, affordable housing and a good quality of life; our research also suggests that investors have similar priorities in the hunt for skills, talent and infrastructure.

Collectively that suggests that the top Good Growth Cities are good for employers, workers and their dependants.”

UK inflation fell to 1.0% in the year ending November — the lowest rate for over 12 years

Economic recovery ‘well under way’

t HOUSE PRICE GROWTH

NORTHERN Ireland’s economic recovery is well under way, according to the latest economic commentary from the Department of Enterprise, Trade and Investment. The study concludes that there are positive signs across a range of indicators.

Highlights of Northern Ireland’s recent economic performance include growth in regional economic activity, as measured by the Office for National Statistics’ gross value added measure and in the Nisra annual business inquiry statistics. These estimated, respectively, that the Northern Ireland economy grew in 2013 by 1.2% and 1.6%.

UK house prices rose by 8.5% in the year to December, down from 9.0% in the year to November, according to Nationwide Building Society

t ECONOMIC GROWTH

The rate of economic growth in Northern Ireland has fallen, according to the latest Ulster Bank purchasing managers index. While there had been 17 months of growth, it had slowed down for output, orders and employment

6 BUSINESS MONTH 12 January 2015

Other positive indicators instanced by the commentary include the 3.4% increase in research and development spending in 2013, the significant level of innovation activity amongst Northern Ireland’s micro businesses, the strong performance by a small number of large and high growth companies and Northern Ireland recording the second fastest growth in knowledge economy activity in the UK. It also noted a net increase in employee jobs during 2014 of 12,780.

But the commentary adds: “Despite the largely positive growth performance, economic activity still remains well below its pre-re-

cession peak in Q2 2007 by 12.6%.

By comparison, UK GDP is now 2.7% above its previous peak, whilst Republic of Ireland GDP is just 3.5% below.”

Although the transformation is slow, Northern Ireland’s economy is rebalancing away from the dominance of the public sector.

Total economic growth in the last year of 1.4% represented a growth of 2.2% in the private sector, but a contraction of 0.8% in public sector activity. A negative note is struck with a report on the construction sector. Output within Northern Ireland is continuing to fall and is now just half of its pre-recessionary high.

7

NEWS BITES

Schools engage with businesses NORTHERN Ireland’s schools are happy to engage with businesses and other employers as they strive to improve, says Education Minister John O’Dowd.

The minister said: “I believe that employers and the business world in general have an important part to play in the complex area of educating our young people. I am keen to engage and make sure we maximise the benefits to educational outcomes.”

Mr O’Dowd was responding to the ‘Step Change’ report from the CBI. “I share the CBI’s wish for all of our young people, once they leave school, to be equipped to be valuable citizens and to contribute to and lead business and the economy,” he said.

“We are making excellent progress in achieving this vision, thanks to the hard work and dedication of local schools and that of pupils and their families.”

He added: “There is no doubt that employers can collaborate in the delivery of education so young people are enabled to get on after leaving school. I welcome this opportunity to engage once again with the CBI on how we can best achieve this and look forward to doing so again in the future.”

CBI regional director Nigel Smyth said: “When recruiting young people, firms look above all else for the right attitudes and behaviours — for example, 85% of firms in Northern Ireland rate attitudes to work as the most important factor when recruiting school and college leavers — and this should be a key focus of our schools and colleges. Our young people need to learn resilience, enthusiasm, curiosity and creativity. These are the traits that will help them get ahead and these should be the outcomes our education system drives towards, alongside academic progress.

“The best education systems globally start with a clear idea of the desired outcomes — we need to do the same here and then ensure all aspects of the system are aligned to deliver those outcomes.”

Doubts over value of PFI college project PAUL GOSLING ONE of Northern Ireland’s largest private finance initiative (PFI) projects may not have represented value for money for the taxpayer, a report from the Assembly’s Public Accounts Committee has concluded.

The questions were raised about the funding for the construction of the new Belfast Metropolitan College at the Titanic Quarter.

Michaela Boyle MLA, chairperson of the Public Accounts Committee, said: “We can all agree that the new Belfast Met campus is a beautiful building which has won awards for its design and is delivering a high level of staff and student satisfaction.

“Nevertheless, there were very serious shortcomings in the way the project was managed.

“The Department for Employment and Learning (DEL) paid £20m of the £44m capital cost up-front. The Belfast Met was the largest and most expensive further education public/private funding project ever undertaken.”

Committee members concluded that the project’s preferred bidder, ICL, was given preferred bidder status prematurely. This enabled ICL to dictate the pace and outcome of negotiations with the college. Consultancy costs on the project were also allowed to overrun considerably from £300,000 to £1.5m, reported the committee.

The MLAs also expressed unhappiness at the means by which DEL assessed the value for money of the project. The committee said that taking a holistic view of the project, DEL was left with a financial shortfall of £14m. But DEL

argued that the cost of removing surplus properties should not be considered as part of the value for money assessment.

In their conclusions, the committee said that any future PFI projects must provide much greater financial transparency.

Ms Boyle said: “While there are some serious questions to be asked on our long-term PFI commitments, we welcome an undertaking from The Office of the First Minister and the deputy First Minister to improve transparency around this.

“While we are pleased to see the OFMDFM taking this forward, we will be keeping the issue of private finance initiatives on our radar. It is crucial that we ensure that value for money is obtained and that the public know how and where its money is being spent.”

City of Culture year gives a £47m lift to Derry economy OVERNIGHT stays in the Derry and Strabane area rose by 50% during the City of Culture year, the latest figures from the Northern Ireland Statistics and Research Agency (Nisra) have revealed.

The year generated an additional £47m into the economy, says Nisra.

But even during the City of Culture year, the Giant’s Causeway and Belfast remained Northern Ireland’s premier tourist attractions.

Belfast is the most popular destination for overnight stays, followed by the Causeway Coast and Glens of Antrim district, the Newry, Mourne and Down council area and Fermanagh and Omagh.

Some 754,000 people visited the Causeway during 2013. The next most commonly visited sites were Titanic Belfast, which attracted 604,000 visitors, the Ulster Museum (416,000 visitors) and Derry’s City Walls (411,000).

Tourism is particularly important for the Causeway Coast area.

There are five times more overnight visitors to the district than the number of people resident in the population. This visitor to resident ratio is the highest

8 BUSINESS MONTH 12 January 2015

Derry’s historic walls attracted 411,000 visitors to the city of any part of Northern Ireland.

During 2013, £722m was spent on overnight stays in Northern Ireland. Of this a third — £227m — was spent in Belfast. Some £110m was spent in the Causeway Coast and Glens of Antrim, while £86m was spent in Fermanagh and Omagh.

Enterprise Minister Arlene Foster said that there are hopes

that tourism will grow even more in 2015 compared to the strong results in both 2013 and 2014.

She said: “Tourism Ireland aims to build on this year’s growth in overseas tourism and to welcome almost 1.9m visitors to Northern Ireland in 2015. This figure will represent growth of 6% over 2014 and deliver £552m to the Northern Ireland economy [in 2015].”

9

NEWS ANALYSIS

Let’s redefine our economy Economist Andrew Webb says cutting corporation tax is an economic development solution

W

HEN the modern economic history of Northern Ireland is written, the campaign to lower corporation tax will either form an interesting yet inconsequential footnote, or take centre stage as the policy that helped redefine the economy.

Although much of the debate has centred on rebalancing Northern Ireland’s excessively large public sector, the policy does offer another more potent potential — the power to rebalance our private sector.

Invest NI has enjoyed tremendous success recently in driving inward investment, but the nature of that investment has been focussed on sectors such as software development and back office services. Over the long-term we need to rediscover our historical genius for making things.

Securing corporation tax powers could accelerate growth in those knowledge-economy sectors in which we already excel, but, more importantly, it could give manufacturing a badly needed adrenalin shot.

Opponents argue that the cost of corporation tax isn’t worth the risk to the Westminster block grant. As a firm which specialises in advising inward investment bodies and FDI clients across the globe, including the World Bank and Invest Hong Kong, OCO’s experience is that corporation tax — if implemented strategically — could be a game changer.

OCO’s forecasts suggest that global FDI is back on course for a path of steady, if unexciting growth. The model, which includes 115 countries and 29 sectors, predicts that by 2024 there will be 16,000 FDI projects and c.200,000 jobs up for grabs.

These are projects which a more competitive Northern Ireland, thanks to lower corporation tax, could be targeting.

Investors consider a wide range of factors when selecting potential regions, from the availability of skills to the quality of infrastructure. Corporation tax is but one of these factors — and by no means the most important — but

Andrew Webb of economic development advisors OCO Consulting

it is the last great differentiator between Northern Ireland and our main competitor south of the border. On a per capita basis Northern Ireland is performing significantly worse than the south in attracting FDI jobs.

The Republic’s tax rate has undoubtedly been a major factor in its huge successes in securing FDI projects and it’s why the Irish Government has fought so hard to maintain its preferential rate.

As a policy, however, it’s not just the sole preserve of Dublin. Other clients of ours, such as the Netherlands, Costa Rica, Hong Kong and Lithuania have all utilised it as an effective economic lever to encourage growth.

With a more competitive proposition OCO estimates that lower corporation tax should enable Northern Ireland to directly at-

10 BUSINESS MONTH 12 January 2015

tract 40,000-plus new jobs over the next decade. There are, however, indirect benefits too and our work with the Dutch Government suggests that each FDI job creates a further 1.5 jobs in the wider economy and that every extra £1m in salaries generates a further £1.6m elsewhere.

Perhaps though the greatest appeal of lower corporation tax is the opportunity to change the type of projects we compete for and to start the process of rebalancing our private sector — a process that will ensure a more equitable spread of projects across Northern Ireland.

We currently do well in sectors that are city-centre friendly — much to the chagrin of those living beyond greater Belfast.

Lower corporation tax would give Invest NI the tools it needs

to realistically target projects in sectors such as advanced manufacturing, engineering or life sciences — sectors that don’t rely upon Grade ‘A’ office space in Belfast city centre. OCO’s recent work with the local life and health Sciences sector suggests that a lower tax rate coupled to a new, dedicated strategy, could deliver economic success in the sector, an area where the Republic has reaped huge rewards, but Northern Ireland has not.

This, of course, depends on whether the policy can be implemented.

Those who have argued for Northern Ireland’s ability to lower corporation tax have faced many hidden summits on their journey.

They were told it would never happen — the EU, Treasury and Westminster parties would not countenance it. But countenance it they have, and at last, the principle has been conceded.

The summit has now been reached, but a vista of problems has come into sight. The Executive’s financial credibility, the difficulties in balancing its budget and the related absence of any more “big cheques” from Westminster until tough political decisions are taken locally, have piled on the pressure. The danger is that corporation tax may fall at the last hurdle.

In the absence of any alternatives that would be a tragic acceptance that Northern Ireland’s economic performance will fall ever further behind the rest of these islands.

While we currently do well for FDI projects, we could do so much better. In a world where investors, particularly US investors, tend to view Northern Ireland in an island-wide context, we’re simply not competing on a level playing field. If we want an economy riddled by a systemic lack of ambition our choice is the status quo.

If, however, we want an economy that can afford excellent public services and can give more of our young people gainful employment at home, we need to step-up and embrace the radical potential lower corporation tax offers.

11

NEWS ANALYSIS

Office space in demand

By Brian Lavery, managing director CBRE Belfast

2

014 was a very busy year in the Northern Ireland commercial property sector. News that the National Asset Management Agency (Nama) had appointed Lazard to handle the sale of its entire Northern Ireland property portfolio, following an approach by a potential investor, was announced early in 2014, taking many by surprise.

Several assets which were being prepared for sale early in the year were then put on hold to see what effect the Nama loan sale would have. Indeed, much of the almost £600m of investment activity recorded in the region during the 12 month period was concluded in the second half of the year following the disposal of Project Eagle to Cerberus, which concluded in June.

The year ended on a similar note with Cerberus agreeing the purchase of project Aran from Royal Bank of Scotland, making them potentially the largest controller of property loans in Northern Ireland.

Some of the more notable investment transactions to complete during the year include the sale of Foyleside Shopping Centre in Derry and Forestside Shopping Centre in Belfast for £145m and the sale of the Abbey Centre in Newtownabbey for over £64m as part of a disposal known as Project Swallowtail; the sale of Shane Retail Park (one of the best bulky good retail parks in Belfast) to US investor Marathon for £30m, reflecting a yield of 7.36%; the refinancing of Connswater Shopping Centre and retail park in Belfast, for £31.5m; the sale to Marathon of Cityside Retail Park (part of a mixed-use scheme in North Belfast anchored by Tesco) for £24m, reflecting a yield of 7.87%; the sale of a Tesco Superstore in east Belfast for £24.74m and the sale of the Obel development in Belfast again to Marathon for a price believed to be in excess of £22m. As in other years, the majority of large investment transactions completed in

Office rents hit £15 per sq ft in 2014 and are expected to rise further in 2015 Northern Ireland during 2014 comprised retail properties.

Demand for prime investment opportunities continued to emanate from UK institutions during 2014 although there was also a notable increase in interest from new investors from other jurisdictions such as the US over the course of the year. The biggest frustration amongst investors was the scarcity of prime investment grade assets being released for sale to match the volume of demand in the market.

Activity in the occupier markets was more muted than in the investment sector during 2014. Office take-up in the region was somewhat disappointing in the first half of 2014. However, there was a notable take-up activity recorded in the second half of the year, bringing total office leasing transactional activity in Belfast during the year to over 350,000 square feet. There were a number of significant job announcements in Belfast and Derry over the course of the year which will in time boost office activity in both locations. Office rents in the city increased to approximately £161 per square metre (£15 per sq. ft.), during the year.

Demand for owner-occupier units in the industrial sector remained strong throughout 2014 with vacancy continuing to be eroded in some of the better industrial estates across

12 BUSINESS MONTH 12 January 2015

the region. However, take-up was somewhat disappointing due for the most part to a scarcity of bank funding to enable industrial occupiers to purchase properties. Although there was an increase in activity in the retail occupier market experienced during 2014 with a number of new store openings, this uplift was predominantly experienced in Belfast city centre.

As we look to 2015, it regrettably remains in the balance if Northern Ireland will be given autonomy to set its own rate of corporation tax to match or compete with the 12.5% prevailing in the Republic of Ireland. If this materialises, subject to other budget agreements in Stormont, it could prove a very significant boost for FDI and job creation across the region.

The overriding issue in the office occupier market in Belfast in 2015 will continue to be the scarcity of Grade A accommodation to satisfy occupier requirements. This will put further upward pressure on office rents in the city over the course of the next 12 months and we anticipate prime rents reaching £16 per square foot by year-end. This is getting very close to the level which makes office development an economic reality and more forward looking developers may therefore go on site during 2015.

Many retailers are likely to

experience some reduction in their rates bills following the revaluation effective in April 2015, which will make stores more affordable for occupiers.

However, there will be some exceptions on high streets such as Arthur Street in Belfast and in some retail park schemes where rates bills are expected to increase. We have not witnessed any growth in retail rents over the last 12 months and it is likely that any growth during 2015 will be very location specific. Although economic conditions have been strengthening recently, there is still concern around prospects for growth in the region over the coming years, particularly if proposed austerity measures are implemented, which have the potential to impact negatively on consumer sentiment and retail spending patterns.

A similar volume of activity could be achieved again in the investment sector in 2015 considering the volume of deleveraging that has yet to occur across the region. In addition, a considerable volume of secondary trading is anticipated with assets purchased through loan sales over the last number of years being offered for sale.

There are several assets due to be offered for sale during 2015, the majority being retail properties although we anticipate some landmark offices will also come to the market.

The relative value of commercial real estate will become increasingly topical in 2015. While there is currently a notable arbitrage between interest rates, bonds and real estate, which is encouraging investors, it is important to remember that this arbitrage will be eroded once interest rates and bond rates ultimately start to increase. It is anticipated that UK interest rates may start to rise in 2015. However, rises are not anticipated to be very dramatic and the relative yield arbitrage offered by real estate investment will remain, even if prime yields as anticipated contract slightly over the course of the year in Northern Ireland.

13

NEWS ANALYSIS

A New Year Resolution Pinsent Masons commercial and corporate director Hilary Griffith gives her view of the prospects for mergers and acquisitions in 2015

T

RADITIONALLY January is a time when most people take stock of the previous 12 months. A pressure on the waistline may cause us to reflect if all those festive feasts and Quality Streets were such a great idea. We may be considering some changes in lifestyle and approach in a fit of self-improvement. In fact a variety of research shows that around 40% of people will be setting new year’s resolutions.

Businesses are no different.

Four new quarters glisten pristinely on the business plan, and leadership teams will be thinking about new opportunities, and new directions.

Looking forward to the year ahead, what will this mean in terms of merger and acquisition activity? Answering that question is a speculative exercise, but what can we learn from the platform of 2014?

Globally, 2014 was a bumper year for M&A, with activity across the first three-quarters hitting $2.66trn, fuelling optimism that 2015 levels would close the gap on pre-downturn figures. However at a national level, UK M&A figures could be described as anaemic at best, with domestic acquisitions in particular reaching a record low in the latest third quarter reports. At a regional level Northern Ireland was by far the worst performer with a drop of 56.7% reported by Experian over quarters one and two compared to the same period in 2013. That figure could be even more dramatic if compared to the second half of 2013, where Northern Ireland enjoyed a surge of 30 deals with a total of 78 for the year.

So what factors are in play if M&A activity is to pick up in 2015? The first is obvious - confidence is key. Business confidence rose generally throughout 2014 although the autumn saw a slight turn in the curve. Availability of credit is also likely to be crucial to businesses considering a purchase.

While banks in Northern

Ireland express an appetite for corporate lending, the experience of local businesses is that this is curbed somewhat when pushed beyond familiar boundaries of property assets. Our culture of raising finance for investment would benefit from broadening beyond traditional debt models, tapping into equity funds that are hungry for opportunities.

The life-cycle of family-owned businesses can also have an influence. Younger generations can disrupt longheld succession planning ideas, opting for different career paths, or perhaps no clear options exist for passing over the reins. Regulatory certainty is a big issue, particularly in some sectors like energy.

In its recent report the Nevin Economic Research Institute identified agri-food, life-sciences and energy as strategic sectors for the Northern Ireland economy. The importance attached to these industries makes them likely candidates to generate transactions, but for different reasons.

For instance, the NI Agrifood Strategy Board aims to create a sustainable supply chain to facilitate long term growth - however, limited availability of capital can impose a barrier. Our local

14 BUSINESS MONTH 12 January 2015

sector must cast an envious glance at the experience of the Irish agri-food market which in 1990 had a stock market value of €734m compared now to €23.2bn. Northern Ireland companies have a unique advantage in being eligible for inclusion on both FTSE and ISEQ Index and in December at the Agri-food Conference the ambitious target of adding three plcs to the sector was mooted. Perhaps Moy Park will lead the way in 2015, but in the meantime there will be activity in the sector with the potential for existing businesses with ambition for growth to attract investors on a global scale.

Life sciences have benefited in particular from significant investment by government, academia and industry in recent years. We expect 2015 to show continued activity as Northern Ireland’s pharmaceutical sector grows particularly in the biomedical and biological sciences field. The region is at the forefront of research and innovation and has already produced some exciting spin out companies with more in the pipeline.

Energy will continue to be an attractive investment prospect in Northern Ireland. Renewables in particular are set to generate an increased flow

of M&A and project financing transactions throughout 2015 before the transition from Renewable Obligation Certificates (ROCs) to contracts for difference (CfDs) in 2017 really takes hold on investment opportunities.

Corporation tax is often regarded as having a potential X-Factor effect on the Northern Ireland economy, but for 2015 it is best regarded in a mathematical rather than showbiz sense, ie, an unknown. The Chancellor’s Autumn statement made clear the commitment to devolution of the powers in principle, but imposed the hurdle of a budget accomodation. A reduction could spark a flurry of activity, as overseas businesses seek to maximise the lower tax regime in Northern Ireland by way of acquisition. However, with the corresponding cut to the block grant, and the diametric positions occupied by the main political blocs, the setting of the rate could be a political bone of contention for many years to come. Without the means of knowing how far or how fast that radical economic lever will be pulled, for growth in M&A activity the best we can hope for is slow and steady.

It’s not a bad approach to 2015 New Year’s resolutions.

X ECONOMY WATCH

The year

Last year saw signs that the ‘spreadsheet at last, but what are the prospects for the

T

HE year 2013 was dubbed the ‘spreadsheet recovery’. The computer said ‘yes’, we are technically in recovery, but the consumer said ‘no, I don’t feel it’. But 2014 saw the recovery begin to download, becoming increasingly evident in more tangible indicators such as employment, house prices, new car sales and business activity.

The local economy is estimated to have grown by 2% in real terms in 2014. A similar rate of growth (1.5% - 2.0%) is expected in 2015, only the dynamics of this growth rate will have changed. Consumer spending, stemming from real wage growth will account for a greater share of economic growth, whilst the corporate sector should see its contribution moderate.

In terms of the labour market, a lack of wage rises blighted an otherwise strong picture in both the UK and Northern Ireland last year. The local claimant count unemployment register has been falling for two years, with 2015 expected to be a third straight year of unemployment declines. The headline International Labour Organisation (ILO) unemployment rate has fallen to 6.3% in late 2014. A dip below 6% for the first time in six years is anticipated later this year, with the unemployment rate expected to average around 6% in 2015.

Last year, Northern Ireland’s rate of employment growth exceeded all expectations with the pace of job creation accelerating from 1.3% in 2013 to 2.0% for 2014. The latter represented the fastest annual pace of growth since 2005. The pace of job creation will slow in 2015 to around +1.6% year-on-year and again more sharply in 2016, when a sustained period of job losses in the public sector will act as a significant

Taxing times

Richard Ramsey

Chief economist at Ulster Bank drag on employment growth and limit opportunities for the younger generation.

As in previous years, the younger generation will remain at the back of the queue with regards to the employment recovery. The unemployment rate for the 18-24 years of age cohort is likely to remain close to 20% throughout 2015.

It remains to be seen whether resources will be re-prioritised to tackle this problem.

Inflation has been public enemy number one for most of the last seven years, with consumer price rises consistently outpacing wage increases. However, since the second half of 2014, the cost of living recovery has begun with a vengeance, and food and petrol prices have gone into reverse. The annual rate of CPI inflation has fallen from 2.6% in 2013 to around 1.5% for 2014.

A huge drop in the oil price, which has still to fully feed through into fuel prices, will help to push the annual rate of CPI inflation to around 0.5% for 2015. This will represent

16 BUSINESS MONTH 12 January 2015

the lowest annual rate of CPI since the series began in 1989.

So 2015 should therefore be the first year of a meaningful wage price recovery.

In terms of the local housing market, it continues to recover from the steepest house price correction in UK history and a slump in house building.

2014 marked the first fullyear of house price rises in seven years. This trend should continue, with average prices expected to rise by 6% in 2015 following last year’s growth estimate of 7%. Residential property transactions are set for their fourth successive year of double-digit growth.

The recent reform of stamp duty should increase activity around the £250,000 price threshold. Following last year’s rise of 27%, the pace of growth should ease to around 15%, taking the annual number of transactions to around 23,750.

A modest pick-up in house building is expected for the second successive year in 2015.

However, this growth is coming from extremely low levels.

Regardless of who wins the next general election, fiscal austerity is going to move up a gear. The UK, and by extension Northern Ireland, will see more public expenditure cuts in the next five years than have been delivered over the last five years. As with the public expenditure cuts, tax rises are also inevitable and unavoidable, not least to dilute public expenditure cuts that are deemed to be both undeliverable and politically unpalatable.

This year is likely to see a rise of English nationalism, which politicians are likely to have to listen to. There will be increasing attention paid to inter-regional public expenditure and revenue comparisons within the UK as a result.

Northern Ireland is potentially vulnerable to this, given that it is the lowest taxed region of the UK and each man, woman and child receives more public expenditure than their counterparts in other UK regions.

Additional devolutionary powers and the UK’s membership of the EU will remain major political issues in 2015.

The Stormont Executive’s five-party coalition up until now has kept the economy as its number one priority. Tension over this priority is likely to build in the coming year as social policy and maintaining public services are rising up the agenda. If corporation tax powers are devolved to Northern Ireland, this will quickly be followed by the question of how will it be paid for?

The Northern Ireland Executive, like government elsewhere, will be in the business of delivering unpopular policies into the foreseeable future. Populist social policies (eg, free prescriptions, no water charges, lower tuition fees and free public transport for the over-sixties) are now simply unaffordable and will increasingly come under

ECONOMY WATCH

ahead

recovery’ was being felt by consumers Northern Ireland economy in 2015?

T

HE global economy slowed in 2014 but at Danske Bank we expect a gradual improvement in the world economy during the first half of 2015. The US economy will continue to lead the global economy during the next 12 months while European and emerging market growth will remain below par. Overall global growth is forecast to reach 3.9%.

The UK economy will probably see more moderate growth of around 2.8% in 2015. Low inflation in the coming months will lend support to household spending power and the labour market should continue to improve, with unemployment levels forecast to average 5.5% in the year ahead.

There are always risks and the UK’s general election in May in particular has the potential to inject some uncertainty into the equation.

Public sector cuts will also undoubtedly take their toll and together these could weigh on confidence levels and act as a drag on economic growth.

Danske Bank forecasts suggest that after growing at 2.5% last year, the Northern Ireland economy will grow by just over 2% in 2015 and 2016.

Growth in neighbouring regions (the rest of the UK and the Republic of Ireland) will lend support to the local economy and indeed the generally improving global picture also augers well for local trade and foreign investment levels next year.

But as always there will some factors placing downward pressure on economic growth and for Northern Ireland in 2015 these factors will most probably include significant public expenditure cuts.

In the private sector we can expect further employment growth this year — although employment levels are expect-

Cuts will bite

Angela McGowan

Chief economist at Danske Bank ed to grow at a more subdued 0.5% (compared to 2.2% growth over the last 12 months). Northern Ireland’s unemployment level is expected to average 5.6% to 5.8% over the next 12 months, but any improvements to the labour market will be dependent on a continued private sector expansion.

Danske forecasts suggest that the sectors seeing the highest rates of employment growth include professional services and ICT. On the other hand public sector cuts are expected to result in job losses and the scale of these cuts will be determined by policy makers. Danske forecasts suggest a loss of almost 8,000 jobs from the public sector by 2017. There is however an expectation that the majority of job losses will be in public administration.

At the time of writing it is somewhat uncertain as to how local departments are going to address the significant declines in their budgets. Although it is possible that the bulk of public sector scaling back could be achieved through recruitment

freezes, early retirements or pay cuts.

Households will take some comfort from the fact that inflation will remain subdued for most of 2015. Bank of England forecasts suggest that over the next 12 months inflation will average 1.2%. But the decline in inflation is not of the dangerous kind, as lower energy and food prices will serve as a positive supply shock that will support economic growth.

The housing market recovered well last year with prices rising by 9.5% and transactions up 21% over the year. Our forecasts suggest this recovery is set to continue with local house prices rising at more sustainable levels of 4% in 2015 and 2.3% in 2016.

In 2015 the Northern Ireland public will be looking for a strong and united political front when it comes to growing our economy. Professional negotiations with HM Treasury are required around public spending and devolved taxation issues.

In the year ahead we could

see legislation introduced for setting our own corporation tax and this would be a huge step for Northern Ireland in terms of attracting foreign direct investment, building clusters in high value added sectors and raising our game in terms of exports.

However, such a dramatic change to our fiscal position requires the Executive to be upfront and honest with the electorate around who pays for the shortfall in our block grant. The public need to know if the gap in our public finances is to be filled by raising local revenue streams or by slashing public expenditure.

To ensure more openness around fiscal decisions (and to get around the fact that politicians repeatedly avoid fiscal changes that are perceived to be ‘vote losers’), it would seem prudent to create an Independent Fiscal Council for Northern Ireland.

Such a council would independently review and monitor the Executive’s fiscal plans, objectives and performance.

With resources stretched, it would be perfectly reasonable to request that a Northern Ireland division of the Office of Budgetary Responsibly should be set up here to both assess the impact of UK government fiscal adjustments on the local economy and the Executive’s fiscal plans.

Northern Ireland has come a long way in the last two years in terms of moving from recession to recovery.

Jobs have been created, confidence has risen and even the housing market has recovered well from its dramatic implosion back in 2007.

However, the local economy is now at a crossroads and in 2015 astute and informed decisions will have to be made if we are to create the right conditions for sustainable long-term economic growth.

12 January 2015 BUSINESS MONTH 17

COVER STORY

FUTURE REALITIES

Invest NI faces a new set of challenges this year. Jamie Stinson explores how budget cuts and EU rule changes will affect the economic development agency The Invest NI headquarters on Bedford Street, Belfast

18 BUSINESS MONTH 12 January 2015

I

NVEST NI announced its best ever Differing views: what the business community thinks jobs performance in its mid-year results in September, making 2014 its most successful year. In the six David Kirk, former Silicon Valley executive n Given the impending budget cuts, one months between the start of the would hope that — for the first time — financial year and end of September, the n Invest NI has had a free ride since it was someone is asking hard questions of agency said companies which received its formed in 2002 — to support business InvestNI’s performance and plans. And support had promised to create 10,800 growth and inward investment. By any real perhaps the real challenge is — is there jobs, in comparison to 2,890 during the measure of performance or productivity anyone in DETI that can even understand same period in 2013. (in the real world) it would be fired long the hard questions to ask?

This has seen new companies from ago. overseas, such as US law firm Baker & n Despite its predecessor (Industrial David Richards, CEO and co-founder of McKenzie and software company Puppet Development Board) receiving a stern a WANdisco Labs, setting up in Northern Ireland for warning and admonishment from Westthe first time, bringing 256 and 100 jobs minster’s Public Accounts Committee n Back in 2012, the support of Invest NI respectively. in 2000, the Department of Enterprise, helped WANdisco in setting up a software Over the half year period, it highlightTrade, and Investment (DETI), its absentee development centre in Belfast which has ed it added £1.11bn in investment to the oversight, allows Invest NI to fool the gone from strength to strength. Currently Northern Ireland economy, more than its public with a bureaucratic sleight of hand 25 people are employed in our expanding contribution in the full year of 2013/14. known as “jobs promoted”. Invest NI’s Belfast office, and Belfast plays an absoHowever, 2015 is likely to present a performance is never measured against lutely core role in our global operations. different set of challenges to the economic how many jobs are actually created, just However, it wasn’t Invest NI alone that atdevelopment agency. This year will see by how many jobs the companies receiving tracted us to Belfast. The region possessNorthern Ireland face up to uncomfortits grants tell them they will create. It es excellent local talent, driven by high able economic realities in the province. cannot even tell how many jobs are really class universities. The development work There will be radical changes throughout created so their incompetence opens up a conducted in our office is being driven by the public sector, as the size of the state hole for massive abuse in awarding grants graduates and professionals from Belfast. will be reduced. without accountability. n Invest NI has been very helpful in facilNearly all departments’ budgets in n InvestNI has also intervened to “save itating access to local talent and making the Executive are due to be slashed, as the investment ecosystem in Northern the introductions required to recruit the the public sector in Northern Ireland Ireland”. Unfortunately its strategy has talent required to fuel the growth of a fast decreases. not only failed, but it has amplified the growing business such as WANdisco. The Invest NI has been given a budget of market failure it was trying to save. global expansion of a company can be a £96m — and as the agency itself exUsing a flawed and universally criticised difficult process in terms of recruitment, plained, at that level the budget is 93% technique of subordinating taxpayers maintaining culture and access to infracommitted at the start of the year, leaving money to clueless investment managers, structure. Being part of a local network limited levels of funding for new business. and by setting goals for those managers is always beneficial in turning these Invest NI is not escaping the budgetary to “make zero profit”, Invest NI have both challenges into accelerators to growth. equivalent of the Red Wedding — a maslost public money, and paid fund managers Moving forward, our Belfast centre is a key sacre in cult TV show Game of Thrones, for losing it. part of our plans. which is filmed in Northern Ireland — unscathed.

Moy Park are examples of expansions by ly to large companies that already have a According to economist John Simpson, large firms that Invest NI will not be able local organisation. State Aid rules mean the cuts proposed in the draft budget to support in the future. that investment grants are allowed only could potentially have serious effects on “This drive to ensure we were able to when a new investment is being made for the agency. get these projects over the line before June a product or service that has not “Budget cuts could be a serious 30, and in turn secure the projects for already been assisted. Follow-on handicap if applied as set out in Northern Ireland, has meant we have had investments will be excluded the draft budget. However, the a spike in the number of jobs promoted unless the project is in a draft budget is, in total for and the investments made. Consequently different product or service the executive, an unlikely we expect to see a slowdown in the second area.” if not impossible objective. half of this year,” Mr Hamilton added.

This played a major part Some serious modificaThe changes to State Aid will impact on in the strength of Invest tion or postponement will investment to firms already in Northern NI’s mid-year results in be needed. Otherwise, Ireland, so should not impinge on attract2014. In ensuring deals Invest NI will have to meet ing new companies to make the move to were rushed through before existing commitments and the province. the June deadline on the ‘go slow’ on accepting too “The State Aid restrictions are likely to State Aid changes, it promoted many new commitments,” Mr affect assistance to businesses already in more jobs than previous years.

Simpson pointed out.

NI for whom new assistance will not be As a result of this, there will Another issue facing Invest NI Alastair Hamilton, allowed to replace or duplicate existing be an inevitable decline in the in 2015 is the European Union’s CEO at Invest NI capacity. The State Aid rules will push figures of the second half of the changes to State Aid rules. These Invest NI to rely more on assistance other year. changes, which came into force than capital grants,” Mr Simpson added.

Alastair Hamilton, CEO at Inin the middle of last year, restrict This year will certainly be different vest NI, acknowledged as much when the support offered by governments to firms for Invest NI, and will present many results were released: “When we became already operating in the region. new challenges. Coupled with budgetary aware of the changes the EU planned to Mr Simpson explained the changes will changes, and, potentially, a different govmake to our ability to support reinveststop grants being given to firms that proernment at Westminster after the general ments by large companies we made a vide the same service as a company which election in May, Invest NI is to a certain concerted effort to bring forward projects has already received assistance from the influenced by the political and economic before the EU deadline. Projects such as state. “The ceiling on financial capital the 807 jobs by PwC and the 628 jobs by assistance is now applied more restrictive>> Turn to page 20

12 January 2015 BUSINESS MONTH 19

COVER STORY >> Continued from page 19 circumstances surrounding Stormont.

Invest NI’s previous methods of job creation, through its own financial investment, will need to change. One new magnet to attract foreign direct investment (FDI) is the potential of a reduction in the rate of corporation tax.

The devolution of corporation tax has come a step closer with the Stormont House Agreement but much focus will be required from politicians to finalise the process. But in theory a bill, which is supposedly already drafted, could pass through UK Parliament before it dissolves for the general election later this year.

Employment and Learning Minister Stephen Farry said a lower rate of corporation tax will be big advantage not just for FDI, but also for indigenous firms in the province. “We will become more attractive to different types of investment, particularly those investments which are bringing profit centres into Northern Ireland, obviously to take advantage of the tax concessions.

“It’s also a huge opportunity for our local businesses to expand, and certainly to upscale, and look to see how they can become much more export focused. So I think it will be a real boon, in all aspects of the private sector, whether it’s inward investment or local indigenous business.”

Corporation tax will be a helpful bargaining tool for Invest NI, but there are others with which Northern Ireland could improve its competitiveness, according to Mr Simpson.

The economist pointed out: “Lower corporation tax will be a help, provided Northern Ireland takes all the other steps to enhance our competitiveness.

The continuing questions relating to NI’s competitiveness whether in labour costs and productivity, energy policy deficiencies and employment law modernisation, alongside anticipated tax changes.”

Energy costs are a particular worry. For example, Northern Ireland has the second highest electricity costs for manufacturers in the Europe, according to the Utility Regulator in the province.

One person critical of the effectiveness of Invest NI, and questioning of its methods, is technology expert David

Corporation tax will be a great tool for the province, supporters claim Kirk. The Belfast-born former vice-president of AOL said: “Invest NI’s problem is, and always has been, that they have zero experience in (a) venture capital investing, (b) technology startups and (c) US corporate multinationals.

“If it has a chance of fixing itself that need to, firstly, acknowledge that it does not know what it’s doing. And secondly, that by keeping doing the same things and expecting different results is the usual definition of insanity.”

One inevitability for 2015 will be the decline in the number of jobs created, due to last year’s exceptionally high job numbers.

Mr Simpson said: “2014 will be seen as an unusually successful year because of the combination of changes in State Aid rules and the arrival of economic recovery. Invest NI may have a smaller budget but we should expect it to set out a new series of key performance indicators by which it might be assessed and monitored.”

20 BUSINESS MONTH 12 January 2015

“Invest NI will, in the main, need to emphasise alternative incentives. Watch for more emphasis on training, R&D applications, innovation aid, and ‘assured skills,’” Mr Simpson added.

One of the main motivations overseas firms give for why they choose to locate in Northern Ireland is the highly skilled workforce present in the province. DEL, which works along side Invest NI in bringing investment to Northern Ireland, plays a big role in helping with the maintenance and improvement those skills.

Like Invest NI, in 2015 it will face budgetary pressures.

Dr Farry said he will try and protect those areas of the department’s budget which assist in providing investment in the province.

“I will act as strategically as I possibly can to protect those areas that are most relevant towards inward investment.

For example, I’m asking our colleges and universities to do what they can to protect our

offering around what we call narrow STEM, which involves computing, science, mathematics, engineering. They are often the very particular subjects a lot of companies require.”

DEL offers training assistance through its assured skills programme for companies making the move to Northern Ireland, an area he will try to protect. “Assured skills is very much at the pinnacle of our current offer (to firms). It is providing real success and is so intrinsic now around inward investment. So I do want to give some assurance that assured skills will be something that we will be seeking to protect come what may,” Dr Farry added.

One area which will need to be addressed will be Northern Ireland’s poor export figures.

According to the Northern Ireland Chamber of Commerce, the province has seen the largest fall of any UK in the number of goods exporters. While all UK regions saw the number of exporters fall over the last five years, there were around 1,600 active goods exporters in Northern Ireland in 2013, down from 1,700 in 2009.

Northern Ireland has seen the slowest recovery in exports throughout the UK regions, according to the Chamber.

However, the province was the only region to see exports in the year to September 2014, rising 2%, against the UK figure of -3%. Manufacturing exports rose by almost 9% to just over £6bn, but this was mainly driven by large firms, with medium and small firms both seeing a decline. Large firms in Northern Ireland account for 60% of manufacturing, with only 10 companies making up half of manufacturing exports from the province.

Alastair Hamilton, CEO of Invest NI, said: “We continue to see slow progress in growing Northern Ireland manufacturing exports towards the 20% Programme for Government target. However, feedback we are receiving from companies as part of our quarterly surveys indicates that they are experiencing growth in exporting, and also in external sales to Great Britain. We have seen companies make good progress in winning new business, such as the £30m contract in Singapore for Wrightbus; and break into new markets like Clonallon Laboratories’ first deal in the Middle East.

COVER STORY “Despite this, the continued difficulties in key European markets, current restrictions on exports to Russia, an emerging growth market for us, and a slowdown in China, do mean that we expect to see slow growth and that it will take some time for our exports to reach the target levels set by the Programme for Government.”

One area Invest NI helps Northern Ireland exporters break into new overseas markets is through its trade missions.

Lisburn-based beer producer Hilden Brewery took part in one of its trade missions and spoke highly of effects in helping it break into new markets.

In 2014, the brewery broke into the Czech Republic, a country which drinks more beer per person than any other in the world.

Lisa Maltman, sales and marketing manager at Hilden Brewery, said: “Invest NI played a crucial role in Hilden Brewery’s deal with our distributor (JASO) in the Czech Republic. On the trade

Hilden Brewery benefited from Invest NI’s help mission in June 2014 to Poland and the Czech Republic Invest NI, along with their partners NITC, organised six meetings with potential distributors, which were excellent. Four out of the six distributors we met

would have been a great match for Hilden Brewery, and in the end we were able to reach an agreement with JASO.” Ms Maltman said the trade mission was easy to process to go through. “Invest NI support

you through the process, from organising meetings with market experts to prepare for your visit, to appointing a travel consultant to assist with booking flights and accommodation.

“Members of the Invest NI Trade Team were also on hand during the trade mission, and without their help and the guidance from Invest NI, we would not have been as confident tackling the Czech Republic market, especially as it has such a well established beer culture. The whole process from start to finish was made very easy. I would highly recommend an Invest NI trade mission to any companies who are just embarking on their export journey.”

Whatever the changes for Invest NI, what is apparent is 2015 will mark a definitive change in how it creates jobs.

With the transformation of State Aid and the likely transformation of its budget, worker skills and lower corporation tax will play a bigger role than ever in maintaining investment.

12 January 2015 BUSINESS MONTH 21

NEWS ANALYSIS

Bypassing the banks Alan Watts explores whether the crowdfunding boom is here to stay

W

HATEVER way you look at it, the growth in crowdfunding is amazing. But is this a bubble and is it going to burst?

In the UK alone, crowdfunding has grown from £267m in 2012 to £1.7bn in 2014. Last year alone it grew 160%.

Of course there is no such thing as ‘crowdfunding’. These days it’s a general term which encompasses a number of different forms of funding.

However they all have one common characteristic: that a lot of people pitch in relatively small amounts of money, and as a result, worthy and exciting ventures come to life where traditional methods of funding simply wouldn’t have got involved.

Most people assume that crowdfunding is investment.

However, when you analyse the figures in more depth, it’s clear that lending, rather than investing, is the main driver. Last year in the UK these different types of lending accounted for over £1.5bn.

And the fastest growing and largest sector of lending is peer-to-peer business lending.

This is where people lend to businesses but bypass the traditional banks.

Don’t think that this is highrisk lending to early start-ups.

Actually it is sticking to good old fashioned banking principles of lending to companies who have the cash flow to be able to service the loan.

Where crowdfunding does get involved in higher risk companies is in two of the most interesting and high profile areas — equity and reward crowdfunding.

To highlight equity in particular, equity crowdfunding is where ‘the crowd’ invest for shares. Another good old-fashioned concept. And this is the highest growth area of all, expanding at over 400% annually for the last two years.

The analogy here is with business angel investing,

Many projects in the UK have been funded through the successful use of crowdfunding although it can be argued that traditional face-to-face angel investing provides a lot more than just money.

Now there is a perception that with the crowd you have a lot of investors, so that many put in very small amounts of money. Since the minimum investment is often as low as £10, it’s easy to see how this idea has grown.

However for equity crowdfunding this turns out to be a myth. Two thirds of these investors have invested more than £1,000.

Early research into the ef-

22 BUSINESS MONTH 12 January 2015

fects of this investment suggest that over 70% of funded companies have gone on to increase sales and 60% to increase their employment.

So amidst all the froth and publicity about crowdfunding, a more sustained picture is emerging with at least two significant trends.

It seems that real investment is taking place by serious investors. The internet-based crowdfunding platforms are not sucking in the gullible masses.

Instead their reach, speed and connection are facilitating and improving the marketplace for

investors to discover interesting companies.

And large sums are being invested in a low overhead, highly matched and efficient manner. Most informed observers agree that there will be some spectacular failures followed by a correction in the growth of crowdfunding.

But it’s clear that this isn’t a bubble and it certainly isn’t going to be burst any time soon.

Alan Watts is the director of Halo, the Northern Ireland Business Angel Network. More information can be found at www.haloni.com

BREAKING THE MOULD

At the cutting edge

‘We create products that would be at home in a James Bond movie’

Name: Gareth Morrison Company: Managing director of the Lava Group

and solves their problems. Our technical director Edward Hanna is a founding member of Lava Group. His skills as a systems architect and designer have underpinned some of our most innovative and successful products.

The Lava Group was the first in the custodial sector to use biometrics to create an independent audit trail, the first in the UK to record real time custody interactions at the cell, the first in the UK to provide biometric secure login to enable staff to access computers and the first to provide a Power over Ethernet custodial lock.

I got into a technology business because…

My dad worked as a systems analyst when I was young and he worked a lot of overtime at the weekends so I spent time with him, programming on my Spectrum 48k. I have always been interested in technology, and in particular programming. This is a field which is constantly changing and it offers the opportunity to be innovative in the solutions we find for our clients. As we work in the area of biometric technology solutions we are at the cutting edge of the capabilities of this sector, creating products more commonly seen in James Bond films, including fingerprint readers and eye scanners. The Lava Group has been developing unique software for the criminal justice market for the past 15 years and we are looking at moving into the area of connected health.

The person I take inspiration from…

From a technology perspective, Mark Zuckerberg has shown just how quickly a software product can dominate on a global scale. He has managed to change the way we communicate with one successful product. His ambition means that he isn’t afraid to take risks. This is a sector where you need to be ready to take risks. We will be pushing forwards as a company in 2015, reaching out to a global market and exploring opportunities for our products in Canada and Australia.

I haven’t always done this….

I have always enjoyed working with numbers so I thought that I’d try accountancy at university. At that stage I didn’t really know what I wanted to do and I thought accountancy would give me plenty of options. One of the modules in that course was programming, which I loved and did quite well in, so it was always in my mind once I graduated to move in that direction. The background in accountancy has helped in my role as managing director. It has given me an early understanding of business and finance and I feel comfortable managing budgets and working on projections with our accountant.

When I graduated I travelled to Australia for a winter to play cricket. Experiencing a

Gareth Morrison graduated as an accountant before moving into the IT sector, starting as a programmer different culture I feel helped me understand the importance of working hard. I realised at that point that you only get out of life what you put in.

After university I then did an IT conversion course for non-IT graduates with BIC Systems called the RAP program. My first job was as a programmer and I progressed into management within various technology companies. Working in the Lava Group is particularly interesting because we are normally tasked with creating bespoke software solutions where other companies have

24 BUSINESS MONTH 12 January 2015

tried and failed. This means that we are often working to tight deadlines.

The best thing about my work is…

Working with great people who share my passion for problem solving. Our technology is successful because of the talented people we employ.

We have a blend of youth and experience in an enthusiastic team whose prime objective is to deliver high quality solutions to our customers that exceeds their expectations

My advice to anyone starting out in technology…

Never accept that something can’t be done. I have heard our engineers on many occasions saying ‘we will find a way’. So far we always have. If you keep pushing and have the right people, then you will always find a solution to a problem.

We are now exploring opportunities within the connected health sector. The experience we have gained in the custodial care sector, where inmate care and accountability are paramount, is helping us develop solutions in the increasingly important area of connected health.

AND I’LL TELL YOU ANOTHER THING...

‘Our model works’ Declan Moore of Progressive Building Society on his career Name: Declan Moore Company: Operations director at Progressive Building Society My first job was...

I joined Progressive in 1992 and have held the positions of area manager and head of sales and marketing until my most recent appointment as operations director earlier this year.

After I graduated I moved to London where I started as a trainee manager with a national building society before working my way up to a more senior position. While the experience of working in London was invaluable, after six years I was keen to return home.

At the time Progressive Building Society was recruiting and I was fortunate enough to be offered a position and haven’t looked back since. I am now responsible for the planning and execution of the society’s operational activities including the delivery of the society’s sales and marketing objectives.

The person who taught me to succeed was...

Undoubtedly my parents have had a major influence on me and they both worked extremely hard to provide for a family of five children and instil in all of us a strong work ethic.

My business mantra is...

Treat others the way you would wish to be treated, with fairness, honesty and integrity.

It’s all changed since I started out...

While I have seen considerable change over the last 20 years both within Progressive and the broader housing Market in Northern Ireland, I am extremely proud of the fact that we have always remained true to our principles and responsive to the needs of our customers and members.

The last decade has seen both the highest house price appreciation and the largest house price reduction of any region in the UK. During the more

Declan Moore, operations director at Progressive Building Society, which marked 100 years in business in 2014 difficult years, many thought that our business model was dated and too traditional. But nothing could be further from the truth. Progressive celebrated 100 years in business last year and our strategy paved the way for the society to be the only sizeable financial institution in the whole of Ireland to remain profitable throughout the last decade. We now begin our second century in business in a very strong position to enable us to grow and to meet the demands of an ever-changing marketplace.

In 10 years the world will...

Probably be moving at a faster

26 BUSINESS MONTH 12 January 2015

pace than it already is now. We are living in an extremely exciting time in terms of science and technology and no doubt social media and mobile technology will continue to advance over the next decade.

However while technology has a vital role to play in the social and business world, in my opinion nothing beats face to face and direct contact with our members and customers.

That is why we believe in providing excellent customer service and we are passionate about direct engagement with our members and potential customers through our branch network which we continue to

invest in right across Northern Ireland.

My one business regret is...

I don’t believe in regrets everything happens for a reason and normally works itself out in the end. My one piece of business advice is...Don’t be afraid to pursue your dream job or to go after the career that you really want.

I couldn’t start the day without...

A strong cup of coffee and a review of the latest news from local and national websites. I find this is a great way to ease into what is normally a very busy schedule of meetings.

SME WATCH

Sound fella

Amanda Ferguson speaks to Soundhouse managing director Steve Martin as he celebrates 30 successful years in the business

Soundhouse MD Steve Martin (right) with Brian Cummins of Citybeat

28 BUSINESS MONTH 12 January 2015

F

ROM the Holywood Road, Belfast to Hollywood, USA. The award-winning Soundhouse and Picturehouse provide audio-visual services to film makers, advertising agencies and corporate clients across the UK, Ireland and the US. MD Steve Martin runs the firm with partner Hugh Matier and 16 staff. They offer online and offline editing, grading, compositing and visual effects (VFX), animation, motion graphics, dubbing, recording, sound design, music composition, jingles and more.

“We make television and radio commercials and we would also do post-production on TV programmes,” Mr Martin said.

“We would also work with all of the major film companies like 20th Century Fox, Paramount, Sony Pictures, Warner Brothers and HBO. “We do something called ADR (automated dialogue replacement). We worked for a couple of years on the Game of Thrones, when they finished filming and they are editing it up. One year Sean Bean was down swashbuckling in Tollymore Forest and they discovered the sound of the river was too loud so he came into the studio and replaced his lines.

“We have done that for a long, long time for the big players in America so we have a bit of a reputation for that.”

Soundhouse also work for the majority of Northern Ireland advertising agencies and companies in Great Britain such as Trust Ford UK and SPAR. “We work for a broad range of clients,” Mr Martin added.

The company, which used to be known as Jingle Jangles, is celebrating 30 years in business this year. “We started off as Jingle Jangles, myself and my partner Hugh Matier,” he said. “We started doing jingles for ad agencies for their clients and then we progressed from that and became Soundhouse.

“We went into the sound end of things and then created Picturehouse about 17 years ago, that’s the vision side of the business. The Picturehouse does post-production.”

2015 is shaping up to be another busy year for the company. “We are gearing ourselves up to hit the ground running in the New Year with ad agencies and direct clients across the water,” Mr Martin said.

“It’s a big, big market for us.

We are delighted we work with the main players here in Northern Ireland and hopefully they think we produce good stuff.

“It is something different every day,” Mr Martin said.

“You could be working on a radio commercial, or linking up with New York to record Liam Neeson for a tourist board ad. It is very exciting.

“With HBO we had the great and good in. Everyone from Sean Bean and Peter Dinklage to Charles Dance. It’s fantastic having them in and working on major productions from this little corner of Belfast.”

Soundhouse was linked to 91% of Publicity Association Northern Ireland (PANI) award winners last year.

“We were checking back and out of 23 awards made for television and radio, we were involved in 21 of them in one

Simon McCormick shows the Soundhouse sound studio in action way or another, either sound and or vision,” Mr Martin said.

“91% is some achievement. It is our best year yet. Normally it is around 75-80% so I was delighted.”

Over the last 30 years Mr Martin has witnessed a variety of changes in the industry.

“I am delighted jingles and music beds seem to be coming back into their own,” Mr Martin said. “For quite a

few years there wasn’t jingles being made, it was really stock library music, but people are now getting their own original pieces done.

“My business partner Hugh is a composer so he would put it together and if we need someone we would bring local musicians in.

“For laying vocals down on a jingle, we would put a guide vocal on it and send it across

to London or America or wherever and a vocalist would lay it down and send it back to us to make sure we are happy with it.”

The business has been a success thanks to the dedication of the Soundhouse customer focused team.

“We work very hard at it,” Mr Martin said.

“We work for people throughout the whole of Ireland and across the water which delights us and it is something very few people know or realise.

“We work regularly for the likes of BSI — the British Standard Institution — and universities both locally here and in the south producing sound and video.

“Apart from our ability and having talented people in our team, we concentrate on the way we treat people and the service we provide.

“I have a wee saying here — nothing is too much trouble, there are no problems here only solutions.”

For more about the team visit http://www.thesoundhouseni. tv/

12 January 2015 BUSINESS MONTH 29

ASK ASKTHE THEEXPERTS EXPERTS

WHAT factors do I need to consider when appointing a successor to my business?

MANY business owners dedicate their lives to building their business and have a desire to see it grow, even after they retire. The key consideration for succession planning is selecting the right successor.

Some people know exactly who they want to appoint, but for others it is a difficult decision.

Would you appoint a member of your family, a close friend, a senior member of staff or simply sell the business? Does your preferred successor have the correct skill set and experience? It is important to think about the impact your departure would have on the business and discuss your wishes with your potential successor, well in advance of your succession date, to plan for the changes ahead.

It is never too early to plan.

Changes can happen at any time and it is prudent to have contingency measures in place.

Your plan should have provisions in place for most conceivable scenarios and not be left until the last minute. The tax position for you, your family and your business should all be taken into account.

When moving on you should consider what, if any, further involvement you will have in the business. Will you be leaving altogether, work part time or even retain an interest as part-owner? It is important that your role is clearly defined.

You must consider how your departure will impact the business. Will processes, operations or roles be affected by the change and if so how will these be explained? The effect on staff, customers, suppliers and other key stakeholders should be considered and a coherent communication strategy devised.

You should have an expert assist you and your business with the planning and implementation of any succession plan.

Our corporate team at MKB Law have extensive experience of advising business owners on succession planning. SH

Stuart Horner Solicitor at MKB Law

Mark Willis Claims director, Willis Insurance and Risk Management

Michelle Ray Little Rays Nursery

Sound advice can be a valuable commodity We put your questions to the experts with the answers

I’m very concerned about the risk of flooding to my business premises — what should I do and what are my options?

EVEN if you feel you are in an area with a low risk of flooding, remember that anywhere it rains, it can flood. Just because you haven’t experienced a flood in the past doesn’t mean you won’t in the future.

Flood maps have been created to show the flood risk for your community — visit www.nidirect. gov.uk To prepare for a flood, you should sign up for advance flood warnings by visiting www. environment-agency.gov.uk/flood, create a flood plan by downloading a template from www. environment-agency.gov.uk/flood, prepare a flood kit with essential items such as your insurance documents, a torch, (and if you live on the premises), warm clothing and blankets, a first aid kit any prescription medicine, bottled water and non-perishable foods.

Then prepare your premises for flooding, elevate the furnace, water heater and electric panel if your business is an area that has a high flood risk, and elevate or remove expensive items such as IT or specialist equipment. Consider installing ‘check valves’ to prevent floodwater from backing up into the drains. Flood insurance, of course, is the ultimate preparation for your business. Check your

I’VE recently set up a new business and have employed a working parent. How do childcare vouchers work and how can I set up a scheme?

Childcare vouchers are an acceptable method of paying for registered childcare and offer savings for working parents who use registered childcare. There are also employer savings to be made.

Childcare vouchers work through a salary sacrifice scheme, which means parents swap part of their salary, tax and National Insurance-free, to contribute towards their childcare costs, eg childminder, day nursery, holiday schemes, afterschool and breakfast clubs.

Each parent can save up to £933 per year through the scheme by being exempt from tax and National Insurance contributions on the value of the vouchers purchased. A total of £243 per month can be sacrificed from parent’s pay packet.

Employer savings occur through exemption from National Insurance contributions on the value of the vouchers purchased by employees.

In order to establish which weekly or monthly exempt amount applies, employers will be required to carry out a basic earnings assessment for all employees who join the scheme.

Employers For Childcare vouchers applies an administration fee on the value of the vouchers ordered. VAT is applicable to the administration fee only. Employers should note that they are exempt from paying the Employers’ NICs of 13.8% on the value of the vouchers ordered therefore even after paying the administration fee, the employer will still make a saving. There is no administration fee charged during the weeks/ months where no vouchers are ordered. To set-up the scheme visit http://vouchers.employersforchildcare.org or call 0800 028 3008. MR commercial cover to make sure you are covered for flood damage.

Flooding poses a substantial— but not ruinous—threat to UK businesses.

Purchase a comprehensive policy that accounts for business

All questions should be addressed to: experts@businessmonth.co.uk Questions and advice are publishted in good faith but should not replace the advice of your professional financial advisor.

30 BUSINESS MONTH 12 January 2015

interruption and is tailored to your specific industry and location. Taking risk-reduction measures may help cut down your premium or excess. Visit www.willisinsurance. co.uk/floodinsurance to download our flood toolkit. MW

INSIDE REPORT

TAXING MATTERS As Northern Ireland’s businesses anticipate the devolution of corporation tax, Paul Gosling looks at the benefits and the concerns

T

HERE has been near unanimity from the Northern Ireland business community supporting the devolution of corporation tax to the Executive.

Wilfred Mitchell, the policy chair for the Federation of Small Businesses, spoke for many when he said: “We recognise the range of challenges facing our politicians, but would stress that one of the main ways to boost our local economy is by increasing the flow of wealth from outside of Northern Ireland.

“One of the primary ways in which this can be achieved is through increased export sales and foreign direct investment, both of which will be achieved if we cut the rate of corporation tax, as this will increase our competitiveness.”

The CBI has taken a positive, though carefully nuanced, position. Colin Walsh, the CBI’s chairman in Northern Ireland, referred to the “many years of sustained, united lobbying by business in Northern Ireland” which led to the agreement in principle to devolve corporation tax. He said: “This recognises our unique geographic position within the UK and the significant strategic challenges we face.”

But the CBI also represents members in Great Britain, whose businesses could be negatively affected by the move.

This no doubt explains the more cautious words expressed

by the director-general, John Cridland.

“In devolving corporation tax to Northern Ireland, the Government has had to balance the unique needs of local business in the face of growing competition south of the border.

“But firms across the rest of the UK view a unified business tax regime as an essential pillar of Britain’s single market.”

Both the CBI and others have stressed that any devolution of corporation tax is insufficient on its own to deliver a step change in economic performance in Northern Ireland.

Mr Cridland urged the Executive to invest in skills and infrastructure to make Northern Ireland more attractive to investors.

Paul Terrington, regional chairman of accountancy firm PwC, also pointed out that devolving corporation tax is only part of any solution.

He said: “The fact that Westminster is willing to take this step should stimulate an informed debate on what Northern Ireland needs to do to ensure that, if corporation tax is devolved, we get the greatest benefit for the region at the lowest cost to taxpayers and business.”

There are also practical issues to ensure that devolution of corporation tax delivers genuine benefits, rather than simply the facilitation of tax avoidance through what is often termed ‘profit shifting’.

32 BUSINESS MONTH 12 January 2015

That profit shifting might involve so-called ‘brass plating’ — with British companies ‘setting-up’ in Belfast, with a brass plate on the door and occasional meetings in a building, but no actual employment.

However, this is not a new concern for tax authorities.

Many multinationals have for years claimed to operate in one jurisdiction — which is low tax — while actually operating their businesses and generating their profits in another jurisdiction.

This general issue was addressed by the Chancellor in his Autumn Statement, with the proposed introduction of what is being termed the ‘Google tax’, or, to give it the correct name, the diverted profits tax.

Enforcement of the diverted profits tax will involve HM Revenue & Customs making judgments on whether multinationals are avoiding taxes through the use of artificial transactions with related companies overseas in order to disguise where profits are generated. Tax professionals expect many of the tax officials’ judgments to be challenged in the courts and to be difficult to legally enforce.

Chas Roy-Chowdhury, head of tax for the Association of Chartered Certified Accountants, said: “We see these rules — which have been devised to bring into the UK around £1bn of economic activity — being challenged by the MNCs

[multinational corporations] it impacts as being extra-territorial and wrapping-up the UK in significant levels of litigation.”

The question of whether a differential rate of corporation tax within the UK will similarly lead to more levels of artificial accounting is one of the reasons the devolution move has been questioned by the Institute for Fiscal Studies,

the leading independent body examining UK policy on tax and government spending.

In a briefing following the Chancellor’s Autumn Statement, the IFS’s senior research economist, Helen Miller, said: “In principle, corporation tax isn’t a great candidate for devolution. That is because company profits are particularly mobile. Devolution [of corporation tax] opens up

concerns of profit shifting and tax competition within the UK. This concern will be increased if Scotland and Wales also want this devolution.”

But there is another reason for scepticism about the choice of corporation tax as a tool of tax competition. Such has been the level of corporation tax competition in recent years that governments have increasingly moved away from

relying on corporation tax for revenues. This is illustrated by the UK having cut its main corporation tax rate from 52% in 1982, to 30% by 2000 and just 20% from this coming April.

Given the ease, and willingness, with which multinationals can relocate corporate headquarters, governments have shifted the tax burden onto other financial activities that are more difficult to avoid.

One example is sales taxes.

The UK’s Vat rate has risen from 8% in 1979, to 20% today.

The overall impact of this shift in tax burden is illustrated by a recent study conducted

by PwC of total tax contributions by the UK’s 100 largest companies. This found that in 2005 corporation tax represented 50% of the companies’

>> Turn to page 34

12 January 2015 BUSINESS MONTH 33

INSIDE REPORT >> Continued from page 33 tax payments, the figure fell by 2013 to just 26%. Other tax contributions are generated by national insurance and business rates, as well as Vat. It could therefore be argued, as some do, that devolving the setting of national insurance rates would be more effective than corporation tax devolution. It would also potentially provide a specific incentive for job creation, rather than having the unintended effect of assisting tax avoidance.

There is clearly an assumed level of economic displacement from Great Britain to Northern Ireland in the figures used to calculate the cost to Northern Ireland of the devolved policy.

This is evident from the comments by Enterprise Minister Arlene Foster’s explanation of the lowered assumption of jobs created for Northern Ireland as a result of the fall in recent years in UK corporation tax rate. Matching the Irish rate is now expected to generate 40,000 jobs in Northern Ireland, compared to the 58,000 that had been projected three years ago – when the UK’s cor-

Implementing a corporation tax cut could prove to be controversial poration tax rate was higher.

There is a sting in the tail, here. The UK Government has made it clear that any losses in corporation tax revenue that it receives as a result of profit shifting or displacement are likely to be imposed upon the

34 BUSINESS MONTH 12 January 2015

Northern Ireland Executive.

Nor should it be forgotten that while Northern Ireland will get the jobs resulting from attracting investment through lower corporation tax, much of the fiscal benefit would accrue to the UK Exchequer. Additional

income tax, national insurance and Vat revenues would all go to the UK government.

Although it seems as if corporation tax devolution is on its way to Northern Ireland, the road ahead is neither easy nor without obstacles.

TICKERS

The month’s local indicators at a glance Ulster Bank economist Richard Ramsey looks at the story behind the statistics DECEMBER’S labour market report for Northern Ireland arguably contains the most impressive set of labour market statistics since the economic recovery began. Further improvements were made with employment on the rise as unemployment continues to fall. The preferred survey for measuring Northern Ireland employment is the quarterly employment survey. The latest survey for September 2014 represents the strongest set of job creation figures since the recovery began. In the third quarter the total number of employee jobs increased by 6,460 or plus 0.9% (up 2.0% y/y) relative to the previous quarter. This represented the fastest quarterly rate of growth since the first quarter of 2005.

Furthermore, in numerical terms, the net gain in employment of 6,460 jobs represented the largest quarterly increase

since the second quarter of 1997. The latest quarterly rise in employment in quarter three 2014 represented the 11th successive quarter of employment gains. During this period from quarter four 2011 to quarter three 2014 there has been a net

gain in employment of 28,880 jobs. This means almost 70% of the jobs lost during the downturn (41,780 jobs) have been recouped. There are now more people employed in the services industry (591,800) than there were at the pre-recession peak

(584,500) in the second quarter of 2008. Conversely, employment within the construction sector, although increasing by over 1,000 in quarter three, remains some 36% below its pre-recession peak in quarter four 2007.

UK consumer prices increased by just 1.0% year-on-year in November which was the lowest annual rate of inflation since September 2002. The plunge in the oil price is a key factor behind the weaker than expected rate of inflation. However, the lack of inflationary pressures is broad-based, food prices have fallen by almost 3% since February. Given that the sharp falls

in oil prices that have occurred this month have yet to feed into consumer prices, a further decline in the rate of inflation is anticipated in December.

Consumer price inflation is expected to average around 0.6% in 2015. Given this inflationary outlook the Bank of England’s Monetary Policy Committee is not expected to raise interest rates until 2016 at the earliest.

THE UK has continued to borrow heavily, with some £91bn required for the current year alone. Whilst borrowing is set to fall, with a surplus finally arriving in 2018/19, this is only possible due to even more public expenditure cuts. These public expenditure cuts, as yet unspecified, are on top of existing cuts yet to take effect. The OBR notes that we are now in

the fifth year of a 10-year fiscal consolidation. Furthermore, 60% of the planned cuts in public expenditure are still to take place in the next Parliament. It is noted that total public spending as a share of UK GDP is set to fall to a level not seen since the data began in 1948. This raises question marks over the fiscal credibility of the current Chancellor.

36 BUSINESS MONTH 12 January 2015

BUSINESSPEOPLE

The Northern Ireland businessperson who... ...took his dog for a walk and opened a brewery Matthew Dick on co-founding Boundary Brewery

I

WAS halfway through a Masters in Theology at Queen’s — however, I was getting more and more distracted by beer. Instead of reading the Early Church Fathers, I was reading entire books about hops, or beer styles, or Belgian beer-brewing monks.

I had moved back home from Reno, Nevada with my wife in 2010. The beer scene back in the States was electric.

Back home, not so much. I began to dream about a life of lecturing New Testament and running a brewery on the side.

I finished my Masters and immediately started my PhD. I was allowed to lecture from the beginning, which was great. I was struggling to balance my time between studying, writing, teaching and looking into what it would take to open a brewery in Belfast.

The more I looked into the brewery, the more I realised that I would be absolutely insane to try to balance the two. I am married. Sheena was pregnant. I slowly began to realise that academia and beer wouldn’t both work for me if I wanted to be healthy.

The choice was easy. The idea of creating something from scratch, that no-one had done here yet, was enticing.

It only took me just over a year to make the decision.

The decision was almost made for me a year later, in November 2013. It was at Beer Club. The decision to leave my studies came in the shape of a robot that brewed beer.

Brewbot was a local Belfast based company who had designed this robot that brewed beer. Being a dork, and seeing that the company was local, I had obviously kept an eye on their progress. That night, Chris McClelland came to me, “I know you’re studying and

Matthew Dick will have his range of beers on the market by March all, but do you want to come and work for us?” It was a really easy decision for Sheena and I. We quickly made a complete career change.

By this stage, Boundary already had a board of directors who had been meeting for five months. They encouraged the decision too. My only concern was that Brewbot may slow Boundary down. I was really clear about this concern with Chris from the beginning. We revisited that conversation a couple of times during my year at Brewbot.

So I started working with Brewbot in December 2013. I struggled to keep afloat in a completely new world to me, the tech start-up world. It’s a crazy world. Crazily beautiful.

Before I knew it, I was brewing beer for events all over the world. My beer was being served in the USA, Spain, and palaces in England. Even the King of Spain was given a bottle of my beer. Suddenly I wasn’t wasting time by reading an entire book about yeast. It was my job.

Within a few months at Brewbot, I had made friends for life. I was also learning a lot. Whilst studying, I had learnt a lot about time management, efficiency, and work-life balance. This was tested and improved at Brewbot. I slowly found that I was able to do more with less.

In early 2014, we were accepted onto a Tech Accelerator Program called Techstars. It is the world’s leading tech accelerator program. The Brewbot guys were really excited. So was I, but if I was really honest, this world was still very new to me, and the idea of being completely immersed in it for three months in the States, away from my family, was a massive commitment.

Sheena and I decided it was worth it. So I moved to Austin, Texas. It was hot. Actually, it was humid. Most of the experience was absolutely incredible. I discovered even more about myself; mainly a driven-ness for perfection and an impatience and intolerance for half-assery.

I also got the world’s best crash course in starting a business; financing, seed rounds, raises, go-to market, pivots, marketing, PR, market research, branding, venture capitalists, angels, UI (user interface), coding, networking, email. I even knew what UX (user experience) meant now. I now had a deep confidence in the details of Boundary. And when I left Austin in September, I knew that I needed to do this Boundary thing. And I needed to do it now. I felt that if I didn’t get Boundary off the ground quickly, I was going to spontaneously combust.

So within two months, I left Brewbot and threw myself into Boundary.

I reconnected myself back to that one moment I had in early 2013 when I was walking my dog. Time stood still. Almost everything about Boundary came to me at that one moment — the name, the design, the marketing, the size of bottle, the styles of beer. I knew from the beginning that Boundary was something I needed to share. Something I wanted to share. We are fighting a lot of battles opening a brewery like this in Northern Ireland.

We needed all the support we could get from the beginning.

It was in the summer of 2013 that I met Matt Scrimgeour who convinced me that doing Boundary as a co-operative was the way to go.

So in November 2014, we went into overdrive. We finished our community share offer document, got a website up, and opened membership to our co-operative.

We raised £100,000 in eight days.

And we will have beer in the world in March 2015.

Almost two years exactly since that one day I took my dog on a walk.

12 January 2015 BUSINESS MONTH 37

FOCUS ON: MEDICAL DEVICES

LIFE SCIENCES

Clare Weir describes how Northern Ireland firms - from testing kit businesses and cancer-seek-

I

T’S one of the unsung heroes of the Northern Ireland economy, but the life sciences industry, incorporating medical device manufacturing, is certainly in rude health.

From pharmaceutical firms like Almac, to testing kit business Randox, cancer-seeking software designer PathXL and medical camera makers Andor, now part of global giant Oxford Instruments, our companies are world leaders in their fields, partly due to strong links with Queen’s and Ulster University.

Last summer, 13 businesses and organisations took part at the BIO International Convention, a major life sciences exhibition, in San Diego.

Part of the success of the sector is the family ethos and personal touch of the companies, no matter how big they get.

Ulster academic Professor John Anderson, who died in 2012, was a co-founder of HeartSine and in the 1960s developed the world’s first portable defibrillator designed for use outside hospitals.

The first cardiac ambulance in the world was developed and delivered in Belfast and to this day, the process that emergency departments use to treat cardiac arrest is known as ‘The Belfast Protocol’.

Based in newly-expanded premises in the east of the city, HeartSine, which recently announced 40 new jobs, is the only manufacturer of defibrillators in the UK and Ireland and the products are sold to over 70 countries across the world.

But despite its global reach, each and every life saved by a HeartSine product is recorded.

When the data from a device is relayed back to Northern Ireland from wherever in the world it was used, the Belfast workers are gathered together and the people who made it are given a round of applause.

Declan O’Mahoney, chief executive of HeartSine Technologies, said that he wants to double sales of the existing product portfolio in target markets over the next three years.

With around 100,000 people dying from sudden cardiac arrest in the UK and Ire-

38 BUSINESS MONTH 12 January 2015

land each year, compared to few hundred fire-related fatalities, he wants a defibrillator in every public building, like a fire extinguishers or smoke alarms.

Mr O’Mahoney said that the growing life sciences sector was providing an in-

spiring business atmosphere.

“There is constant growth in this sector and a great supply of talented people,” he said. “It is a very supportive environment and Northern Ireland continues to lead the way in innovation.

FORGE AHEAD

ing software designers - are world-leaders in medical devices, exporting across the globe

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“We certainly wouldn’t want to be anywhere else.”

Another company which started from humble beginnings has grown into one of Northern Ireland’s biggest business success stories.

Back in the 1970s, Dundonald pharmacist Tom Eakin began working on improving wound pouches for people with ostomies – an opening in the body for the discharge of bodily waste following surgery.

Northern Ireland companies continue to lead the way in innovation Fast forward to today and the Eakin Group has a turnover of £72m and sells to 40 countries, with a huge market in America.

Indeed Tom’s sons Paul and Jeremy have seen their wealth rocket by £100m in just a year, putting them at third place in the annual Sunday Times Rich List for Northern Ireland.

Earlier this year the company invested £12m extending its Comber manufacturing facility to over 100,000 sq ft and acquired English firm Cliffe Medical, which owns Respond Plus in Larne.

Larne is also home to Japanese blood products firm Terumo.

The acquisition of Cliffe is the Eakin Group’s first since 2007, when it took over Pelican Healthcare in Cardiff.

A new kid on the block is ARC Devices, which develops and manufactures non touch, infrared digital thermometers.

The company was established in 2013

by Kevin Paul, who decided to base the firm in Northern Ireland.

The firm has an international shareholder base, backed by independent investors from the US, UK, Canada, Ireland and The Netherlands, and sells to 22 countries.

Staff are currently carrying out design, support and market development activities.

Future research and development projects include the design of devices to monitor vital signs including pulse, heart rate, respiratory rate, blood pressure and blood saturation.

ARC acquired Brooklands Inc in Florida, giving it ownership of VeraTemp.

It is the world’s best-selling non-touch >> Turn to page 40

12 January 2015 BUSINESS MONTH 39

FOCUS ON: MEDICAL DEVICES >> Continued from page 39 thermometer, and uses an infrared sensor to measure temperature. The firm plans to expand sales of VeraTemp into mainland Europe, Russia, and the Middle East.

In May 2013, Enterprise Minister Arlene Foster and then-Health Minister Edwin Poots revealed that the health and social care sector spends almost £4.5bn, provides for 9% of the workforce and generates almost 10% of total economic output. They called for further collaboration between health and life sciences in the private sector and academia to drive innovation.

Mr Paul said that ARC was a good fit with existing medical and healthcare companies already operating here.

“ARC Devices provides a much-needed boost to the health care sector in Northern Ireland and supports the minister’s economic vision for the future, contributing to the competitiveness of Northern Ireland and increasing employment and wealth in the region,” he said.

Jeremy Eakin, managing director of TG Eakin, with Enterprise Minister Arlene Foster

40 BUSINESS MONTH 12 January 2015

FOCUS ON: ACCOUNTANCY

Numbers add up Belfast is now a office location for top global financial firms, writes Simon Rowe

I

F accountancy is a numbers game then Belfast was number one in 2014.

With more than 1,600 new jobs announced by three of the ‘Big Four’ accountancy and professional services firms in the past 10 months, Belfast can rightfully stake a claim to being the most attractive business location for global financial companies looking to base their back-office, tech support and data analysis operations.

Global giants such as Deloitte, EY and PwC are investing an estimated £90m in setting up new business hubs in the city, with Invest NI supporting the recruitment splurge to the tune of £10.5m.

Alternative global locations were considered by the firms, so securing the jobs for the region represents a real coup

by Invest NI and is seen as a further boost to Northern Ireland’s booming services sector.

But rather than seeing it as a fresh explosion in ‘back office’ hubs, industry insiders insist that the investment marks a step-change in the transformation of financial services in Northern Ireland, whereby the majority of the new roles will be “client-facing” and “high value”.

“Back-office work suggests that you do relatively low-level data processing,” said one insider. “This is not the case with the majority of these new jobs.

Many of them are client-facing roles. The new employees will either be out with the clients

Firms like Deloitte and PwC have invested £90m in setting up new business hubs in the city

delivering a service to them or will be delivering the client’s service out of a Belfast hub.

But it will not be the routine processing which most people understand to be back-office work,” he said.

Regardless of the debate

42 BUSINESS MONTH 12 January 2015

surrounding back-offices and the need for high-value jobs, Northern Ireland is reaping the rewards as the economy transitions from its traditional industrial base to one dominated by a diverse range of global services.

The biggest jobs announcement in the sector was made

by PwC, which plans to create 800 jobs over the next five years at its Waterfront Plaza hub.

More than 300 of the posts are aimed at qualified account-

for accountants

ants, as well as graduates, in a new cloud advisory service called My Finance Partner which is tailored to the needs of early-stage and fast-growing businesses.

The other 500 jobs are aimed at graduates and school leavers

who will be recruited for ‘staff augmentation’ teams in PwC’s global client businesses. Many of these ‘staff augmentation’ teams will be mobile, travelling the world and servicing PwC’s global client base, as around 70% of PwC Northern Ireland

revenues come from export markets. Other ‘static’ teams will be based in business silos at its Belfast hub serving domestic and international clients.

PwC’s staff headcount in Belfast currently stands at 1,000, with 300 of those staff recruited in the last two years alone.

In another massive vote of confidence in the high standard of our local graduate pool and the region’s business infrastructure, financial consultants Deloitte is set to create 338 new jobs at the firm’s technology hub in Belfast over the next five years as part of a

£30m investment.

This will bring the firm’s Northern Ireland workforce, where the average salary is around £30,000, to more than 700.

The jobs are in addition to 177 roles created in 2013.

Deloitte’s Technology Studio, which focuses on analytics and financial statistics, was started as a pilot in Belfast in 2011 and is now being expanded into a fully fledged centre.

Deloitte senior partner Jackie Henry said choosing Belfast for such a massive expansion

Continued on page 44 >>

12 January 2015 BUSINESS MONTH 43

FOCUS ON ACCOUNTANCY Continued from page 43 >> that Belfast is not only open for business but is open for big business.

“This significant investment in digital and analytics services as well as finance, pensions and actuarial consulting tells the world that we have the skills and the ambition to succeed in globally competitive markets,” she said. “The choice of Belfast for this investment is significant, and was made in the face of strong international competition.”

One of the first of the ‘Big Four’ firms to capitalise on our talent pool was EY, formerly Ernst & Young. Last April it announced plans to create 486 jobs over the next four years in a major expansion of its Belfast operation.

EY has created a new business unit offering advisory and assurance services to clients outside of Northern Ireland.

EY already employs 145 people at its office in Bedford Street, among a total work-

Our ‘talent pool’ figures add up for the likes of EY, which is creating 486 new jobs here inside the next four years force of 1,450 people across its five offices, north and south.

Mike McKerr, managing partner of EY Ireland, said the “business case” for expanding in Belfast was simple: “As a company with a presence in

44 BUSINESS MONTH 12 January 2015

more than 150 countries, we continually evaluate the best locations for expansion to ensure maximum productivity and growth,and Belfast ticked all the boxes,” he said.

The creation of more than

480 new jobs at EY will deliver an additional £19m in salaries and make a huge contribution to the wider economy.

With numbers like that — in financial services terms — it looks like Northern Ireland

OFF LINE SECTION TAKE OFFWITH BRENDA

SKI OFF FORA BREAK

MANABOUTTOWN

DAY

GET

THE

IN THE LIFE

A day with BA’s partnership manager

OFF PISTE

Experience a black run in the Swiss Alps

CHAIRMAN

Inside track on Northern Ireland business

WINTER WONDERLANDS JET OFF SKIS ON

12 January 2015 BUSINESS MONTH 45

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OUT TO LUNCH Motor sports impresario Bobby Willis enjoys food and conversation at Bennett’s Cafe on Belmont Road, east Belfast

Rallying support put motorsport back on the map Joris Minne heads out to lunch at Bennett’s with Bobby Willis, director of Circuit of Ireland

S

PORTSMEN and women come in all shapes and sizes. You can usually tell a competition cyclist from a pro darts player at 100 paces. But what of international class rally co-drivers and navigators? Belfast-based motor sports impresario Bobby Willis, the man who resurrected the Circuit of Ireland, may be the perfect specimen.

He is compact (takes up less room in the tight confines of super lightweight, highly tuned cars), alert (has to know what’s around the next bend with split second timing) and calm (lifting off in a Toyota doing the ton over a bridge requires nerves of tungsten, especially when you’re in the passenger seat).

The mild-mannered Willis has a rally pedigree which any 60-year-old motor sports veteran would consider as seriously accomplished. He has raced in the world’s top rallies since the 1970s in Europe, the Middle East and Africa.

Having caught the bug from his father who raced in the 1949 Circuit of Ireland, Bobby Willis is the man behind the resurgence of that same event in recent years.

He may have guided drivers through high speed chases in some of the most challenging motor sports events ever devised including several Paris-Dakar rallies with the VW factory team, but he says his proudest achievement is getting the Circuit of Ireland back in the

46 BUSINESS MONTH 12 January 2015

public consciousness.“The Circuit of Ireland went off the radar for a bit but our ambitions to reinstate its international standing have now been fulfilled,” he says. “The 2012 Circuit of Ireland was a turning point: since the International Rally Championship was amalgamated into the European Rally Championship, the 2014 event held here represented Ireland and the UK. “This was broadcast by Eurosport to millions of viewers across the globe and the 2015 event from April 2 to 4 promises lots more positive exposure.”

But before any of this, the event almost sank out of sight until its resurrection in the north by Willis whose Rally Maps business relied on the continued success of not just the Irish event but the 13 other rallies in the European series.

His Rally Maps are a specialist service provided to race organisers and require a forensic approach to map-making, in this case, maps which will have the precision demanded from drivers, co-drivers and event management.

“The event is more to do with PR and promotion than anything else,” he says, citing Stephen Smith as the PR brains behind the re-emergence of the event. “I learned a lot from Stephen who showed me how PR worked and how to make the event attractive to the news media.”

It hasn’t been all plain driving, though.

Bobby lost £25,000 of his own money in the ill-fated 2013 circuit of Ireland which had promised so much. The Easter date seemed safe enough weather-wise, until the snow fell and stayed in huge, impenetrable drifts across main sections of the route. The 2013 circuit had to be cancelled.

“But we came back with a vengeance in 2014 and the impact the TV coverage had will be remembered as equal to that of the Irish Open, the Giro and other large-scale, international events,” he says.

“It’s all down to the backdrop: can the event show off Northern Ireland to its best?

In our case the 2014 Circuit during which the sun shone and the place looked heavenly, the backdrop was the Ulster scenery in its full spring-time splendour.”

Bennett’s Café Hake Scallops Fries Apple crumble Cheesecake Glass wine Sparkling water Tea & coffee Total

11.50 9.00 3.00 4.50 4.50 4.95 4.10 3.40 45.45

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STREETVIEW

Streetview No.52: Bracken Equestrian Saddlery Ron McBride

J

UST outside south Belfast, up a tree-lined driveway near Purdysburn village, is one of Ireland’s top saddleries.

Crawford Jackson runs Bracken Equestrian from his ancestral home and has been in the business since the early 1980s.

The original farmhouse has a pleasant wooded setting with the salesroom and workshop located in a courtyard with stables. The signage may be slightly faded and the expansive showroom not ‘modern’ by today’s standards but there is a sense of warmth generated by the look and smell of leather.

The shop’s main section is large with a vast array of stock as one looks into the distance: it is ‘busy’ with shelving and floor displays and both saddles and tack hanging from the ceiling. This is one of the few working saddleries remaining with two of the four staff, Crawford and Tina, master saddlers.

The leather workshop has what may be described as ‘character’, a place where all types of leatherwork is carried out. Biker’s leathers; vintage car repair or theatrical props such as armour and sword scabbards made for Game of Thrones all complement the repair of saddles. Such a variety of work befits members of the Society of Master Saddlers and the Society of Master Craftsmen.

Quality Argentinean leather is used in this one-stop-shop for equine needs. Saddles are

fitted on a province-wide basis, both for rider and horse. Repairs are carried out although some older side saddles, which can cost £3,000 to £4,000 new, may be beyond repair if they have started to rot.

Customers come from all over the province, from Dublin and the border counties.

The equine laundry service, which also includes repairs, is popular.

Bracken caters for both private and commercial customers with clubs, riding schools and competition riders

amongst their customers.

As with many businesses, the recession has made its mark. Owning a horse can be expensive, given livery fees in addition to veterinary costs and feed, riding kit and tack.

Crawford estimates that ownership has fallen by around 25% in recent years.

The business has a good website which gives potential customers good information in different sections dedicated to: saddlery, riding kit, horse feed and supplies, equine laundry, leatherwork and theatrical props.

Customers, be they bikers, theatre producers, riders or vintage car owners will find something of interest in this friendly, professional business, be it on a visit or checking their website.

Bracken Equestrian Saddlery 87 Ballycoan Road Purdysburn BELFAST BT8 8LP 02890812485

12 January 2015 BUSINESS MONTH 47

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DAY IN THE LIFE

‘Notwodaysarethe same. Ilovetheversatility, theexcitement and the people I meet ’ Brenda Morgan

Partnership manager for Northern Ireland at British Airways, sponsor of the Belfast Telegraph Business Awards 2015

7am:

I usually wake up to the alarm beeping. I prepare the breakfast the night before as catering for the varying requests of the Morgan children can prove to be a challenging task.

Mornings until 8.30 are generally busy in our household, so being organised is key to the day starting smoothly. Then I take the kids to school and my working day begins.

8.45am

I work from home when I’m not travelling to the Dublin or London offices. I don’t hit traffic and I tend to arrange any meetings for post-rush hour, which means checking emails before heading out for the rest of the day. Between October and December is the busiest period for me in the commercial department as we prepare for 2015 activity and round off 2014 - so a full day in my office can be a luxury.

This morning however, I’m off to London for meetings.

Its great getting breakfast on-board the British Airways aircraft (at no extra charge) as lunch may be on the run later

in the day. It’s my first time arriving into Terminal 5 from Belfast City Airport following the recent move of the Belfast London Heathrow flights from Terminal 1. We have had great feedback following the terminal change and it really is a positive move for Northern Ireland passengers. The move means passengers now enjoy the benefits of quicker, smoother connections through the airport to over 100 cities worldwide served by British Airways from Terminal 5.

Connection times have been reduced to 60 minutes as passengers will not have to transfer between terminals before getting onward connections. This means that there are now more global connections available from Belfast via London Heathrow, as well as a greater choice of fares and of course transiting through the best terminal in the world. A lot of passengers also don’t realise you can get the Heathrow Express and London Underground direct from T5 into central London, so it’s still a new experience for many of our customers.

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11am

Next on my agenda is ‘A Brand, Product and the Know Me Presentation’ to colleagues at Waterside. Waterside is British Airways’ HQ in London and is a building that I love visiting.

It is where the majority of British Airways, American Airlines and Iberia staff reside. It’s a spectacular building with so much going on. My presentation is a discussion around the ‘Know Me’ campaign, which British Airways has embarked on to get to know our passengers better. While it is a relatively new project, it is showing very positive results as customers are getting quicker response times and it ensures that they receive a personal response. It is really making a difference. Our meeting also discusses investment and improvements on our shorthaul aircrafts, now in place on our Belfast flights.

2pm:

I’m now moving on to an ‘On Business’ product update with the team. The British Airways ‘On Business’ programme is our loyalty scheme for the busi-

nesses. It allows a company to accumulate miles and rewards for flights employees take.

Plus the passenger can still accrue their Executive Club Miles - Avios points. Today we are receiving updates on the programme as it is undergoing exciting changes, which will be great news for the SME market and Northern Ireland.

4pm

Now I’m homeward bound and back at T5. I love airports at this time of year as there is so much excitement especially with families welcoming loved ones back for Christmas. Soon I’m on my flight home with a gin and tonic, crisps and biscuits in hand. A nice end to the day.

7pm

Tonight there are no evening events. At this time of the year there can be two to three during the week. So it’s straight to cooking dinner and overseeing homeworks. No two days are the same and I love the versatility, the excitement and the people I meet. Here’s to tomorrow.

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Donnelly and Taggar claim dealer of the year award

DONNELLY and Taggart Eglinton has received the Suzuki ‘small dealer of the year award,’ highlighting the success of one of the latest dealerships to join their multi-franchise site.

They impressed Suzuki with their levels of customer service volume of sales, presentation of vehicles and attention to detail, all of which were tested on a number of manufacturer ‘mystery shops’.

As a result, Donnelly and Taggart Eglinton is now officially number one on the customer satisfaction index in sales and after sales out of all Suzuki dealers in the UK.

Cadillac driven by Elvis goes under the hammer

The 1977 Cadillac Seville bought and driven by King of Rock ‘n’ Roll Elvis Presley is the latest exhibit at the National Motor Museum at Beaulieu in Brockenhurst, Hampshire.

The Cadillac was purchased

by Elvis in October 1976 for his own use and he chose the burgundy and silver colour scheme that the car still retains.

It is in original condition and still has the CB radio that Elvis used to communicate with the kitchen at Graceland and to the guard house outside his estate to open the gates.

Its features include electronic windows and mirrors and a grey interior with wood grain accents on the dashboard, doors and steering wheel.

Previously auctioned in Las Vegas in 1994 and sold for $101,500 to a private collector, it again came up for sale in August when Graceland held its first ever auction.

The auction coincided with Elvis Week at Graceland, which commemorates the death of the legendary musician on August 16, 1977.

Aston Martin marks 60 years with sports cars

ASTON Martin Works — which marks its diamond jubilee in 2015 — is celebrating 60 years at Newport Pagnell with the commissioning of six limited edition sports cars.

The first of the cars has just been revealed to mark the start of 12 months of anniversary activity at Aston Martin Works.

The six bespoke cars, all versions of the current Vanquish Super GT in either Coupé or Volante form, are being created in association with the luxury brand’s Gaydon-based design team, and its personalisation service, ‘Q by Aston Martin’.

Each of the six cars is subtly different, and tailored to reflect one of the six decades being celebrated.

The result is a collection of rare and ultra-desirable sports cars that will be instantly recognisable as ‘Works 60th Anniversary’ models.

Artists gather at Charles Hurst specialist exhibition

ARTISTS from across Northern Ireland were showcased alongside some of the most breathtaking cars in the world at Charles Hurst’s first ‘specialist’ art exhibition.

The exhibition, the first of its kind for Northern Ireland’s biggest car retailer, was to help launch the new Ferrari California T — and give motoring enthusiasts and specialist car aficionados a sneak peak of the Ferrari’s latest Grand Tourer.

The recently introduced Ma-

MOTORING NEWS

serati Ghibli was also on show highlighting the pinnacle of Italian car design.

Hosted in Charles Hurst’s new £1m Ferrari and Maserati showroom in Belfast, the event attracted dozens of art lovers — as well as the artists themselves, including Laura Breen, Karen Nickell and Anthony Scott. Sculptures, portraits, landscape and even modern interpretative jewellery from Laura Breen dominated the showroom and wowed the Ferrari and Maserati fans.

Wrangler retains the top off-road award for Jeep

THE legendary Jeep Wrangler continues to demonstrate its award-winning credentials after taking 4x4 Magazine’s 4x4 of the Year, Hardcore class for the third year running.

The award comes as the specialist off-road driving publication’s panel of expert judges once again put the rugged USbuilt off-roader top of its class ahead of international rivals.

In the same awards, Jeep’s new Cherokee received a highly recommended accolade in the Top Range SUV category.

12 January 2015 BUSINESS MONTH 49

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MOTORING

Fiat 500X Cross Plus Fiat has extended its iconic 500 range into the crossover market, Jim McCauley reports

W

ITH the 500 and 500L sitting at number one in their respective segments in Europe, Fiat has decided to build on the success of its retro-influenced range and extend it further with the addition of the 500X. Despite each derivative growing in size from the latter-day 500 hatchback, head of design Roberto Giolito has managed to maintain the family

50 BUSINESS MONTH 12 January 2015

relationship in the signature design elements. The 500X takes the range into a segment which in the past 10 years has seen crossover models increase from 5% to 20% and introduces a Fiat competitor against the likes of the Renault Captur and Nissan Juke.

At the car’s European launch in its native Italy, the full range was rolled out featuring all engine and transmission options, the all-

wheel drive models designated Cross Plus.

Test choice was the top end Cross Plus model powered by Fiat’s latest development of its 2.0 litre MultiJet diesel engine. This 140 hp unit drives through a 9-speed automatic transmission and covers the 0-62 mph benchmark sprint in under 10 seconds with the potential to reach 118 mph. To reduce energy wastage and improve

fuel consumption, the power output is to front wheels only with all-wheel drive transfer cutting in automatically as soon as the need is identified by the electronic management system. Additionally there is what Fiat refer to as a ‘mood selector’ drive option which acts on engine, steering and transmission to give the driver a preferred response. The auto setting gives overall optimum

FIAT 500X Engine: 2.0 litre turbo-diesel MultiJet, 140 bhp @ 4000 rpm. 350Nm torque @1750 rpm.

Drive: : Via 9-speed automatic gearbox, on demand to all four wheels. Start/ stop technology Performance: 0-62 mph (100 km/h) in 9.8 seconds; max, 118 mph (190 km/h) Fuel on combined cycle: 51.4 mpg ( 5.5 l/100km) CO2: 144 gms/km; VED Band F for £130 annual car tax Trim: Cross Plus Price: £25,845 Insurance: N/A Warranty: 3-year/60,000 miles.

Benefit-in-kind: 24% Euro NCAP: N/A Available extras: Lane assist, adaptive cruise control, blind spot assist, reversing camera, brake control accident avoidance system.

comfort and economy, while the sport setting enhances performance and the all weather setting is for poor grip conditions.

On-road, and once cruising, engine refinement improves with the 9-speed automatic responding seamlessly to throttle demands.

Overall insulation is good, maintaining a quiet cabin, and on poorer surfaces there is little intrusion of suspension noise. The dual clutch transmission adds a sporting feel to the car with its slick changes, while manual override is also available. Body roll is well controlled and the car impresses with its overall performance.

Off- road, and on Fiat’s Ballaco test facility in Northern Italy, the compact

dimensions of the 500X proved invaluable for placing it through the wooded areas and the 4-wheel drive system provided the confidence to cope with loose gravel and deep muddy tracks. In addition to the standard ESC provision, the 4X4 version tested also features dynamic steering torque systems which improve safety and handling performance by actively correcting over- and under-steer. The car also has electronic rollover mitigation (ERM), hill start assist, electronic parking brake, tyre pressure monitoring system, and front fog lights with cornering function.

Appearance-wise, the 4X4 variant features specific bumpers and protective skid plates which enhance the

retro style of the standard vehicle while the interior also relates to the exterior styling cues to provide a holistic entity. The driver’s side features an instrument panel divided into three circular sections with the 6.5 inch infotainment screen sitting high in the centre of the dash to give easy sighting and excellent control access. Front seats wrap neatly around the occupants, while plentiful cabin storage units complement the 350 litre boot.

Safety provision on this model includes six airbags and electronic stability program as standard while the infotainment package with duplicated steering wheel controls is based on Fiat’s ‘Uconnect’ system which allows integration through

a smart phone to use many apps including real-time news updates from Reuters, access to over 100,000 internet radio stations and the availability of millions of music tracks on Deezer.

In the 500X, Fiat has maintained its successful recipe of a retro blend with modern technology in a vehicle that will not only compete successfully against the likes of the Renault Captur and Nissan Juke, but will see comparisons made with the MINI Clubman.

The new addition to the 500 range will go on sale in April, but the order books are now open for delivery in the second quarter of the year.

Prices start at £14,595, while the range topping 4X4 tested is listed at £25,845.

12 January 2015 BUSINESS MONTH 51

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TECHNOLOGY 1. Knomad Mini with Power £119 @ www.knomobags.com Organisation for digital and travel essentials. Fits an iPad mini or 8” tablet along with a smartphone, pen, credit cards, passport, etc. Includes a 5000ma slim battery pack to keep your devices charged, even if you are on the move.

This is the perfect organiser for digital and travel essentials, as it allows you to carry your must-haves in a compact and fashionable way. The organiser comes in a range of colours and is made using coated cotton canvas twill fabric combined with antique brass hardware and natural rawedge leather trim.

4.Taggled secures partnership

2. Kono Aura H2O eReader £139.99 Kobo Aura H2O is the first premium eReader that truly allows for worry-free eReading because of its waterproof and dustproof design. Although it is not advisable to leave it in water for a prolonged period, it is waterproof for up to 30 minutes in one metre of water with the cover closed. It also features an impressive extra-large, no-glare 6.8” Carta E Ink touchscreen that reads like print on paper – even in direct sunlight.

Eyestrain is minimized in any light with the fully adjustable ComfortLight directing light at the page, not your eyes.

Plus, with ClarityScreen+, Kobo Aura H2O provides a high definition reading experience, with crisp, clear text for easy and enjoyable reading.

Belfast-based technology company, Taggled has secured a partnership with US-based ShopStyle. Taggled’s ground-breaking tech- nology makes video content “shoppable” for viewers. The team at Taggled have worked with ShopStyle to create a tailor-made solution that will provide ShopStyle’s customers with a streamlined process to purchase directly via click-through from its videos. Taggled’s interactive video tagging technology will integrate into ShopStyle’s fashion and beauty video blogging community, who will be able to use the tool to add clickable tags to their product-orientated videos. This will not only increase sales for participating retailers on ShopStyle but also offer independent video publishers and vloggers an opportunity to monetise their video content.

52 BUSINESS MONTH 12 January 2015

3. Bluesmart Connected Suitcase approx £216 @ www.bluesmart.com If you have travel plans this smart technology promises to make things a whole lot easier.

The Bluesmart Connected Suitcase crams in a smart lock so you can lock and unlock it using your phone, and you can even share access with other handsets, letting your travel companion open your case if required. It’s the location and proximity tech that could prove even more useful, as the Bluesmart will alert you if you stray too far from the bag and it lets you know exactly where your luggage is even if you are not sitting with it. Although it is only designed as a carry-on, so in theory you should always have it with you – it’s always good to have the technology in place in case the worst happens.

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Chilling out

Vintage pattern jumper £18 @ Primark

By Grainne McGarvey

W

ITH every New Year comes the fear of plummeting temperatures, and if you aren’t lucky enough to be jetting off to the slopes, the secret is to wrap up warm against the elements. Fair Isle and snowflake prints will con-

tinue to be my frosty favourite, but if you want to get extra fashion points then faux fur on collars and cuffs is a great way to look cool as well as staying cosy. Remember that most of you body heat is lost out of your head so beanie or Russian Cossack hats are a great choice of headwear.

Red Herring wool hat £16 @Debenhams

Bobble hat £14 @ Miss Selfridge Faux fur coat £89.99 @ Zara

FASHION

North Face jacket £220 @ www.surfmountain.com

Snow boots £13 @Sainsbury’s Navy padded jacket £60 @ River Island

12 January 2015 BUSINESS MONTH 53

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TRAVEL

Going off piste Nick Boulos improves his technique on the slopes - and enjoys his first taste of a black run during a visit to Verbier in the Swiss Alps

S

EEING yourself on camera is rarely a pleasant experience, particularly if it’s footage taken while hurling down a mountain with all the grace of an elephant on ice. I had no choice though.

“We film all our pupils in action and analyse the footage. It’s the most effective way to improve your skiing,” said professional coach Warren Smith, who’s been transforming nervous novices into seasoned skiers at his academy in Verbier since 1998.

I had come to the Swiss Alps hoping to break through my intermediate plateau, a problem that afflicts most keen skiers at some stage. I can get down a red run, but still find myself, involuntarily and far too frequently, reverting to a snowplough. It was time to address the problem.

Catering for anyone from complete beginners to professional athletes, Warren’s five-day courses are designed to build confidence and master key techniques, such as carving and, in my case, parallel turns.

The day had started on Les Ruinettes

54 BUSINESS MONTH 12 12 January January 2015 2015

piste with Fiona, one of the academy’s 10-strong team of instructors.

“People think of Verbier as a resort for advanced skiers but it’s also full of good terrain for beginners and intermediates,” she said as our group of six set off along the groomed slope. In the basin of the valley far below, the treetops and pitched roofs of Verbier were coated in sparkling snow.

After observing our skiing and teaching us the art of pole-planting (a trick that helps improve balance and controlled turns) Fiona paused and rummaged in her pocket, retrieving a video camera. It was the moment I was dreading. She raced on ahead before stopping to point the camera directly at me.

That evening, everyone gathered in the cosy bar of the Chalet Hotel de Verbier. The entertainment on offer wasn’t karaoke or a movie, but the videos of us skiing up on the big television. There was nowhere to hide; I shifted uneasily in my seat. I entertained an image of myself on the slopes as a vision of skill and agility.

I knew this was far from the truth, of course, but I never had to confront the

ugly reality, until Warren hit play.

After several impressive but not faultless displays from my fellow skiers, it was time for my critique. I flashed up on the screen: a dark smudge inching across the snowy backdrop, all wobbly knees and snowploughs.

“Good effort, Nick, but your body weight is in the wrong place,” Warren remarked, rewinding and playing the clip again, this time in slow motion, prolonging my embarrassment. “Your hands drop back and your legs aren’t flexed.

Tomorrow, we’ll work on getting you on the front of the skis.”

I digested my lacklustre display over dinner at the nearby Le Farinet Hotel. It’s due to reopen next month after a major refurbishment that will be crowned with the Après Bar and Lounge where live bands and Cream DJs will perform every night.

It’s symbolic of Verbier’s glitzy appeal: this is the resort where Richard Branson keeps a chalet, and where W debuted its first ski hotel last winter. The Cordée des Alpes hotel opened the previous season, a design property filled with locally

sourced stone, wood and marble whose walls are etched with murals of the Valais Mountains. The spa offers a cocooning body massage using “oxygenating” Swiss chocolate. However, this month, there’s a new three-star in town. The Montpelier Hotel has just opened its doors, with 47 rooms that feature stylish Alpine touches and fine mountain views.

Warren and I had the slopes to ourselves the next morning. “Everyone hits a plateau because they pick up bad habits and lack fundamental skills – things like range of movement, symmetry, and confidence,” he explained. “Successful skiing is also about the psychology of being on skis.”

One-on-one time with Warren doesn’t come cheap — £599 a day in addition to the cost of the five-day course — but his approach, one of science, philosophy, and practical advice made easy, delivers results.

Returning to Les Ruinettes, we began by working on posture and flexibility.

I traversed the slope on one leg before raising and lowering my arms at precise intervals to ensure the optimum centre of balance.

“Imagine you’re pedalling a bike,” shouted Warren over the crunch of my skis on the packed snow. “Push down on your leg and extend as you initiate a turn.

Then gently roll the other knee out to stay parallel.”

Repeating Warren’s instructions like a mantra (“push, extend, roll”) I glanced downwards to see my skis turning and coming together naturally rather than spreading apart in the dreaded V-shape.

Keen to push me further, Warren introduced more complex exercises, including the “braquage” turn — the simultaneous

pivoting of skis in one swift movement.

“It’s crucial for negotiating narrow terrain and a move you should be able to do on a 10p piece,” he said. My initial attempts were laughable but subsequent efforts were decent, or so Warren told me.

Speeding on ahead, Warren veered off the main piste and down a short but steep slope that ran parallel. Following his lead, I criss-crossed the challenging passage making tight and controlled turns, relishing every second of my newfound confidence.

Waiting at the bottom, Warren broke into applause. He pointed back to the vertiginous piste and smiled. “You’ve just had your first taste of a black run.” It barely seemed possible.

Fuelled by adrenalin, we pressed on until Warren’s video camera made another appearance. This time, however, I skied with conviction. We reviewed the footage on the camcorder’s grainy screen.

It wasn’t perfect but each parallel turn was followed by another. I hadn’t just overcome my plateau; I’d smashed it.

Getting there Nick Boulos travelled with Inghams (01483 791111; inghams.co.uk) which offers a week in Verbier from £544. The price includes return flights from Gatwick to Geneva on December 6, transfers, and half-board accommodation at the Chalet Hotel de Verbier.

Visiting there Five-day courses with the Warren Smith Ski Academy (inghams.co.uk/warrensmith) start at £419.

Hotel Le Farinet (00 41 27 771 6626; hotelfarinet.com). Doubles starting

Hotel Le Farinet will reopent after a major refurbishment from CHF410 (£272) The Montpelier Hotel (00 41 27 771 6131; montpelierverbier.ch). Doubles from CHF225 (£149), including breakfast.

La Cordée des Alpes Hotel (00 41 27 775 4545; hotelcordee.com). Doubles from CHF350 (£232), including breakfast.

More information Verbier Tourist Board (00 41 27 775 3888; verbier.ch)

12 12 January January 2015 2015 BUSINESS MONTH 55

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TRAVEL

Make a travel resolution: Learn a new skill or be more adventurous Learn a new skill

Learning a language covers several potential resolutions: gain a new skill, improve your qualifications, and maybe even move abroad.

Based in the Western Loire, Let’s Speak (00 33 2 43 026027; letsspeak.net) offers learning by immersion. Stay with a host family and absorb French language and life, visiting bakers, winemakers and musicians. Seven nights from €723 excluding travel.

Or get two for one with Cactus Language (01273 830960; cactuslanguage.com), which offers combination trips: Spanish and tango in Argentina, Italian and opera in Verona, Portuguese and football in Brazil. A Spanish and scuba trip in Playa del Carmen, Mexico, including five days of language lessons and a Padi dive certificate, costs £648 in January for the course and a six-night half-board stay with a host family. Flights not included.

Relax

The Healthy Holiday Company (0208 968 0501; thehealthyholidaycompany.co.uk) has several options for trips aimed at achieving peace of mind. The week-long Mindfulness Programme at Villa Padierna Palace Hotel in Spain combines meditation and yoga to relieve stress (from £3,050 per person, including flights, accommodation and transfers), while the five-night Embracing

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Change package at Kamalaya on the Thai island of Koh Samui aims to “enrich your emotional wellbeing” through expert consultations, massage, Chinese medicine and holistic fitness (from £2,025 including flights, transfers and full-board accommodation).

Alternatively, if you are looking for an excuse to switch off, a digital detox is much easier when you have something else to keep you occupied. Huab Lodge in Namibia has no TVs or mobile reception, and instead offers activities including hot spring dips and safaris.

Bungalows with two double beds are N$3,498 (£202) a night in January through i-escape (0117 946 7072; i-escape.com).

Spend time with family

Multigenerational trips are a great way to spend quality time with loved ones. Oliver’s Travels (0800 133 7999; oliverstravels.com) offers many villas that tick the family box.

Its Le Rosseau Cottage, near Beaune in Burgundy, sleeps 11, with downstairs bed and bathrooms and a private heated pool that’s child-safe and fitted with handrails. There’s also an acre of garden, a barn-cum-games room and a walkable boulangerie and bar.

From £638 per week.

Cruises are a good option too. Royal Caribbean’s enormous Allure of the Seas (0844 493 4005; royalcaribbean.com) has family

staterooms and ocean-loads of fun for all ages: from kids’ clubs to a zip-line, surf simulator and ice rink. It also has adult-only solariums and restaurants plus childcare services, if you do need to take a night off. The seven-night Western Caribbean cruise, from Fort Lauderdale, Florida, costs from £484 per person, excluding flights, with several departures between January and April.

Be more adventurous

If your resolution is to push your boundaries, take the plunge and head off on a solo adventure.

Solos Holidays (0844 815 0005; solosholidays.co.uk) offers itineraries based on various themes (sun, hiking, dancing, ski) in age bands (over 30s, 40s and 50s). Its four-night Magical Lapland trip to Finland lets you choose from a range of activities including snowshoeing, kick-sledging and a Northern Lights safari. For a 26 January departure the price is £839, including B&B and flights. Activities extra.

Just You (0844 273 5553; justyou.co.uk) also specialises in trips for single travellers. On its 11-day Kerala: a Taste of South India trip you can tour Cochin, learn to cook, marvel at Kathakali dance and enjoy a traditional dinner with new friends. The price of £2,399pp for a 26 February departure includes flights and four-star accommodation. Additional dates available in September and November.

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Appointments

OUT AND ABOUT

withThe

CHAIRMAN

The Chairman has been kicking back his heels and enjoying some festive gatherings as well as some food and nibbles

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Symon Ross has been appointed head of corporate PR at MCE Public Relations. He has been a business journalist for 15 years, working in Belfast, London and New Zealand. Before joining MCE he worked for BBC NI, Ulster Business magazine, The Belfast Telegraph and Dow Jones Newswires.

Brian McKimm has been appointed chief financial officer at private financial cloud provider Options. Mr McKimm was previously director and head of internal audit in KPMG Ireland’s advisory division.

Options recently opened an office in Belfast.

Tracy Hurst has been appointed head at recruitment specialist Alexander Mann Solutions’ new services centre in Belfast.

She has 14 years experience in human resources and has lived in Northern Ireland since 2008 and has worked for Alexander Mann Solutions for five years.

D

ECEMBER marked the 10th anniversary of Belfast’s Continental Market, and an elegant soiree in the City Hall celebrated the occasion.

The market has become a Christmas tradition, and even the Chairman has been known to knock back a few steins in the beer tent.

However, it isn’t to everyone’s taste.

The acid-tongued former Newsnight presenter Jeremy Paxman did his best to try wind-up the population of Belfast upon a recent visit to the city.

The journalist dismissively described the market as offering “the odours of 40 varieties of food you could not think of eating”.

It may not have been up to the standard of the University Challenge host, but the market attracted 800,000 punters in 2014.

The event at City Hall sparkled with festive decoration, as guests at the celebrations included Lord Mayor Nichola Mallon, Belfast Telegraph columnist Pamela Ballantine, and the market’s manager, Allan Hartwell.

The charity Barnardos, which raised money at the market, was represented by Jeanie Rogers and Anne Dawson.

Traders from the Continental Market John and Gemma Deeks of Coffee Express joined in the festivities.

Pamela Ballantine with Lord Mayor Nichola Mallon and Continental Market manager Allan Hartwell at the market’s 10th anniversary celebration

...

THE CHAIRMAN felt a bit out of place at the launch of new nightclub, Sixty6, as the young

58 BUSINESS MONTH 12 January 2015

Lisa Morrow, Ruth Jackson, Caroline Reid at the launch of Sixty6 Social, at new cocktail bar and nightclub on Belfast’s High Street

Appointments

Andrew Fisher has been appointed to the business advisory board of Davy Private Clients. Mr Fisher is a former chief executive of Coutts & Co and chief executive of UK investment specialists Towry Holdings. He will help the Belfast office build its share of the wealth management market.

Shauna McNeilly has been appointed as European engagement officer of Creative Europe Desk UK, based at the Arts Council of Northern Ireland. She has 14 years experience of working in arts and events and is a theatre studies graduate of the University of Ulster.

John and Gemma Deeks of Coffee Express, along with friend, enjoyed the Continental Market’s 10th birthday

people of Belfast drank their cocktails, and danced the night away.

Revellers at the new club, based above the National Grand Cafe on High Street, included Emma McGreevey, Claire Kitson and Jullian Thompson.

Sorcha and Petra Wolsey kept a watchful eye over the hospitality group Beannchor’s latest venture. ...

WITH THE CHAIRMAN

caught up in a social whirl of dinners, drinks and debauchery — whoops, I mean debonair doings — for the festive season, it was off to Michael Deane’s newest venture Eipic to enjoy the company of Gerry Lennon and Anne McMullan from Visit Belfast for their annual Christmas Media Lunch.

It was a rotten day outside and the golf umbrella was taking quite the battering, so the Chairman was delighted to enjoy such a convivial atmosphere once inside the Howard Street venue.

Guests were greeted with bubbling prosecco and seaweed canapes in the spacious bar while Mr Deane watched on in his chef’s whites and his delightful wife Kate Smith kept the journos entertained.

The team from LK Communications was in fine fettle, with Nikki Larkin and Alison Fleming greeting the guests, while David Cullen was being kept on his toes by determined BBC business hack Julian O’Neill.

Gary McDonald and Simon

Paula Gibson has been appointed as a solicitor in the private client department of Cleaver Fulton Rankin.

She graduated in law from Queen’s University and worked as a solicitor in a family practice. Her specialisms include wills and powers of attorney.

12 January 2015 BUSINESS MONTH 59

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THE CHAIRMAN Appointments

Lorraine McGoran has joined Visit Belfast as marketing and campaigns manager to manage strategy across NI, the Republic, Britain and Europe. She previously worked as marketing manager at the LyricTheatre, and at the Odyssey Arena.

Jaimé Bennett has been appointed conference and events manager at Visit Belfast. She will look after destination and event management and support conference organisers in the city. She has more than 10 years experience.

Sorcha Wolsey and Petra Wolsey of Beannchor Group at the launch of the business’s latest venture, Sixty6 night club and bar. The new venue is above the National Grande Café on High Street

Cunningham from the Irish News, Rankin Armstrong and Tina Calder from the News Letter, as well as Clare Weir from the Belfast Telegraph were all present.

Newly-married David Young of the Press Association regaled his table with anecdotes from his vineyard nuptials in Portugal, including how the romantic candle-lit reception in a cave was in fact due to a power cut.

Other guests included Peter McVerry of U105, Jim McDowell from the Sunday World and Victoria Square manager and uber-shopper Michelle Jackson, who gave helpful tips on last-minute Christmas bargain hunting for us hopeless males and wily advice to the womenfolk on how to eke out the perfect present.

Following a short video presentation from our hosts highlighting another successful year for Visit Belfast, diners soon tucked in to the seven-course taster menu, helpfully explained between each setting by our exhuberant servers.

The courses included Jerusalem artichoke and garlic soup, sea bass, some exquisite beef and a slab of chocolate cake which was perhaps bigger than all the other courses put together, followed by a selection of cheeses.

With that the Chairman was forced to squeeze on his galoshes and wobble back to base camp for a carbohydrate-fuelled snooze.

Enterprising youth gets to grip with business Aoidin Gormley of Rathmore Grammar School, Belfast HAVE you ever wondered what it would be like to have been Steve Jobs or Bill Gates? Running one of the most successful businesses in the world, making millions and being on top? That’s my job.

Except I’m not making millions and my company consists of 20 hormonal, stressed teenagers.

This year I am managing director of my school’s Young Enterprise company and it’s my job to lead our team to success. This isn’t going to be easy.

We have entered the company programme and, as a team, we have to develop our own brand and product. It has given me an

insight to the business world and the different opportunities you can reach out and grab. But I never realised how challenging this would be. Everyone has their own ideas and opinions yet nobody wants to do any work.

It’s very different to a normal business in that we have to balance Young Enterprise with

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school work, football training and whatever else we have on – typically more than your average adult. That’s stress. So how does it work?

In four weeks I have learnt so much about myself and others, trying to answer that question. And I still don’t have the answer. So far we have battled over picking a name, designing a logo and coming up with product ideas. But I have found the hardest part to be trying to separate my YE life from my social life. I go from being the

boss who gives out jobs and nags people to work, to friend and peer. I have to work with people I’ve never talked to before, people I’m best friends with and people I’m not fond of. But that’s the job.

In just one month I have learnt patience, leadership, teamwork, motivation and compromise. This has been one of the most exhilarating experiences of my life.

There will undoubtedly be more issues to deal with but I am so excited to see what thrill and adventure comes with it. So keep an eye out in Business Month for more news about my adventure.

THE LAST WORD

with John

Sherrocks

Why, more than 40 years after the Equal Pay Act, are women still paid less than men? It is now time the business world made a New Year’s resolution to resolve this, once and for all

L

OOKING back on 2014, it was in many respects a year that reflected well on us as a species. Yes, the world certainly had its share of misery, horror and tragedy over the past 12 months, but there were also acts of great compassion, heart-warming generosity and mind-boggling ingenuity.

We chased a comet travelling at speeds of 135,000km an hour for some 6.4 billion kilometres through the solar system to make history by landing a scientific probe on its surface, while back on Earth selfless medics travelled to distant lands to comfort and care for ebola victims. In the British Isles, thousands of caring individuals, many still suffering from the sting in the tail of the global financial crisis, each played their part in helping Children in Need raise £32.6m.

Wonderful achievements of which we as human beings can all be proud. But these deeds also accentuate our failings — not least the fact that more than 40 years after the Equal Pay Act was passed, many UK companies are still guilty of paying men more than women for doing the same or comparable jobs.

I’d hope that no business would even contemplate paying one employee less than another on the basis of race or skin colour.

So why do so many differentiate between the sexes when it comes to earnings?

Apparently progress towards eliminating this discriminatory practice was made in 2014; for the first time since records began being kept in 1997, women in their 30s earned more than men. According to the Office for National Statistics, female workers are now outdoing men by 0.2% in the 30 to 39 age bracket. However, it’s a short-lived victory because as soon as they hit their 40s, women once again fall behind their male colleagues, a trend which is maintained until they retire.

Overall, the gender pay gap did narrow in 2014 to its lowest level since the stats were recorded, with men across all ages now earning 17.5% more than women on average per hour. When full-time work is taken in isolation, women earn 9.4% less than men, down from 10% in 2013. Cause for celebration? I think not, especially considering that in 2013 the chasm in earnings grew for the first time in five years to 19.8%. Two steps forward, one step back comes to mind.

To put this difference into context, for every £1 earned by a man working partor full-time, a woman earns 82p, which

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means that, on average, it takes a woman almost two decades longer than a man to earn £1m.

And not only are salaries a problem, there is also a persistent bonus pay gap.

According to the Chartered Management Institute (CMI), the average bonus for a female director is £41,956, while male board members pocket £53,010.

It was heartening to discover that Northern Ireland is leading the way when it comes to equality in earnings — unfortunately my sense of pride was somewhat dampened by a civil servant pointing out the real reason women in Northern Ireland on average earn 3.3% more than men; it’s not down to employers here having a greater sense of fair play, but rather that there are more women in the employ of the public sector where salaries are generally higher than those paid by the private sector.

For the 187 women sewing-machinists who in 1968 went on strike against unequal pay at the Ford Dagenham plant in east London, it must seem like the world’s stood still for decades. Their determined stand back then ultimately led to the 2010 Equality Act. In 2015, it seems we’re content to merely ponder ad infinitum as to the reason why unequal pay prevails.

Raising children is cited as a significant contributory factor. Another cause is that a far higher proportion of women do parttime work. Then there’s the fact that men gravitate to industries which pay more.

However, I believe that the lack of transparency in our pay system is the primary reason this injustice has prevailed for so long; secrecy over pay allows companies to get away with paying female employees less than their male colleagues, without staff even being aware of it.

The TUC wants the government to legislate and make audits compulsory additions to annual company reports. A move which I imagine the CMI’s chief executive Ann Francke would welcome, given her recent observation that “a lot of the FTSE 350 are [paying women managers less than men] ...there are very few good guys”.

Tesco is among the good guys. The supermarket chain publishes data on its gender pay gap, as does the law firm Linklaters, which reveals the percentages of women it employs at different levels. Publishing annual gender pay gap information and conducting regular pay audits would enable companies to identify any gender pay gaps, and take action to close them.

In its defence, the government has recently announced measures to help businesses analyse their pay gap and “empower women to challenge their employers if they feel they are not being paid correctly”, to quote Jo Swinson, Minister for Women and Equalities and Business. The government has also extended the right to request flexible working and is introducing shared parental leave and tax-free childcare.

Once again, moves in the right direction, but far more needs to be done. At the moment it feels as if the closest we’ve got to equality between the sexes is men and women being charged the same price for tickets to Made in Dagenham, the West End musical which recounts the 1968 landmark strike.

There needs to be a shift in mindset by all of us. It shouldn’t be down to the government or the TUC to eradicate this discrimination. As shareholders, bosses, employees and concerned citizens, let’s resolve this New Year to ensure that discrimination in earnings ends. After all, we’ve all got mothers, if not sisters, daughters, nieces ...

Too many women are still paid less than men

To put the difference in pay into context, for every £1 earned by a man working part- or fulltime, a woman earns 82p