Firms have sights set on growth, says Minister

IBEC CEO CONFERENCE: MANY IRISH businesses have moved beyond the adjustment process and are focused on growing and winning new business, Minister for Finance Michael Noonan said yesterday.

Addressing more than 400 delegates at the Ibec Ceo conference in the Convention Centre, Dublin, Mr Noonan, said that, although employment is still falling, the private sector as a whole was a net creator of jobs in the second quarter of the year.

On the controversial decision to increase VAT by 2 per cent in the forthcoming budget, Mr Noonan said there was a need to have “an informed debate” on the issue, and “not simply resort to rhetoric”.

He said the 3 per cent difference between the Irish and UK VAT rates that will exist following the budget will be lower than the 3.5 per cent differential that was in place throughout the 1990s and 2000s

“For almost two decades . . . the UK operated a standard VAT rate of 17.5 per cent while Ireland’s rate was 21 per cent,” he said.

Some 400 representatives from the business community and members of the international media attended the Ibec conference.

Among the main speakers was the head of credit ratings agency Standard Poors, David Beers, who warned it was “very hard to see how a number of countries in the euro zone will avoid a recession next year”.

On the subject of bank lending and financing for businesses, the recently appointed chief executive of Ulster Bank, Jim Brown, said that Ulster Bank was funding export businesses predominantly, and had supported 5,000 new start-up companies over the last 12 months. He said domestic lending remained “tough”, as the number of mortgage delinquencies indicated.

Asked whether Ulster Bank would pass on ECB interest rate reductions to customers, Mr Brown said the bank would do so “as soon as the cost of funding comes down”.

He also called for the introduction of a Government-backed loan guarantee scheme.

Ibec director general Danny McCoy struck an upbeat note in his speech to delegates, highlighting the fact that international perceptions of Ireland had improved considerably since last year’s conference.

“While we made some dreadful mistakes in our fiscal and financial management, we are still one of the best countries in the world in which to do business and we retain the core of an economic model which can again be the envy of Europe,” he said.

Dennis Nally, chairman of PwC International, highlighted the need for Irish companies to focus on non-European and US markets. “Dependence on the EU and the US is no longer sufficient,” he said. “Given the sluggish growth of many of its traditional trade partners, Ireland needs to look even harder towards the emerging markets,” he continued, citing the fact that the BRIC countries, particularly China, are driving growth.

Delegates also heard from the chief executives of some of the top international companies operating in Ireland, including UPC, CityJet, and Heineken Ireland, as well as the chief executives of Glanbia, CRH and Paddy Power.