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Northern Ireland

Volume 523: debated on Wednesday 9 February 2011

The Secretary of State was asked—

Value Added Tax

1. What assessment he has made of the effect on economic growth in Northern Ireland of the increase in the basic rate of value added tax. (38253)

Before answering, may I pay tribute to Ranger David Dalzell of the 1st Battalion the Royal Irish Regiment? He came from Bangor, but he was also stationed with his regiment in my constituency at Tern Hill. I am sure the whole House will join me in offering our condolences to his family and friends, and thanking this brave young man for his service to his country after he was killed in Helmand this week.

The reckless years of debt and spending made the VAT rise a necessary step for national economic recovery. Forecasts from the Office for Budget Responsibility show that the Government’s plans will deliver sustainable growth for each of the next five years, with employment rising by 1.1 million by 2015, and the deficit falling.

When will the Secretary of State set out his paper on rebalancing the Northern Ireland economy? That is particularly crucial at a time when the VAT rise is damaging local retailers.

The hon. Lady is correct. We need to bring the paper forward as a team effort, working with local Ministers. I will come to that in response to later questions. We had a very satisfactory meeting with the Exchequer Secretary earlier this week, and we hope to publish the paper as soon as possible.

I am grateful to the Chairman of the Select Committee on Northern Ireland Affairs for his question. That has to be finally decided, but I would estimate that we should have a public consultation period of two to three months.

I associate myself with the comments of the Secretary of State on Ranger Dalzell. Across the House we are all well aware of the bravery and courage that all those young men show. We sympathise with his family at this time.

On VAT, shoppers from the Republic of Ireland coming across to Northern Ireland contribute greatly to the economy of Northern Ireland. The VAT increase has impacted directly on Northern Ireland, leading to a 10% reduction in sales and a 28% reduction in exports. What will the Secretary of State do to address that?

I am grateful to the hon. Gentleman for his comments on Ranger Dalzell.

Cross-border taxation is an issue that we will consider as part of the paper. We are acutely aware of the ability of consumers to move their spending rapidly either way, depending on taxation.

Can the Secretary of State put into context the changes in taxation? Basic rate taxpayers in Northern Ireland have had their personal allowance increase, which has taken many of them out of the tax net.

We regard Northern Ireland as an integral part of the United Kingdom. Northern Ireland taxpayers pay their tax and receive public spending in return.

I join the Secretary of State in his tribute to Ranger Dalzell and his family.

The Secretary of State has made it clear that he wants to be Northern Ireland’s man in the Cabinet. As he knows, following the rise in VAT instituted by his Government, a litre of fuel in Northern Ireland is the most expensive in any part of the UK. Can he tell the House why it is more expensive in Belfast than in North Shropshire, and what a litre of fuel costs in Belfast this morning?

Prices vary from 120p to 133p for petrol or diesel, but the right hon. Gentleman should remember that it was his Government who increased the rate of duty on fuel. He was in the bunker with the great incompetent for Kirkcaldy and Cowdenbeath (Mr Brown), who got the country into this mess in the first place.

I am glad that the Secretary of State managed to find an answer in his folder. The First Minister and Deputy First Minister are asking him urgently for help in Northern Ireland now. He has been in the job for nearly a year, but so far there has been no real help on the economy, just a promised paper on the economy that is still stuck in the printing press. Meanwhile, VAT is up, fuel prices are up and private sector business activity is reporting the biggest fall in 26 months. Hundreds are losing their jobs at Belfast Metropolitan college, 4,000 more are due to lose their jobs in health and social services and tens of thousands more jobs will go in the public sector. In Dublin, demand evaporates. Now we learn that he is losing his battle with the Chancellor for a future grab on end-of-year funding from the Executive. We can all see that it is hurting. When are people in Northern Ireland going to see it is working?

I do not know how the right hon. Gentleman has the nerve. When he was sitting in the bunker in Downing street shoring up his former boss, who overruled the right hon. Member for Edinburgh South West (Mr Darling) when he wanted to raise VAT, the Belfast News Letter found out that I was in Northern Ireland more than he was. We were in the danger zone in May, but thanks to the measures that we have taken, everyone in the UK, including in Northern Ireland and Lancashire, are in a better place as we establish stability in the public finances. We cannot go on spending £120 million a day on debt interest.

Stop-and-search Powers

My right hon. Friend the Secretary of State updated the House this morning on plans to make amendments to powers of stop and search in Northern Ireland. These powers are essential in Northern Ireland for tackling the threat from terrorism. They have prevented attacks, saved lives and led to arrests and convictions. The Police Service of Northern Ireland uses all available legislation to deal with the terrorist threat. Oversight and accountability mechanisms are in place to ensure that powers are used properly.

I thank the Minister for that response and for the statement that has been placed in the Library. The use of section 44 powers has undoubtedly saved lives in Northern Ireland, along with powers under the Justice and Security (Northern Ireland) Act 2007. What assurances can he give the House that the PSNI will in no way be hampered in its efforts to disrupt and prevent terrorist activities?

That is an entirely legitimate question. The changes that we are making are to bring legislation in Northern Ireland into line with changes to section 44. The hon. Gentleman should be reassured, because, as he would imagine, we have been discussing these matters closely with the PSNI. It has a range of other powers at its disposal, but I agree that it would be a retrograde step to limit its powers at what is a difficult time in Northern Ireland. The proposed amendment will not do that.

Will the Minister kindly confirm the precise details of the Army’s powers of stop and search if deployed in Northern Ireland?

With your leave, Mr Speaker, I would like to take this opportunity to thank colleagues on both sides of the House for their generous tributes to my young constituent—only 20 years of age—David Dalzell, who fought alongside his fellow Rangers in 1st Battalion the Royal Irish Regiment with great courage, enthusiasm and pride, but sadly lost his life in a tragic accident in Afghanistan at the weekend. I thank all Members for their comments today.

I associate myself with the hon. Lady’s comments. I can confirm that there are no plans to change the powers of stop and search for the military in Northern Ireland.

How can the Minister justify not changing the Army’s powers of stop and search in Northern Ireland, which exceed those granted to the police under the 2007 Act? They are not subject to annual renewal by Parliament as emergency provisions, as they were throughout the years of the troubles, and are now permanent and not subject to any of the accountability checks that apply to police powers?

The hon. Gentleman will be aware of the rising terrorist threat in Northern Ireland, and he will recognise the part played by the military’s bomb disposal units and the need to go about their business, not least in his own city of Londonderry, where unfortunately we had an incident recently.

When the police in Northern Ireland have used stop-and-search powers, they have used them when there is a reasonable suspicion of terrorist activity. Will the Minister reassure the House that that will continue to be the case? Dissident republican activity is on the rise, and those powers are required principally and forcibly by the police to thwart that terrorist threat.

Look, we want to make those powers watertight; we do not wish to water them down. It is because the PSNI has used those powers proportionately that we are where we are with section 44, and the Home Secretary was clear in saying that. She went to Northern Ireland and specifically said that the PSNI had been behaving properly, but we do not want anything we do in Northern Ireland to be subject to a possible challenge. That is why we are taking that action, and why a code of practice will be worked out in conjunction with the PSNI—as I say, to make the powers that we have watertight, not to water them down.

Police Service of Northern Ireland

3. What arrangements he has made to ensure that the Police Service of Northern Ireland has the resources to meet threats from dissident activity. (38255)

Funding for the PSNI is primarily a matter for the Northern Ireland Executive. However, this Government are committed to ensuring that the Chief Constable has the necessary resources to counter the threat posed by terrorist groups. The Northern Ireland Justice Minister has made a strong case to the Treasury for access to additional resources, but discussions are continuing at the highest level, and I am confident that we will have a satisfactory outcome soon.

The Chief Constable of the PSNI has requested an extra £200 million to deal with the perceived dissident threat in Northern Ireland. Yesterday the Chancellor of the Exchequer said that he was “interrogating the request”. Surely we should have had a proper response by now.

The hon. Gentleman is quite right: the Chief Constable and the Justice Minister have made that request, and we are taking it extremely seriously. The bid is, of course, for money over four years, which is probably unprecedented for the reserve, and it is not an easy matter, given the national economic circumstances that we face. I remind the hon. Gentleman, however, of the Chancellor’s words yesterday. He said:

“We will treat the request with due diligence, but I am clear that security comes first. That will be my priority.” —[Official Report, 8 February 2011; Vol. 523, c. 148.]

The Secretary of State will no doubt be as delighted as I am by the proposed visit of the Queen down to Dublin, but he will have seen the news on republican websites that there is likely to be dissident activity. What assistance will be given to the PSNI during that difficult period?

My hon. Friend will know that no visit has formally been confirmed, although everyone in the House would welcome one. I should like to confirm that we have the closest possible collaboration with the Garda Siochana out in Dublin. A couple of weeks ago I met the new commissioner, Martin Callinan, and I am delighted to say that he is absolutely as robust and as determined to face down those terrorists as his predecessor, Fachtna Murphy.

Given the continuing perceived threat from dissident activity, the disruption to normal human and economic activity two weeks ago in Belfast, and the calculating callousness of leaving a booby-trap device on a child’s bicycle, will the Secretary of State now take action to ensure that intelligence is transferred from MI5 to the Police Service of Northern Ireland, which has all the accountability mechanisms in place?

I agree with the hon. Lady about the disgusting nature of those terrorists: booby-trapping a child’s bicycle is absolutely revolting. I know that her strong belief is that the regime should be changed, but at this moment it would be crazy to move the furniture around. Let me make it very clear that Lord Carlile, who conducted an independent review of the matter, said that MI5 and the Police Service of Northern Ireland are working very closely together, and that we could not do more work, or do it more energetically, to deal with what is a very difficult threat. I am afraid that we just have to disagree on this matter, but I do agree that we have to do everything that we can to bear down—

Although PSNI funding is rightly the responsibility of the devolved Administration, will my right hon. Friend reassure the House that, in the event that dissident activity becomes much stronger, resources may be made available from the UK Government?

I thank my hon. Friend for that question. We made it clear that a bid has been made by the Justice Minister, whom I met on Monday and talked to this morning on the phone. We are raising this at the highest level of government and we are determined to stand by Northern Ireland and do the right thing.

It would be churlish of me to let this occasion pass without congratulating the right hon. Gentleman, the Minister of State, on his elevation to the Privy Council, and I do so with pleasure.

It would be negligent of me—

Order. Let me say to the hon. Gentleman that there is real pressure on time, so let us get on with the question.

It would be negligent of me, Mr Speaker, not to remind the Secretary of State that the request for additional funding has been with the Treasury since last year—for months. The signal that we send to dissident terrorists is the most important thing here. Will the Secretary of State fight for Ulster, fight against the dissidents and fight with the Treasury to get this money, which the PSNI needs now?

I thank the hon. Gentleman for his congratulations to my right hon. Friend. He is not quite right about the request—[Interruption.] No, he is not right to say “months”. The Minister of Justice has negotiated within the Executive and got a significant increase from his fellow Ministers, which we welcome. Having resolved where he stood with the Executive, he then wrote to me with a request calling on the reserve. That letter came to me in January.


4. What recent assessment he has made of the level of threat to security in Northern Ireland posed by residual terrorist groups; and if he will make a statement. (38256)

9. What recent assessment he has made of the level of threat to security in Northern Ireland posed by residual terrorist groups; and if he will make a statement. (38262)

The threat level in Northern Ireland remains at severe. So far this year there have been 15 arrests and three persons charged with terrorist-related offences. This follows 210 arrests and 80 persons charged in 2010. The severity of the threat was highlighted by the recent Antrim road incident, for which there have been three arrests in the past 48 hours. This attack not only endangered lives but also caused major disruption to local communities and businesses.

I thank my right hon. Friend for that answer. Does he agree that cross-border co-operation between the north and the south is essential to address the level of threat posed by terrorist groups?

In a word, yes. My hon. Friend will have heard my right hon. Friend the Secretary of State say that he has now met the new chief of the Garda Siochana, Martin Callinan. We continue to work very closely with the Garda, which has had some very lucky finds and some finds as a result of its hard work and co-operation with the PSNI. We applaud the work—

The Minister has made it clear that he is in negotiation with the Treasury over the extra funds needed to tackle dissident groups. Can he say at this stage whether he agrees with the assessment of the Chief Constable that this money is required?

Clearly we do, because we have endorsed it. These things do not come out of the blue. We are working very closely with the PSNI. We continue to work with the Department of Justice and David Ford, and we continue to work with the Treasury. The hon. Gentleman needs to think about the sums of money that are involved in all these things. He would surely agree that it is only fit, right and proper that the Treasury looks at all applications for funding very closely so that we do not find ourselves in the same hole that we were in when we came into power in May last year.

The recent third annual report of the independent reviewer of the Justice and Security (Northern Ireland) Act 2007 states:

“So far as terrorism is concerned, the activities of the residual terrorist groups have been dangerous and disruptive.”

What steps is my right hon. Friend taking to help Northern Ireland to combat this threat?

The threat in Northern Ireland is extremely serious. The majority of people in Northern Ireland are against the residual terrorist groups, which have no support in the community and are disrupting businesses. In the case of the Antrim road incident, they put about 100 people out of their houses on one of the coldest nights of the year. We continue to work extremely closely with the PSNI. The PSNI works with the Garda in the Republic of Ireland to bear down on these terrorists. We are certain that we can do that and drive them out. They have no place in modern Northern Ireland—

Intelligence agencies tell us that a republican group in County Tyrone is planning to announce its appearance with a bombing wave in Northern Ireland. One hundred members of the Provisional IRA have seemingly pledged their allegiance to this new group. Can the Minister assure the House that any republican prisoner released under the Belfast agreement who becomes a member of this group will immediately be returned to prison?

I can reassure the hon. Gentleman that the Secretary of State and I keep under constant review the possibility of recalling those who have been released earlier. It is under constant review.

I thank the Minister and the Secretary of State for the work they have been doing with the Treasury to address the problems that are faced with dissident terrorist activity. Is the Minister concerned that the current to-ing and fro-ing is giving succour to those dissident terrorists when what the Treasury needs to do is to stand by commitments made?

No, I do not believe that. I do believe, as I said to the hon. Member for Caerphilly (Mr David), that the PSNI has made a good case to the Treasury. We have worked on that with the PSNI and the Department of Justice. It is now up to the various bodies involved to negotiate an outcome. I can only repeat what the Chancellor said yesterday in answer to the hon. Member for Ealing North (Stephen Pound):

“I am clear that security comes first.”—[Official Report, 8 February 2011; Vol. 523, c. 148.]

I have no reason to suppose that the Chancellor has changed his mind in the intervening 24 hours.

Will the Minister comment on the assessments that have been made of the intentions of dissident republicans here on the mainland with regard to the preparations for the Olympics? What might that activity mean in terms of future terrorist attacks here?

The right hon. Gentleman asks that question 15 years to the day since the Canary Wharf bombing, which heralded the end of the IRA ceasefire. It is therefore a timely question on a date that we all remember. Of course, there is a threat here from Northern Ireland-related terrorism. That is why, for the first time ever, the Home Secretary raised the threat level. I assure hon. Members that all services are working closely together to ensure that any attempt to disrupt the Olympics or any other occasion of national importance in the coming months or years—

Economic Development

5. What recent discussions he has had with Ministers in the Northern Ireland Executive on economic development in Northern Ireland. (38258)

The Minister of State and I met last week with the Exchequer Secretary and Northern Ireland’s First Minister, Deputy First Minister, Minister of Finance and Personnel, and Minister of Enterprise, Trade and Finance to discuss the Government paper on rebalancing the Northern Ireland economy and promoting investment and growth.

Given the coming corporation tax cut, the national insurance contributions holiday for small businesses and the avoidance of Labour’s national insurance tax increase next month, does the Secretary of State agree that this Government are restoring Northern Ireland’s reputation as a destination for inward investment, which was badly damaged by the previous Government?

I endorse my hon. Friend’s comments. We had an excellent meeting at Hillsborough only last week with a number of major businesses, at which we saw significant investment coming in from Denmark. I am pleased to say that our plans were endorsed by a coalition of significant business organisations last week.

Will the Secretary of State outline his assessment of the potential impact on the Northern Ireland economy of the reduction in corporation tax, and of its cost?

The coalition of businesses that I mentioned gave an estimate last week of 94,000 jobs, and the Northern Ireland Economic Reform Group published a report yesterday with an estimate of 90,000 jobs. On the costs, the hon. Gentleman should consider the case of Canada, where corporation tax has been reduced over recent years and revenue has increased. He will have to be patient and wait for the publication of our paper, which I hope will happen soon.

Does the Secretary of State agree that Northern Ireland urgently needs meaningful action on creating economic opportunity? Has there been any discussion about how we might create the authority for the Northern Ireland Executive to create bonds, thereby creating private funding to boost our construction industry and build the necessary schools and infrastructure that are missing?

Order. There is far too much noise in the Chamber. [Hon. Members: “Hear! Hear!”] Agreement is one thing; abiding by it is another. Ministers cannot even hear what is being asked. A bit of order please.

I am grateful to the hon. Gentleman for his question. We will have a consultation period once the paper is published. He made an interesting suggestion, which the Chancellor will have heard. I hope that he will put it through formally in the consultation process.

Economic Affairs

7. When the Government expect to publish their proposals for rebalancing the Northern Ireland economy. (38260)

The Exchequer Secretary, the Minister of State and I continue to work intensively with Northern Ireland Ministers on the Government’s consultation paper to set out measures aimed at rebalancing and growing the Northern Ireland economy. We hope to complete our work and publish the paper soon.

Does the Secretary of State accept that the Northern Ireland economy needs to stimulate the private sector? How do the Government propose to do that?

The hon. Gentleman is right. According to one report, Northern Ireland’s economy depends on public spending for 77.6% of its gross domestic product. That is wholly and totally unsustainable. I have been visiting Northern Ireland for three and a half years now and visiting businesses, and we are considering a whole range of measures for rebalancing the economy and helping to promote the private sector, which will be published in our report. There are excellent private businesses in Northern Ireland, just not enough.

The Secretary of State will be aware that to travel from Aldergrove airport in Northern Ireland on a transatlantic flight, a passenger has to spend an additional £150 in tax. If he travelled from the south of Ireland, 90 miles away, as of 1 March he would pay €3 in tax. What is the Secretary of State going to do about that to encourage people to travel on transatlantic flights from Northern Ireland?

The hon. Gentleman raises an important issue. I discussed it with Declan Kelly, the US envoy, 10 days ago, and it was also discussed at our meeting with local Ministers and the Exchequer Secretary earlier this week. My right hon. Friend the Minister of State is working on it with colleagues in the Treasury.