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Northern Ireland

Volume 525: debated on Wednesday 23 March 2011

The Secretary of State was asked—

Corporation Tax

1. What recent progress has been made in discussions with the Northern Ireland Executive and the Chancellor of the Exchequer on changes to corporation tax in Northern Ireland. (47492)

I have had discussions with my right hon. Friend the Chancellor on this issue yesterday and today. A Government consultation paper on rebalancing the Northern Ireland economy will be published tomorrow. The paper will include a discussion on the potential for transferring the power to reduce corporation tax to the Northern Ireland Executive.

To what extent has the Azores judgment had a bearing on the Government’s ability to vary the rate of corporation tax in Northern Ireland and other regional authorities?

I thank my hon. Friend for that question—given that I converted him to the Conservative party in my kitchen. The Azores judgment will conform to our plans, which will be laid out in the consultation tomorrow. We agree that the powers should be devolved to an Assembly that has entire control over its own area and that there should be no countervailing intervention from central Government.

I thank the Secretary of State for his interest in the subject. Will the Government now consider the devolution of further tax-raising or tax-varying powers to the Northern Ireland Executive? Does he agree that the more economic levers the Northern Ireland Executive and the Northern Ireland community have available to them, the more the economy will be helped to develop in a better way?

I thank the hon. Lady for her question. We have no plans to devolve further powers, and I would stress to her and her colleagues that we are talking about a consultation. It is not in the bag. We have lengthy discussions with other colleagues and the Treasury, and it would help if she could galvanise a campaign across Northern Ireland to work with us.

It is good that it is not yet in the bag, because the Secretary of State will know that since 2000, 80 countries have cut corporation tax rates. I am sure that, among those, he has studied Puerto Rico, a territory of the United States which has an effective corporation tax rate for manufacturing of 2%. What assessment has he made of how that has helped tackle unemployment in that United States territory, and how it has helped those countries generally to recover from global recession?

I am most grateful to the shadow Secretary of State for his question, but Puerto Rico is a bizarre comparison. I spent three and a half years travelling to Northern Ireland every week. Week after week I went to businesses, and week after week they said that a reduction in corporation tax would most help them.

It is clear that the Secretary of State travelled week after week, but it is also clear that he learnt nothing. Unemployment in Puerto Rico went up again last month, to 16%. The economy remains in recession for the fourth year. We need Northern Ireland to get out of recession, not to stay in it, so let us be clear—and a simple yes or no will do. Given the vital importance of infrastructure, education and skills to attracting and retaining business, will he guarantee that any consequential changes to the annual block grant and from tax revenue will not leave the Executive with an annual net loss? Yes or no?

We need no lectures on the economy from the right hon. Gentleman. He was in the bunker with the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and he left us with a bill of £280,000 a minute in borrowing and £120 million a day in interest costs. We are absolutely clear that, following the example of the Republic of Ireland, we will grow the revenue.

Economic Situation

Northern Ireland Executive Ministers and I agree that the economy in Northern Ireland needs to be rebalanced. The Northern Ireland economy is too dependent on the public sector, for all the reasons that the House will understand. The consultation paper that we are publishing tomorrow and our ongoing work with Executive and Treasury Ministers will play a significant part in boosting the private sector and attracting investment to Northern Ireland.

In the last quarter for which figures are available, almost 22% of 16 to 24-year-olds were not involved in education, employment or training, at a cost of more than £250 million. What measures can be taken to rectify that?

The detail of training and employment policy is now in the hands of devolved Ministers, but my hon. Friend has touched on a common theme. We all have an interest in reviving the private sector in Northern Ireland and seeing those young people put into worthwhile employment.

Does my right hon. Friend agree that Northern Ireland benefits from being part of the United Kingdom economy, because it is this Government and this Chancellor who will get the budget deficit back under control and rebalance the economy in favour of sustainable economic growth, as highlighted recently in the OECD report?

My hon. Friend is absolutely right to remind the House of that. We have a worse deficit than Ireland or Greece, yet our interest rates are considerably lower. That is thanks to the robust measures that the coalition Government have taken to enable us to recover from the wreckage left behind by the previous Government.

Is the Secretary of State aware that the very high price of petrol and diesel in Northern Ireland—the highest in the United Kingdom—is having a severe impact on the living standards of families and the viability of businesses? In his discussions with the Chancellor yesterday and today, has he raised support for a fuel duty stabiliser and other measures to tackle this crippling problem, specifically in relation to Northern Ireland?

The right hon. Gentleman is absolutely correct to raise the issue of fuel costs in Northern Ireland. He will have to be patient and wait to hear what the Chancellor has to say in a few minutes, but I can tell him that the issue has been raised at the highest level.

I thank the Secretary of State for that answer. An issue that he can respond on is his talk of an enterprise zone for Northern Ireland. Will he elaborate on that and tell the House what specific measures he has in mind to bring about real change and boost competitiveness for Northern Ireland businesses? Has he looked at the specific issue of air passenger duty, which is having a detrimental effect on Northern Ireland compared with the Irish Republic?

I have been using the expression “enterprise zone” for three and a half years as a cover for looking at ways of reviving the private sector in Northern Ireland. As the right hon. Gentleman knows, I am a convinced evangelist for the proposal to devolve corporation tax, to allow it to be lowered. The paper published tomorrow will also contain an amalgam of ideas from the Executive. On the issue of air passenger duty, he will also have to be a little more patient and wait for the Budget statement.

On the subject of robust policies, we have now had nine months since the emergency Budget, yet the 65% employment rate in Northern Ireland is the lowest in the UK and unemployment is rising to 8%. May I ask the evangelical Secretary of State how much further pain families in Northern Ireland must be expected to bear?

The hon. Gentleman should remember the Budgets that he voted for. I remind him that we are borrowing £280,000 a minute, and that we are spending £120 million a day on debt interest, compared with £95 million on education. That is where the money is going: we are paying off the deficit that he left behind.

Air Passenger Duty

3. What assessment he has made of the likely effects of changes in air passenger duty on business travel between Northern Ireland and London. (47494)

I have had meetings with the Northern Ireland Minister of Enterprise, Trade and Investment and with my hon. Friend the Economic Secretary to the Treasury to discuss air passenger duty. My Treasury colleagues fully understand the issues involved. The rates that took effect last November were, of course, set and legislated for by the previous Government.

I thank the Minister for his answer. He will be aware that, in addition to air passenger duty, Heathrow and Gatwick intend to levy passenger landing charges for regional flights, which will compound the problem. Will he confirm that this matter is at the top of his agenda, so that we can ensure that Northern Ireland businesses have access to the capital?

Indeed; these things have been discussed at ministerial level. I am glad that my right hon. Friend the Chief Secretary to the Treasury is here to listen to the hon. Lady’s comments. We take this matter very seriously. A lot of the issues to do with Gatwick and Heathrow are commercial matters that are more properly dealt with by BAA.[Official Report, 4 April 2011, Vol. 526, c. 12MC.]

Will the Minister continue to speak to the Chancellor of the Exchequer about the possible dangers that a per plane duty could pose for businesses in Northern Ireland, given the geographical situation of the Province?

My hon. Friend raises a good point. It is worth pointing out that 75,000 fewer people—business men and tourists—went to the island of Ireland every week last summer. It is important that we keep up the amount of people who come here. I think that his question might be better directed to Ministers after the Budget, which will follow in a few minutes, but I am sure that his comments will have been heard.

Political Donations

4. What recent discussions he has had with ministerial colleagues on the registration of donations to political parties active in Northern Ireland. (47495)

10. What recent discussions he has had with ministerial colleagues on the registration of donations to political parties active in Northern Ireland. (47501)

An order to extend the current confidentiality arrangements for political donations in Northern Ireland was debated and approved by both Houses last month. [Interruption.] This order came into effect only from 1 March, so I have not had discussions on this issue with ministerial colleagues since then. [Interruption.]

Order. I understand that the House is eagerly awaiting subsequent business, but there are far too many noisy private conversations taking place, which is very discourteous to the people of Northern Ireland.

While discussing donations to political parties in Northern Ireland in the Northern Ireland Affairs Committee, the Minister made reference to “details of the recipient”, “the amount received” and when donations were made. Those were the reference points, so can the Minister tell us what progress has been made?

Indeed, I can. I remain firmly of that view. We are not in the position that we would like, but I am advised that there are serious doubts about whether the issues that I mentioned can be addressed under existing legislation, which is very tightly drafted. I hope to make provision to bring more transparency to existing arrangements when a suitable legislative vehicle can be found.

Will my hon. Friend let us know when legislation will be brought forward to make sure that donations and loans made to political parties in Northern Ireland during the prescribed period are not disclosed when the prescribed period expires?

My hon. Friend makes an important point, which was behind the introduction of the statutory instrument. I hope that this will happen at the earliest opportunity. Primary legislation will be required: we have extended the order for a further two years, so it allows us time to find a suitable legislative vehicle.

One of the problems with regulating donations to political parties in Northern Ireland is that a loophole enables some parties to bring funds in through the Republic of Ireland—without requiring the kind of registration that applies to funds donated within the United Kingdom. Will the Government move to close this loophole so that there is a level playing field for the funding of political parties in Northern Ireland?

The right hon. Gentleman will be aware that any donation over £7,500 has to be declared to the Electoral Commission, as it does in the rest of the UK, so that is covered. When we move towards a Bill on the whole issue of elections in Northern Ireland, we can certainly look at that issue, along with other anomalies that we believe exist.

The Ulster Conservative and Unionist New Force was the snappy title given to the alliance adopted by the Conservative party and the Ulster Unionists in last year’s general election. Will the Secretary of State share with the House how the new force in UK politics is doing these days?

We remain committed to bringing national politics to Northern Ireland. I am not sure that the hon. Gentleman’s question is within the scope of the subject of registration of political donations, but I can assure him that many people in Northern Ireland and in the rest of the United Kingdom wish to support a Conservative party, which is why we are in government and he is not.

Aggregates Levy Credit Scheme

5. What recent discussions he has had with the Chancellor of the Exchequer on the aggregates levy credit scheme in Northern Ireland. (47496)

I have spoken with my hon. Friend the Economic Secretary on this matter. The Government remain fully committed to reinstating the aggregates levy credit scheme in Northern Ireland. The Treasury is in regular contact with the devolved Administration to co-ordinate the provision of evidence to the European Commission to support a new scheme.

I thank the Minister for that reply. He will be aware that the withdrawal of the scheme is having a severe impact on a hard-pressed sector in Northern Ireland. It is also having an impact on the public purse in its effect on capital expenditure. As well as talking to the Treasury, will the Minister consider together with the European Commission whether a recasting of the overall agricultural levy scheme could help to get Europe round its undue hang-ups?

The hon. Gentleman signed the early-day motion on this matter tabled by the leader of his party, the hon. Member for South Down (Ms Ritchie), who is in her place. My right hon. Friend the Secretary of State has twice met Gordon Best, the director of the Quarry Products Association, and we are seized of the importance of this industry to Northern Ireland and of the unfairness with the Republic. All I would say to the hon. Gentleman is that the Treasury is continuing its negotiations with the Commission and that the proper place for suggesting ideas is through the Treasury to the Commission. The Government remain committed to addressing this very serious—

I represent an area that contains seven quarries which employ more than 100 people and generate a multi-million industry that exports to all parts of the globe. Will the Minister confirm that he will work industriously with the Northern Ireland Executive and, indeed, the Treasury to ensure that the exemption for the quarries continues in the near future?

It is quite handy having the Chief Secretary to the Treasury here to listen to Northern Ireland questions. We should try to arrange for it to happen more often.

The Government remain very disappointed by the suspension of the aggregates levy credit scheme, but, although disappointing, it is unavoidable. I hear what the hon. Gentleman says about his constituents in Strangford, but this does not affect only Strangford; as I have said, the industry is important throughout Northern Ireland. We are in a difficult position, but I can reassure the hon. Gentleman that we are working closely with Treasury Ministers, as indeed are the Executive in Northern Ireland. The Finance Minister himself discussed the matter recently with the Economic Secretary to the Treasury.


The Government are committed to working with the Northern Ireland Executive to help boost private sector growth and investment in Northern Ireland. The consultation proposals for rebalancing the economy that the Government will publish tomorrow will send a powerful message to overseas investors. They have the potential to make Northern Ireland a beacon for foreign investment.

Does the Secretary of State recognise that one of the most competitive parts of the Northern Ireland economy is the renewable energy sector? Will he convey to the Chancellor the message that the establishment of a strong green investment bank with its own borrowing powers during the current Parliament is essential to drive the green economy in Northern Ireland?

I thank the hon. Gentleman for that constructive question. He will have been pleased to note the significant investment in Harland and Wolff’s wind apparatus by DONG Energy the other day—that is very much a theme of the coalition Government—but if he wants to hear further announcements, he will have to restrain himself and wait for the Budget statement which will be delivered in a few minutes’ time.

Northern Ireland, like North Yorkshire, is powered by small business. What message does the Secretary of State think today’s sizzling Budget for growth will send to risk-takers in Northern Ireland and beyond?

We have the Ulster fry, with which we can celebrate in numerous splendid establishments in Northern Ireland. I think the message is that we have stabilised the economy. We have moved out of the danger zone that we used to inhabit after inheriting the mess from the last Government, and today we can celebrate moving forward with a constructive Budget and specific measures to help small businesses in Northern Ireland.

I hope that the Budget sizzles but does not burn the economy.

Does the Secretary of State believe that a corporation tax change for Northern Ireland which also imposes a huge financial burden on public expenditure is likely to promote the competitiveness to which he has referred? Will he ensure that if corporation tax is devolved, it is devolved at a fair rate and in a way that does not make it—

The hon. Member for East Antrim (Sammy Wilson) and I discussed this matter at length at Hillsborough the other night. We talked until after midnight. He knows that we are proposing a consultation. If the power is then devolved, it will be up to him and his colleagues to decide the manner in which that is done. [Interruption.] He also knows—if he looks south of the border—that the reduction in corporation tax there was recently described as a “cornerstone” of the success of the rebuilding of manufacturing in the Republic of Ireland.

Can the Secretary of State give us any advice on steps that the Northern Ireland economy might take to become more productive and efficient? [Interruption.] I am thinking especially of research and development, and in particular of European framework programme 7 for R and D funding.

Order. I appeal to the House to come to order. It is very difficult for Ministers even to hear the questions that they are being asked.

The hon. Gentleman will have to wait until tomorrow to see the details in the consultation paper, but I can tell him that we have taken up a range of measures proposed by the Executive. Let me also draw his attention to the national policy that we have imposed, which involves a huge range of measures to revive science and research in this country.

Enterprise Zone

My right hon. Friend the Chancellor of the Exchequer will unveil the Government’s plans for enterprise zones later today in the Budget. Separately, tomorrow we will publish a consultation paper on rebalancing the Northern Ireland economy and making Northern Ireland an even more attractive place to do business.

I thank the Secretary of State for that reply. A recent report by the Work Foundation found that 80% of the jobs created by enterprise zones are a result of relocation, and therefore are not new jobs. How will he ensure that the enterprise zones in Northern Ireland will be different?

The hon. Lady probably does not know that I have been using the phrase “enterprise zone” as a cover-all term for a whole range of measures that would revive the private sector in Northern Ireland. I am sure she agrees that it is unsustainable for—according to one report—77.6% of the gross domestic product of the Northern Ireland economy to come from public spending. Tomorrow, we will publish a paper blending our ideas with those of the Executive on how we will rebalance the Northern Ireland economy.

Does the Secretary of State agree that an enterprise zone across the whole of Northern Ireland is one thing, but if it is interpreted as it was in the 1980s, that will cause major displacements throughout the Province?

I repeat again what I just said: I have used the phrase “enterprise zone” over the past three and a half years as a cover-all term for referring to investing in a whole range of measures that will help revive the private sector. I have visited the hon. Gentleman’s constituency, and he agrees with me that we must rebalance the economy. The Chancellor will announce the detail of specific measures on enterprise zones in a few minutes, and I hope they will be taken up by the Executive, who will have responsibility in Northern Ireland.

Security Threat

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. (47500)

The threat level in Northern Ireland remains at severe. This Government continue to support the Police Service of Northern Ireland in countering the small but dangerous groups who regularly endanger the lives of police officers and the general public. That is demonstrated by the recent exceptional provision of an additional £200 million for the PSNI over the next four years to combat the threat.

I am sure Members of all parties will join me in condemning the small number of dissidents who continue to use violence. Will my right hon. Friend reiterate how important it is for the public to co-operate with the PSNI by passing on any information that could lead to taking terrorists off our streets?

My hon. Friend is absolutely right to draw attention to the role that the public can play. The PSNI now has broad support across the community, and as Robert Peel said, the police are citizens in uniform. If the Antrim road bomb had gone off, members of the public would have been maimed by a device put on a bicycle.

I thank Members for their silence.

Given that during the troubles terrorist organisations murdered 102 members of the Royal Ulster Constabulary reserve, and that the Secretary of State could not attend a thanksgiving service for the reserve at St Anne’s cathedral on Sunday, will he please take this opportunity to put on record his appreciation of the outstanding courage and enormous sacrifice of the RUC reserve?

I wholeheartedly endorse the hon. Lady’s comments. Unfortunately, the Minister of State and I had long-standing commitments that we could not break, but we were ably represented by my hon. Friend the Member for Bournemouth West (Conor Burns), who stood in for us, and who will have visited several people there and expressed the same opinions we would have expressed had we been in his place.

Dissident Activity

11. What assessment he has made of trends in the level of dissident activity in Northern Ireland. (47502)

Will the Secretary of State join me in congratulating the Garda on the outstanding co-operation over the past few weeks, particularly over the arrest of several dissidents just south of the border?

I am very grateful to my hon. Friend for his continued interest in Northern Ireland, and we value his experience. I wholeheartedly wish to place on the record our tribute to the Garda for the work that they have done. We have an unprecedented level of co-operation with them: I have met Martin Callinan, the new commissioner; I met the Taoiseach in Washington last week; and I will be visiting Dublin soon to follow up my recent discussions with the new Tanaiste and Justice Minister. We are indebted to the work that the Garda have done and by working with them we will bear down on these unrepresentative dangerous terrorists.

The dissident threat level remains high. Yesterday, the Secretary of State announced the end of the 50:50 discrimination rule in recruitment to the police. Will he join us next week in ensuring that the 10 years of discrimination against young Protestants is completely at an end, and in ensuring that young Protestants and young Catholics can join that police service to combat dissident threat levels and ensure a return to normality in Northern Ireland?

I am grateful to the hon. Gentleman for his question. We are happy that the Police Service of Northern Ireland now represents the community and offers a career path that attracts people from all across it. The issue is now in devolved hands, which is where it should be.