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Northern Ireland

Volume 530: debated on Wednesday 6 July 2011

The Secretary of State was asked—

Security Situation

1. What recent assessment he has made of the threat to security in Northern Ireland posed by residual terrorist groups. (63167)

6. What recent assessment he has made of the threat to security in Northern Ireland posed by residual terrorist groups. (63173)

7. What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement. (63174)

8. What recent assessment he has made of the threat to security in Northern Ireland posed by residual terrorist groups. (63175)

With your permission, Mr Speaker, I believe that the House will want to pay tribute to Sir Oliver Napier, whose funeral was held yesterday. He was a founding father and leader of the Alliance party, and a member of the power-sharing Executive in 1974. He led the way towards inclusive politics, and was widely respected across the entire community. He will be much missed.

The threat level in Northern Ireland remains at severe. Despite the overwhelming community rejection of violence, the terrorist groups continue to pose an indiscriminate threat to the safety of police officers and the general public, who want their lives to be free of fear, disruption and intimidation.

The violent scenes that we have witnessed in part of east Belfast in recent days are obviously a matter of great concern. Will my right hon. Friend join me in sending our support and gratitude to the Police Service of Northern Ireland for its restraint, courage and success in combating that disorder as well as the continuing terrorist threat in Northern Ireland?

I am grateful to my hon. Friend for his question and I wholly endorse his comments. I happily put on record the Government’s deep appreciation of the restraint and skill with which the PSNI handled the recent disturbances.

However, I would put out a public appeal to all those who are considering expressing their views over the next few days. They, too, should show restraint. I remind them that the rule of law will prevail, and that this week, significant prosecutions have resulted from charges against those who broke the law a year ago.

Does my right hon. Friend agree that close co-operation between the PSNI, the Garda, and Ministers here, in Belfast and in Dublin, is essential in combating the ongoing terrorist threat? Will he join me in congratulating the Garda on its recent discovery of an arms cache and arrests in County Louth?

It is almost impossible to stress how closely we are now working. Last week, I met Eamon Gilmore, the Tánaiste and Minister for Foreign Affairs and Trade, and I had several discussions in the last week with the Minister for Justice, Equality and Defence. I also recently saw the Garda commissioner. The Garda is to be wholly congratulated on its recent raid at Hackballscross in County Louth, where a significant amount of lethal matériel was apprehended. I am delighted to confirm that the co-operation with the PSNI gets better from month to month.

Does my right hon. Friend agree that at a time of such pressure on the public finances, the exceptional deal to the give the PSNI an extra £200 million over the next four years is a clear demonstration that this Government will always stand by Northern Ireland?

I am grateful to my hon. Friend for giving me the chance to remind the House that we endorsed £50 million last year and a further unprecedented £200 million over the next four years. We are absolutely determined to bear down on the current threat, and I am delighted that Matt Baggot, the Chief Constable, to whom I spoke this morning, confirmed that we

“have the resources, the resilience and…the commitment”

to meet that threat.

All of us in the House are concerned about the recent violence in east Belfast and acknowledge the challenges facing the PSNI. Does my right hon. Friend agree that there is a very significant role for the Northern Ireland Executive in tackling the underlying causes that fuel that violence?

I am grateful to my hon. Friend and constituency neighbour for his question. The problem cannot be contained by security activity alone, however well co-ordinated and well funded by the PSNI and the Garda. Ultimately, this must be sorted out on the ground, by local politicians working with local people. That was confirmed in the Independent Monitoring Commission report that said:

“The main responsibility for dealing with these challenges rests with the Assembly, the Executive and local politicians, working in conjunction with community leaders, churches, the law enforcement and other public institutions, and ultimately, with the…whole community”.

In 2004, Jane Kennedy, the then Northern Ireland Office Minister, told the House that an inventory of all decommissioned weapons would be published when the Independent International Commission on Decommissioning had completed its work. The IICD stood down on Monday, but no inventory was published. Will the Secretary of State tell the House why that pledge was not honoured, and does he accept that that will affect public confidence?

The IICD made it clear why it did not publish an inventory. We would like to be in the position to publish this data, as the then Member for Liverpool, Wavertree, Jane Kennedy, was back in 2003-04, but the success of the IICD has been its independence, and it is for it to decide—it is entirely within its remit—where it puts this information. It is now in the hands of the US Secretary of State and cannot be divulged without the prior agreement of the Irish and British Governments.

I acknowledge the information that the Secretary of State has just given us about dissident activity, the report published by the Independent Monitoring Commission last Monday and the fact that the level of dissident activity is now higher than when it published its first report in 2004. The report stated that loyalist groups were finding it difficult to contemplate going out of business. In that context, does he agree that whatever we do to bring the paramilitary activity to a peaceful conclusion, it will not be achieved by throwing money at gang leaders, as has been suggested in east Belfast over the past few weeks?

I just quoted from the IMC report showing that these problems will not be resolved by one simple solution. They have to be resolved on the ground by working with local people at the closest level. That means down to community groups and local politicians. It is not for us to lay down the law from Westminster. That is now in local hands.

Will the Secretary of State give us some guidance on the extent to which the police and his office are getting co-operation from all communities in identifying those responsible for the ongoing terrorist activities on both sides of the divide?

I am grateful to the Chairman of the Northern Ireland Affairs Committee. The police are conducting a review and a serious investigation into the disturbances last week, and it would be wrong to pre-empt what they discover. However, once we have the information from the police, we will make further decisions.

Government Spending

2. What assessment he has made of the effects on the service sector in Northern Ireland of reductions in Government spending. (63168)

Tackling the deficit remains the Government’s biggest priority, and Northern Ireland has its part to play in achieving that outcome. My right hon. Friend the Secretary of State and I are working closely with the Northern Ireland Executive to boost private sector growth and investment and to help rebalance the economy.

I am sure that the Minister will have seen that 59,500 people are signed on the dole in Northern Ireland. Whenever anyone losses their job, it is a tragedy for their family and causes hurt and pain. What are the Government going to do about it?

I welcome the hon. Gentleman’s interest in Northern Ireland, and I hope that it will continue. I hope also that he will join me in celebrating the jobs that the service sector in Northern Ireland has attracted. The New York stock exchange has attracted 400 new jobs; Citigroup financial services will attract 500 jobs over the next five years; and the law firm Allen and Overy has attracted 300 jobs in Belfast. To answer his question directly, I would say that Northern Ireland is a great place for the service industries. It is open and we want more investment, and I hope that he and his party will join us in making that happen.

Well that all sounds very good, but in the past 12 months, the Northern Ireland claimant count has increased by 7%. That is the biggest increase in the UK and 21 times the national average. The Minister will know that the Northern Bank/Oxford Economics survey has now dramatically downgraded economic growth forecasts in Northern Ireland to 1.1% from a previous forecast of 1.9%. The Northern Ireland economy needs help now. What is the Minister going to do?

It is regrettable that the Secretary of State is talking Northern Ireland down—[Interruption.] The independent Office for Budget Responsibility’s recent updated fiscal and economic forecasts show that the Government’s plans will deliver sustainable growth in each of the next five years with employment rising by 1.1 million by 2015 across the UK and the deficit falling. That of course includes Northern Ireland. The unemployment rate for Northern Ireland was down by 0.8% over the quarter and the number of unemployed people in Northern Ireland was estimated at 61,000—down 6,000 over the quarter. It is because of the Government’s determination to tackle the deficit and the legacy we inherited from a Government of which the right hon. Gentleman was part that these figures are good.

Regrettably, the only thing that is going down is an economic forecast from 1.9% to 1.1%. Undoubtedly the Minister will update his brief in due course. The Secretary of State proposes a change in corporation tax rates to help in the long term. I seek clarification. We know that the immediate impact of the cut in the block grant will be the loss of tens of thousands of jobs in the public sector, especially in education. However, if the policy in the medium term creates jobs, it follows that there will be additional revenue from income tax and a decrease in welfare payments. He wants the public sector, especially in education, to take the pain now, but in the future, if those benefits flow from increases in jobs and tax revenues, will the Treasury keep the money or will it go to the people of Northern Ireland?

The right hon. Gentleman is right to raise the issue of corporation tax. There has been widespread consultation on the issue, and all the political parties in Northern Ireland support devolving the power to Northern Ireland. We believe that it will bring growth and jobs; equally, we believe that it is important to rebalance Northern Ireland’s economy, regardless of the situation that we inherited. Like me, the right hon. Gentleman represents an English constituency, and he will be aware that Northern Ireland receives about 25% more in spend per head of the population than England. It is therefore important that we rebalance Northern Ireland’s economy and allow it to grow.

Fuel Smuggling

3. What recent assessment he has made of the extent of petrol and diesel smuggling from the Republic of Ireland into Northern Ireland. (63169)

Her Majesty’s Revenue and Customs leads the work to crack down on fuel smuggling and fraud, working closely with the Irish authorities. The Organised Crime Task Force, which is chaired by the Northern Ireland Justice Minister, estimated in its 2011 threat assessment that there is an annual tax loss of £200 million from fuel fraud and legitimate cross-border fuel shopping.

Estimates suggest that the Government actually lose between £280 million to £300 million a year to fuel smuggling and laundering in Northern Ireland. That pushes up fuel taxes for everyone, which is deeply unfair. Does my right hon. Friend agree that extending rural fuel pilots to the new economic zones would cut smuggling and save the taxpayer an absolute fortune?

I agree that we need to save the taxpayer an absolute fortune, and I have had discussions about this issue with both the Northern Ireland Justice Minister and the Exchequer Secretary to the Treasury. I recently brought to the attention of the Exchequer Secretary and the Financial Secretary to the Treasury—who is here with us today—the comments of the hon. Member for North Antrim (Ian Paisley), who has some ideas about various companies that can help with the traceability of fuel. However, I would also point out to my hon. Friend that the “Cross-Border Organised Crime Assessment 2010” said:

“Changes in exchange and duty rates have made this…less profitable over the past few years than it would have been previously.”

We have just heard about the amount of money that Her Majesty’s Government are losing in revenue to fuel smuggling and laundering. The Minister will be aware of recent findings of large amounts of fuel on the border. Can he please update us on the fuel duty escalator and the possible introduction of a pilot scheme in Northern Ireland?

I think that I have just answered that question, which was not dissimilar to that asked by my hon. Friend the Member for Harlow (Robert Halfon). In direct answer to the point about co-operation across the border, relations are extremely good, as is true for all our relations with the Republic of Ireland, not least with the Garda. We are working in close co-operation, hence the success of the Organised Crime Task Force and HMRC in driving down fuel smuggling.

Tourism (VAT)

4. What recent representations he has received on the rate of VAT applied to tourism activities in Northern Ireland. (63170)

Northern Ireland has enormous attractions for tourists and we strongly support efforts to encourage them to visit. The hon. Member for South Down (Ms Ritchie) raised the issue of VAT rates at a recent meeting with my right hon. Friend the Secretary of State, but these matters are not our direct responsibility.

The Minister of State should be aware that as of last week, VAT in the tourism sector in the south of Ireland has been reduced to 9% for 18 months. Similar steps have been taken in France and Germany. Will he and the Secretary of State use their standing with their colleagues in the Treasury to commend a sectorally targeted VAT cut for tourism throughout the UK?

The hon. Gentleman knows that the EU average for VAT is 20.8%, whereas VAT in the UK is 20%. Germany’s lower rate is simply a mechanism to redistribute money from the centre to the Länder, as Germany has many local tourist—or “bed”—taxes. We would all like lower taxation and we would all like the deficit to be addressed, which is what we are seeking to do, but this is not just about the rates of VAT. London hotels are doing better than they have done for some time, there are more tourist visitors to Northern Ireland than there have been for some time and the hon. Gentleman’s city of Londonderry will be city of culture in 2013. We need to offer people value for money and good hospitality—that I am sure we can do—and the issue of VAT will then become secondary.

On future taxation policy, will the Secretary of State tell us whether the electricity White Paper that is soon to be published will contain proposals to address the fact that Northern Ireland has a single electricity market, linked with the Republic of Ireland? Will it address the implications of those arrangements for providers and users of energy in Northern Ireland, in that they could influence the market disproportionately?

The hon. Gentleman is very cunning to have got that question in. The Treasury will have heard his remarks, and I shall make certain that the relevant Treasury Minister gets back to him to address those pertinent points.

Disturbances (Belfast)

5. What assessment he has made of the role of dissident republicans in recent disturbances in the Short Strand area of Belfast; and if he will make a statement. (63171)

The Government utterly condemn all those involved in the localised violence in part of east Belfast a fortnight ago. It would be unwise for me to comment on the role played by specific groups while the police investigation is ongoing, but I know that the Police Service of Northern Ireland is determined to bring those responsible to justice.

Will the Minister accept that the unanimous condemnation by all the parties in Stormont shows that dissidents of all traditions might have the power to damage the peace process but not to derail it?

I am happy to concur wholeheartedly with the hon. Lady’s comment. Northern Ireland has moved on by a huge distance, and everyone can now express their legitimate political aims and pursue them by democratic means. There is absolutely no place for political violence in Northern Ireland today.

On behalf of the whole House, may I congratulate the Minister of State on his upgrading of my right hon. Friend the Member for St Helens South and Whiston (Mr Woodward) to his new role of Secretary of State for Northern Ireland? I am not entirely sure whether that was a prediction, but it is certainly one that we would support. Further to the question from my hon. Friend the Member for North Tyneside (Mrs Glindon), the Secretary of State will be aware that even below the most placid surface, dark cold undercurrents flow, and that we have to address the issue of the sectarian legacy. What is he doing to support groups such as Co-operation Ireland and other peace-builders?

I am grateful to the shadow Minister, who is on perky form this morning. I have regular meetings with the chairman of Co-operation Ireland; I am actually seeing him again today. However, dealing with community groups is very much in local hands. I have had recent discussions with the First Minister and the Deputy First Minister, and I am seeing both of them again tomorrow. This is very much a local issue to be sorted out on the ground according to local circumstances. [Interruption.]

Order. There are far too many private conversations taking place in the Chamber. We need to be able to hear the Secretary of State.

Given the ease with which guns were produced at the Short Strand interface, does the Secretary of State understand the annoyance and anger at the fact that the inventory of the weapons destroyed by the Independent International Commission on Decommissioning was not made known? Does he agree that the people of Northern Ireland have a right to know the full extent of the destruction of weaponry that has taken place? The Conservatives and Labour have agreed on that, and the inventory has also been lodged in Washington.

I am fully aware of the concerns behind the hon. Gentleman’s question, but we have to take the advice of those very experienced independent professionals, who have pulled off an extraordinary task. I pay tribute to General de Chastelain and his colleagues for what they did, and if it is their professional opinion today that it would not be helpful to publish that inventory, we have to take that advice seriously, as do the Irish Government. That is why the inventory has been placed with the American Secretary of State, where it will rest. No one will see it until the British and Irish Governments together decide that the time is appropriate.

Public Expenditure Reductions

9. What assessment he has made of the effect on economic growth in Northern Ireland of reductions in public expenditure. (63176)

As I said earlier to the hon. Member for Islwyn (Chris Evans), tackling the deficit has to be the Government’s biggest priority, and Northern Ireland must play its part. My right hon. Friend the Secretary of State and I are working with Northern Ireland Ministers to attract growth and investment and to help rebalance the economy.

Northern Bank’s quarterly economic forecast states that Northern Ireland’s construction sector has hit a new low and is facing its fourth year of decline. It has already suffered some of the worst job losses anywhere in the country. Do the 10,000 people who could now lose their jobs, on top of those who have already done so, have any cause for optimism, given the complacency that the Minister showed in his earlier answer?

I do not think that I showed complacency in my earlier answer. We are fully aware of the effect of the recession on the construction industry not only in Northern Ireland but in the whole of the United Kingdom. It has had a real effect in many of the border areas where people used to go down to the building sites of Dublin and earn their money that way. That is a serious issue for all kinds of reasons. The fact that we came to the aid of the Republic of Ireland has allowed us to have far greater involvement in its investment decisions affecting Northern Ireland, not least those of the banks, as well as in other issues of mutual interest.

Does the Minister agree that air passenger duty is helping to strangle economic recovery in Northern Ireland? Does he have any plans to persuade the Treasury to make changes to it?

As the hon. Gentleman knows, there has been a consultation process on air passenger duty, which is continuing, and we have discussed the issue with the Finance Minister at Stormont. These are issues that we take very seriously, not least in respect of what I describe as the economic umbilical cord—the link to New York by Continental airlines. We are keen to see that continue. A number of companies, including the New York stock exchange, came to invest in Northern Ireland because of that air route. As I say, we are taking this extremely seriously and we are batting for Northern Ireland.

Human Trafficking

10. What recent discussions he has had with the First Minister on the level of cross-border human trafficking to and from Northern Ireland. (63177)

Data on the exact level of cross-border trafficking is not available, but there is clearly a cross-border element in many cases. I spoke yesterday to the Northern Ireland justice Minister and I know that he has been working closely with authorities in the Republic of Ireland to tackle this despicable crime.

I thank the Minister for his response. People are being trafficked across the border with bogus papers. Unfortunately, they are being trafficked from this country into the Republic of Ireland. The Republic of Ireland is discovering trafficked people whose papers are so obviously bogus that they should never have been admitted to the United Kingdom in the first place. This is an issue that we really need to look at.

My hon. Friend is, of course, absolutely right. The Minister for Immigration is working closely with his counterparts in the Irish Republic to ensure that we jointly strengthen our external borders against threats such as human trafficking gangs. I would like briefly to pay tribute, if I may, to my hon. Friend’s work on the all-party group and, indeed, to that of our former colleague, Anthony Steen and the Human Trafficking Foundation, which I hope to accompany to Northern Ireland. My hon. Friend has much to add to the debate. [Interruption.]

Thank you, Mr Speaker. The ease with which cross-border trafficking between Northern Ireland and the Republic can occur is quite obvious and apparent to everyone. Will the Minister ensure that liaison with the Republic of Ireland’s authorities is stepped up to ensure that those who are being trafficked can be helped, given the problems that they are facing?

We all want to hear the hon. Gentleman—I hope others heard him better than I did. The little that I heard was about cross-border co-operation. I can assure him that we have had some recent successes in Northern Ireland, as he will have seen from the newspapers. We work extremely closely with the authorities in the Republic. This is an issue that affects us all. It is a despicable thing, and I draw the attention of all Members to the Joseph Rowntree Foundation’s report “Forced labour in Northern Ireland”, which has recently come out and bears reading.

Economy

Northern Ireland is an excellent place to do business and enjoys world-class aerospace, engineering and health technology companies, but the Northern Ireland economy is still too over-reliant on the public sector, so we are working together with the Northern Ireland Executive to help rebalance it and to boost private sector growth.

Will my right hon. Friend ensure that internal squabbles in the Assembly do not undermine the consultation?

I am delighted to report that the consultation, which ends on Friday, has received the overwhelming endorsement of all five political parties. The leaders in the Executive came to Kelvatek for the launch of that very successful consultation. My right hon. Friends the Prime Minister and the Chancellor of the Exchequer have been to Northern Ireland to see what is happening for themselves—as has my hon. Friend the Exchequer Secretary, who is going again tomorrow—and we will respond in the autumn.

Does the Secretary of State agree that if the Northern Ireland economy is to be helped through the devolution of corporation tax, that must come at a fair, reasonable and acceptable price rather than a price that is detrimental to economic growth?

As the hon. Gentleman knows, the Treasury document makes it clear that every 2.5% reduction in corporation tax requires a £60 million to £90 million reduction in the block grant. That constitutes 0.5% of the block grant, which many economists and businesses consider to be a very modest investment.