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Economic Policy

Volume 568: debated on Wednesday 16 October 2013

The Government are working closely with the Executive to promote growth and rebalance the Northern Ireland economy. Last week, we published an update on progress made on the economic package signed in June, and my right hon. Friend the Prime Minister attended a very successful investment conference at Titanic Belfast.

Does my right hon. Friend agree that access to finance is critical for small businesses in Northern Ireland, and does she welcome as I do the Government’s decision to bring forward an independent payments regulator to promote more competition in banking and better access to finance?

I am happy to give that assurance. I, too, welcome the setting up of an independent payments regulator, and I pay tribute to the work done by my hon. Friend and the Treasury Select Committee in bringing that about. It is crucial to the success of banking in Northern Ireland that we encourage new entrants into that market. This regulator will help to achieve that. [Interruption.]

Order. These exchanges are of very great importance to people in Northern Ireland and beyond, and I feel strongly that these questions and the Secretary of State’s answers must be heard.

With almost half of the population of Northern Ireland in fuel poverty and 90,000 pensioners suffering because of the granny tax, does the Secretary of State agree that Northern Ireland is in the clutch of a cost of living crisis?

We are concerned on both sides of the House about cost of living pressures. That is why the Government have taken steps to cut income tax for more than 600,000 people in Northern Ireland, have taken 75,000 people there out of income tax altogether, have halved the income tax bills of those on the minimum wage and are freezing fuel duty. Above all, our deficit reduction strategy is keeping mortgage rates low, which is crucial for the cost of living in Northern Ireland and elsewhere.

The Secretary of State will be aware that the Republic of Ireland has announced the scrapping of its equivalent of air passenger duty. What assessment has the Secretary of State made of the impact that could have on airports in Northern Ireland? Will she reconsider the Northern Ireland Affairs Committee’s proposals that attention should be given to removing the tax on flights to and from Northern Ireland?

I know that the Northern Ireland Affairs Committee has a strong view on air passenger duty. I understand the concerns about competitiveness and the recent announcements by the Irish Government. The Government have not had a request from the Northern Ireland Executive to devolve short-haul APD. We would consider such a request seriously, but it would be an expensive change to make.

The Secretary of State will join me in welcoming the visit to the House today by the Northern Ireland Assembly and Business Trust, an effective organisation that brings political and business leaders together. How does it strengthen the Northern Ireland economy to centralise jobs in the Driver and Vehicle Licensing Agency in Swansea, resulting in the loss of hundreds of jobs and millions of pounds from our local economy?

The issue is a difficult one. The Government must look carefully at proposed efficiency measures. I know that the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) is looking with care at the proposal, and I have had a lengthy conversation with him, as I did with his predecessor. He is very much aware of the issues, and I have made it plain that it is important to consider the onward economic impacts in Coleraine of the decision that he will be making in due course.

Now that Northern Ireland has the second highest per capita inward investment of any region in the UK after London, what can the Minister do to ensure that that investment is spread across the whole of Northern Ireland and not concentrated in Greater Belfast?

The hon. Gentleman makes a valid point. The investment conference that the Prime Minister attended last week was incredibly successful. There was huge interest from current investors in expanding, and from new investors in setting up business, in Northern Ireland, which is a great place to do business. Several investors at the Belfast conference were interested in the whole of Northern Ireland, and we will do our best to ensure that the benefits are spread throughout Northern Ireland, as we did in bringing the G8 to County Fermanagh.

May I say to the Secretary of State, as one survivor to another, that I agree with her analysis of last week’s investment conference, which provided an excellent opportunity to showcase Northern Ireland’s potential? But all is not sunny optimism in the land. What steps does she plan to take to support the small businesses in Northern Ireland that are struggling to get credit?

We have introduced an allowance for employer’s national insurance, which will make it cheaper to employ people and create jobs; we are keeping interest rates low through our deficit reduction programme; we are freezing fuel duty; and we are cutting corporation tax to boost business. We are determined to make Northern Ireland a fabulous place to do business in, and to help small businesses.

I welcome our new shadow Secretary of State and pay tribute to his predecessor for the great work he did. Does the Secretary of State agree, however, that an economic boost would do a lot to defuse the current community tension? Will she commit herself to helping us to achieve some of the measures, such as the maintenance of low VAT and others that have been mentioned, announced in yesterday’s Irish budget? That would be a major achievement.

I am afraid that EU rules mean that we cannot have a different level of VAT in one part of the country, but we will certainly look at the measures introduced by the Irish to see what lessons can be learned. We are also determined to help rebalance and boost the Northern Ireland economy, which is why we signed the economic pact in June. Last week I announced an update, which demonstrated real progress on start-up loans, research and development, support for Bombardier, and a ministerial taskforce on banking to ensure that businesses get the access to finance they need.