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Northern Ireland

Volume 589: debated on Wednesday 10 December 2014

The Secretary of State was asked—

Economy/Inward Investment

1. What steps her Department is taking to strengthen the economy of, and increase inward investment to, Northern Ireland. (906458)

2. What steps her Department is taking to strengthen the economy of, and increase inward investment to, Northern Ireland. (906459)

May I first thank you, Mr Speaker, Opposition Front Benchers and the House for your indulgence in allowing the Secretary of State to be absent, exceptionally, today? As you know, she is chairing the extremely important talks at Stormont, and we hope that they will come to a satisfactory conclusion very soon. She takes her duties in this House very seriously, as you know, and she is grateful to you for your indulgence today.

The Government’s long-term economic plan is working for Northern Ireland, and the UK Government continue to work with the Executive to promote Northern Ireland as a great place to invest. Political stability is paramount in attracting further investment, and I encourage the parties to make significant progress in the current cross-party talks.

As a result of the autumn statement, 12,000 people in Northern Ireland will be lifted out of income tax altogether following the increase in personal allowances, and almost every home buyer will pay less stamp duty. Does my hon. Friend agree that the autumn statement will bring great benefit to the whole of Northern Ireland and its people?

Yes, I very much do. It is quite clear that we need to increase prosperity in Northern Ireland. Prosperity is the key to improving security, as indeed is security to the prosperity of Northern Ireland. It is worth noting the substantial amount of foreign direct investment that Northern Ireland is now attracting. It gets the UK’s second most FDI per head, with a 32% increase last year. Foreign investors are recognising that Northern Ireland is a great place in which to invest. The latest figures are extremely encouraging.

I welcome the Chancellor’s announcement that corporation tax setting powers will be on their way to Northern Ireland. The Northern Ireland economy is of course very heavily dependent on public sector jobs. What more can the Government do, using the corporation tax powers when they come, to encourage inward investment and innovation in Northern Ireland?

The Chancellor has expressed our desire to devolve that power to the Executive, and the Executive are keen to take it on. The extent to which it will impact on the Northern Ireland economy is of course a matter for the Executive—as is the level at which they wish to pitch corporation tax, once devolved—but they have suggested that up to 40,000 jobs might be created in Northern Ireland by having the power. It is particularly important for encouraging the private sector. As my hon. Friend will know, we are trying with the Executive to rebalance the economy so that the private sector is encouraged, and the devolution of corporation tax is an important part of that.

Does the Minister agree that the Government’s key extra measure of focusing on skills and making sure that people are properly trained, coupled with business investment, is precisely the way to improve productivity and therefore living standards?

I absolutely agree. My hon. Friend will have noted that the changes to national insurance in particular in the autumn statement are very much focused on getting young people into employment. The national insurance rebate is extremely helpful for small business in particular. He will have read with pleasure, as I have, the list of firms that are increasing their presence or investing for the first time in Northern Ireland. It is truly impressive, and it just shows what a great place Northern Ireland now is in which to invest.

The Minister rightly referred to the big increase in foreign direct investment under the Northern Ireland Executive in recent years, but does he agree that the Executive has to deal with many issues and problems that are unique to Northern Ireland? The legacy of the past causes a financial drag on the Executive—increased expenditure—and that has to be addressed by the parties and the Government in the talks this week.

The right hon. Gentleman is absolutely correct. The past still hangs heavy over Northern Ireland. For people of my generation, our image of Belfast in particular is of course shadowed by what we saw on the television screen all those years ago. Investors who are now looking to Northern Ireland still have those images in their minds, and we need to overcome that. The security situation is key to this, and the improvement in the security situation has been instrumental in making Northern Ireland look and feel a far better place in which to invest.

Does the Minister agree that, as we all accept, political stability is absolutely key in growing the economy in Northern Ireland and creating the conditions for economic prosperity? In his recent remarks in Enniskillen on 24 November, Gerry Adams said that his party was using equality to “break” Unionists—he actually used a foul-mouthed expletive at that point. He said that that was the republican strategy. Does the Minister agree that such language on the use of a policy such as equality is deeply offensive to everybody in Northern Ireland, undermines political stability and confidence and shows that Sinn Fein’s honeyed words and positive language sometimes mask a deeply disturbing policy?

I think Sinn Fein needs to be very careful about the language it uses, as indeed do all politicians. People are looking at Northern Ireland as a potential place to invest and are put off by that kind of posturing. It is very important that all parties work together to continue making Northern Ireland a great place to invest.

As the Minister said, central to attracting business investment into Northern Ireland is political stability and leadership. In that context, the Opposition welcome the Prime Minister’s planned visit to Northern Ireland later this week and his intention to participate, alongside the Taoiseach, in the current all-party talks. Will the Minister assure the House that, alongside an agreement on the budget, including welfare reform, the Government are at the very least seeking to secure agreements on the past and on parades?

The talks are comprehensive, and it is hoped that their outcome will be ambitious. The hon. Gentleman is right that issues around the legacy of the past are central to what is being discussed in Stormont at the moment. I am hopeful that by the end of the week we will have a positive outcome, but all parties need to understand that this is part of a process and that they must remain engaged. Let us hope for some good news in a few days’ time.

I thank the Minister for that answer. Will he clarify whether the Government are linking the devolution of corporation tax solely to the parties reaching an agreement on next year’s budget? Surely the decision should be based on longer-term considerations such as the impact on jobs and growth and the block grant in Northern Ireland, as well as on the implications for the rest of the United Kingdom.

No, I think it is important that corporation tax is seen as part of a whole. It cannot be taken in isolation, and it is important that the Executive formulate a balanced budget that takes welfare reform into account. Without that balanced budget, it is difficult to see how we can reasonably devolve an important power such as that.

Just a week ago, the members of the Northern Ireland Affairs Committee met Senator Gary Hart in Belfast. He was very positive in suggesting that it may well be possible to arrange a trade mission to come from America to Northern Ireland to see what the possibilities are. Will the Minister follow up such a suggestion?

I am very pleased that my hon. Friend has met Senator Gary Hart, who is very much part of the current talks process. Apropos my remarks earlier about foreign direct investment, I am pleased to say that it is going up dramatically, although clearly it is not enough, and we would like to see far more in Northern Ireland from America and elsewhere. I would certainly welcome such a proposition.

Security Situation

The safety of people and communities remains the Government’s top priority in Northern Ireland. Although the threat level in Northern Ireland remains at severe, excellent co-operation between the Police Service of Northern Ireland and its partners has put violent dissident republicans under strain in recent months. There have been a number of significant arrests, charges and convictions, which are helping to suppress the threat.

I thank the Minister for his update on the serious nature of the security threat from republican terrorists and the absolute necessity of defeating them.

Does the Minister also accept that there are those who violate the sanctity of the homes of elderly people living in our community, threatening and terrorising them? Should not those criminals get custodial sentences of at least seven years, irrespective of how little or how much they actually steal through their criminal activity?

I will not be drawn on matters that are outside my sphere of competence, and I would certainly defer to the Department of Justice for action on many of the issues that the hon. Gentleman raises. I know that the PSNI takes these matters extremely seriously, as do the Government, and appropriate action must be taken.

Does the Minister agree that the greatest contribution to increasing overall security would be a successful and comprehensive outcome to the talks, which enter a vital period this week? It is important that we confront not only the problems of today but the wounds of the brutality and violence of the past. Is the Minister aware that a number of families are in Westminster today as part of their campaign looking for justice and for answers?

May I thank the hon. Gentleman, particularly for his contribution to the current talks? He is correct to say that the outcome of those talks will have a big impact on security in Northern Ireland, and we must all understand that. All parties must understand the extent of the stakes, because if this process fails I am afraid that the future will not look good. The positive developments that we have already discussed today cannot be guaranteed, so we must ensure that the talks have a positive, comprehensive outcome.

Is the Minister satisfied that appropriate and, as necessary, enhanced security measures are in place over the festive season?

That is a matter for the Minister of Justice in the Executive and the Police Service of Northern Ireland. I know that as we approach Christmas the tempo of operations by dissidents in particular has a tendency to increase. The PSNI and the Department of Justice are aware of that and making appropriate preparations.

There is a high level of dissident republican activity over Christmas and new year, and there is evidence that dissident republicans have direct contact with terrorist groups in north Africa and the middle east. Will the Minister outline what discussions have taken place with Governments from that region to ensure that the flow of weapons and bomb-making expertise is stopped?

Those matters are primarily for my right hon. Friend the Home Secretary, and she is in touch with relevant countries to ensure that the threat of terrorism from individuals from countries outside the United Kingdom is reduced as far as possible. The hon. Gentleman will be following closely the progress of the Counter-Terrorism and Security Bill through this House, as that is relevant to the issue he raises.

In recent weeks the Northern Ireland Affairs Committee heard from officials in Northern Ireland and the police service that cuts to budgets are already leading to long delays in the resolution of actions covered by the Historical Enquiries Team. Will the Minister look into that and ensure that no further cuts lead to people who should have had justice years ago having to wait even longer? People are already waiting three times longer than was originally scheduled.

The spending power of the Executive has increased since the beginning of this Parliament and will continue to do so. Spending within the police budget is a matter for the Chief Constable, who has set up the historical legacies team from the Historical Enquiries Team. A further body is under discussion as part of the current talks.

I understand fully the concerns expressed by the hon. Member for South Antrim (Dr McCrea) about the recent horrendous attack in Lisburn on an elderly person, although I am not authorised to speak on sentencing policy on behalf of my party. The first responsibility of any Government in relation to Northern Ireland remains security. In the run-up to Christmas when threat levels are high, as other hon. Members have said, we owe a particular debt of gratitude to the brave men and women who serve in the Police Service of Northern Ireland. Looking ahead, what assessment has the Minister made of the impact of current and projected budget cuts on police numbers and public protection?

The deployment of police assets is a matter for the Chief Constable and the Department of Justice, which broadly takes its funding from two sources—the block grant, plus additional security funding provided by the UK Government, which, as the hon. Gentleman will know, amounts to £31 million in the next financial year. I know that the Chief Constable greatly values that additional resource to cover some of the additional security costs in Northern Ireland, but principal responsibility for the deployment of that resource rests and remains with the Minister of Justice.

Party Funding

5. What assessment she has made of the level of transparency of political party funding in Northern Ireland; and if she will make a statement. (906462)

Political parties in Northern Ireland must report funding they receive to the Electoral Commission, but this is not published owing to the risk of donor intimidation. Legislation will be brought forward shortly to increase the information available about party funding in Northern Ireland, while still protecting donor identities.

Section 15A of the Northern Ireland (Miscellaneous Provisions) Act 2006 makes provision for funding to be published and, thanks to the excellent Library, I have today read the Sinn Fein accounts, which told me next to nothing, needless to say. Sinn Fein’s money used to come from the IRA through nefarious activities. Does my hon. Friend agree that it is important for the integrity of the political process in Northern Ireland that we have transparency in political funding as soon as possible so that we can learn whether Sinn Fein is taking a legal approach?

I certainly agree with my right hon. Friend that transparency of funding of political parties is essential. Indeed, I see on the Sinn Fein website that it is the stated intention of that party itself. Although the material published on the Electoral Commission’s website in relation to Sinn Fein’s accounts is basic, I hope that the new legislation—in which my right hon. Friend was very much involved—will give us greater clarity, although it is important that donor identity is preserved.

We had the scandal of the on-the-runs, we had the scandal that for 10 years people associated with one political party were involved in fuel smuggling to raise money, and we have the ongoing scandal of elected Members not taking their seats but receiving money from the House. When will the Government address that?

People considering how to cast their votes should pay particular attention to the work that their elected representatives do here. That increasingly appears to be the case and, given the current circumstances, I would have thought that it applied to Sinn Fein more than any.

While I wholly support the cross-party consensus on transparency in political funding in Northern Ireland, I would like a commitment from the Government that they will continually reassess the position. Until we have full transparency, Northern Ireland will not be wholly free.

We are all working towards complete normality in Northern Ireland. The assessment at the moment is that we are not there yet, and for security reasons we have to ensure that donors have anonymity. My hon. Friend must accept that, but it is an issue that needs to be kept under constant review. At some point—sooner rather than later, I hope—we will be able to normalise that aspect of election law across the United Kingdom.

With the general election only five months away, can the Minister confirm that the Northern Ireland Office has already sought an assessment from the Chief Constable of the risk of violence to donors to political parties in Northern Ireland?

The provisions in the Northern Ireland (Miscellaneous Provisions) Act should protect the identity of donors, but if they wish to make themselves known through the Electoral Commission, they can do so. In the run-up to the general election, the security services in Northern Ireland are well aware of increased threats to individuals that may obtain, including those whom the hon. Lady mentions.

Corporation Tax

6. When the Government plan to publish an analysis of the potential effect of introducing a devolved rate of corporation tax in Northern Ireland. (906463)

8. When the Government plan to publish an analysis of the potential effect of introducing a devolved rate of corporation tax in Northern Ireland. (906465)

The autumn statement set out that the Government are in favour of devolving corporation tax powers to the Northern Ireland Assembly. If the powers were devolved, the Executive would be responsible for setting the rate of corporation tax in Northern Ireland. The effect would therefore be dependent on the approach taken by the Executive.

What assessment has been made of the effect of the Government’s economic and welfare policies in Northern Ireland on the feasibility of devolving corporation tax? Can the Minister give the House a fuller explanation?

It is estimated by the Executive that the devolution of corporation tax, and the implementation of the cuts it envisages, would result in 40,000 new jobs in Northern Ireland, which is substantial. It will certainly help to improve and enhance the level of foreign direct investment, which I have touched on already. That is impressive, but it has to be sustained. It is particularly interesting to note that in the Office for National Statistics figures announced today, one of the highest sub-regional centres in the UK, in terms of gross value added per capita, is Belfast. We need to grow the economy in Belfast. The devolution of corporation tax would play an important part in that.

Will the Minister give a guarantee that the devolution of corporation tax will not have an adverse effect on the block grant to the Northern Ireland Executive?

Whenever the Minister is speaking with his right hon. Friends the Secretary of State and the Prime Minister, will he ensure that ongoing talks consider the possibility of additional resources, so that the skilled work force in Northern Ireland can become a pool of employees for inward investors who take advantage of corporation tax?

The hon. Gentleman will be familiar with the economic pact published about 18 months ago and updated during the summer, which gave significant new powers to promote the economy, in particular to grow jobs, and there was a significant amount of lending as a result. It has been successful. The groundwork has been laid and we have seen, in the figures I have quoted today, that it is having some level of success. Corporation tax will take that to the next level.

10. Last week, the Chancellor of the Exchequer said that the figures on the cost of devolving power over corporation tax to the Northern Ireland Executive were given to the Executive. Will the Minister spell out to us the cost to the block grant and the timeline for implementation? (906467)

That very much depends on whether the powers are taken up by the Executive and the extent to which they are taken up. The hon. Lady will be aware that corporation tax in the last financial year raised in excess of £400 million. Were corporation tax to be devolved, and reduced as far as it possibly could be, then we are talking about that sort of figure.

13. Is the Minister aware that the Nevin Economic Research Institute warns that £400 million will have to be cut from public spending in Northern Ireland should corporation tax be moved there? (906470)

That is a matter for the Executive. They need to make a judgment on whether it will produce a net improvement to the economy in Northern Ireland. They have decided that it will create up to 40,000 extra jobs, so they clearly believe that corporation tax will have a net benefit to the economy of Northern Ireland, but they will have to find the money from the block grant.

Welfare Cap

7. What assessment she has made of the effect in Northern Ireland of the introduction of the welfare cap. (906464)

Welfare expenditure accounts for one-sixth of all public spending. The introduction of a UK welfare cap was overwhelmingly approved by 520 Members of this House, although I accept not by the hon. Gentleman. The cap ensures that social security expenditure remains fair to claimants and yet affordable to taxpayers in both Northern Ireland and Great Britain.

On welfare spending in Northern Ireland, what assurance can the Minister give that the operation of the cap will not entail a cap within a cap in ways that mean future benefit take-up campaigns will, for the first time, be at the expense of other benefits, which has never been the case in the past?

The hon. Gentleman is perhaps confusing the welfare cap with the benefit cap. It is important to note that the previous Minister in the Department for Social Development, Nelson McCausland, said that universal credit will lift 10,000 children out of poverty, and that most people in Northern Ireland will benefit from the change in the welfare rules. This has a substantial capacity to improve the lives of those who are reliant on welfare in Northern Ireland.

Youth Unemployment

The November labour market survey reports that the unemployment rate in Northern Ireland for 18 to 24-year-olds has come down 5% over the year, and the Government are directly helping to get young people into work by abolishing national insurance contributions for businesses employing under-21s and apprentices aged under 25.

The Minister will be aware that unemployment in Northern Ireland is much higher than the UK average, and a recent survey by the Belfast Telegraph found that two thirds of young people wanted to leave Northern Ireland. What specific steps is he taking to improve skills and training to encourage young people to stay in Northern Ireland?

Of course, these are matters primarily for the Department for Employment and Learning, with which the Government work closely. I hope the hon. Lady will be aware of the economic plan published 18 months ago in collaboration with the Northern Ireland Executive laying out the steps that we would take jointly to promote a shared and integrated future, including the creation of the further education college at Craigavon. Further such measures will be considered. The important thing is to increase the number of apprenticeships in Northern Ireland, and the national insurance contributions announced in the autumn statement are an important part of that.