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David Simpson
Absolutely. I thought my hon. Friend was going to mention the EU again; he disappointed me greatly in not getting it slipped in. He is right: we need to look at other ways we can help. Some companies across Northern Ireland, certainly in my constituency, have availed themselves of gas lines, which have made a big difference to electricity costs, especially for bakeries. As the Executive move forward, I believe we have a big part to play in reshaping energy policy.
I meet companies regularly, as I am sure all right hon. and hon. Members here do. One of the major issues they raise continually is business rates—if it is not energy costs, it is business rates. In Northern Ireland, we have capped rates for manufacturing at 30%. I have to say that that is a success for my own party—other parties agreed to it, but it was brought forward by the Democratic Unionist party and we have achieved great things with it. Companies today are surviving because of it, and without it, those companies would not still be here.
My constituency of Upper Bann is the second largest manufacturing base in Northern Ireland outside Belfast. For every manufacturing job in the Province, 1.5 jobs are supported elsewhere in the economy, contributing £2 billion in wages to staff and a further £2.2 billion though jobs supported outside the sector. I fear future losses if we do not address the issue of energy costs, which I keep coming back to, because it is crippling a lot of our companies.
The Parliamentary Under-Secretary of State for Northern Ireland (Mr Ben Wallace)
Will the hon. Gentleman join me in pressing the new Executive to ensure that one of the first things they do is resolve the issue of providing a proper and appropriate superconductor between the Republic of Ireland and the north? It is widely believed, and stated to me by the energy companies, that Northern Ireland’s manufacturers and residents have higher energy costs than their neighbours in the Republic because of the lack of a modern, 21st-century superconductor process to allow electricity to move around the whole country and island.
David Simpson
I am grateful to the Minister for intervening. He is absolutely correct, but that project has been held back by environmentalists—I do not want to get on the hobby-horse of my hon. Friend the Member for East Antrim—and, I have to say, by Sinn Féin, as far as planning permission is concerned. We need to address that. The Minister is quite right that that will make a big difference to energy costs. I think Northern Ireland has the second most expensive electricity after Japan, and addressing that would help the economy to grow even more.
Despite the difficult times we have had, 40,000 new jobs were created in the past five years. A lot of that, of course, was done through the Department of Enterprise, Trade and Investment. Mrs Arlene Foster was the Minister in the Department at that stage, so she has a good track record, along with her colleagues in the Executive. We also welcomed £2.9 billion of investment in that time, which is almost three times the £1 billion target. We are well on the way.
We look forward to the reduction of corporation tax. Our party is focused on that and has promised its delivery. Is it a silver bullet? No, but it is certainly part of a large armoury that will be available to the Executive. It is estimated that 30,000 jobs could be created through the reduction in corporation tax, which would mean 10% growth in our economy. Our party and the First Minister will certainly be pushing for that. The Northern Ireland Assembly today is in a good position to maximise the potential of all those things, but we need the Government’s support behind us.
Tom Hall, the vice-president of international technology and operations at Allstate, has said:
“Our experience in Northern Ireland far exceeded our expectations. We came here originally for the cost savings. We find ourselves staying for the people and the talent that is available.”
That leads me on to a key factor relating to Northern Ireland’s economy—one that I am proud we are delivering. Northern Ireland is the top region in the UK for educational attainment. The hon. Member for North Down (Lady Hermon) raised the issue of education, which we need to make more progress on. We cannot rest on our laurels. However, the official figures show that in 2015, 83% of Northern Ireland students achieved the three top grades in A-level exams, compared with 77.3% across the rest of the UK. Students and young people play a pivotal role in the Northern Ireland economy. Their input is not given enough focus, and the skills and expertise they are achieving needs to be given the accreditation it deserves.
Northern Ireland is the only region of the UK that has increased salaries for new jobs in the past year. However, new salaries in Northern Ireland remain lower than the UK average of £33,815, so there is still some work to be done. We need to stop haemorrhaging our trained professionals to other countries, which can offer better rates of pays. It is a vicious circle that we are in: while better pay is available in other countries, it encourages our young people to go to them and perhaps not return—if they are going for educational purposes or to learn skills or whatever and returning, that would be a different story. We need to improve our rates. The only way we can do that is to encourage the private sector to invest in Northern Ireland and to reduce the public sector. That is something that we are trying to achieve, and it has been achieved to an extent, but again there is still some way to go.
As I said earlier, our manufacturing sector was certainly one of the worst hit, but the 30% cap on manufacturing rates has made a big difference. The latest figures show that companies may now be prepared to pay for new recruits and to invest in new staff. That may go some way to encouraging young people to embark upon apprenticeships, especially plumbers, electricians, bricklayers and other such areas in the construction sector. There remains a concerning lack of skilled tradesmen throughout Northern Ireland. Last year it was reported that the construction industry was paying grossly over the odds, as they had to bring recruits in from other countries to ensure that they met their completion dates.
The Parliamentary Under-Secretary of State for Northern Ireland (Mr Ben Wallace)
May I thank the hon. Member for Upper Bann (David Simpson) for securing this debate? It is great that we are having a debate about Northern Ireland’s economy. I am delighted that his speech was much shorter than the Upper Bann count on Saturday night. I was waiting and waiting for the final results of the Northern Ireland Assembly elections, and, for some reason, Upper Bann managed to spin it out until almost the last possible moment.
I heard what the hon. Gentleman said. It is true that we have to do all we can to continue supporting very important parts of the Northern Ireland economy. I am delighted that it is moving in the right direction, with manufacturing at its heart. I am a north-west MP, and I see a lot of strong similarities between his part of the world and mine. While Bombardier has had some bad news, I am delighted by the order of more than 70 C series planes, which is a big order for any aeroplane manufacturer. There are 6,000 BAE Systems workers on my patch, and I know how that can secure their future for a long time. This Government are working to support Bombardier when called upon, to achieve more orders across the world for that very successful plane, and I hope we can do that.
The hon. Gentleman raised the issue of energy costs. It is true that UK energy firms can face, and have sometimes faced, higher energy costs compared with their competitors, but I would not lay it all at the door of environmental issues or, indeed, the European Union. Germany may, as it says, have lower business energy costs, but it has much higher wage and social costs. For example, there is little variation in steel prices across Europe because each country has different costs for its businesses.
I visited the Irish national electricity generation company down in Dublin a few months ago, and it is clear that the consumer in Northern Ireland, whether business or residential, could have lower energy prices if we just sorted out the superconductor crossing the border. It is in everyone’s interests—including all the parties in the Executive—to ensure that that happens and that we get on with it, because it is unfair to penalise Northern Ireland’s businesses for something that is within the Executive’s power to put right. I will do everything I can to help with that.
It is great that we have some real blue chip companies based in Northern Ireland. Thales is doing well, and I was delighted that 80 new jobs were announced this week in AXA over in Derry. That is all going in the right direction, but I understand that there are challenges. The agri-food industry is a big industry, and it is important that we recognise that it comprises not just the farm but the processor and the retailer. Some are doing very well out of it, some are not. On Monday night I met members of the farming community at Queen’s University Belfast, when Commissioner Hogan came over from the European Commission. It is true that we face some big challenges to ensure that our farmers have a profitable, stable and enduring future, and I think everyone has a role in that.
As for farming, it is absolutely clear that access to export markets, and growing exports for produce, is the No. 1 priority for the Government and for farmers. I will say this on Brexit: putting extra or new barriers in the way of growing export markets will not help farmers in the short or long term. Farmers in the north of Ireland need to sell their beef abroad, they need to sell their milk abroad and they need access to markets. If people say it is the EU that holds them back, they should look to the south, where the farmers in the Republic of Ireland have a better milk price than farmers in the north. That is mainly because the Republic of Ireland—little Ireland, on its own—has managed to open up bigger markets in China to sell its milk produce and remain within the EU. The challenge is not to put more barriers in front of our farmers if we want to see our agri-food sector increase; the challenge is to decrease the number of them. Wherever we see protectionism around the world, I believe the EU is better at trying to remove it than countries trying that alone.
The other point is stability—other hon. Members have mentioned it, so I will not dwell on it—and stability of governance in Northern Ireland. We saw that the last round of crisis, with Stormont effectively suspended, did not help with the message on the economy. All parties here know that the strongest message for business is stability, so it can plan and invest. The Northern Ireland Executive, which are back up and running, have a great opportunity to capitalise on that good message about potential. It is very important that, when business feels that the environment is not stable, people speak up for it and make sure that politicians hear that message. It is also true that stability is important here in Great Britain.
On education, it is tragic when we see the great, educated population of Northern Ireland not getting the jobs, or when the skills are not matched to them. That is something that we all have to work on across the UK and in Northern Ireland. That is why we were delighted, in the Stormont House agreement, to commit £500 million over 10 years towards shared and integrated education, to help funnel that and improve people’s educational chances across Northern Ireland.
The hon. Member for Upper Bann talked about the family budget. It is true that we need to do more to make sure that everyone in Northern Ireland, those on lower and higher incomes, go along together with any growth. That is why I am proud that this Government have managed to raise the personal allowance to £11,500 this year. No one will pay tax if they earn below that. The national living wage came in last month, which will see a real increase in people’s pockets across Northern Ireland for those on lower incomes. Also, the upper rate of tax now starts at £43,000. If we are going to encourage people to stay and invest in Northern Ireland and aspire to do things, why should they not keep some of that money as a reward as well? We do not want to drive away our entrepreneurs and penalise them for doing well. That is very important.
As a north-west MP, I know that the hon. Member for Foyle (Mark Durkan) is absolutely right to say it is very important to make sure that our economic development is balanced across a region or a country. It is the same in Scotland. I used to represent North East Scotland, and there was a similar debate between Aberdeenshire, Glasgow and Edinburgh. We have to make sure that we always rebalance, and that we do so fully conscious that it is not always about one big city. I am delighted about the Republic of Ireland’s commitment on the A5—after this election, we hope. The Northern Ireland Executive have already said that they are going to move ahead with the A6 and finish off the dualling. If we can get Derry and Londonderry much faster to get to, there is great hope. I hear the hon. Gentleman loud and clear on the city deals and enterprise zones. I have already spoken to the hon. Member for South Down (Ms Ritchie) about how we can help to lobby and put together a bid. We will happily go with her to see the Chancellor and lobby for that, whether it is for South Down or Londonderry.
With 30 seconds left, I finish by saying I come back to a Northern Ireland that is full of confidence and that is actually pretty united. In the Chamber today we heard nationalist and unionist parties agreeing how good a place Northern Ireland is, how attractive it is for investment and how the economy is going in the right direction. If the pride of the country can be mixed with stability—once the referendum is out of the way, we should all work for that—and with aspiration, I think Northern Ireland has the ingredients to make a cracking economy and to move forward.