Northern Ireland Economy and Innovation: Government Support

Tuesday 29th October 2019 Westminster Hall

16:27

[Emma Little Pengelly (Belfast South) (DUP)]

I beg to move,

That this House has considered Government support for the economy and innovation in Northern Ireland.

First, may I say what a pleasure and privilege it is to serve under your chairpersonship, Dame Cheryl? I am particularly pleased to finally secure the debate. The Minister will be aware that I had secured the debate twice previously, and that it unfortunately fell twice because of the proroguing. I am glad to be here, particularly at this moment in time, to talk about the business and innovation community in Northern Ireland, which is such an important issue.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Will my hon. Friend join me in being extremely grateful that she did not succeed in securing the debate for next week?

[Emma Little Pengelly]

Absolutely. Even when I saw that the debate was scheduled, I thought that I had jinxed the entire thing, and that it certainly would not be third time lucky. However, it is, and I am really pleased to be here, because I am passionate about supporting the economy and businesses in Northern Ireland.

The issue is particularly important at this pivotal time for Northern Ireland and our United Kingdom, of which our businesses are very much part. I will touch on a number of issues relating to business, innovation and the economy in Northern Ireland, and I will raise questions and issues on particular elements. I am grateful to the Minister for being here to respond.

First, I want to paint the broader picture in Northern Ireland. Northern Ireland has an incredibly proud industrial and manufacturing history. We have been world leaders. Many companies that were created and thrived in Northern Ireland, and have been world leaders, will be well known to many across the United Kingdom and the world. Northern Ireland has contributed in a valuable way, including to the economy of pre-partition Ireland and of this United Kingdom. We have been world leaders in manufacturing and industry.

Many generations in Northern Ireland have worked, created, innovated and led the way. They have been critical to our economy and the tens of thousands of jobs they created, changing lives. The mighty companies of the past put Belfast and the rest of Northern Ireland on the map. However, as we are all aware, times have changed, and some of those huge, mighty industries of the past have faded away or are disappearing. This is common not only in Belfast and Northern Ireland, but across the United Kingdom and in many other countries.

However, we must build on our incredibly strong foundation to move forward. Having spoken to businesses, universities, and people in my constituency and across Northern Ireland, I believe there is a huge appetite to do that. It is often said that we stand on the shoulders of giants, and that is true when it comes to the economy and business in Northern Ireland. We have a bright and optimistic future if there is application, support and the right environment to help our businesses, economy and companies grow.

[Paul Girvan (South Antrim) (DUP)]

I want to highlight the benefits we receive from the likes of Ulster University. Its Harry Ferguson building, a centre for innovation, brings forward many world-leading manufacturing products, which will revolutionise the future. But sometimes we fail to embrace the great innovation that we have in Northern Ireland. In my constituency, Conemaster developed a safety product for laying out cones on motorways. Unfortunately, it was set aside by the UK Government and those who want to run things here. It is important that we buy from, and support, local industry, and do not promote others.

[Dame Cheryl Gillan (in the Chair)]

I remind hon. Members that interventions must be brief.

[Emma Little Pengelly]

I thank my hon. Friend for that intervention, which was so good that I almost intervened on him. I absolutely agree. We have incredible companies. Politicians from all parties, but particularly the Democratic Unionist party, have always been proud to showcase and promote those companies, in London, the UK and across the globe. I have had the privilege and pleasure of accompanying many of those businesses on trade missions across the globe. I can see the huge interest in the innovation and creativity of those companies.

The Democratic Unionist party has often been referred to as the party of business in Northern Ireland. Some may disagree with that, and we do not always agree with business on everything, but one thing is clear: the Democratic Unionist party is a proud pro-business party. We recognise that supporting business is critical to supporting our economy, and growth in our economy is critical to getting new opportunities for young people and building a better future for them. We know that shared prosperity in Northern Ireland will bring shared stability. That is essential for Northern Ireland as it emerges from decades of trouble and division, and their legacy, which we still deal with; we know that growing the economy is key.

That is why, in 2007, when the Northern Ireland Assembly was restored, the Democratic Unionist party made growing the economy in Northern Ireland the No. 1 priority. We do so by building a coalition with all the other parties that agree that growing the economy is the best way to get a bright and better future for all in Northern Ireland, across all communities: Catholic and Protestant, Unionist and nationalist, and new and other communities that do not define in that way. We want everybody in Northern Ireland to succeed, and to have the best opportunities, and we recognise that one critical way of doing that is to have a robust, growing and strong economy in Northern Ireland.

[David Simpson (Upper Bann) (DUP)]

My hon. Friend is making a very good speech. She mentioned large companies, but the backbone of Northern Ireland is small, family businesses. We have helped those in manufacturing with rates relief and other measures. Regarding innovation, we have the Young Enterprise programmes, which are coming through into small businesses to give them some initiative. I am sure she will also welcome that.

[Emma Little Pengelly]

I absolutely agree. Later in my speech, I will come to the various aspects of our economy in Northern Ireland, and the particular issues, challenges and opportunities they face.

Northern Ireland is the smallest region of the United Kingdom, making up just 3% of the UK, but we still make a mighty contribution, and have a mighty story to tell. All of us here from Northern Ireland want it to play an even greater part in what is often referred to here as global Britain, but we would like to see a truly global United Kingdom agenda, in which every part of this United Kingdom is fully integrated and promoted and each region pulls its weight.

[Sammy Wilson (East Antrim) (DUP)]

Does my hon. Friend accept that one of the downsides of the current withdrawal agreement is that although we are a major exporting region of the UK, we might find ourselves prevented from taking part in trade deals that the Government might strike with other parts of the world because of the way in which we are tied into the EU?

[Emma Little Pengelly]

As a member of the International Trade Committee, I am very aware of the opportunities, challenges and barriers that full participation in international trade entails. It will come as no surprise to hon. Members to learn that I will mention the ‘B’ word—Brexit—later in my speech, and specifically the dreadful proposal for the Northern Ireland economy. My right hon. Friend’s points are valid; that constitutes a real and present risk to our economy.

Northern Ireland, just 3% of the United Kingdom, relies hugely on trade with the rest of the United Kingdom. Great Britain is the biggest market by far for Northern Ireland—bigger than the Republic of Ireland, the European Union and the rest of the world combined. Over the past 10 to 20 years, and certainly since the restoration of the Assembly in 2007, huge effort has been put into increasing our exports, and the market for our exports in other countries in the European Union and across the world, but Great Britain remains our biggest market, which we rely on hugely. Any barriers to trade with it would have significant impacts. I will touch on that later.

A factor that is discussed less often in this debate is consumer choice. Consumers in Northern Ireland rely hugely on the Great British market for goods, from the supermarket goods that we see in common high-street shops, to bespoke and craft products in smaller, family-owned shops. Many of those goods come from Great Britain, and there are real concerns about how people will access them. Many people today access goods through online marketplaces, such as Amazon, eBay and Etsy; that, too, gives rise to concerns about consumer choice and access. Many of the companies in those marketplaces are based in Great Britain, and many are very small producers; barriers might prevent them from posting their products to shops and consumers in Northern Ireland.

As a small region of the United Kingdom, we rely heavily on its economy, but Northern Ireland has a really strong case to make. As we have gone round the world trying to attract new businesses and, particularly, foreign direct investment to Northern Ireland, we have been able to showcase the fact that we have the highest skills in the United Kingdom. We have three excellent universities: Ulster University, Queen’s University in the heart of my Belfast South constituency, and the Open University, which does a huge amount of work. We also have high skills and a good education system. That is not to say that we do not have challenges—I have spoken about the challenges of trying to support every child to succeed in getting skills—but we are one of the highest-skilled regions in the United Kingdom.

We have relatively low staff turnover, which is very attractive to businesses moving to Northern Ireland, because they know that if they take those staff on, train them and invest in them, they will show loyalty. Indeed, I think we have the lowest staff turnover in the United Kingdom, which is comparatively unique. A company looking to come to the United Kingdom will also find relatively low set-up costs in Northern Ireland, as well as people who can support it through the process, and comparatively low recurring running costs.

We have a strong case to make, but of course there have been challenges. Over the past 15 years, the Republic of Ireland has cut its corporation tax time and again to make it even more competitive, knowing that our corporation tax rate is tied to that of the rest of the United Kingdom, and is therefore significantly higher. The Republic of Ireland has created tax incentive packages that I would describe as innovative, particularly to attract big US companies such as Facebook and Apple. We want to be able to attract those companies, too. Since 2007, working closely with Invest NI, Northern Ireland has had a very strong record; in fact, for some years, it attracted more FDI than any region of the United Kingdom outside London and south-east England. For a small region with the challenges that we had, that is a really strong story to tell. It is a story that we should be proud of—but we want more. We want to do better, and we need to do better, because we still have challenges and we still do not have the types of jobs that we want for our young people: high-value, stable jobs that young people with the right skills can move into, creating happy, healthy lives for themselves and their families with the prosperity that we want to bring.

[Sammy Wilson]

My hon. Friend is right that it is not just jobs that we want, but good-quality jobs. Does she agree that when the Assembly was working properly, one of its successes was in attracting such jobs? Indeed, about 50% of the jobs attracted through FDI paid wages above the average wage in Northern Ireland.

[Emma Little Pengelly]

I absolutely agree. Statistics released in recent days indicate that although we have had growth in the average wage, it has now slowed down, and there has been a slowdown at the high-value end of jobs. In Northern Ireland we have comparatively low unemployment, but those statistics do not necessarily show the whole story. My constituency of Belfast South has one of the lowest unemployment rates not just in Northern Ireland, but across the United Kingdom—but too many of those jobs are at the lower end. We need high-value jobs that pay people better, because there is significant in-work poverty. The best way to get out of poverty is with a well-paid job. People need jobs with stability to help them to support themselves and their family.

We also have persistently high levels of economic inactivity. Although people point to that inactivity, the reality is that right now we cannot just match it with jobs growth. We need good programmes to support people, regardless of why they are economically inactive. In Northern Ireland, we have a higher than average percentage of students, who are currently defined as economically inactive, but those are not necessarily the people we are worried about; we are worried about those who have been economically inactive for some considerable time. Even more worrying are people in families who suffer from transgenerational unemployment. They need the right support and skills programmes, at the right level.

This is not just about getting people entry-level jobs; we want them to skill up and make progress. I have heard House of Commons statistics about how many people go into an entry-level job and stay at that level for their entire career. Social mobility and support for people throughout their career, so that they can increase their wages and their family income, are essential to the shared prosperity to which we are committed.

Let me touch on a few particular aspects. I have already mentioned foreign direct investment. Northern Ireland’s economy is still very much one of small to medium-sized, largely family-owned businesses, as my hon. Friend the Member for Upper Bann (David Simpson) said. The Democratic Unionist party absolutely wants to support those businesses, but many of them are understandably reluctant to take risks in order to grow—people are content with the strong business that they have built not just for themselves, but for their children and family. We want to encourage those businesses because we need them to grow, but they should be able to take those risks in an environment in which they feel confident and positive. I will say a little more about family and small businesses in a moment.

I know that the Minister will have had meetings with Invest NI and received briefings. I pay tribute to the incredible work of Alastair Hamilton, who I worked with many years ago. He has done a fantastic job in very difficult circumstances, particularly in the past few years, to keep increasing foreign direct investment and high-value jobs. Since the collapse of the Northern Ireland Assembly more than 1,000 days ago, one of the small glimmers of light has been the fact that Invest NI has been able to continue to make jobs announcements, including in my constituency, and to create the opportunities that we really need. Under the framework set by the Northern Ireland Assembly, Alastair Hamilton and his Invest NI colleagues were able to continue going into the global marketplace, winning contracts and attracting companies to Northern Ireland. We want to build on his incredible work; as he moves on from the job, we are all thankful for the amazingly competent work that he has put in.

We are keen to continue to play a full role in attracting foreign direct investment. We can do so much through our regional organisations, such as Invest NI, but as the Democratic Unionist party has pointed out to the Government on a number of occasions, our sell in Northern Ireland must be fully integrated into what the United Kingdom does on a global scale. We want to be fully included in what is being offered, including trade fairs, engagement with countries, and trade missions. Some progress has been made, but we want more. I am sure that Members of Parliament from Scotland, Wales, the north of England and other regions also feel that, historically, their region has not been fully included and integrated in the sell of the UK Government. I have raised that issue on many occasions with the Secretary of State for International Trade, and with the Department for Business, Energy and Industrial Strategy. Progress has been made, but we want to build on it, and we want more of our companies to take part.

We know that innovation is the way forward. Northern Ireland will never be a low-cost manufacturer, but we have been, can be and will be high-quality, innovative and creative in our manufacture, industry and services, and in the skills that we bring to them. Investment in innovation is therefore very welcome. Some investment in research and development has been affected by constraints around state aid and other aspects of the European Union. As we move forward from that, we want a continuation of the investment in innovation, research and skills that we have had before.

The Government have spoken on this issue on a number of occasions, and I certainly welcome the very warm words that they have used. However, we would like concrete proposals on how Northern Ireland will get its fair share from any central programme to support innovation, research and development, and on how Northern Ireland can be more successful in bidding for central funds, to try to get the help and support that our businesses need to grow.

I have mentioned a number of universities, but as the Member of Parliament for Belfast South, I will of course mention once again Queen’s University, which does fantastic work in innovation; in fact, it is leading the way in a number of areas.

I am very conscious that we need to identify the potential growth areas. In what areas can Northern Ireland show unique creativity and innovation? In terms of the UK as a whole, what can we do to be particularly attractive to foreign direct investment and growing businesses? We have done huge amounts in areas such as cyber-security and finance.

[David Simpson]

I thank my hon. Friend for giving way again. An issue raised with me time and again is research and development assistance from Invest NI, because small companies are very much hands-on, so they do not have the manpower or staff to handle research and development. Maybe we could look at another way to deliver R&D.

[Emma Little Pengelly]

Absolutely. The Northern Ireland Executive and Assembly were in a really good place to listen to businesses about their needs, and the challenges that they found when trying to apply for those types of funds––the red tape and other difficulties. In future, particularly post-Brexit, we will need a Government who are responsive to the question of how we can support businesses to grow in a way that works for them and their owners, because those owners have enough to do running those businesses, and focusing on what they are good at. The Government need to support firms in a flexible way, and give them the right tools and encouragement to grow.

I will briefly refer to our small and family businesses, particularly retail businesses on our high streets. I mentioned this issue last night in a debate in the main Chamber. As is the case across the United Kingdom, our high streets are under a huge amount of pressure, but unfortunately, we have not been able to access the same amount of support as other areas. I welcomed the Government announcement of additional support for high streets through the future high streets fund, but of course Northern Ireland was not able to use that money, because it went into the Northern Ireland block grant as an unhypothecated Barnett consequential, which meant that it was not ring-fenced for that purpose. As there is no Northern Ireland Assembly at the moment, there is no accountability; there is no way that elected Members and the people of Northern Ireland can push civil servants to spend that money on high streets.

We all know that our retail sector in our towns, villages, and small urban areas in cities is crying out for help; that is common right across this United Kingdom. Those areas are suffering from high business rates; they feel crippled by the bills that they receive. The shopping habits of consumers are changing, so small businesses are struggling. Very often, they are family-owned, and the owner actually works in the business. They need this help, but I met the head of the civil service to urge him to put that money towards retail, and there is no indication that that has happened.

That brings me to something that I have spoken about many times since I was elected as a Member of Parliament in 2017, namely that there is no Northern Ireland Assembly to listen to what the economy needs, and to do what it needs to do. That genuinely grieves me. The people of Northern Ireland, including our business people, are deeply frustrated. They want politicians to get back to work, to get back into the Northern Ireland Assembly and to start investing to grow our economy.

That is my challenge here today to Sinn Féin. There is no impediment to all the parties going back into that building tomorrow and sorting out our problems around the table, like adults, in the Northern Ireland Assembly. I speak for very many people across the community when I say, “Just get back to work and do what you need to do, because our economy needs to grow.”

[Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)]

My hon. Friend is making a very important point. We are talking about the economy, but peace and prosperity go hand in hand. Does she agree that the current EU withdrawal agreement, which she touched on, has the potential to damage local businesses further? Those businesses bring many of the goods that they sell on the high street from Great Britain, and anything that adds to the cost of bringing in those goods risks the ongoing presence of those businesses on our high streets.

[Emma Little Pengelly]

Absolutely, and I—

[Dame Cheryl Gillan (in the Chair)]

Order. Before the hon. Lady resumes, I point out that I have one eye on the clock, three Members have indicated that they would like to make a contribution, and I want to start the wind-up speeches by the two Front-Bench spokesmen at 5.10 pm. It is, of course, up to the hon. Lady to decide what she does, but I thought it might be helpful to point that out.

[Emma Little Pengelly]

I will try to move on as swiftly as I can. I was coming on to the next section in my speech, which is on Brexit. Your comment is probably a good indication that I should not speak for very long on Brexit, Dame Cheryl; despite the fact that I could do so, I will not do so.

I absolutely agree with my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson). However, before I move on to speak very briefly about Brexit, I will mention business rates, because our smaller retail businesses and other businesses on the high street have been crying out for reform of business rates.

I was chair of the Finance Committee in the Northern Ireland Assembly just before the collapse of the Assembly, so I know that business rates were an issue that we were looking at, because Northern Ireland had led the way in rate support for small businesses. Unfortunately, however, since then, the rest of the United Kingdom caught up with us, and then moved past us, so our businesses are now suffering from business rates that are higher than those for small businesses across the rest of the United Kingdom.

The Democratic Unionist party wants fundamental reform of business rates; we recognise that there needs to be additional support for our small businesses. We are up for that challenge; we want to have that discussion; and we need a Northern Ireland Assembly back in action to do it. However, in the absence of the Assembly, I strongly urge the Minister to do what he can to listen to business, and to work within the regime that we have in Northern Ireland to give that much-needed support to small business.

I will very briefly touch on Brexit. A number of my right hon. and hon. Friends have already made contributions about it, and I will not repeat what they said, especially because I know a number of other Members still want to make a contribution about it. Nevertheless, it is absolutely right that any barriers between Northern Ireland and Great Britain—east-west or west-east—will create greater bureaucracy and disruption, and will threaten the economy that we rely on.

The fabric of that economy is complex. It encompasses everything from the large manufacturers and large businesses that have come in, to the supermarkets, right down to the business owner who runs a gift shop and brings in 10 or 20 pottery mugs, bowls or whatever it may be from a small supplier in Great Britain. When we work through all the detail, we can see where there could be significant additional costs and significantly more bureaucracy. These businesses may actually have problems in getting supplies. That is the difficulty for many, many businesses.

We have raised that issue, because the Democratic Unionist party will always stand up for what is good for Northern Ireland. What is bad for business—what puts up barriers—is bad for Northern Ireland. We know that, and we care about the people involved.

[David Simpson]

My hon. Friend touched on business rates. I understand that there will be a rate review next year in Northern Ireland; as a party, we should use our influence to try to do something for the retail sector.

[Emma Little Pengelly]

I absolutely agree with my hon. Friend. However, I am getting a huge amount of pressure on my right from my hon. Friend the Member for Strangford (Jim Shannon), who is very keen to speak; I know that because he never gets to speak in Westminster Hall. So I will wind up.

In conclusion, I am passionate about supporting the economy in Northern Ireland, and I hope that I have got that across very firmly today. I am passionate about making Northern Ireland work. I am passionate about helping Northern Ireland to thrive. That must mean creating jobs, opportunities and a brighter, more prosperous future for all in Northern Ireland, across all the communities. We recognise that. I recognise that happy, contented people in this Union—in this United Kingdom—will not vote for the chaos, change and decades of transition that leaving this United Kingdom would bring. Members of our party genuinely care about the people of Northern Ireland, and we want our businesses, economy, industry and people to succeed.

[Several hon. Members rose—]

[Dame Cheryl Gillan (in the Chair)]

Order. Regretfully, I have to impose a three-minute time limit on speeches. I am pleased to call Jim Shannon.

16:59

[Jim Shannon (Strangford) (DUP)]

Thank you, Dame Cheryl—hallelujah to get the chance to comment. Northern Ireland is on the cusp of greatness. In football and sport we are doing great things, but our economy is doing even better, with international investment in the IT sector and a booming financial industry. Newtownards, the main town in my constituency, is a commuter town; it is about half an hour from Belfast on the wonderful Glider service. Many people from the town, and indeed from across the Ards peninsula and the wider Strangford constituency, find job opportunities in the Belfast area.

The Minister for retail, the hon. Member for Rochester and Strood (Kelly Tolhurst), came to Newtownards to get an idea of how the towns and the retail end are working. Unemployment in Strangford is at its lowest level for many years. I understand that the Government have acknowledged that FinTech is one of the fastest growing sectors in the UK economy, and Northern Ireland is increasingly recognised as an important destination for new development and investment in FinTech, with more than 36,000 people employed in the financial services sector. We have just had the appointment of a new FinTech envoy for Northern Ireland, Mr Jenkins, which I and my party welcome.

I also welcome the confidence and supply motion. Just this week the Secretary of State for Digital, Culture, Media and Sport announced further rural network broadband investment. Coverage will go from 78% of Northern Ireland to 91%, as the Secretary of State said in the Chamber yesterday. That is good, but it cannot be the extent of Government support for the economy and innovation in Northern Ireland. As I said in March, we have the potential to do so much more. We have state-of-the-art office spaces, UK-wide connectivity and low business rates.

We are a place to invest in, with a high-class graduate labour force and an abundance of administrative staff. As a shooting man, I would say that all the ducks are in a row. It is perfect for Northern Ireland at the moment. Queen’s University, with its innovation in health, its partnerships with companies across the world and its students, adds to that. Pharmaceuticals are doing exceptionally well in my constituency—although they could do better—as is the agri-food sector. TG Eakin in pharmaceuticals, Mash Direct, McCann’s and Willowbrook Foods, Rich Sauces and Lakeland Dairies are all in place.

We could do something on corporation tax to enable us to be more competitive with the Republic of Ireland. We have the rental property space, the skilled labour force, the connectivity and the ability to reach an airport within an hour for most of Northern Ireland—we have it all. We need a Government in our corner helping us to attract international investment and fighting for us as an integral part of the United Kingdom of Great Britain and Northern Ireland, because we are better together—as opposed to something that seemingly works against us—in something that benefits the entire UK body.

17:00

[Ian Paisley (North Antrim) (DUP)]

It is an honour to serve with you in the Chair, Dame Cheryl. The wonderful speech of my hon. Friend the Member for Belfast South (Emma Little Pengelly) really put into perspective the fact that not only does Northern Ireland want to play its part in the economy of the United Kingdom of Great Britain and Northern Ireland, but it plays its part in the world. That is very important, because we have a great history. She mentioned standing on the shoulders of giants. Currently, 10% of all global financial exchange networks flow through Belfast, and 10% of all cholesterol tests for the world flow through Randox Laboratories in Northern Ireland. Northern Ireland plays a significant part in the world economy.

We are therefore anxious for Northern Ireland to do more, and for the Government to recognise and facilitate that, not cut us off from our mainstream economy. In simple terms, about £18 billion-worth of trade is done every year between Northern Ireland and the rest of the United Kingdom; and about £6 billion is done with the Republic of Ireland and the EU. I know which side of the fence traders in my constituency and across Northern Ireland want to be on. It is therefore critical that we get that balance right.

We have five very simple requests for the Government. First, reduce corporation tax in Northern Ireland. Stop footling around with other things in Northern Ireland and deal with corporation tax. Reduce it to 10%. Make Northern Ireland the attractive place that it should be for businesses to invest in. Secondly, remove airport passenger duty for our region and allow us to compete properly with Dublin airport, which is stealing customers, who do not turn left when they get off the aeroplanes in the Republic of Ireland but stay in the Republic.

We need those customers to come to Belfast. Thirdly, therefore, incentivise airline carriers to land in Northern Ireland so that we can have more tourism and more businesspeople. Fourthly, remove VAT on tourism and hospitality so that we can compete fairly with our land-border neighbour. Fifthly, build a bridge. Give us that connection between Northern Ireland and the rest of the United Kingdom. Let the constituents of my right hon. Friend the Member for East Antrim (Sammy Wilson) leave Larne and drive to Scotland, and then drive back again on the same day. Allow them to have that great opportunity, which they really need.

In the last few seconds of my speech, I want to thank the Government for their efforts to keep a brilliant manufacturing company, Wrightbus, alive in Northern Ireland. That will create tens of thousands of opportunities for people in the years ahead.

17:00

[Stephen Pound (Ealing North) (Lab)]

Let us agree on one thing: Northern Ireland is the home of innovation. There has been a long history of that, from the modern tractor through to the Sunderland flying boat, Wrightbus and Shorts Missile Systems. In fact, most of the ejector seats in modern fighter planes are made in Northern Ireland. There is no argument that we have that extraordinary history; that seedbed of innovation, which is flourishing.

When we go to places such as Lagan College and speak to young people who are working in completely new businesses and industries, we realise that the base material is there. So what can we do, as Government, to facilitate the flowering of that innovation and great skill? When, 20-odd years ago, we had a problem with the aggregates industry because of the fiscal harmonisation issue cross-border, the Government were able to work with the aggregates industry in Northern Ireland to equalise the rates of exchange on tariffs, in order to facilitate that local business. However, that is just a tiny bit of it.

We have a philosophical question here: how do we actually support industry and innovation? The days of DeLorean, of parachuting in large amounts of money and of top-down intervention are long gone. We have to work in an entirely different way. Look at companies such as Thales, based in my constituency.

[Ian Paisley]

Will the hon. Gentleman give way?

[Stephen Pound]

Am I allowed to take an intervention?

[Ian Paisley]

Yes, and you get an extra minute. I am delighted that the hon. Gentleman has given way, because he talked about the real innovation in Northern Ireland. This week I visited a company called Creative Composites in the constituency of my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson). They make the entire shell of the new London taxi.

[Stephen Pound]

That is an extremely interesting point, and I am extremely grateful to the hon. Gentleman—

[Ian Paisley]

They make the 720S body for McLaren. They make the Aston Martin shell. Those things are done innovatively in Northern Ireland because they cannot be done anywhere else in the United Kingdom. That is why we should invest in Northern Ireland.

[Stephen Pound]

Do you know, I have no argument with that. Thales employs nearly 1,000 people in Northern Ireland, and it is there for a reason. It took over Shorts Missile Systems, and it is there because of the highly skilled, highly motivated, highly trained and highly capable workforce. What can we, as Government, do to help? In my days in the Navy, the number of marine engineers who came from Northern Ireland was extraordinary, yet somehow we are unable to see that great tradition of engineering innovation and expertise flourish in Northern Ireland.

I could make many suggestions; I will make just a small one. The backbone of Northern Ireland industry is small and medium-sized enterprises. They have a problem with apprenticeships—I am not talking about the Apprentice Boys, but apprenticeships. A small company finds it very difficult to employ apprentices, simply because of the absence of economies of scale. In GB we used to have a thing called the MSC—the Manpower Services Commission—whereby the Government would underwrite apprenticeships or temporary employment periods. Would it not be marvellous if the Minister, a man of great decency and honesty, and who is extremely committed to the expansion of industry in Northern Ireland, could persuade some of his colleagues to loosen the purse strings and look at the Government supporting apprenticeships?

At the moment, most SMEs simply cannot afford to employ apprentices. The foreign direct investment is there. Northern Ireland has a great reputation, not just within the rest of Europe but in America. However, we need small companies to have the capability and elasticity to attract and work up those schemes. Apprentices would make a huge difference. Let us see whether we can do that, because when we see the amazing extent of innovation, intelligence, hard work and commitment in Northern Ireland, we think, “Why isn’t this place the powerhouse of Europe?” I think it could be again.

17:09

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure and an honour to serve under your chairpersonship, Dame Cheryl, and I congratulate the hon. Member for Belfast South (Emma Little Pengelly) on securing this debate. It is third time lucky for her, and also for the House, because the speech with which she opened this debate was passionate, well-informed, comprehensive, and very moving in parts. I, for one, learned a lot from it.

I am proud to represent the party that helped broker the Good Friday agreement, and the current Government’s cavalier approach to preserving that agreement in the Brexit negotiations worries me. As hon. Members have said, the Good Friday agreement is the foundation of peace and prosperity in Northern Ireland, as well as the Republic. The absence of the devolved Government in Stormont is another issue that many hon. Members have mentioned. Labour’s approach rests on increasing local, regional and national democracy, and the lack of resolution to that problem clearly undermines efforts to improve innovation and the economy of Northern Ireland.

I will begin by outlining Labour’s approach to industrial strategy and innovation. It is not a top-down approach; as my hon. Friend the Member for Ealing North (Stephen Pound) said, that is not the right approach. We aim to provide support for a devolved Administration and local councils to make decisions in support of their industry and their workers. We have talked a lot in recent months about the differences between Northern Ireland and the rest of the UK, but there are also many similarities, particularly with my home region, the north-east of England. As the hon. Member for Strangford (Jim Shannon) likes to point out every time he intervenes in one of my Adjournment debates, there are many similarities between our regions, particularly our economies and the investment in making and building things over the centuries. The hon. Member for Belfast South spoke movingly about that in the context of Northern Ireland, as well as the years of deindustrialisation and under-investment in infrastructure and education that have left Northern Ireland with some significant economic challenges.

The legendary Harland and Wolff shipyard was recently saved from collapse because workers staged a nine-week sit-in in protest to show that it was still viable, but those who took redundancy face an uncertain future. Wrightbus has also been mentioned—a company that had been operating since 1946, but which closed its doors in September, threatening 1,200 jobs. It was recently bought by the Bamford family after going into administration, although we still do not know what its workers’ fate will be, particularly as the Government propose a Brexit deal that would place trading barriers between that company and the rest of the UK. The right hon. Member for East Antrim (Sammy Wilson) and the hon. Member for Strangford emphasised the negative impact that would have.

[Ian Paisley]

The business that the hon. Lady has alluded to is in my constituency. It was a very significant employer, equivalent to about 60,000 jobs if it were based here in the mainland, and I am delighted that the Bamford family have invested in it. It is a new chapter for the industry, bringing hydro technology to Northern Ireland. Hopefully, as a result we will get the cleanest, greenest public transport in not only the UK but the world.

[Chi Onwurah]

I thank the hon. Gentleman for his intervention, and I will return to that example. However, my point is that this does not reflect a sound industrial strategy, precisely because the old company collapsed because of its UK customers moving to electric buses and the new company will be making electric buses. A serious industrial strategy would have a plan for transport that could have incentivised the company to move in that direction without the chaos of administration and the sale to a Tory donor, in order to achieve the same outcome. That sort of creative destruction might excite certain Government advisers, but it puts workers under severe stress and often results in employment under worse terms and conditions, as the former employees are in a weaker bargaining position.

That process of collapse and asset stripping is related to the problem of the financialisation of our economy. The last decade has seen the UK economy centred on London and the south-east of England, with a focus on financial services rather than producing things. As the economist Mariana Mazzucato argues, the financial sector has stopped resourcing the real economy. Instead of investing in companies that produce stuff, finance is financing finance. Financialisation changes the motors behind economic activity, giving investors with short-term interests more control over firms, and its legacies are low productivity and low pay. Labour is committed to changing that and putting innovation at the centre of our economy, using our world-class universities—such as Ulster University, and Queen’s University in the constituency of the hon. Member for Belfast South—as drivers of growth, rather than putting off scientific talent from across the world with cruel immigration policies.

Labour’s “innovation nation” mission would raise research and development to 3% of GDP—almost twice what it is now—using science and industry to benefit the whole country. We need to maintain our current centres of excellence, but must also ensure that every region can benefit from innovation and growth. That is why we are committed to putting technology and innovation at the heart of the lowest-paid and least productive sectors. The hon. Member for Belfast South spoke movingly of the need for social mobility in work, which requires increased productivity. We want to restart manufacturing, but we know that most jobs are in the service sector. Some 17% of people employed in Northern Ireland work in wholesale and retail, in the everyday economy. That is why we have plans to create a retail catapult to support those workers.

Much of our additional R&D spend would be drawn on by our industrial strategy missions, such as investing in carbon capture and storage as part of our commitment to decarbonise our economy, delivering hundreds of thousands of green jobs in the process. We propose a £250 billion national investment bank, made up of a network of regional development banks that would properly put regional needs first and restore regional decision making. Earlier this year, the Northern Ireland Chamber of Commerce said that 77% of service sector firms and 74% of manufacturers were having difficulty recruiting staff. Labour’s national education service will support reskilling, delivering education free at the point of demand from cradle to grave and ensuring that we have the skills that businesses need.

Although the DUP might have secured £200 million in next year’s Budget through its deal with the Government, recent weeks have shown how quickly the Government can change their mind. Labour’s £250 billion national transformation fund would invest in transport and digital infrastructure across the UK without preconditions.

Finally, I will turn to the topic of Brexit. In the 2014-20 block of EU funding, Northern Ireland was allocated a total of €3.5 billion—significantly more than the Government’s offer to the DUP. As we have rightly opposed the Government’s shambolic Brexit deal, we have to question whether that funding will even be delivered. Will the Minister commit to publishing an assessment of the impact on the Northern Irish economy of putting extra tariffs on trade between Northern Ireland and the rest of the UK, and making sure that that impact is not negative? Will he also follow Labour’s plan and commit to maintaining the EU levels of structural investment as a minimum? Finally, given the current trade tariffs on EU exports after the row over subsidies to Airbus, what commitment will he give to aerospace workers in Northern Ireland?

17:18

[The Parliamentary Under-Secretary of State for Northern Ireland (Mr Robin Walker)]

It is a great pleasure to serve under your chairmanship, Dame Cheryl, and I join many other Members in congratulating the hon. Member for Belfast South (Emma Little Pengelly) on a superb speech and on having secured this debate—third time lucky. I was disappointed when previous debates were postponed, and am delighted that we have had the opportunity to have this debate today and hear some excellent speeches.

The hon. Lady rightly spoke about Northern Ireland’s proud industrial history and its bright, optimistic future as part of the UK. I strongly believe in upholding the constitutional integrity of the United Kingdom—a family of four nations that are safer, stronger and more prosperous together. Northern Ireland benefits from being part of the world’s sixth-largest economy. Being part of the UK allows the 66 million people living across the four nations to work together to create jobs and opportunities.

As we have heard from many hon. Members, the Northern Ireland economy is strong, with an economic performance that sits alongside the growth of the wider UK economy. Employment is at a near-record high and unemployment is at a near-record low. The UK Government are serious in their commitment to grow the economy and to support innovation in Northern Ireland and across the whole UK.

I will set out some details of the UK Government’s investment in the Northern Ireland economy. We are delivering on our commitment for an ambitious set of city and growth deals across Northern Ireland. Since the funding announcement for the first city deal for Northern Ireland, the Belfast regions city deal, at the autumn Budget 2018, the total regional economic investment from the UK Government has exceeded £600 million. That commitment was reinforced by the Prime Minister’s announcement that £163 million has been allocated to complete the deals for the causeway coast and glens and the mid, south and west regions of Northern Ireland.

The UK Government have announced funding for all 11 council areas in Northern Ireland. That investment will significantly boost economic activity and attract private sector investment. The proposals are an example of what can be achieved when politicians of all backgrounds, local businesses, community leaders, academia and local government stakeholders come together to shape the economic future for their local areas and Northern Ireland as a whole.

[Stephen Pound]

The Minister is making an extremely powerful point. There are occasions when the Government can stand by and simply encourage—when they do not have to finance initiatives. Will he give credit to Thales, which I mentioned earlier, which has set up the primary engineer and secondary engineer leaders awards for Northern Ireland? That does not cost the Government anything, but provides an incentive for people in primary and secondary education in Northern Ireland to achieve awards in engineering.

[Mr Walker]

The hon. Gentleman draws attention to what the private sector can do to support apprenticeships and programmes of that sort, which of course I welcome. I also look forward to seeing the nine digital and innovation business cases from the Belfast region city deal come to fruition next year.

We are of course aware of the challenges faced by some of Northern Ireland’s iconic businesses in recent years, notably Harland and Wolff and Wrightbus. These have been very difficult times for their workforces, the families and the local communities. As the hon. Member for North Antrim (Ian Paisley) kindly paid tribute to, the Secretary of State for Northern Ireland has engaged continuously with the efforts that local hon. Members in both constituencies—the hon. Member for North Antrim and the hon. Member for Belfast East (Gavin Robinson)—have championed to bring in new investors to support those two iconic names. I join the hon. Member for North Antrim in saying that I hope those investors will deliver tens of thousands of opportunities. I believe that hydrogen-powered buses and green infrastructure can play a crucial part in achieving the UK’s aim of achieving decarbonisation, and show how Northern Ireland can continue to lead the way. So I want to see those businesses succeed.

[Ian Paisley]

The way for the Minister to succeed in that is to ensure that the Government here put money into hydro tech and allow hydro companies to produce the resource. He must see the way ahead as not just battery power but hydro power.

[Mr Walker]

The hon. Gentleman makes his bid strongly, as I would expect. I will ensure that that is passed on to the Treasury and other relevant Government Departments. Indeed, we have heard a number of bids during the debate, not all of which I can necessarily answer. Obviously, however, there are a number of opportunities coming to deal with some of those things.

People in Northern Ireland also benefit from the changes that people throughout UK enjoy that have been delivered by the Government, including an increase in the national living wage that benefits about 75,000 workers, and a fuel duty freeze for the ninth successive year that saves the average driver a cumulative £1,000 compared with under the pre-2010 escalator. Following the terrible fire in Bank Buildings, owned by Primark, in August 2018, the UK Government provided £2 million to support the recovery and regeneration of Belfast city centre in the constituency of the hon. Member for Belfast South. I am pleased that much of the city centre has been rebuilt and has reopened after that fire.

As the hon. Lady mentioned, the UK Government announced a £675 million future high streets fund to support local areas in England to develop and fund plans to make high streets fit for the future. As high streets funding and business rates are devolved, the Barnett formula was applied to Northern Ireland in the usual way, as she noted. It is for the Department of Finance and Northern Ireland civil service permanent secretaries to determine how that money should be spent.

I join the hon. Lady in wishing that we had a restored Executive and in encouraging all the politicians in Northern Ireland to come together to bring the Assembly back, so that decisions can be taken on those issues and they can move forward. Hon. Members may be aware that the Government introduced the Northern Ireland Budget Bill today, which is required to place the Northern Ireland budget, presented in February 2018, on a legal footing. Delivering that legislation demonstrates the UK Government’s commitment to providing good governance for the people of Northern Ireland in the continued absence of the Northern Ireland Executive, but of course, we all want the Executive to be restored.

Businesses in Northern Ireland can benefit from UK Government initiatives, including the British Business Bank, which has supported more than 1,200 small and medium-sized enterprises in Northern Ireland with £80 million since November 2014. In the last year, more than 1,000 loans, valued at £7.3 million, have been granted to Northern Ireland businesses. Northern Ireland businesses also have access to UK Export Finance, which has provided nearly £33 million of support for exporters in Northern Ireland. I absolutely commend the collaborative efforts of Invest NI and the UK Department for International Trade to support Northern Ireland exporters to trade across the globe and to attract investment into Northern Ireland. I join the hon. Lady in paying tribute to the work of Alastair Hamilton and in wishing his successor every success in the years to come.

As the hon. Lady will recall, the UK Government’s Board of Trade met in her Belfast constituency earlier this year, which was the first time it had met in Northern Ireland in its 400-year history. The global success of Northern Ireland firms was celebrated, with several Northern Ireland companies receiving their well-deserved Board of Trade awards.

Our prosperity and ability to build a strong economy depends on how we encourage innovation, develop high-quality jobs and skills, and support businesses throughout the UK to thrive and grow. Innovative businesses across Northern Ireland are a huge part of its success, including Armstrong Medical, which I had the pleasure of visiting at a Causeway chamber of commerce business roundtable recently.

As we have heard, Northern Ireland has globally admired universities and research institutions, such as Queen’s University Belfast and Ulster University, because we have nurtured our intellectual powerhouses with public investment. The industrial strategy challenge fund supports innovation UK-wide and has allocated £12 million in Northern Ireland to date, including specific investments in Queen’s University Belfast.

Several hon. Members have touched on the controversies about EU exit. I do not have time to respond in detail to all those points, but I will say that we need to be absolutely clear that Northern Ireland leaves the EU with the UK, and we need to make sure that trade between us continues unfettered. The hon. Member for Belfast South made the point very well about the enormous importance of the UK internal market, which we absolutely want to protect. Northern Ireland continues to be a top destination for inward investment, and we will work with Invest NI to ensure that that continues.

I recognise the hon. Lady’s comment that shared prosperity is shared opportunity. She made the case extremely well on behalf of Northern Ireland business, and I commend her for her efforts.

17:27

[Emma Little Pengelly]

I will not go into any more detail about what we have discussed. I thank all hon. Members who turned up and I apologise for the fact that they had to make short contributions. As I said, there are a significant number of issues—I did not touch on city deals or some of the other issues. I ask the Minister to continue to work closely with us to help Northern Ireland to grow, thrive and succeed in the future.

Question put and agreed to.

Resolved,

That this House has considered Government support for the economy and innovation in Northern Ireland.

17:28

Sitting adjourned.