Oral Answers to Questions

Baroness Ritchie of Downpatrick Excerpts

Tuesday 21st July 2015 Commons Chamber

[Damian Hinds]

Indeed, families with twins will get double the benefit, but everybody with children aged three and four will get that particular benefit, which is part of a suite of increases in childcare support, including through universal credit and tax-free childcare.

[Ms Margaret Ritchie (South Down) (SDLP)]

6. What assessment he has made of the implications for his policy of the European Commission’s decision that part of an exemption from the aggregates levy constituted unlawful state aid; and if he will make a statement.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

In March, a European Commission state aid investigation into the aggregates levy exemptions found almost all of them to be lawful. The Chancellor announced in his summer Budget that these lawful exemptions will be reinstated from August. However, the Commission decided that part of the exemption for shale aggregates provided unlawful state aid. Her Majesty’s Revenue and Customs is in contact with potentially affected businesses, and we will minimise the impact as far as possible.

[Ms Ritchie]

I thank the Exchequer Secretary for his answer. He will be aware that shale is fundamental to the quarrying industry in my constituency, so can he explain to the House: what persuasive case was made by the Treasury to the Commission in that regard?

[Damian Hinds]

I appreciate how important the shale industry is in County Down. Of course we are very disappointed that the Commission made this judgment on part of the shale exemption, having previously found all the exemptions to be legal in 2002. I say to the hon. Lady that if any businesses in her constituency have particular issues to raise, they should talk to HMRC, and it will continue to provide support through the staged payments of other taxes through the time to pay scheme.

Budget Resolutions and Economic Situation

Baroness Ritchie of Downpatrick Excerpts

Monday 13th July 2015 Commons Chamber

[Ms Margaret Ritchie (South Down) (SDLP)]

I congratulate the hon. Members for Southampton, Itchen (Royston Smith), for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton) on making their maiden speeches.

The Secretary of State for Communities and Local Government said that this is a Budget for working people and families. From my perspective, and that of the constituents I represent, nothing could be further from the truth. The Budget is an assault on low-income families. It is unfair to welfare recipients, the young and low-paid workers, as my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and the hon. Member for Glasgow Central (Alison Thewliss) have stated quite clearly. That needs to be redressed, and pretty urgently.

The Budget is most unfair to the regions of the UK that are most dependent on social security, that have a youthful population and where there is a higher prevalence of low pay. Only this weekend The Observer referred on its front page to a report coming out later this week from the Intergenerational Foundation showing that the gap in pay, rewards and values between the young and the old is widening, and that young people and future generations will be at a considerable disadvantage.

I mentioned the regions of the UK that are most dependent on social security and that will be gravely disadvantaged as a result of the Budget. One such region is Northern Ireland, one of whose constituencies I represent. The Budget provides for an overall transfer of wealth from the less well-off to the more well-off; on the one hand we see a benefits freeze, withdrawal of tax credit and persecution of young claimants, and on the other hand we see significant breaks for inheritance tax and taxation of share dividend income for people who are already doing well. The Budget even has a substantial tax break for big cars.

The Government’s claim that “We’re all in this together” collapses both at the level of the individual and regionally within the UK. At the more macro-economic level, it represents a significant transfer of resources from the poorest regions of the UK to the wealthiest.

In relation to underpinning our local economies, the Government missed a trick. Only last week, colleagues and I formed the all-party parliamentary group on the visitors economy. Part of this is about pump-priming our local economies, but, in addition, the Chancellor should introduce fiscal incentives such as changes to air passenger duty, or devolve the power to do so to the devolved regions. He should also, on a UK-wide basis, reduce VAT on tourism, because evidence from internal modelling within the Treasury shows that this would be a revenue-neutral measure.

The other key measure that would help to pump-prime the economy is the reinstatement of the aggregates levy credit scheme, particularly in Northern Ireland. I would like the Treasury to push the European Commission on that. There is also a need for the Treasury to tell the Commission that the withdrawal of the scheme and the exemption for shale on which the construction and quarrying industry in my constituency is so dependent must be reversed. The request for the recovery of moneys from the past 12 years will place many companies and industries in my constituency at a severe disadvantage.

When we talk about this Budget, we talk about more people in poverty, more people dependent on food banks, and more people looking for other means in order to survive. Why are public sector workers facing another four years of a 1% pay increase? Why have they not been given a more significant increase? The public sector workers who give so much to our local economies are being severely disadvantaged.

The Government need to rethink this Budget. In the comprehensive spending review, they need to look at ways to prioritise spending which underpin our economy and take people out of poverty.

Tax Credits (Working Families)

Baroness Ritchie of Downpatrick Excerpts

Tuesday 7th July 2015 Commons Chamber

[Shabana Mahmood]

I think that what we are talking about is the cost of making work pay in the economy that we have at the moment. As I will explain in more detail later, the Government are doing things the wrong way round. As was pointed out by the Chair of the Work and Pensions Select Committee, my right hon. Friend the Member for Birkenhead (Frank Field), we must establish a higher-skill, higher-wage economy before we remove the support for those who are stuck on low pay. I would prefer people not to be in that position.

[Ms Margaret Ritchie (South Down) (SDLP)]

My hon. Friend is advancing powerful arguments. Does she agree that there is a compelling need for the Government to spell out how they intend to increase pay to a living wage, and increase economic growth, so that people can have more access to jobs in our economy?

[Shabana Mahmood]

I think that it is for the Government to tell us what they plan to do about the living wage, and I hope that the Minister will enlighten us when he winds up the debate. At the time of the general election, we made a manifesto commitment to incentivise employers to pay the living wage. The Government are welcome to steal that policy, but they should steal it—and allow it to embed a living wage, and higher wages, in our economy—before they start messing around with tax credits.

Oral Answers to Questions

Baroness Ritchie of Downpatrick Excerpts

Tuesday 16th June 2015 Commons Chamber

[Ms Margaret Ritchie (South Down) (SDLP)]

Will the Minister assure us that, as part of ensuring that people keep more of their incomes in their pockets, the Chancellor will not increase fuel duty in the forthcoming Budget?

[Damian Hinds]

During the last Parliament, the Government made difficult decisions in order to keep fuel duty frozen and save motorists £9 every time their tanks were filled. Of course, no decisions of that kind are cost-free, and difficult measures had to be taken so that we could afford the freeze. All taxes are kept under review, and my right hon. Friend the Chancellor will announce the details in the Budget.

The Economy

Baroness Ritchie of Downpatrick Excerpts

Thursday 4th June 2015 Commons Chamber

[Ms Margaret Ritchie (South Down) (SDLP)]

I congratulate you on your re-election, Madam Deputy Speaker, and your colleagues. I also congratulate all those Members on both sides of the House who made their maiden speeches today. I welcome the opportunity to speak in this debate on the Queen’s Speech, which focuses on the future and, in particular, the economy.

Given the grand claims we have heard from the Government, both before the general election and since, about a long-term economic plan that is working, one would be forgiven for thinking that the UK was in the midst of some kind of economic miracle. The truth, however, is that we are not experiencing any kind of economic miracle and that the recovery, such as it is, remains fragile. We still have record debt, notwithstanding the fact that the Chancellor announced today that Departments will be expected to make further savings through asset sales and that the Government are to sell off their stake in Royal Mail, which I regret and which will have an impact on the delivery of postal services to people across the UK.

We still have that record debt, which despite years of austerity is still rising, and there has not been sufficient growth to improve the fundamental economic ratios. The Government point to their record on job creation, which looks superficially impressive. Record numbers of people are at work, but in fact many of the new jobs are insecure and low paid and many people are doing more work, simply running to stand still. Those people are not feeling better off because they are not becoming better off. The new jobs are not driving economic growth or strengthening the economy because they are low value added and low productivity. Mark Carney, the Governor of the Bank of England, has recently highlighted the fundamental importance of raising productivity and diplomatically reminded us of the real Government failure in this area of economic policy.

The productivity failure is symptomatic of the wider failure to use more imaginatively the economic levers available to Governments. Instead of focusing on austerity and cuts, the Government could do more to stimulate economic activity in sectors that can yield an immediate contribution to growth and prosperity. The necessary stimulus can come from greater fiscal creativity and the smarter application of taxation. One such area is the labour-intensive industry of tourism. I firmly believe that the Chancellor and his Front-Bench Treasury team should give longer and deeper consideration to lowering VAT on tourism for all the UK.

Tourism is the principal economic driver in my constituency. Only last week, we hosted the Irish Open, which attracted 20,000 visitors each day. They came not only to witness our great golfers from the island of Ireland, Britain and elsewhere, including the guy from Denmark who won, but to get outside and sample our local hospitality—our restaurants, eateries and the rest of our tourism offering. But if tourism is to be more successful, the Government need to lower VAT. Northern Ireland—my constituency in particular—has a land border with the south of Ireland, whose VAT rate has been 9% for years, notwithstanding its austerity measures. Our VAT is 20%. It has become increasingly difficult to be competitive in such a world. I ask the Government and hon. Members to give the issue due consideration because fiscal flexibility will help achieve better economic prosperity for difficult regions.

Oral Answers to Questions

Baroness Ritchie of Downpatrick Excerpts

Tuesday 10th March 2015 Commons Chamber

[Danny Alexander]

We have met that commitment in the present Parliament, and we will do so in 2015-16 as well. Spending on defence will, of course. be a matter for the next spending round. However, I suggest that the hon. Gentleman should have regard not just to the total amount spent, but to the efficiency of the expenditure. We have made great progress during this Parliament in securing better value, in terms of defence equipment and output, for the limited money that we have to spend as a country.

[Ms Margaret Ritchie (South Down) (SDLP)]

The Treasury has had meetings with the European Commission to discuss the reinstatement of the aggregate credit levy scheme for Northern Ireland, which could serve as a further tool of investment in infrastructure. What further discussions have taken place?

[Danny Alexander]

I know that discussions have been ongoing, and that the issue has been the subject of a protracted dispute. I have no further updates, but I will ensure that my ministerial colleague who is responsible for the scheme writes to the hon. Lady.

Corporation Tax (Northern Ireland) Bill

Baroness Ritchie of Downpatrick Excerpts

Wednesday 4th March 2015 Commons Chamber

[Mark Durkan]

We await with bated breath the Minister’s great revelations and technical epiphanies.

Whatever the Financial Secretary says about the complex dimensions of this, there is nothing complex about the simple logic and justice of the proposition that wholly and solely-owned mutuals and credit unions should be able to benefit from a devolved tax rate.

[Ms Margaret Ritchie (South Down) (SDLP)]

Is my hon. Friend aware that the Assembly’s Committee for Enterprise, Trade and Investment, which he used to chair, is also supportive of the stance that he and other Northern Ireland Members are taking? It believes that mutual societies and credit unions based in Northern Ireland should be included within the Bill and able to avail themselves of the same reduced rates of corporation tax as other Northern Ireland-based organisations.

--- Later in debate ---

[Naomi Long]

I am aware of the pressure to want to do that quickly, but it is also important that, as the Executive do that, the cost of it to the Northern Ireland economy is thoroughly assessed and we work out how we are going to pay for it in the interim. Otherwise, before we reap the benefits, we could leave a gap in our public finances that creates pressure, particularly from those that are already under financial pressure. It could lead to a push back against the corporation tax reduction. Getting that balance right is important. I agree that it would be wrong for people to be unnecessarily tardy, but I also think it is important that proper due diligence is done around what that level should be.

Reaping the maximum benefit from the changes under this Bill requires political stability. It requires people, when they look to Northern Ireland, to see the positive images that are so often broadcast, as opposed to some of the more negative images we have seen in recent years. If we want lasting prosperity, it has to be shared among everyone in our society. It is therefore hugely important that we see political maturing not just in terms of the Unionist-nationalist question and how that is handled politically in Northern Ireland, but in terms of the productivity of the Assembly.

[Ms Ritchie]

Does the hon. Lady agree that along with having corporation tax as a financial lever, and the need to create political and economic stability in Northern Ireland and the need to encourage people to come and visit, there is also a need for the Treasury to look at reducing VAT on tourism? That would enable us to be more competitive with the south of Ireland in terms of visitors and the economy.

[Naomi Long]

I am aware that the hon. Lady has long since advocated such a move, as have I. Unfortunately, the Treasury response has been that in some way reducing the VAT on leisure would encourage people to have a rather lackadaisical attitude to the workplace. In fact both inward and outward tourism generates a significant amount of money into our economy, so I think a future assessment would be valid.

Today marks a very welcome step forward in the potential for Northern Ireland to rebalance its economy and encourage further growth of the public sector. I hope that when the Executive meet, as they will do over the coming months, they will meet the challenge of setting the rate and stepping up around infrastructure and skills, as well as around stability and peace building. We will then be able to reap the maximum reward for the work that has been done.

--- Later in debate ---

[Ian Paisley]

This is not the place to debate all of the Stormont House agreement, but given that we were instrumental in helping to achieve it, we will, of course, be pursuing every line, every jot and every tittle to ensure that we get the best deal for Northern Ireland in all of that arrangement.

Between 2013 and 2014 we had a record year of investment in Northern Ireland. Nearly 11,000 new jobs were promoted and 23 first-time investors were welcomed into Northern Ireland. If we can do that in one year in advance of the corporation tax Bill, what can we not do if we can now go out around the world and start to market Northern Ireland as the place with what I hope will be the lowest level of corporation tax on these islands? If we can do that, we really will have the opportunity to see Northern Ireland attracting even more companies. Our attracting 23 new, high-calibre investors in the past year, in the hard economic climate we have been coming out of, is a signal that things they are a-changing.

[Ms Ritchie]

Does the hon. Gentleman agree that as part of lowering the level of corporation tax in Northern Ireland there is a need not only to rebalance the economy, but to ensure that a balanced regional development approach is taken to the location of foreign direct investment and other investment, to ensure that all citizens benefit from this lowering of corporation tax?

[Ian Paisley]

The hon. Lady makes a good point—it is key. This tax is not just about investment in Belfast, Londonderry or key cities; it is about investment in the whole of Northern Ireland. The Prime Minister recently stated that he wanted to make the United Kingdom the “factory of Europe” and attract more jobs into the UK, and I hope he was speaking for every part of the UK. I hope he wanted to see those investments coming across not just to London and the south, but to all of the UK, because that is what we really need—we need more investment. I know that the hon. Lady wants to see investment in her constituency. My constituency is carrying what is going to be the single largest job loss in Northern Ireland in several years, with the closure of the JTI Gallaher factory in 2017. I want to see those jobs filled. I want to see opportunity created whereby more investment will be happening in my constituency and more factories will be brought there. If the current Government are returned, I hope that they will add meat to the bones of that call to turn the UK into the factory of Europe by bringing jobs, not only to the hon. Lady’s constituency, but to mine and, indeed, to all our constituencies. I hope we see a balance in the investment that is going to be made.

In an earlier intervention, the hon. Lady also called for a reduction in VAT, especially on our tourism trade, and I fully support that. Tourism is one of the key areas where we are trying to grow our economy and attract new business investment, with new hoteliers and new companies. If we can reduce VAT in that sector, we will see it grow. Again, we compete with the Republic of Ireland in that sector, but it has a lower tax rate and that damages us. We really need to try to make progress on that.

Oral Answers to Questions

Baroness Ritchie of Downpatrick Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mr Osborne]

Small business start-ups have been central to job creation. We have helped them with the employment allowance and the enterprise investment scheme, and we have given the new enterprise allowance to young unemployed people to help them to start businesses—and that has been a great success. We have in place many initiatives to back our brilliant small businesses in Norfolk and across the country.

[Ms Margaret Ritchie (South Down) (SDLP)]

Considering the economic modelling carried out by one of the Treasury’s own economists, Professor Blake, what further progress has been made on reducing VAT on tourism, which would benefit all regions and particularly coastal regions in the UK?

[Mr Gauke]

We have looked at that, but there is a significant cost involved in making the changes. On the point of helping tourism, the hon. Lady will be aware of the substantial increase in Northern Ireland and other places over recent years and, secondly, the coastal communities fund provides a lot of support to many of the areas that benefit from tourism.

Offshore Wind Developments

Baroness Ritchie of Downpatrick Excerpts

Tuesday 6th January 2015 Westminster Hall

[Mr Mike Weir (Angus) (SNP)]

I am pleased to have secured this debate and thank the Backbench Business Committee for recommending it.

Developing the United Kingdom’s offshore wind resource would provide a significant supply of clean, secure energy. Scotland, of course, has huge potential to provide a large proportion of energy from this source. There are proposals for a number of wind farms around our coastline, including three off the coast of my Angus constituency. Between them, the projects off the coast of Angus alone could supply more than 2 GW of electricity.

In addition, developing this resource could create a significant domestic manufacturing and export industry. RenewableUK has estimated that employment in the offshore renewable industry can grow from the current 13,000 jobs to over 44,000 by 2023. The Centre for Economics and Business Research has found that investment in offshore wind will deliver £8.4 billion of gross annual value added to the UK economy by 2020 and that the sector could boost exports by £18 billion a year by 2030.

This is not purely projection. As part of electricity market reform, the Department of Energy and Climate Change established a final investment decision enabling process—a bit of a mouthful, but never mind—which enabled a number of projects to move forward with investment decisions, having been awarded early contracts for difference. This enabled five offshore projects totalling nearly 3.2 GW of capacity to come forward. On the back of this, there was a significant boost to the offshore supply chain when Siemens, the dominant supplier of offshore turbines in Europe, confirmed that it would proceed with a major manufacturing facility in Hull for its new offshore turbines. This was a clear demonstration of the direct link between visibility of deployment at scale and securing wider investment in the supply chain, and it demonstrates that this is not just a Scottish issue; it applies also to the north of England.

If we are serious about the re-industrialisation of the UK, the “march of the makers”, or whatever slogan one wants to use, we need to ensure that we actually invest to get these industrial developments built and producing.

[Ms Margaret Ritchie (South Down) (SDLP)]

Is the hon. Gentleman aware that in Northern Ireland, there was an application to explore having offshore wind farms on the County Down coast, but that fell foul of electricity regulation rules and did not fulfil the time requirements? Does he agree that that was a lost opportunity for economic investment?

[Mr Weir]

I am not familiar with that case, but it sounds like it was. Offshore wind farms give the opportunity to provide not only clean energy, but employment. That is important for the hon. Lady’s area and mine, and for much of Scotland. That point was reinforced in a report from the think-tank Green Alliance, which found that CfDs form part of a strong new investment framework for offshore wind, but that a lack of clarity over post-2020 policy and funding

“is contributing to a shrinking of the offshore wind project pipeline”.

That seems to be the case in Northern Ireland, given what the hon. Lady said.

Clear decisions over future support for the sector will need to be taken in the early days of the next Parliament if the pipeline is to be sustained at levels necessary to support continued growth of the sector out to 2030. Specifically, the report finds that:

“The UK will need a minimum of 25GW of offshore wind by 2030, of which 10GW is projected to be in operation by 2020. Currently, 13GW of additional offshore wind projects are at an advanced stage of development, and a further 20GW have entered development.

Policy, regulation and funding challenges mean the pipeline is shrinking. 8.2GW of offshore wind projects were withdrawn in the 12 months to June 2014, with other projects since shelved. New projects must compete for government funding which will only be sufficient to deploy an additional 1.2GW in the five years up to 2020.

However greater policy stability could result in capital investment worth in the region of £1.8 billion a year between 2015-30 into the UK offshore wind supply chain, over three quarters of which is made up of small and medium sized UK companies.”

That shows the potential; at this stage, much of it is just potential.

Previously, of course, these developments were funded through the renewables obligation, under which developers built projects, gained accreditation and received a fixed sum on top of the market price. However, under the new system of contracts for difference introduced under the Energy Act 2013, projects must be developed to a point at which they have planning consent and a grid connection offer; then they can bid into a competitive allocation round to secure a contract for difference, which tops up the market price to a specified strike price.

I stress that this debate is not an attack on the change in the system. It is fair to say that most, if not all, parties in the House supported the change to contracts for difference.

Autumn Statement

Baroness Ritchie of Downpatrick Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

The shadow Chancellor and the Labour party want to increase corporation tax. That is their stated policy on the legislation this House has passed. They make it pretty clear that they would increase national insurance if they ever came to office. That would be devastating for the small businesses of Enfield, and indeed of the whole country. We know what happens when there is a Labour Government. We know the impact on businesses: the high unemployment and the business closures they would create, because that is exactly what happened five years ago.

[Ms Margaret Ritchie (South Down) (SDLP)]

I welcome the commitment to the devolution of corporation tax to Northern Ireland, but there remains uncertainty on the cost to the block grant. Will the Chancellor outline the possible cost to the block grant over an estimated period, and will he outline the timeline for devolution, predicated on the outcome of cross-party talks?

[Mr Osborne]

The costs of Northern Ireland reducing, for example, corporation tax rates to the level seen in the Irish Republic have been set out and are the subject of discussions that we have had over the past year with the Northern Ireland Executive. We need to be sure—this is about the taxpayers across the whole of the UK—that if we go ahead with this step, which we are very well disposed towards, the Northern Ireland Executive will be able to manage the pressure on their resources. That will be one of the topics for discussion in the cross-party talks. If the cross-party talks are successful we could, as I said in the statement, introduce legislation in this Parliament.