Fuel Duty (Northern Ireland)

Baroness Ritchie of Downpatrick Excerpts

Wednesday 22nd February 2012 Westminster Hall

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

I am pleased to have secured this important debate and I look forward to contributing under your chairmanship, Mrs Main. I am also pleased that the Minister is present, and I look forward to her response.

In the run-up to the Budget, it is more important than ever to bring into sharp focus the record high price of vehicle fuel, which has now reached a critical level. The increased cost of fuel, together with the correspondingly steep rise in inflation in the past year, has put individuals, families and businesses under increasing pressure. There is clearly an over-reliance on importing fossil fuels. Until that is cut, we will always be tethered to external forces. I note with great interest that the incoming Secretary of State for Energy and Climate Change placed an emphasis on energy production that is clean and green. I welcome him to the role, especially if he follows through with that commitment. My own party is committed to a green new deal in Northern Ireland providing jobs, investment and energy security. However, I recognise that that is a long-term goal and we must tackle directly the problems facing consumers and businesses now.

[Ian Paisley (North Antrim) (DUP)]

I thank the hon. Lady for giving way and say that that is the one green deal that my party would support alongside her party. [Laughter.] My hon. Friend the Member for Strangford (Jim Shannon) says, “The only green deal”, but it is a worthwhile point.

The hon. Lady will be aware that since we became Members of Parliament two years ago, the one issue we have debated most is fuel duty and the implications of its constantly rising cost. I am sure that, like me, she understands that the little piece of water between the mainland and Northern Ireland—those 17 miles—is the most expensive stretch of water in these islands, as it inflates prices of fuel disproportionately. For our rural constituencies, the smack is double, because rural areas suffer more. The luxury of car transport is a necessity to get kids to school, and people to work and into employment.

[Mrs Anne Main (in the Chair)]

Order. Will hon. Members please ensure that interventions are brief?

[Ms Ritchie]

Thank you, Mrs Main. I thank the hon. Member for North Antrim (Ian Paisley) for his long intervention. I could not agree more—rural communities, particularly in Northern Ireland, are more deeply affected because they rely totally on car transportation. There has been insufficient investment in public means of transportation—a matter for the Northern Ireland Executive—and no doubt the Minister will take care to pass that on. We will no doubt pass that point on as individual Members of Parliament from Northern Ireland.

I will highlight specifically the problems faced by businesses and consumers in Northern Ireland, but those problems do not exist in a vacuum. We must consider the scale of the problem confronting consumers across these islands. The Automobile Association’s latest data, from industry price trackers Experian Catalist, showed that the latest average pump prices for petrol are 134p, compared with 128p a year ago, and 111p in mid-January 2010. That is within sight of the record prices witnessed last May. Indeed, the average price of diesel has just hit an all-time high at an average price of 143p. The AA reported that in Northern Ireland the price of diesel is the highest of any region in the European Union.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady share my concerns? The fuel that comes in through the ports of Belfast and Londonderry, and is then dispersed across the whole of Northern Ireland, is the same as the fuel in Great Britain, so why is it so much dearer in Northern Ireland? It is an unfair penalty towards those in the rural community.

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. I agree that it is the same fuel type, which is imported directly from the middle east and wherever it is refined before it reaches the ports of Belfast and Derry. I also agree that rural communities are more deeply affected as a result of fuel duty increases. We find little reassurance in the current global situation. Just this week, Iran suspended the sale of crude oil to the UK, and the strait of Hormuz, through which 35% of all traded oil travels, is in a state of great uncertainty. It is not my intention to turn this into a debate on Iran and the middle east, but the point remains that while we rely so heavily on imported fossil fuels we will be somewhat captive to external events. Set against that, the Treasury is not doing enough to ameliorate the consequences of these events for consumers and businesses alike.

Consumers and business are caught in a pincer between the volatile price of a critical commodity and an inflexible Treasury duty regime. With the current instability in Iran, combined with the suspension of the refinery at Coryton, we would be naive to think that there will be no more inflationary pressures on the price of petrol. While the Minister has little control over an uncertain world, I would like to know what plans she has to protect people from the worst effects of those circumstances. Put more bluntly, in the short-term the Chancellor must extend the freeze on fuel duty hikes that was announced in the autumn statement. The measures announced in the autumn statement—the deferral of the 3p increase in duty and the cancellation of the escalator—were welcome short-term measures, but they will do little to mitigate the increased long-term rise in fuel prices. According to Consumer Focus back in March 2011, the 1p reduction in fuel duty was wiped out within days by rising oil prices. There is not the feeling that the Treasury is shouldering its share of the rise in the same way that motorists and businesses are.

[James Wharton (Stockton South) (Con)]

I congratulate the hon. Lady on securing this important debate. I represent a constituency in the north-east of England, which in many ways faces similar economic challenges to Northern Ireland. One issue—

--- Later in debate ---

[James Wharton]

Absolutely. As the relative income is lower compared with some English regions, as it is in Northern Ireland, the effect of fuel prices is felt more acutely. Will the hon. Lady clarify whether she is looking for Government measures that are specific to Northern Ireland, or a nationally applicable measure that would benefit everybody in the UK?

[Ms Ritchie]

Naturally, I will be looking for measures that are specific to Northern Ireland because I represent a constituency in Northern Ireland. I understand the difficulties of other regions. As Mrs Main has directed, this debate is specific to Northern Ireland. If the hon. Gentleman will let me progress a little, I will explain where I am coming from.

While we rely on imported oil, fuel prices will always be vulnerable to exogenous pressures and external shocks, but the Treasury has levers at its disposal with which it could mitigate the worst of those effects for consumers. The 3p increase in fuel duty is still approaching in August and the Chancellor’s remedy would seem to be palliative rather than curative. It is a market in which price rises are passed on with alarming rapidity to the consumer, while decreases are notable mainly by their absence. It is like a seesaw with a very heavy weight at one end—a lot of jumping up and down at the other end seems to make very little difference.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Is the hon. Lady suggesting that it would be helpful if VAT rates were set by the Northern Ireland Assembly? Of course, the reaction to that would be ensuring that the block grant also suffered.

[Ms Ritchie]

The hon. Gentleman brings me into an interesting debate about the devolution of tax-varying powers to Northern Ireland, which my party supports. He raises the other important issue of the block. No doubt, as with corporation tax, that matter will be decided by the Office for Budget Responsibility. Naturally, we in Northern Ireland would say, collectively across parties, that we are a special region within the UK, notwithstanding our political or identity differences. We are coming out of a legacy of conflict and that needs to be addressed for the people who live there.

[Stephen Pound (Ealing North) (Lab)]

Surely, the point is that Northern Ireland is the only part of the United Kingdom with a contiguous land border with another European country. Just as in Europe, there are variable tax rates on borders—between Luxembourg and Belgium, for example—so surely there is a case for recognising that the problem is not solely part of the rural differential, although that is significant. It is a cross-border issue. We must look to that as well. Surely, Her Majesty’s Government should be working in that direction.

[Ms Ritchie]

I thank my hon. Friend for his intervention. I wish to progress to the issue he mentioned, because we share a land border with the south of Ireland. There are differential tax rates and we in the north of Ireland need to be given a certain degree of comfort.

With specific reference to Northern Ireland, having brought attention to the general problem besetting the market, I now turn to our own constituencies and Northern Ireland in particular, where the situation is even more severe. I have already highlighted the general point in relation to Britain, but I emphasise that from January to December last year petrol and diesel prices in Northern Ireland were the most expensive, and in January this year the price of diesel was the most expensive in the European Union. The AA has recently demonstrated that Northern Ireland has higher fuel prices than any other region and that on average we pay 134.6p at the pump, while the average price in the UK is 133.5p.

Prices continue to rise in Northern Ireland. In December 2011, it cost £66 to fill a standard 50-litre engine—£70 for diesel—and within a year this has gone up to £70, a 6% increase. A family in my constituency that owned a Ford Galaxy car with a 70-litre engine recently told me they are faced with a £100 bill every time they refill their car. Such families will be faced with paying hundreds of pounds more than they used to every year, an amount that I guarantee the Minister is not insignificant for the vast proportion of people, at a time when they are already suffering, with welfare reform proposals coming down the line and with the cost of motor car insurance much higher in Northern Ireland, particularly in rural areas, compared with comparable regions in Britain.

The average family sends £680 a year to the Treasury in London just to cover fuel duty. Many families will be affected by the public sector pay freeze enacted by the very same Treasury. The high cost of fuel is particularly problematic for the poorest in society, for whom such an amount represents a significant proportion of income and for whom the use of a car is most important to remain economically active.

There is a discrepancy not just between regions but within them, with rural areas in Northern Ireland, including my constituency, particularly prone to high prices. Indeed, this problem is exacerbated by large retailers operating across many sites, charging different premiums by location, a practice that drives up prices in certain areas, particularly in rural locations, where the dependence on fuel is often the greatest.

The problem in rural areas can be compounded by the absence of large supermarkets to drive down the prices. For example, the AA cited the lack of Asda forecourts in Northern Ireland as a key contributory factor, meaning that price competition is not as keen as in the UK. I urge the Minister to review how location-specific pricing and the absence of large supermarkets distort the market and create an unfair playing field.

We cannot separate this problem from our investment in public transport services. It may interest the Minister to know that, historically, Northern Ireland has received the lowest spend per capita on transport infrastructure, leaving the car as king and often the only viable choice. A perfect example of this is the atrocious management of the rail link between our two biggest cities, Belfast and Derry, which has been compounded by the legacy of blinding ignorance to organising the network on an all-Ireland/island basis.

Simply put, people have no option but to get in their car. Those who are priced out of the market by high fuel prices are often left economically isolated and socially disfranchised. Indeed, there needs to be joined-up thinking on a north-south basis regarding the fuel duty regime to avoid striking disparities, particularly around the border, as my hon. Friend the Member for Ealing North (Stephen Pound) mentioned. This problem distorts the local market for fuel and leaves local retailers and consumers at a marked disadvantage.

These problems are faced not only by our people but by our businesses. We hear the Secretary of State for Northern Ireland and Treasury Ministers talk about rebalancing and growing the Northern Ireland economy. This seems to be rhetoric in search of a policy at the minute. Does the Minister not agree that one of the main things holding back business growth in Northern Ireland is the punitive price of petrol? Action here would be the ideal way for the Treasury to demonstrate its commitment to growing the Northern Ireland economy.

The Minister does not need to tell me the problems faced by small and medium-sized businesses in the current climate. Does she not agree that a cut in fuel duty would act as an immediate stimulus to the economy in Northern Ireland?

I do not want to create the impression, by focusing on these immediate measures, that I am ignoring the big picture. As a society, we must wean ourselves off dependence on oil. Without doing so we will have the same debate in the House year after year. Doing this will take foresight rather than expediency, and ambition rather than an “as you were” mentality, but until we reach that point, the Government must do more to help those in need; they must shoulder a fair share of the burden and not simply pass on price rises to consumers and local businesses. The Government must commit to their pledge to consult on a fuel duty stabiliser and cancel the planned duty increases scheduled for August.

In Northern Ireland this problem is particularly striking. We must address the basic problem, which is that our people pay more at the pump than in any region in the UK and, indeed, in the EU. There are clearly issues surrounding the operation of large retailers, which bring price competition, but not evenly across the board. As other hon. Members have clearly articulated, rural areas are often most vulnerable and often people and businesses in rural areas are most dependent on their cars. If the Treasury is serious about growing our local economy, would this not be an obvious place to start? I acknowledge that the Northern Ireland Executive at Stormont also have a major role to play.

These immediate measures must be buttressed by a sustainable approach to our energy future and transport infrastructure. My party and I are committed to proper investment in new, green energy technologies in Northern Ireland. I look forward to the Minister’s response.

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

I congratulate the hon. Member for South Down (Ms Ritchie) on securing the debate and on presenting her case so eloquently. The debate is clearly well attended, with members of the Select Committee on Northern Ireland Affairs present, which puts me in mind of an extensive session that we had in the past few weeks discussing fuel fraud in Northern Ireland. I wonder whether that serious economic issue in Northern Ireland, which we all recognise, will also occupy the hon. Lady, if she has any spare time.

The first issue raised by today’s debate is what the Government have done to assist motorists and businesses in a time of high oil prices. Secondly, I will go on to what we intend to do, before returning, as requested by the hon. Lady, to some details about the fair fuel stabiliser. Before dealing with those two areas, I acknowledge what she said about the difficulties of living, working and running businesses in a rural economy, in particular given the absence of other large businesses whose decisions might be able to bring about cheaper fuel points of purchase. I live in Norwich and am conscious that I can access cheap fuel partly because of the availability of a number of large supermarkets competing with each other on price. She might not be in that position.

I note also what the hon. Lady says about public transport, although I regret that I am not a Transport Minister and cannot assist her directly today, and that she might be floating the idea of co-operation on tax matters between north and south on the whole island of Ireland. I do not know whether she is suggesting that and I hear what she is saying, but that is not something that we think that the British Treasury should necessarily do, and I am not entirely sure that the Republic would wish to do so either.

[Ms Ritchie]

I was referring to a discussion between the British and Irish Governments about harmonisation on fuel duty and about the problems encountered by people on both sides of the border, living in close proximity and able to travel with great speed from north to south, and vice versa. At the minute, prices in the south are lower than they are in the north. What amelioration can be brought to the people?

[Miss Smith]

I understand that point. The topic could be on a long list of what the two Governments discuss, and I note positive aspects of those discussions in the realm of transport, such as acknowledgement of the importance of the land border in setting air passenger duty rates, of which the hon. Lady must be aware. We also acknowledge the significance of the land border to fuel fraud—returning to that important subject—but there is a point to stop short of in harmonising tax rates.

I shall plough on swiftly with some helpful points. First, there is absolutely no doubt that the cost of fuel remains difficult for families and businesses up and down the country, as demonstrated in the debate. I am also sure that many of the hon. Lady’s constituents joined the 100,000-signature petition delivered to the Government last autumn and to which we responded in the House. Our response—indeed, I personally responded —recognised that the price of petrol, which is different from the rate of duty, is extraordinarily high in many people’s eyes. The price is the result of a combination of the duty and various global factors, which she has already mentioned, so it is not fully in the control of the Government to say, “The total cost of your litre of fuel shall be this.” What a responsible Government must do, however, is listen, consider and respond.

The Government have eased the burden on motorists by £2.5 billion up to 2012-13. We started by cutting fuel duty by a penny per litre from 6 pm on Budget day. We cancelled the previous Government’s fuel duty escalator and introduced the fair fuel stabiliser, which I shall come on to shortly. Our response also includes the deferment of last month’s duty increase to August and the cancellation of the original increase planned for August, ensuring genuine help for motorists through only one inflation increase this year. The fuel duty changes support motorists throughout the country, including Northern Ireland—I do not see a distinction—because any motorist can be approximately 10p per litre better off as a result of our Government’s actions. The hon. Lady asked me to acknowledge businesses. An average haulier will be better off by £4,400 because of our fuel duty and vehicle excise duty actions, which I am sure she will welcome in her part of the world, as everyone else does.

Car Insurance (Northern Ireland)

Baroness Ritchie of Downpatrick Excerpts

Wednesday 19th October 2011 Commons Chamber

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

I am pleased to have secured this debate on an issue that severely impacts on my constituents and others across Northern Ireland. I welcome the fact that the Financial Secretary to the Treasury is here to respond to the debate.

There are considerable problems in the motor insurance market at present, especially in Northern Ireland, where drivers are subject to excessively high insurance costs that are rising rapidly year on year. The problems are not unique to Northern Ireland, but they are particularly striking in our case. We have also found in our research that consumers in Northern Ireland have less choice of insurance providers, with three times fewer companies offering car insurance.

I also welcome the introduction of the Motor Insurance Regulation Bill, promoted by my right hon. Friend the Member for Blackburn (Mr Straw). My right hon. Friend, quite rightly, shone a light on troublesome referral practices and the Bill promises to make much-needed changes to the regulation of the insurance market in England and Wales. Although referrals operate in a different manner in Northern Ireland, the purpose of my speech this evening is to cast light and call for action on many of the issues that plague the operation of the car insurance industry in Northern Ireland. These issues are not entirely commensurate with those raised by my right hon. Friend in relation to England, but must be dealt with in the same direct and purposeful manner. I call on the Minister, where possible, to ensure that that is the case and to use his good influence to press the Northern Ireland Executive to act on the issue.

In August the Consumer Council for Northern Ireland launched a campaign to highlight the cost of car insurance, which I fully support. The Minister will no doubt be aware that the Office of Fair Trading subsequently agreed to undertake an investigation into the car insurance market with a specific focus on Northern Ireland. We must robustly establish why premiums have increased by a reported 40% in the 12 months to March 2011, and why insurance costs are significantly higher in Northern Ireland than in other regions. Indeed, we need not only to assess that, but to redress it. The findings must be robust and the resulting measures must have teeth.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on introducing this debate on an issue that is very important to us all in Northern Ireland. The concern about the insurance premiums is clear, and one reason for those insurance premiums, and the difference in price between Northern Ireland and the UK mainland, is the Compensation Act 2006. Is the hon. Lady aware that in the past year the number of claims notified to the compensation recovery unit in Northern Ireland fell by 23%, whereas in England and Wales it rose by 17%? Is she also aware that last year some 30,000 claims for compensation were made, but that in the past year only 768 were made and their value in the county court is less than £5,000—far below the equivalent figure in England and Wales? Does she feel that, for those reasons alone, insurance premiums in Northern Ireland should be reduced? It is quite obvious that the drivers and vehicle users in Northern Ireland are being disadvantaged financially.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. That intervention was a tad long, Mr Shannon.

[Ms Ritchie]

Thank you, Mr Deputy Speaker. I thank the hon. Gentleman for his rather long intervention. I none the less agree with him, and I will come to that point later in my speech.

The extent of the problem is stark. The Consumer Council report, “The Cost of Insurance in Northern Ireland”, published in March 2009, indicated that consumers in Northern Ireland were paying 84% more on average than those in the rest of the UK. Furthermore, five Northern Irish cities ranked among the top 10 most expensive areas in the UK. Relatively expensive car insurance premiums prevail throughout Northern Ireland.

[Naomi Long (Belfast East) (Alliance)]

I thank the hon. Lady for giving way, and I appreciate the fact that she has brought this matter to the Floor of the House. Does she agree that the OFT investigation is crucial, because although the Consumer Council report is useful in highlighting particular issues, it is flawed in a number of respects? For example, it compared median rather than best available prices in the UK. It also compared only products available on comparison websites, which is restrictive when we consider the wider available market.

[Ms Ritchie]

I thank the hon. Lady for her intervention. Like her, I believe that the OFT report is vital in making critical recommendations that I hope will result in the lowering of insurance premiums. I hope that the report has the teeth to deal with this difficult and vexatious issue.

According to evidence, car insurance premiums in Northern Ireland have increased by almost 73% in the past two years. The situation is even worse for younger drivers, whose premiums, according to research, have increased by 112%. Young people face severe difficulties in entering the job market, and the prohibitively high cost of motor insurance is yet another barrier to their finding work.

The average yearly car insurance premium in Northern Ireland is now £923.90, compared with the national average of £525. I am concerned that that, with the increasing cost of fuel, will force some people off the road altogether, or that it will lead to an increase in motorists driving illegally without insurance. I am sure the Minister agrees that we must ensure that that does not happen.

Those problems are compounded by the restricted range of companies offering premiums in Northern Ireland, which limits competition and drives up prices. I urge the Minister to address, and where possible to remove, any barriers to companies that wish to enter the market in Northern Ireland.

Two fundamental arguments are put forward to justify the high costs of motor insurance in Northern Ireland. The first argument is that Northern Ireland is a case apart, because its demographics and road layouts bring an increased risk of incidents on our roads, and the second is that the Northern Ireland legal system places a higher burden on insurers.

To begin with, the evidence that Northern Ireland has a very young population is greatly exaggerated. Indeed, we have a proportion of young people similar to that found in English regions such as London. Likewise, a lack of motorway coverage has been cited as a reason for increased premiums, because statistically those are the safest road type. However, maps show that Northern Ireland has a relatively consistent motorway density compared with regions in the UK and Europe. Moreover, some of the fundamental actuarial evidence regarding the number of accidents, claims and casualties on our highways weighs against any of the debatable factors regarding demographics or road layout.

Those facts must be kept at the forefront of our mind when considering the claimed justification for the increased cost of premiums. They are rising at a time when Northern Ireland is experiencing a decline in the number of road traffic accidents: 2010—the most recent year on record—saw the lowest number of road deaths since records began in 1931. Naturally, every death on our roads is a tragedy, but we must commend the work done to improve safety.

There are some basic facts that are hard to reconcile with rising insurance costs. The number of road traffic accidents reported to the police service has dropped over the past decade from nearly 40,000 per year in 2000 to about 30,000 per year in 2009. The number of compensation claims is decreasing, whereas in England and Wales the numbers are rising. More specifically, according to a National Audit Office report published at the beginning of the year, the number of claims reported to the compensation recovery unit fell by 23% in the decade up to 2009. In short, the trend is clear: although accidents and claims are decreasing, the cost of insurance is increasing. I ask the Minister to give detailed consideration to that fundamental point.

[Naomi Long]

I am grateful to the hon. Lady for giving way a second time. Does she accept that one of the factors cited was the higher compensation paid out in Northern Ireland, which was attributed largely to the fact that juries have been involved in such decisions for much longer than in England and Wales? Critically, however, compensation levels did not increase but insurance premiums did, so it cannot be argued that that was what led to increased premiums.

[Ms Ritchie]

I thank the hon. Lady for her useful intervention.

All those facts weigh heavily against any argument that the specific demographic or topographical factors in Northern Ireland justify the increasing costs of insurance, and are extremely difficult to relate to the draconian rise in the cost of insurance premiums.

It has also been suggested, by the Association of British Insurers and others, that the legal system in Northern Ireland imposes increased costs on insurers. However, when compared with what happens in England and Wales, many of the factors in Northern Ireland would be expected to act in the opposite direction. My right hon. Friend the Member for Blackburn rightly highlighted the impact of referral fees on insurance premiums in England. It must be noted that a statutory prohibition is in force against solicitors paying referral fees in Northern Ireland. Given that the payment of referral fees to claims management companies has frequently been cited as a significant contributory factor to increasing premiums in England, its absence would be expected to drive down the costs of insurance in Northern Ireland. However, that does not appear to be the case.

I am certainly not claiming that the system in operation is perfect. Indeed, although referral fees are prohibited for solicitors, other agents, such as brokers, credit hire companies and repair garages, may receive them. Although credit hire companies offer a useful service for non-blame drivers, they also raise the cost for insurers, and we must have firm regulations to remove the potential for the exploitation of accidents or those involved in collisions. The claims advice service is an important step in doing that, and should be commended. Another factor cited as a reason for increasing insurance prices in England is the practice of “no win, no fee”. Such a regime does not operate in Northern Ireland. Indeed, the fact that any claimant would have to invest their own money, or else find a solicitor willing to fund the costs, is a powerful disincentive against speculative claimants.

[Jim Shannon]

I shall be very quick with this intervention, Mr Deputy Speaker. Does the hon. Lady think that specific consideration needs to be given to social need and the fact that Northern Ireland is clearly, as we all know, a rural community? There are special circumstances in Northern Ireland. Does she think that those should be considered as well?

[Ms Ritchie]

I take on board what the hon. Member for Strangford (Jim Shannon)—my neighbouring constituency—has said. Like him, I represent a rural constituency and am well aware of issues such as a lack of jobs, inaccessibility, and the economic burden on people. All those can place increasing burdens on people at a time when insurance premiums are increasing.

All that, taken together with the absence of referral fees for solicitors, suggests that Northern Ireland offers a legal system that should act to keep costs down and be at least as effective as the system in England and Wales, if not more so. I would like the Minister to note my concern that that is certainly not reflected in the cost of insurance. I accept that the cost of claims for minor injuries in Northern Ireland can be higher than in England and Wales, partially as a result of there being no recourse to the small claims court for such cases, but opening up the small claims court to such cases is not necessarily the remedy, as that will bring its own risks and problems. However, more needs to be done to ensure that spurious and over-inflated claims do not clog up the system and raise costs for honest motorists. We must increase the burden of medical evidence that is required before establishing cases of whiplash or other, similar injuries, not to penalise the vulnerable—those with genuine, medically verifiable injuries would in no way be affected—but to ensure that the police and medical authorities work together so that claims are paid only in cases involving genuine accidents and genuine injuries.

I have dealt at length with the figures and the legal issues, but behind the wealth of statistics are the everyday problems that the high cost of insurance represents. Those living on low incomes or in rural areas can simply no longer afford to keep a car on the road. Many young motorists and their parents in my constituency have told me of their struggles to secure affordable insurance. They are understandably concerned about the discrepancy in insurance prices between Northern Ireland and other regions in Britain. Through having to pay excessive insurance fees, households in Northern Ireland are being discriminated against. That unfair practice has been in place for too long, adversely affecting those, young and old, who depend on their cars for work, particularly in areas where public transport provision is limited.

The broader context is that the economy is suffering, with record numbers of young people out of work, and that is only exacerbated by restricting people’s use of motor vehicles. We need a dynamic, mobile work force, but making the cost of car insurance so expensive puts up a barrier to our economic success, especially for the young, among whom the unemployment rate is estimated at 18%—almost one in five cannot find a job—compared with an overall unemployment rate in Northern Ireland of 7.6%. Excessive insurance premiums adversely affect young people, preventing them from offering the skill of driving to potential employers. In these extremely challenging economic times, I would ask the Minister to consider any measures that would make insurance more affordable for young people, particularly when driving relates to their employment.

Insurance costs have a real impact on people, young and old, who need to be mobile for social and economic reasons. I hope that I have made clear the scale of the problem faced by our motorists. The insurance industry must stabilise its premiums so that hard-pressed motorists get a fair deal when they purchase their vehicle insurance. I seek assurances from the Minister that he recognises the problem and will act in unison with ministerial colleagues in the Northern Ireland Executive to address the problem in the light of any recommendations from the upcoming Office of Fair Trading report.

Day in, day out, my Northern Ireland colleagues and I face constituents who come to us about the rising cost of car insurance. I heard it again today when I participated in a BBC Northern Ireland debate. There were numerous calls from young people, as well as middle-aged to elderly people, all complaining about the lack of competition and the lack of insurance companies offering different insurance rates. However, the most abiding comments that I heard were about how people wanted insurance costs driven down so that they could drive their cars and access the employment market.

I thank you for your indulgence, Mr Deputy Speaker, and look forward to the Minister’s response.

Banking

Baroness Ritchie of Downpatrick Excerpts

Wednesday 9th February 2011 Commons Chamber

[Mr Osborne]

No, instead I learned from the example of all the things that went wrong when the shadow Chancellor was City Minister. As one does on these occasions, I came into the Chamber armed with many of his quotes about what a golden legacy he was leaving in the City, how bonuses were at the appropriate level, and how he was going to resist all calls in Parliament to toughen up regulation. It would take a couple of hours to read them all out, but no doubt over the next few years we will have plenty of opportunities to remind him that he is a man with a past.

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

I understand that the business growth fund will have a network of regional offices throughout the UK. Will there be such an office in Northern Ireland to work with the banking sector, the business community and the Northern Ireland Executive?

[Mr Osborne]

Yes, I will ensure that there will be a presence in Northern Ireland. We are seeking to ensure that there is co-ordination between the business growth fund and the Government’s regional fund. As I have said on many occasions to Members from Northern Ireland, we are acutely aware of the challenges in Northern Ireland. The Secretary of State for Northern Ireland has produced a paper on how we might revive the Northern Ireland economy, which is now with the devolved Government. I am taking a close personal interest in that and I hope shortly to come forward, with my right hon. Friend, with some concrete proposals.

Savings Accounts and Health in Pregnancy Grant Bill

Baroness Ritchie of Downpatrick Excerpts

Monday 22nd November 2010 Commons Chamber

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

Representing, as I do, a constituency in Northern Ireland where there is considerable dependency on benefit and high levels of deprivation in urban areas, I am particularly opposed, as are my colleagues in the Social Democratic and Labour party, to the abolition of the child trust fund, the saving gateway account and the health in pregnancy grant. We are therefore opposed to the Bill. The current Government seem to think, as the Minister has shown, that the child trust fund, the saving gateway account and the health in pregnancy grant would contribute to deepening the deficit and are therefore unaffordable. It is extremely unfair that the disadvantaged and vulnerable should be penalised when efforts should be made to help to support them, and I find it shameful and unacceptable.

As a former Minister in Northern Ireland, I, like my right hon. Friend the Member for Delyn (Mr Hanson), have been responsible for the Department for Social Development and, therefore, for social security benefits, community development and housing. I note, with some alarm, that Ministers in the Northern Ireland Executive have not been consulted or asked for their opinion of the Bill’s content or its possible impact on the most disadvantaged and their communities. It is worth noting that 36 neighbourhood renewal areas in Northern Ireland are defined statistically by the Noble statistics on deprivation as having acute levels of poverty.

The withdrawal of these funds, combined with the coming changes to the benefit system, will simply deepen poverty levels and plunge people into further depths of despair. The measures might push people who are already suffering undue financial burdens into the arms of loan sharks and, in certain parts of Northern Ireland, they could enable those with paramilitary control to have a tighter grip on people. But no cognisance has been taken of any of that and there has been no consultation. The Government should step back from the brink and avoid implementing the measures. They should think of Northern Ireland as a place that is coming out of the legacy of conflict. We are trying to mitigate the influence of poverty and conflict and we are trying to underpin devolutionary arrangements. I ask the Government to please abandon the Bill tonight; we will be voting against it.

Financial Assistance (Ireland)

Baroness Ritchie of Downpatrick Excerpts

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

As I said in reply to earlier questions, we entered into certain commitments about the mechanism that I did not support at the time; I have made that clear. I was an opponent of the Lisbon treaty, as were many hon. Members. However, I have to deal with the world as I find it today, and that is a world in which Ireland’s economic situation is unsustainable. One of the reasons for choosing to offer a bilateral loan is precisely so that this Parliament, including my hon. Friend, can have a view and a vote on it, and we can account for that to our constituents.

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

I thank the Chancellor for his statement and the proposed assistance. Will the Treasury carry out an in-depth study of the economic impact of Ireland’s assistance settlement on the regions of the UK, particularly the devolved regions? Will the Treasury be prepared to intervene where any region may be affected negatively, such as Northern Ireland, where there is a connection in the banking sector and where two of the banks are Irish-owned?

[Mr Osborne]

We are taking this action precisely because, in part, we recognise the specific economic connections between Northern Ireland and southern Ireland. I would be very happy for the Treasury to work with the Northern Ireland Executive on looking at the potential economic impact of what is happening in Ireland. Obviously, the intention is to bring some stability to the Irish economy, and then some growth, which would be in the interests of not only the people of the Republic but the citizens of the United Kingdom.

Comprehensive Spending Review

Baroness Ritchie of Downpatrick Excerpts

Thursday 28th October 2010 Commons Chamber

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

When the comprehensive spending review was debated recently in the Northern Ireland Assembly, there was a general feeling that, against the budgetary framework outlined at the time when devolution was restored, we had been short-changed. Notwithstanding the protestations of the Secretary of State for Northern Ireland, we have been disappointed, to say the least. I note, however, the undertakings given today by the Chief Secretary to the Treasury that the Government will keep their commitments on track. The Members of Parliament for Northern Ireland will undoubtedly hold them to that.

During that debate in the Assembly, there was an air of financial realism. Perhaps for the first time in our recent history, it has become clear to everyone in Northern Ireland that we really are responsible for ourselves and for making the best use of the available resources. I hope that it might still be possible, however, to secure improvements around the edges of the published settlement, including guarantees on policing and security; access to end-year flexibility; latitude in how welfare reform is implemented in Northern Ireland, given its unique legacy; and more freedom to borrow. For this reason, I fully support the plans of the joint First Ministers in Northern Ireland to engage directly with the Prime Minister and the Chancellor.

The impact of the CSR settlement on Northern Ireland can be assessed in three parts. First, on current expenditure, we are facing a cut in real terms of 7% by the final year of the CSR. That is challenging, but it is not insurmountable. Secondly, in regard to capital expenditure—regardless of the smoke and mirrors put in place by the Chancellor, the Prime Minister and the Secretary of State for Northern Ireland—we have been left well short of our expectations. Thirdly, on capital investment, we faced a further downturn the other day with the suspension of the Northern Ireland aggregates levy credit scheme. I want to ask the Chancellor and his Treasury team to continue the negotiations with the European Commission to ensure that that is reinstated.

[The Economic Secretary to the Treasury (Justine Greening)]

This is a very important issue, and I want to take this opportunity to reassure the hon. Lady that that is precisely what we are doing.

[Ms Ritchie]

I thank the hon. Lady for her response.

The most important thing to us in Northern Ireland is the annually managed expenditure, through which our benefits are paid. What makes this iniquitous is the fact that the money does not come out of the Northern Ireland block, but directly out of the pockets and purses of benefit recipients. In Northern Ireland, that represents up to £0.5 billion being taken from some of the poorest households. The Prime Minister claims that that is fair, but what is fair about snatching the mobility allowance that is payable to people in residential care? What about the changes to child benefit? What about the changes to housing benefit? Are they fair? On the face of it, those large-scale welfare cuts have little to do with the laudable desire to help people move from benefit dependency to the dignity and self-sufficiency of gainful employment. They represent an old-fashioned onslaught on the poor.

I am a former Minister for Social Development in Northern Ireland with responsibility for benefits. Along with my successor, I have engaged in continuing discussions with the Department for Work and Pensions about welfare reform issues and the respects in which welfare reform proposals are inappropriate for Northern Ireland. I believe that we have reached a point at which we may need to redesign the social security system in Northern Ireland to make it much fairer for all, and to give ourselves greater freedom and flexibility to do things differently. I believe that that can be done without the need for an increase in the net subsidy to Northern Ireland.

We are doing a lot of thinking about how we can secure more local control of Northern Ireland’s economic levers, and we expect a robust but fruitful dialogue with the Chancellor when the promised economic paper on Northern Ireland is circulated by the Government within the next few weeks. The Chancellor indicated in last week’s CSR statement that both he and the Secretary of State for Northern Ireland intended to engage with all Northern Ireland Members of Parliament. As one of those Members of Parliament, and as a Northern Ireland party leader, I look forward to that discussion. There is no doubt that we need to rebalance our economy, but one thing that we must not do is throw the baby out with the bathwater and remove people from the public sector, because that will throw asunder our whole jobs and investment scenario.

Equitable Life (Payments) Bill

Baroness Ritchie of Downpatrick Excerpts

Tuesday 14th September 2010 Commons Chamber

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

I, too, congratulate the hon. Member for Congleton (Fiona Bruce) on making her maiden speech. She has a hard act to follow in Ann Widdecombe, and I hope that she will follow in her footsteps, if not her dance steps.

As you know, Mr Deputy Speaker, I represent a constituency in Northern Ireland. Like other hon. Members, I have been written to by many constituents, particularly elderly ones, about the unresolved, inexplicable and inordinate delay in bringing forward payments in a fair and equitable manner for Equitable Life policyholders. They are very proud people, many of whom are entrepreneurs in industrious communities. Some are farmers or bin men, and they represent a wide cross-section of the local population. Many of them are still waiting for the matter to be resolved, having waited a considerable time already.

I wish to make it absolutely clear that, in the majority of cases, those who invested in Equitable Life were not in the high income brackets. I can certainly say that on behalf of my constituents who were affected. In the majority of cases, their investment in Equitable Life over many years was itself a struggle to meet, but their sense of responsibility drove them to make that commitment to their future. I fear that when we talk of investors, it is all too easy to think about those in receipt of large pensions. We are talking about people in the lower and middle income brackets. Many of our constituents who are affected are farmers, fishermen, small business men, dinner ladies and librarians—and the list goes on. During their working lives, those pensioners contributed much to society for the minimum return.

There is a clear need to resolve the issue. Much forensic work has been done, including the reports of the ombudsman and Sir John Chadwick. However, we thought we had a resolution. On 11 May, the coalition Government issued a statement in which they agreed to implement the ombudsman’s recommendation to make fair and transparent payments to Equitable Life members, but sadly that has not happened. Hon. Members are now aware that such “fair payments” will be based not on the guidelines set out by the parliamentary ombudsman, but on those set out by Sir John Chadwick, which the Bill seems to follow.

The previous Government’s appointment of Sir John Chadwick was an attempt to devise a system of limited ex gratia payments, which would be made only to those who were disproportionately affected. The coalition Government appear to be continuing down that road, as we understand that the independent payments commission will abide by Chadwick’s proposals. Victims will receive less than 10% of their losses, and the total sum that the commission is working to repay will be a meagre £400 million, in the face of estimates by the Treasury’s own actuaries of much greater losses.

I caution the coalition Government against going down that route, not only on the grounds of the independent parliamentary ombudsman’s recommendation and fairness for the many investors who have been left quite desperate, but on the grounds of what is right and proper at the heart of government. The handling of the Equitable Life issue by the previous Government and the coalition strikes at the heart of democracy and at the question of how the Government treat many people.

[Alun Cairns]

I certainly accept the hon. Lady’s criticisms of the previous Administration, but does she accept that the coalition Government’s prioritising the Bill early in this Parliament demonstrates some sort of commitment? However, I recognise the need for greater negotiation with EMAG to reach an appropriate settlement.

[Ms Ritchie]

It would have been much better for the coalition Government to implement the ombudsman’s recommendations. That would have been much more democratic and it would have reflected the needs of all our constituents.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Lady accept that although the coalition Government have been quick to introduce a Bill that enables payments to be made, the level of payment is equally important to our constituents, as is the commitment, which was made by both parties in the coalition before they entered government, to implementing the ombudsman’s report?

[Ms Ritchie]

I could not agree more with the hon. Gentleman. That is exactly right, and it is the kernel of the letters that I have received from my constituents. They want this matter resolved by amendments to the Bill to reflect what was said in the original ombudsman’s report.

The parliamentary ombudsman’s report is independent and transparent, but it is being overruled by a Government-directed report that results in less favourable terms for investors. Such injustice at the heart of successive Governments is a great slight on our democracy. I urge the Government, at this late hour—perhaps it is not too late—to make amendments so that the Bill reflects clearly the ombudsman’s report. Such amendments would show that we are truly earnest about helping some of the most beleaguered members of our society.

Economic Affairs and Work and Pensions

Baroness Ritchie of Downpatrick Excerpts

Tuesday 8th June 2010 Commons Chamber

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

Thank you for calling me, Mr Deputy Speaker. I greatly appreciate the opportunity to make my maiden speech in a debate about economic affairs, and in particular about the services and assistance that we provide for our most disadvantaged and vulnerable citizens. It is an honour for me to follow the hon. Members for East Hampshire (Damian Hinds) and for Birmingham, Ladywood (Shabana Mahmood).

The subject of today’s debate is one close to my heart, not least because until very recently it was part of my responsibilities as the Minister for Social Development in the devolved Administration in Northern Ireland. In addition, concern for the disadvantaged and the vulnerable has always been top of my political agenda and that of my party. The Social Democratic and Labour party is here to serve.

No one better personifies dedicated public service and a lifelong desire to improve the lives of fellow citizens than my predecessor Eddie McGrady. He has been an exemplary contributor to making Northern Ireland a better place for all its people, across a career spanning 50 years of steadfast public service. Unlike others, his leadership style has not been bellicose or loud. Instead, he is a member of that elite group of statesmen and politicians who make progress for everyone through their wisdom, dedication, patience and hard work. For me personally, he has been a role model and a true friend. I am proud of what he has done for the constituency of South Down. The evidence of his endeavours is there for all to see throughout that beautiful constituency.

I said that South Down was beautiful, and it is. Located in the south-eastern corner of Northern Ireland, it boasts at its heart the magnificent Mountains of Mourne, which play host to Northern Ireland’s highest mountain peaks and cradle the crystal-clear waters of Silent Valley that sustain our capital city of Belfast. South Down also has an extensive and charming coastline, stretching from Carlingford lough at the Irish border to the south, through the bustling harbour towns of Warrenpoint and Kilkeel and on to Newcastle where, famously.

“the Mountains of Mourne sweep down to the sea.”

The coastline curves northwards beyond that again, to the historic town of Downpatrick—the place that I call home.

Although there is some vibrant manufacturing industry and commerce in the area, the main industries in South Down are agriculture, fisheries and, increasingly, tourism. Regrettably, South Down also has its own pockets of deprivation. It is a very good example of a place where, if the kind of welfare-to-work initiatives envisaged by the Government are to have any success, there needs to be an accompanying concentration on job creation. For the House can rest assured that there are very few people I know, especially in South Down, who do not want to work.

As a former Northern Ireland Minister, I told the previous Government that a policy of pressing people into work when there are few jobs to go to could not prosper, and I repeat that message to the new Administration. I share the Government’s desire to help more people enjoy the dignity and self-sufficiency that comes from gainful employment but, in Northern Ireland, a policy of hounding people away from benefits when there are few new opportunities for employment will cause only hardship and resentment.

But let us be positive: I believe that we in Northern Ireland have it within us, now that all the pointless violence has ended, to make our economy take off for the first time in generations. We are attracted to the possibility of devolving tax-varying powers to the Stormont Executive—powers that will allow us, for the first time, to compete as equals in the quest for foreign direct investment. I very much welcome the indications from the Government that they will help us harmonise corporation tax on the island of Ireland.

We can do more for ourselves in many other areas, too. Northern Ireland has potentially a very rich renewable energy resource. It can be at the centre of our plans to develop the green economy. We also have huge potential in our agriculture and food industries to drive for higher added value. We have a well-educated and trained work force, and a world-class broadband infrastructure that can be the platform for the growth of our tradable sectors. We must get all of this moving if we are to be credible in offering work to everyone.

I also think Northern Ireland can harvest a major expansion of its tourism industry. We offer a well-priced and absorbing tourism product that is enhanced by high-quality hospitality and a genuinely friendly and welcoming people. The potential for tourism development is, I believe, at its most enticing in my own constituency of South Down.

In the Downpatrick area, we hold the authentic heritage of our national saint, Patrick, and that is something very special. The whole world celebrates his anniversary on 17 March, yet that same world has limited understanding of his story. It is a powerful and compelling story of bringing Christianity to Ireland and allowing it to blossom in a land of saints and scholars at a time when it was threatened with extinction in Britain and the rest of Europe.

Patrick transcends all our historic quarrels in these islands and in particular within the two traditions in Northern Ireland. He is a unifying figure and his message is one of reconciliation. He was a Roman Briton, and as such was our greatest ever import. He is, and can be even more, our greatest ever export. In special parts of South Down, we hold the sites where Patrick first landed in Ireland and where he built his first church, the healing wells where he bathed, the place where he breathed his last, and the grave where he now rests.

I am confident about the future and the ability that we have to improve the economy and the living standards of our people. I will work positively here to achieve those objectives, but each week I know that I will be returning to a special place. I invite all Members here to visit South Down, and Downpatrick in particular, where they can walk in the footsteps of Patrick.