Leaving the EU: Funding for Northern Ireland

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Tuesday 24th January 2017 Westminster Hall

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

I beg to move,

That this House has considered the effect of the UK exiting the EU on EU funding for Northern Ireland.

I am very pleased to have secured this debate, Mr Hollobone. I welcome the fact that the Minister is here to respond on behalf of the Northern Ireland Office and that the shadow spokesperson, the hon. Member for Ealing North (Stephen Pound), is here. This is a momentous day in the history of the European Union; the declaration made—I am very glad to say—by the Supreme Court will enable parliamentary sovereignty to reign on this issue. That shows how important Parliament is in this matter.

I am here today to represent the majority of voters in South Down—67%—who voted to remain within the European Union, and the majority of voters in Northern Ireland—56%—who voted to remain. They do not want to see our local economy sacrificed to appease the anti-EU agendas of those with no connection to or no interest in Northern Ireland. I also rise to correct the glib “it’ll be all right on the night” hand-waving that some Ministers have offered when asked about the plan for Northern Ireland post-Brexit.

I mean no disrespect to the Minister responding to this debate when I say that some other Ministers, particularly from the Treasury, seem to have been so excited by the prospect of leaving the EU that they have neglected to familiarise themselves with the complex realities now facing the island of Ireland as a result of Brexit. I hope that highlighting the unique importance of EU funding to Northern Ireland will sharpen the Government’s thinking about precisely what their negotiating goals for Northern Ireland should be. I believe it to be of particular importance following the failure of Sinn Féin and the Democratic Unionist party to maintain an Executive who can represent Northern Ireland’s needs to the Prime Minister directly.

The European Union has been responsible for billions in investment in Northern Ireland over the past two decades—well in excess of what it would have received from ordinary Barnett formula consequentials. In the spirit of not re-fighting the referendum, I will not inundate those here with statistics on how much money the EU has provided over the years, although there are many. However, in the east border region alone, where my constituency is located, through Interreg VA, the EU is currently sponsoring projects to the value of €43.4 million, including €9.7 million for protected habitats and €15.9 million for a project intended to increase the proportion of small and medium-sized businesses working in cross-border research and reconciliation. In total, Northern Ireland was expected to draw down €3.5 billion in the period 2014 to 2020, including PEACE funding, Interreg funding and agricultural subsidies.

[Sammy Wilson (East Antrim) (DUP)]

I hope that I have not stopped the hon. Lady in mid-flow. Does she accept that, according to all the analyses, by 2020 Northern Ireland would have become a net contributor to the EU and that the Westminster Government have already committed to ensuring that any EU-funded project will be honoured by them?

Social Security

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Wednesday 14th September 2016 Commons Chamber

[Sammy Wilson]

That was the problem. In his short intervention, my hon. Friend did not have the opportunity to explain what happened. We were not delighted that the powers were taken away from us, but because of the use of the petition of concern by the SDLP and others, the ability to bring legislation forward was blocked. We then faced a situation in which we could not bring forward our own bespoke Northern Ireland legislation because of the block.

[Ms Ritchie]

rose—

[Sammy Wilson]

I will give way in a moment, but let me just explain this, because it is important. Rather than being delighted that Westminster had taken responsibility, our party worked frantically to try to find ways of ensuring that the worst aspects of welfare reform—the ones that we believed were the most damaging and that, for structural reasons, could not be introduced in Northern Ireland—were dealt with by taking money from other priority areas. We used that money to alleviate some of the difficulties. That was blocked—stopped dead in its tracks—by the SDLP’s use of the petition of concern. We worked our socks off to try to get a bespoke arrangement for Northern Ireland, which could be agreed to by all of the parties and would therefore have some kind of democratic authority, but it was impossible to do that because of the actions of the SDLP. It protested that it wanted the legislation dealt with in Northern Ireland, but did its darnedest to ensure that it could not be dealt with in Northern Ireland and that it had to be dealt with here.

[Ms Ritchie]

Let me refresh the hon. Gentleman’s memory, as I fear that he and his colleagues may have forgotten what actually happened. My colleagues in the Northern Ireland Assembly proposed an all-party Committee as far back—[Interruption.] It is not flannel. It was proposed as far back as March and April 2011 to address this issue. We wanted to achieve all-party consensus so that we could go forward to the Treasury here in London as a united team to achieve the best possible deal for the people of Northern Ireland.

[Sammy Wilson]

I was the Finance Minister in Northern Ireland at the time, and I can remember those discussions. There was a whole list of demands. Basically, it was demanded that we should not introduce any of the welfare reform proposals and that we should just go ahead as usual. The important question was who was going to pay for it. There was a naive belief that if all the parties in Northern Ireland came to Ministers here in London, with the great and the good from Northern Ireland on their coat-tails, and pleaded a special case, we would somehow be exempt from the welfare changes that were being made in all other parts of the United Kingdom. That was the cunning plan. I am afraid that even those who were sympathetic to the SDLP’s point of view knew that nothing would come from it. Indeed, Baldrick could not have devised a more stupid plan had he sought to do so.

There is no point in saying that the SDLP tried to find ways of changing this; the only suggestion was that we should oppose the changes and say that we therefore did not want them for Northern Ireland. The more realistic position, and the one now reflected in the order, was to say that we should look at what resources were available, look at the most damaging aspects of the legislation and see whether we could find, within our own resources, the ability to mitigate some of them.

--- Later in debate ---

[Sammy Wilson]

This is the amazing thing: I know there are all these attempts to rewrite history, but it was a DUP Minister who actually brought the legislation to the Assembly—who was prepared to walk through the Lobby and to vote for it. However, because a petition of concern was introduced by the SDLP, even if a majority of Members in the Assembly had voted for the legislation, it would still not have become law. Once that petition of concern was triggered and the legislation was turned down, we could not have any welfare reform Bill. That is the truth of the matter—not that we ran away. We faced up to things. I can remember doing interview after interview where we even faced flak from people who said, “You’re going to hurt individuals because of part of this legislation.” We argued, “At least we’ve done something to mitigate it. We have got the best possible deal.”

Can I just say that we did get changes and allowances made by the Department for Work and Pensions? I want to give credit to Ministers in the Department. When we were negotiating on welfare reform, they accepted that Northern Ireland could make changes, albeit that we had to accept the financial consequences of those changes. However, flexibility was demonstrated by the Department, although it was rejected by those who wanted simply to be able to say, “We are purer than everyone else on this issue. We have stood on our principles”—regardless of the consequences of that.

We have the legislation that we have today. Those who are most vulnerable in Northern Ireland have been safeguarded by the changes that have been made and by the resources that have been devoted to this issue by the Northern Island Assembly, and that has been a painful choice, because, of course, it means that there is less money to spend on other things.

[Ms Ritchie]

Will the hon. Gentleman give way?

[Sammy Wilson]

The hon. Lady had plenty of opportunity to make her point during the debate, and I have allowed three or four interventions already—I know she is struggling with the case that she has and with the embarrassment of the way in which the SDLP has handled this issue.

We now have this order. I recommend it to the House—it is the best deal we could possibly have got. Unfortunately, it would have been far, far better had it gone through the Assembly, but because of the Assembly’s structures and the ability of minority parties to obstruct legislation through a petition of concern, this measure was the only avenue by which we could ensure that the Assembly finances were protected and that the political process in Northern Ireland was able to continue.

Northern Ireland Economy

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Wednesday 11th May 2016 Westminster Hall

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

I am pleased to serve under your chairmanship, Mr McCabe. I again congratulate the hon. Member for Upper Bann (David Simpson) on securing the debate. Like him, I congratulate everyone who was elected to the Northern Ireland Assembly on Friday and Saturday of last week. There is a major job of work to do, and I am sure they will get down to that as part of their preliminary work tomorrow.

I will focus my contribution on the role that tourism and the visitor economy can play in bringing prosperity to Northern Ireland, but first I want to echo the comments of the hon. Member for North Down (Lady Hermon) about education. Clearly, education, skills and training are directly linked to the economy. However, on 23 March, schools received a letter from the Minister saying that their budget would be at a certain level. It a major cut, which will have an impact on the delivery of the curriculum to many pupils throughout the schools sector. That will have an impact on our economy in the long term, which needs to be addressed as a priority.

[Sammy Wilson]

rose—

[Ms Ritchie]

The hon. Gentleman will appreciate that two other hon. Members wish to take part in the debate, but I give way to him.

[Sammy Wilson]

Will the hon. Lady accept that, given how the block grant works, the only way more money can be found for education is through reform of the education system in Northern Ireland? I am talking about holding less money at the centre for Department-inspired initiatives and instead giving it to principals, and about showing less favouritism to certain growing sectors of education at the expense of other sectors, some of which are already working under capacity.

[Ms Ritchie]

I thank the hon. Gentleman. I agree that there needs to be investment in schools and education. That is the priority, because investment in well-developed children’s education will lead to better outcomes for training and our economy.

Northern Ireland is undoubtedly a beautiful place, and our appeal has been strengthened by our growing position as a world-leading location for films and television. In that respect, tourism is an important revenue generator. In the year from October 2014 to September 2015, it brought total expenditure of more than £700 million to our economy. That helps to support jobs and gives communities new livelihoods.

As a co-chair of the all-party group for the visitor economy, I am anxious, as are many members of the group, for the Government to bring forward proposals to reduce VAT on tourism on a UK basis. That fiscal incentive would have a deep and generous impact on the Northern Ireland economy. We need only look at the south of Ireland, where VAT on tourism has been levied at 9% over the last number of years. As a consequence of that measure, about 9,000 jobs were created in the two years after it was introduced. We are part of the UK, which is one of only two of the 27 countries in the European Union that do not have a lower rate of VAT on tourism, so that immediately places us at a disadvantage.

The hon. Member for Upper Bann also raised the issue of Brexit. Obviously, I take a very different view from him and his colleagues in the Democratic Unionist party. I and my colleagues in the Social Democratic and Labour party believe that we should remain in the European Union and I give a little warning based on evidence direct from Danske Bank. This week, it said in the quarterly sectoral review for 2016 that the economic growth forecast for Northern Ireland had been revised down to 1.6% from 1.8%. Angela McGowan of Danske Bank was reported in the business press yesterday as having indicated that that was due to the threat of Brexit, austerity and slower global growth, which takes us back the global commodity markets. She said:

“The message remains that Northern Ireland’s economy continues to expand, but the pace of growth is slowing. While the continued reduction in the public sector jobs will weigh down overall growth in the short to medium term, by far the biggest risk to growth this year is Brexit which has lowered investment and growth in the first half of this year…but there is no reason the private side of the economy should not bounce back”

after the referendum, which I hope will produce a remain vote.

Those on the leave side have not produced any evidence on which to base their arguments, and they do not know what the far side of a leave vote would look like. However, I know that there will be a severe impact on our local economy. I firmly believe that there is a future for the Northern Ireland economy and for our young people, but that depends on several factors. One is staying in the European Union, otherwise we will close easy access to the 500 million potential tourists in the EU and block off one of our biggest areas of growth.

I once again congratulate the hon. Member for Upper Bann on securing this important debate. I hope that the Northern Ireland Executive will get down to work and ensure that new areas of growth can be tapped into and that new areas for visitors can be created. That can happen only in a context in which we are totally open for business and totally open to new markets. That means remaining in the European Union.

Further to that, I want our agri-food sector to grow—

EU Referendum: Timing

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Tuesday 9th February 2016 Commons Chamber

[Sammy Wilson]

It does. I accept that. I was simply stating that the Minister had indicated he was going to make a clueless speech. The one thing I would say to him is that he has already ruled out certain dates, so ruling out one more day in the 670 days that remain before the last date on which the referendum could be held is not an unreasonable request, especially when there has been such unanimity among the devolved Administrations to do so. I hope that the Minister carries back the message that has come from the Chamber today.

Let me go through some of the arguments used by those who oppose the motion. The first is that using the term “rushed” is a bit over the top. I noted that the hon. Members for Pudsey (Stuart Andrew), for Macclesfield (David Rutley), for Blackpool North and Cleveleys (Paul Maynard) and for Milton Keynes South (Iain Stewart) all queried the point about the referendum being rushed. Of course the debate about our membership of the EU has been going on for some time now, but the referendum is going to be on the Prime Minister’s promised reform, and we do not yet know the terms of what he has got. Those issues will have to be addressed along with all the wider issues affecting our membership of the EU.

It is not a question of our simply having talked about the issue for a long time. The same thing could be said about what happens between one election and another. All the issues pertaining to an election are discussed over a five-year period, but the election campaign is the time when people focus most on those issues. When we talk about the referendum being rushed, we are simply asking why we should compress the debate into a short period, especially when it has implications for the devolved Administrations.

I have not heard any Member answer the point put time and again by the right hon. Member for Gordon (Alex Salmond): how this will affect Administrations that are having elections. Governments will need to be formed after the elections, but instead of getting into the full role of forming a new Government, a new Administration and a new programme for government, we will be into another period of purdah for at least six weeks—after having one of at least four weeks beforehand. That is disruptive of government, and this important point has not been addressed by any Members participating in the debate.

[Ms Ritchie]

Does the hon. Gentleman agree that there is a need, an urgency and an obligation on the Government to provide a Minister to answer that particular issue about the disruption to democracy resulting from two periods of purdah?

[Sammy Wilson]

Yes, and we have heard allegations that straw men are being put up to indicate, for example, that the electorate would be confused. However, my right hon. Friend the Member for Belfast North never claimed that. He simply made the point that conflating the election campaign with the referendum campaign was inappropriate where different nations and different issues apply. Indeed, parties will be competing with each other in the Assembly or devolved Parliament elections, but they might want to co-operate during the referendum campaign, so further confusion is introduced there, too.

Social Security

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Tuesday 1st December 2015 Commons Chamber

[Sammy Wilson]

Mr Deputy Speaker, you have made it clear to the hon. Lady that I would be digressing if I went down that route. The good thing is that Sinn Féin did face up to the reality that we could not go along a route where we did not have a sustainable budget and could not deliver services in Northern Ireland, we were going to hit a constitutional crisis and the devolution settlement was going to be under threat if we did not deal with this issue. I do not see what happened as a cop-out on our part, because we had always advocated that, if this matter could not be dealt with in the Assembly, it should be dealt with here—my only regret was that the Secretary of State did not take the powers earlier. Perhaps it is better that the powers were handed to her by the Northern Ireland Assembly and therefore we have this order tonight.

[Ms Ritchie]

Does the hon. Gentleman not recall that, when I was Minister for Social Development, I facilitated the request by the Social Development Committee, under the chairmanship of the hon. Member for East Londonderry (Mr Campbell)? He and others asked me whether it would be possible for money to be paid directly to the landlord rather than the tenant as part of housing allowance, in order to ensure the protection of tenants, and I was very glad to do it. Does the hon. Member for East Antrim (Sammy Wilson) also agree that the whole purpose of those statutory instruments was to ensure that money was got to people as quickly as possible, in order to take them out of poverty and into a situation where they had money?

[Sammy Wilson]

The whole point of the order before us is that it allows for those changes to be made in Northern Ireland. The range of the changes has been highlighted here tonight: the exemption from the spare room subsidy changes; the direct payments to landlords; the split payments to households; and additional funding for those who would be affected by housing benefit changes to their rates. All those have been facilitated as a result of the negotiations that took place—under the auspices of a Democratic Unionist party Minister; the DUP negotiated many of those changes. As I say, we were pleased that the Government were prepared to be flexible, albeit that their largesse did not extend to funding those changes and those had to be funded from the Northern Ireland budget.

The good thing about this order is that it removes something that was toxic in the Assembly. Until December next year, any welfare changes will be done through this House and therefore the kind of impasse that we have experienced before will be removed. That is good for the stability of the Assembly. It is good that we have an order that reflects some of the changes that we believe were necessary and some of the amendments we wish to have in the legislation. Overall, it is a good part of the package. We are not ashamed of it. We do not believe it dilutes devolution. It is a recognition that the current blocking arrangements in the Assembly created problems that we had to find a way around.

--- Later in debate ---

[Ms Ritchie]

On that point, I can well recall that there was robust opposition to those fines by my colleagues in the Assembly. Let me ask the hon. Gentleman this: do he and his colleagues regret the fact that there was an in-and-out approach to ministerial office by the DUP back in September, which resulted in very long waiting lists for health and in many people still having to wait for surgical procedures?

This debate and this order reflect the Government’s attitude and the disregard for the Assembly’s democratic processes on the part of the Government and Sinn Féin and the DUP. This sunset clause has been presented by other parties as the cut-off point in the Secretary of State’s interference in our welfare system, but of course that is not the case. The legislative consent motion voted through by the DUP and Sinn Féin locks Northern Ireland into the welfare provisions.

May I remind you, Mr Deputy Speaker, that DUP Members walked through the Lobby with us to vote against the provisions, yet they have joined Sinn Féin in signing up to this? My colleague in the Assembly, Mr Attwood, received a letter from the DUP Minister for Social Development last week, confirming that our constituents would face a benefit freeze for four years up to 2020 and that Westminster would have the power to impose an even lower benefit cap—lower than £20,000 for the North. That is what the DUP and Sinn Féin have locked us into. Such a four-year freeze will mean real reductions year on year for people on income support, jobseeker’s allowance, employment and support allowance and universal credit. It will mean a freeze for constituents, whether those of my hon. Friend the Member for Foyle (Mark Durkan), of the hon. Members for East Derry (Mr Campbell), for East Antrim (Sammy Wilson) or for Upper Bann (David Simpson), or of the right hon. Member for Belfast North (Mr Dodds).

[Sammy Wilson]

Does the hon. Lady accept that most people in Northern Ireland do not regard a benefit freeze on the scale that she suggests, which is equivalent to take-home pay of £37,000 for someone in work, as unreasonable, and that if we are talking about making work pay, such a benefit freeze is essential?

[Ms Ritchie]

May I suggest to the hon. Gentleman that the standard of living in Northern Ireland is much higher and that we are talking about a benefit cap. I remind the hon. Member for East Antrim not to lead people in a slightly different direction by confusing a freeze with a benefit cap. The debate on this Order in Council, which has 140 clauses, is really about the needs of families and individuals who need to access the benefits system. People do not do that because they want to; they are forced into it because they cannot find a job, have lost their job or they live in an area where there have been considerable job losses. In Ballymena, in the constituency of the hon. Member for North Antrim (Ian Paisley), there will be considerable job losses as a result of closures at Michelin.

We are all united in a desire to build a more united society where there will no longer be peace walls, and we have a stable economy with plenty of economic growth and productivity and stable political institutions. We want to ensure that we can live, and people with families can rear them, in relative comfort. It is not a lifestyle choice to be in receipt of benefits; as I explained, many people are forced into such circumstances because they do not have a job or they have some form of disability.

I would like the Minister responding on behalf of the Department for Work and Pensions to explain the calculation of the top-ups and which budget they will come from. Will they come out of the existing Department for Social Development budget or the Social Security Agency budget, or will there be a raid on the discretionary fund, which will disadvantage other people?

I take on board the fact that there is a top-up regime, and I hope that that money will be safeguarded by the Treasury to ensure that money flows to people. We do not want to see a sanctions regime lead to youth homelessness, which has been an emerging phenomenon in Germany and here in England and Wales, where benefits sanctions are in operation. Such sanctions can often bear down on the individuals and families least financially able to tolerate them. None of us, no matter what our political perspective or affiliation, would want that to happen to any of our constituents.

In conclusion, I would like to touch on a rather bizarre criticism levelled at my colleagues by hon. Members representing the DUP. They suggested that there was some contradiction in our argument that Northern Ireland’s welfare powers should be legislated for in Northern Ireland and, in the absence of that, our attempt to protect claimants through our amendment put to this House last week. There is no contradiction. We believe in democracy and in the processes of both the Northern Ireland Assembly and this House to scrutinise and amend legislation. Just because the DUP and Sinn Féin undermined the processes of the Northern Ireland Assembly, the SDLP will not undermine the role, duty and responsibility of this Chamber.

To my knowledge, Sinn Féin has been oddly quiet on this issue. Its only response to the trade unions protesting outside its offices on the issue at the weekend was that it supported the unions in

“directing united opposition against the Tory government in London”—

by handing over powers to that same Tory Government. That is rather bizarre and ludicrous.

The most important thing is that we are able to build on the political institutions and on sound economic growth and productivity in a balanced way throughout Northern Ireland, and that people are not worse off as a result of this measure—that is, people who are forced into the benefits system because of a lack of opportunity and jobs.

Northern Ireland (Welfare Reform) Bill (Allocation of Time)

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Monday 23rd November 2015 Commons Chamber

[Ms Ritchie]

I hear what the hon. Gentleman says, but we believe that this instrument is an abuse of parliamentary democracy, an abuse of this House and an abuse of the role of Parliament and of the Cabinet. This should not happen. There will be no diminution of the time available for debate on other aspects of the Bill. This is a matter of procedural priority and propriety, and of the accountability of this House. In any liberal democracy, there will be questions about accountability and about the role of Parliament and the Cabinet. The Cabinet should not seek to subjugate Parliament in this regard. We believe that this matter has serious implications for devolution in Northern Ireland, and that it could set a difficult and dangerous precedent for other devolved institutions in Britain as well as in Northern Ireland.

[Sammy Wilson]

Does the hon. Lady recall that last week, in a flurry of rhetoric, her own spokesman on this issue in the Northern Ireland Assembly asked, in terms, “How dare anyone take this issue, which we have fought for so long to have devolved, to the House of Commons so that people outside this jurisdiction can make decisions about what happens in Northern Ireland?” Is she now saying that he was wrong, and that she wants this House to make those decisions, over the heads of Assembly Members?

[Ms Ritchie]

The hon. Gentleman is trying to direct me down a certain path. That debate in the Northern Ireland Assembly dealt with the measures in the Bill and with the legislative consent motion. Tonight, we are debating my party’s amendment to the allocation of time motion. I remind Members of the motion’s statement that

“the Question on any amendment moved or Motion”

can be made only “by a Minister”.

That means that we can debate our amendments but we cannot move them. Is that not unquestionably undemocratic, in this particular House? Therefore, I second and support our amendment.

Northern Ireland (Welfare Reform) Bill

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Monday 23rd November 2015 Commons Chamber

[Ms Ritchie]

It is interesting to note that, according to research carried out by the Library, 112,500 people in Northern Ireland are in receipt of tax credits and the annual £60 million of tax credit top-ups for the next four years will meet only 40% of what Northern Ireland will lose.

[Sammy Wilson]

I do not mean to cut the hon. Lady off during a flourish of rhetoric, but does she accept that the welfare reform legislation does not include changes to tax credits? Those have been made through other legislation that is totally separate. It is wrong to set up a straw man by indicating that there is a connection between this legislation and tax credits.

[Ms Ritchie]

My understanding is that the British Government, whose representatives are here today, including the Secretary of State, are claiming that that is the situation.

The people of Northern Ireland fought long and hard with political parties and both Governments to secure the democratic political structures. The SDLP wants to see the bedding down of those institutions through political stability; economic prosperity; greater devolution in respect of fiscal flexibilities, broadcasting and telecommunications; and the deepening of the north-south and British-Irish structures that were facilitated by the Good Friday agreement and the Northern Ireland Act 1998. We do not want to see power removed from the Northern Ireland Assembly and the Executive to be given to the Secretary of State and this Chamber. That was not the purpose of the Act that we voted for in 1998, when power was given to the Northern Ireland Assembly and the Executive.

--- Later in debate ---

[Ms Ritchie]

I thank the Minister for that helpful intervention, but it would be much more helpful if he and his colleagues supported our amendments, which would help to clarify matters and to further delineate such measures. Before he winds up the debate, will the Minister reflect on our amendments as we move to the Committee stage?

[Sammy Wilson]

The hon. Lady does at least engage in debate on these issues. We might appreciate her anger against the welfare reform proposals were it not for the dual standards that her party has adopted. She is railing against some of the measures in the Bill. For example, her party opposes the bedroom tax, as she calls it, but it was her own Minister who introduced the removal of the spare room subsidy for people who live in the private sector. On the one hand, she condemns the Government for picking on people in the public sector, but her own Minister introduced it for people in the private sector, where rents are even higher.

[Ms Ritchie]

I well recall that measure being debated and it related solely to the private rented sector.

I regret that the Bill has not been taken in the Assembly, where it rightfully belongs. I hope the Minister will reflect on our amendments in his winding-up speech and provide greater clarity. I hope Northern Ireland can be a place of work, endeavour and prosperity. That is our job, the job of Parliament, the job of Cabinet and the job of the Northern Ireland Executive.

Superfast Broadband

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Monday 12th October 2015 Commons Chamber

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

I congratulate the hon. Member for Boston and Skegness (Matt Warman) on securing the debate. I agree with the hon. Member for Dumfries and Galloway (Richard Arkless) that this issue is critical to the development of our local economy throughout the UK, whether we live and work in urban communities or rural communities. Like many of the Members who have spoken today, I represent a rural constituency that has been left behind in the broadband roll-out. A number of my constituents are experiencing digital exclusion and the social and financial implications that that entails.

[Sammy Wilson]

Does the hon. Lady accept that her constituency and mine are the worst two in Northern Ireland for broadband coverage, in terms of availability or speed? Does she accept also that part of the problem is the monopoly that BT has and its emphasis on getting line rental rather than looking at innovative ways of ensuring that broadband is more widely available?

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. He, like me, has heard stories from constituents in both the residential and the business sector who are unable to access broadband. For example, in a major town in my constituency is a business centre. It has a box in its business complex which accommodates 60 businesses, but the box is not enabled. That has a significant impact on the location of local investment and urgently needs to be addressed. In other cases, owing to the topography of the Mourne mountains, many young people cannot do their homework as they do not have access to broadband. They are forced to travel some 8 or 9 miles to a local library to do that simple task. That is totally unfair.

Let us look at the statistics. Of the £1.7 billion to provide superfast broadband throughout the UK, £11.6 million for phase 1 and phase 2 was allocated to Northern Ireland. Phase 1 aims to provide superfast broadband to 90% of premises. Phase 2 will seek to further extend coverage to 95%. At present my constituency has about 63%, and by June 2017 it will have 64%. Yet again, it is ordinary businesses in the agricultural sector, which is now expected to do everything by digital means, and the business community and ordinary residences that will be affected. It is believed that the format for broadband supports the majority in the wider community, rather than the minority—those isolated, inaccessible businesses in rural communities that make up our local employment base.

I urge the Minister to announce tonight that he, with BT, is going to deal with the issue, as the hon. Member for East Antrim (Sammy Wilson) said, and not only hold the “not spot” summit but take immediate action to ensure better access to broadband. Our local economy, our local financial and business sectors and the wider retail economy, as well as ordinary citizens in their homes, depend on that for their future economic survival.

Budget Resolutions and Economic Situation

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Wednesday 18th March 2015 Commons Chamber

[Sammy Wilson]

I do not want to be churlish about this Budget, because there are a number of things—my hon. Friend has led me on to them—that I welcome. Given the way that farming income changes, it is important that farmers should have the ability to look at their income and spread their profits and losses, and the tax they pay on them, over a five-year period rather than a two-year period. I welcome the announcement of a requirement to have a universal service obligation for broadband, although I see that there is no timing for it, so maybe the Minister can give us some indication of that. I know that in my constituency smaller businesses that want to set up in rural areas are held back because they do not have that easy means of communication.

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

The hon. Gentleman is making a compelling argument about the need for investment in infrastructure, part of which is this whole area of investment in broadband. Does he agree not only that the time scale to be specified is an important consideration, but that we have to see geographical locations? He, like me, will have talked to constituents, particularly those in rural areas, who cannot get access for topographical reasons.

[Sammy Wilson]

Hopefully, a universal service obligation will mean exactly that and the investment in the infrastructure will include all parts, regardless of how difficult they are—I notice that one of the things that will help is satellite broadband where fixed line broadband cannot be used.

I also welcome the Government’s promise to improve incentives for people to save for the deposit for their first home—especially given the number of young people who come to me looking for ways to get their first home—and to give additional support of up to 20% for those savings. As one who supports the fair fuel campaign and represents a rural constituency where many people do not have the opportunity of using public transport, I also welcome today’s announcements on fuel duty.

I suppose the fears we have for the future, especially in Northern Ireland, are these. I welcome the fact that the Government have made available to us the devolution of corporation tax and the impact that I believe it can have on our economy. Nevertheless, as we seek to rebalance the economy, that must not be counterbalanced by serious public sector expenditure cuts, especially for an area that is still dependent on the public sector. It must not be offset by huge cuts in infrastructure. We have already suffered a 40% reduction in public infrastructure investment in Northern Ireland, with devastating effects on the ability to deliver on many of the things that we wanted to deliver on. I hope that the optimism that the Chancellor has expressed today comes to fruition, but I believe there are obstacles. They are highlighted in the Red Book and in the speech today. Some of them are in the Government’s control and some are outside it. I hope we will walk tall and not find that there are many people and many areas of the United Kingdom still stooped under an economic policy that is not doing its best for Britain.

Corporation Tax (Northern Ireland) Bill

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Tuesday 27th January 2015 Commons Chamber

[Sammy Wilson]

I seem to have hit a sore spot or at least the tender parts of the body politic among those parties that have engaged in such activity.

We have to get the welfare reform proposals through the Executive, but agreement has been reached and I hope that, as this Bill makes progress, we will also see the passage of the welfare reforms in Northern Ireland, albeit with changes—mostly secured by my party—to the Welfare Reform Bill that will make it less draconian. Indeed, I think that some of the changes in the Welfare Reform Bill will have to be revisited by this Parliament at some stage.

[Ms Ritchie]

Will the hon. Gentleman give way?

[Sammy Wilson]

I will, because I know that the hon. Lady is feeling sore from some of my remarks.

[Ms Ritchie]

I assure the hon. Gentleman that I am not feeling sore in any way. He is avoiding the reality to suit a certain political situation. He used to be a sceptic about corporation tax, but he has had a damascene conversion. Notwithstanding that, can he tell us what measures will be introduced to achieve the benefits of welfare reform for the people of Northern Ireland?

[Sammy Wilson]

If the hon. Lady is not feeling sore from some of my remarks, she is more brazen than I thought she was—[Laughter.] As she has not yet heard the rest of my speech, she does not know what I am going to say or the balanced arguments that I am going to make about corporation tax.

Everyone who has spoken so far has suggested that there is widespread support for the Bill in Northern Ireland. That is, of course, not true. The Green party opposes it, but then that party opposes economic growth apparently, according to its latest manifesto. I can understand, therefore, why it would not want to see any measures that would encourage economic growth in Northern Ireland. I do not know how the Green party expects us to tackle our unemployment or standard of living problems with no economic growth, but in any event it opposes the Bill.

The other opponents of the Bill are the trade unions, which are organising a one-day strike against it and other measures some time in March. At the same time as they complain about youth unemployment and the low-wage economy, they oppose a measure that has the potential to address all of those issues and want to strike against it. I do not understand their logic.

The only other party that opposes the measure is the traditional Unionist voice, but I think that is because we support it. That seems to be the rationale for anything it does.

All parties in this House are agreed that tax incentives can be beneficial in stimulating business growth. Some may disagree about the actual form the tax incentive should take or the degree to which it should be used, but there is an undeniable correlation between such incentives—be they small business rates relief, corporation tax reductions or oil industry taxes—and growth. Shareholders are attracted to putting money into businesses, which in turn have more profits to plough back into investment. Tax incentives can also give businesses a competitive edge over those in other countries. That is the rationale behind the Bill and no one can deny that it will have an effect.

In Northern Ireland there is an additional reason to make the change in that we share a land boundary with a country that has had a lower corporation tax rate. Some people say that this will not have a beneficial effect, but it is significant that, even when the Government of the Irish Republic were having to slash public expenditure and incur the wrath of the population by reducing wages in the public sector, putting up taxes, introducing new charges for water and so on, the one area for which they were fiscally responsible and did not make any changes was corporation tax. They had obviously judged that when it came to fighting for business, corporation tax—albeit along with other measures—was a shock and awe tactic they could use to try to attract businesses to the Irish Republic. That is a significant argument.

I have a degree of scepticism about economic modelling. As I am sure the Financial Secretary would tell us, we can put whatever finely tuned assumptions we want into economic models, but they can be upset fairly quickly. In the next 15 years, it is estimated that output in the Northern Ireland economy will grow by 11%, creating about 37,500 jobs. Any economic model must come with a warning that the assumptions on which it is based can change fairly rapidly. However, the estimate has been made using the economic data we have at present: assumptions, past trends, information from other economies and so on. In Northern Ireland, we cannot afford to ignore that estimate, even if it is not totally correct, especially if it will grow the private sector and bring in well-paid, above-average jobs.

We had concerns about a number of issues. We did not want a Bill for people who simply moved their profits to Northern Ireland and did not create jobs. There is no benefit to us in having companies with just a brass plate outside the door, but no substance. I believe the Bill addresses that issue, as much as it can, by indicating that it will benefit trading profits only. In addition, there will be strict investigation by the Treasury of companies who try to move profits. As I understand it, there will be a charge for ensuring that compliance measures are put in place to avoid such scenarios.

If we do that, what about small businesses? Many small businesses, especially in the construction industry, have a substantial amount of work in Great Britain because of the decline in the construction industry. We did not want small businesses to have huge administrative costs imposed on them for differentiating where they made their profits. I welcome the proposal in the Bill that businesses based in Northern Ireland with 75% of their activity and employment there, will be exempt on all their profits. That should cover 99% of small businesses in Northern Ireland so there should not be administrative costs for small businesses.

Oil and gas is excluded from the legislation. I hope that very shortly, despite the endeavours of the Social and Democratic and Labour party Environment Minister, we will have a substantial oil and gas industry that can exploit the shale gas resources that we believe are buried under the ground in Northern Ireland. There may be some who play the populist line and say, “Let’s just keep those resources there. After all, they’re nasty CO₂-producing fossil fuels.” I want them to be exploited for the benefit of the people of Northern Ireland and the United Kingdom. The profits from those companies would not currently be subject to the corporation tax arrangement, but I hope that if and when we develop such an industry, Northern Ireland will benefit from the kinds of promises that have been made to the north-east of England, including a sovereign wealth fund to take in part of the profits from those businesses and plough them back into public expenditure projects. I understand, however, why that has not been included at present.

On financial sector profits, there were two issues. I was not all that supportive of the argument about why those nasty banks, who nearly destroyed our economy, should benefit from reductions in corporation tax, paid for by reductions in the block grant. I understand the emotional rhetoric in that argument, but I am more concerned that the profits of banks and other financial institutions are much more volatile and more easily moved without detection than the profits of manufacturing or other companies. One has only to look at the difference between 2007-08 and 2008-09, when banks’ profits changed from £255 million to £45 million. That kind of volatility in tax revenue was a compelling reason why we should not include the profits of financial institutions in the Bill. I am glad that the Government have responded to that.

Budget Resolutions and Economic Situation

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Wednesday 20th March 2013 Commons Chamber

[Sammy Wilson]

For an average haulier, this will mean an annual saving of about £750 per vehicle and for the average motorist it will mean a £25 saving per year. Again, that is a good thing for the hard-pressed motorist.

The Chancellor made much of the monetary measures that he has introduced, especially the funding for lending scheme. Unfortunately, given the state of the banking industry in Northern Ireland and the fact that most of the banks there are not even part of the scheme, this is likely to have very little impact. However, positive impacts are being felt, and it would be right to start by acknowledging that. It is easy in opposition to criticise when we do not have to make the decisions. We can be the armchair economists who see everything that is wrong, what should be done and what one would do if one were sitting on the other side. However, there are some issues that the Chancellor has got wrong.

First, we have a Budget that he has said is fiscally neutral. That comes at a time when the economy needs some form of stimulus. He has admitted in his speech that it is not coming from consumer spending, because consumers do not have the money to spend or the necessary confidence. It is not coming from business spending, because businesses are trying to contract their loans and deleverage during the recession. It is not coming from exports, because our deficit is actually increasing. The only source of that stimulus therefore has to be what the Government can do in a practical and sustainable way.

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

Does the hon. Gentleman agree that there is an ever-increasing need to stimulate our economy, particularly in Northern Ireland? Our unemployment figures came out today and they are the highest in the past 15 years, with the level at about 23%. Wearing his other hat, as well as his hat in here, does he have any thoughts as to how the local economy should be stimulated?

[Sammy Wilson]

I thank the hon. Lady for her intervention, which leads me to a point that I wanted to make. We have a Budget that, as the Chancellor has admitted—in fact, boasted—is fiscally neutral. Although it contains good things—I have highlighted some of the impacts of the decisions—it moves the existing money around and does not mean an increase in the total level of demand. If that is not coming from exports, from consumers or from industry, because of a lack of confidence, it has to come as a result of properly targeted Government initiatives.

Although I sit on the Opposition Benches, I do not have a vested interest in Government failure and a failure of economic policy, and nor does my party. I want the Government’s policy to succeed, as it means more jobs for people in Northern Ireland and a better standard of living for them. It means that we can balance our economy. However, it is not a policy that is designed for success; it simply tries to continue the fiscal position that the Government are in at the moment. Indeed, if we look at all the targets that the Chancellor has set himself, we see that he wanted to increase confidence in the economy, yet we have seen low demand from consumers, and firms have not taken up loans—the right hon. Member for Wokingham (Mr Redwood) mentioned that—either because they cannot get money from the banks or do not believe that there is any point in investing at the moment. Firms are running down their stock levels, because they see no prospect of additional sales in future.

The Chancellor also set himself the objective of keeping Britain’s credit rating, but that is slipping because the people who make the assessments are looking at the state of the British economy and asking when we are going to get out of the downward spiral of debt. If there is no growth, we cannot pay off the debt.

Changing Perceptions of Northern Ireland

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Wednesday 7th March 2012 Commons Chamber

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

On what is a sad day, 2012 promises to be an action-filled year. The SDLP welcomes the progress that has been made in the north of Ireland over the past 10 to 15 years, of which we were very much part. We shaped the character of that progress and its development. In fact, we were particularly innovative in the political developments.

There has been much to celebrate in Northern Ireland, particularly with regard to our sporting heroes right across the sporting arena, whether in rugby, athletics, golf or the Gaelic Athletic Association. There is much there, and we must not forget that we are talking about a shared and inclusive society. There is much to celebrate in the film industry. Only two weeks ago a person from Northern Ireland won an Oscar for “The Shore.” Only last year the same director produced a film in Downpatrick, in my constituency, called “Whole Lotta Sole”, which will have its debut later this year. That film was centred on a fish and chip shop, but it was not necessarily about fish. In fact, it might have had more to do with the political turmoil out of which we have emerged.

There has been considerable movement away from violence and conflict and towards a more peaceful and harmonious society. We are all very glad about that and want to see the institutions that emerged out of the Good Friday agreement and the principles that were laid down in the agreement fully realised. Therefore, we believe that the institutions should be fully functional, that the Northern Ireland Executive should have a detailed programme for government and a full programme of legislation and that the North/South Ministerial Council must become fully operational. We also believe that it should be cross-sectoral in its approach, by which we mean that it should have a north-west focus, which my hon. Friend the Member for Foyle (Mark Durkan) would welcome, and a south-east focus, which would accommodate the interests of my constituency of South Down and those of north County Louth. We want more north-south bodies to be created, for the review of the north-south dimension to be published and for the Irish identity to be not only recognised and acknowledged, but given political weight.

That brings me to the motion. We welcome the fact that the Northern Ireland 2012 campaign is intended to change perceptions of Northern Ireland and encourage many more visitors. We want people to see the beauty of Northern Ireland, the scenery and the attributes of the people, which are already demonstrated through their inventions and sporting prowess and in many other fields. However, I am a bit afraid and will be looking to the right hon. Member for Belfast North (Mr Dodds) and the hon. Member for Strangford (Jim Shannon) to clarify some points for me, because it could be construed that the motion—how shall I say this?—focuses on a single identity and is one-track or single-dimensional, because it contains no reference to an Irish identity or Irish nationalism, which is also very much part of the north of Ireland and is represented in this House by the three SDLP Members.

[Sammy Wilson (East Antrim) (DUP)]

The events of 2012 are the events of 2012: there is the centenary of the Titanic, the centenary of the Ulster covenant and the Queen’s diamond jubilee. So the motion, and its writer, did not dictate those dates, but does the hon. Lady agree that all those events, given that they will improve and provide opportunities to add to economic activity in Northern Ireland and can be enjoyed by all, should be seen not as single-identity events but as something that can unite all the people in Northern Ireland, who will be able to enjoy them and, indeed, benefit from them economically?

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. I say to all Members present that it is important that we look to all events and at all the attributes of the people of Northern Ireland. It is not enough simply to look through the narrow prism of one identity, but this motion could be construed as such, and I say that more in sorrow than in anger, and more with regret than anything else.

So I look to the right hon. Member for Belfast North—

--- Later in debate ---

[Ms Ritchie]

All of it.

[Sammy Wilson]

All of it, yes. That includes the features in the hon. Lady’s constituency that people visit and into which money has been poured to develop some of that tourism infrastructure, and the celebrations of St Patrick and that whole tradition—some claim St Patrick for the Roman Catholic community, some claim it for the Protestant community. It really does not matter! If St Patrick is a marketable commodity, let us make him a marketable commodity and benefit from it. [Interruption.] Yes, and a neutral flag as well.

It is disappointing that this is seen as divisive rather than unifying. There are huge opportunities for us in the celebration of the Titanic, of the Ulster covenant and of Her Majesty’s 60th anniversary. We have not been selective about these events. They are outside our control. This year is the 100th anniversary of some of these events, and we cannot dictate which ones we include and which we do not. They just happen to be there. We need to ensure, however, that we get the maximum benefit from them and that they are used in a way that is not divisive but unifying so that the whole community can benefit from the economic opportunity.

The motion recognises, at the very end, that we want to see Northern Ireland moving forward, and moving forward together. We recognise the progress made and we do not see these events as exclusive. They are to be enjoyed by people in Northern Ireland. Most importantly, we want them enjoyed by people outside Northern Ireland. I will not go through, as I am sure other hon. Members have, all the benefits of my own constituency, although I mentioned some of them in the introduction.

Northern Ireland Economy

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Thursday 1st March 2012 Westminster Hall

[Sammy Wilson]

No, I do not think I have adopted any of them. The only one that was adopted was then condemned; namely, that we could get some money from housing associations by cutting their grant and making them borrow more in the market. When that was adopted, the first party to condemn it was the party sitting to my left. Even when we adopt some of that party’s ideas, it suddenly decides that they are not good ideas.

[Ms Ritchie]

Further to the point made by my hon. Friend the Member for Belfast South (Dr McDonnell), I make the simple point that it is my clear understanding that the budget review group that sits in another place in Belfast has adopted a lot of the proposals contained in the SDLP document, “Partnership and Economic Recovery”. Perhaps the hon. Member for East Antrim might like to comment on that fact, rather than being disparaging.

[Sammy Wilson]

If I had anticipated the length of that intervention, I might have listed some of the things that had been adopted. I cannot think of too many, other than the one that has now been condemned by the party that first suggested it. I have to say that it is actually working quite well. We are getting more houses built for less money in the public sector, and of course that is a good idea.

[Ms Ritchie]

Will the hon. Gentleman give way?

[Sammy Wilson]

No, I will not give way. This debate is not about the internecine warfare that goes on in the Northern Ireland Assembly, much as I enjoy it. I am sure that hon. Members do not want a rehash of the kind of budget debates we have in that other place. I will make one point, however, because there has been a call for more devolution of tax-varying powers in Northern Ireland. There seems to be a contradiction. On the one hand, the idea is that if we had tax-varying powers we could use them to spend more money on public sector projects. On the other hand, when we get those tax-varying powers it is not to put taxes up, but to bring taxes down. I do not know how we bring taxes down and spend more money as a result, but that is the equation put forward by the hon. Member for South Down, which I think is part of her party’s policy. More recently, we have been told that if motor tax were devolved to Northern Ireland, we would be able to avoid all the changes that we do not want to introduce in welfare reform. From the devolution of motor tax we could find—according to the SDLP’s erroneous figure—£600 million. I would not like to be a motorist in Northern Ireland if we had to raise £600 million extra from a motor tax.

There are many issues I do not run away from. The Executive and the Assembly in Northern Ireland cannot run away from their responsibility for the things that they have to do to try to help to rebalance the economy. Some things are done well, some things are not being done so well, and some things still have not even been started. Those are internal matters, and the Minister may make reference to them later on. However, we are well aware that where we have responsibility, that responsibility should be taken. However, certain matters reside here at Westminster, and they are important if we are to rebalance the economy in Northern Ireland.

The first matter is the debate on devolution of corporation tax and tax-varying powers in relation to corporation tax. I would be cautious about that. It is not that I would be opposed to it, but if it is devolved it must be devolved at a price that does not put further pressure on an already pressurised public sector budget in Northern Ireland. We have lived with the cuts. I am not one of those who believes that because of Northern Ireland’s special circumstances we ought to be exempt from all of the financial difficulties that have to be faced by the rest of the people in the United Kingdom. I do not take that stance. It is an unreasonable stance for people from Northern Ireland to take.

We have lived with a £4 billion reduction in our budget in the next four years—a 40% reduction in the capital budget for expenditure in Northern Ireland in the four years. We have sought to ameliorate that by looking at what sources of revenue we could raise, what assets we could sell, how we could switch expenditure around, and where we could make savings. If, on top of that, as a result of the devolution of corporation tax, we were then hit with an additional burden—a burden that the Treasury estimates could be anything up to £500 million—that would not be either fair or sustainable. Given that the price would be paid immediately and the benefits would only be experienced in the medium term, that price would not be affordable. Nor would it produce, even in the medium term, the desired result of rebalancing the economy.

--- Later in debate ---

[Sammy Wilson]

That is one reason why, when one looks at all the business surveys and the terms offered for loans, compared to the rest of the UK—I had the figures here somewhere, but I cannot dig them up at the moment—some 10% more businesses in Northern Ireland are saying that terms for loans have worsened between 2007 and 2011. Of course, on top of that many businesses have huge debts associated with property.

I listened to the chairman of RBS the other morning on Radio 4 saying how the bank had brought down its bad property debts. That is good from the point of view of the bank’s record, but I know what that means in places such as Northern Ireland: a good, strong business with a core operation, but with some bad land loan attached to it, is squeezed to bring down the debt on the land and, in doing so, people are being put out of work and businesses are finding it impossible to expand, even where they have good markets. The Government have to address the banking issue in the longer run.

I will mention only one more thing, so that other Members have a chance to get in, and that is VAT. I understand Government reluctance to reduce the rate when VAT brings in a lot of revenue, but to do so would of course have very beneficial effects in stimulating the economy. The Government do not have to reduce VAT rates generally; specific reductions in the tourist sector, as in the Irish Republic, or in the building sector, so that people could put extensions on their houses and so on, could stimulate a lot of labour-intensive employment not only in those particular industries but wider afield—I am not saying for Northern Ireland specifically. Come the Budget, the Government should look at that.

[Ms Ritchie]

Does the hon. Gentleman agree that the forthcoming Budget on 21 March is an opportunity for the Government and the Treasury to look at VAT? We are not coming from Northern Ireland with a begging bowl, but we would like to see some mitigation of VAT on tourism or general products. If that were possible, we would be extremely grateful.

[Sammy Wilson]

As I said, a reduction should be targeted, and not at Northern Ireland in particular. For example, we are looking to grow tourism in Northern Ireland; we have great opportunities to do so over the next number of years, because it is one of the growth areas we have identified, but any such VAT reduction could benefit the whole United Kingdom,

As someone who values the Union, I do not want to see lots of the fiscal ties broken. Equally, I understand and said earlier that, if the home nation is facing particular difficulties, we must face them along with the rest. Being part of the Union and the Union family, however, also means that there is an obligation on that family: if there are specific problems in a particular part of the kingdom and remedies are available, those remedies must be given serious consideration. As a Unionist and as someone who believes that the Union is stronger when specific problems are recognised and action taken, I hope that the Government will respond positively to some of the suggestions made by me and other contributors to this debate.

Cost of Motor Insurance

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Tuesday 8th November 2011 Commons Chamber

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

I congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on tabling this motion for debate. As the hon. Member for Strangford (Jim Shannon) said, some two weeks ago I had an Adjournment debate on the cost of motor insurance in Northern Ireland. A Minister from the Treasury responded on that occasion, and I found that useful, but many issues are involved in the rising cost of insurance premiums in Northern Ireland.

Drivers in Northern Ireland are subject to excessively high insurance costs that are rapidly rising year on year. I appreciate that the problems are not unique to Northern Ireland, but they are particularly striking in our case. We have found in our research that consumers in Northern Ireland have less choice of insurance providers, with three times fewer companies offering car insurance. In August, as the hon. Member for Strangford stated, the Consumer Council for Northern Ireland launched a campaign to highlight the cost of car insurance, and I fully support that. The Minister is no doubt 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 comparable regions of Britain. Indeed, we must not only assess that but redress it. The findings from the OFT must be robustly addressed and the resulting measures must have teeth.

Some of the evidence produced has suggested that 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. Only yesterday, I received a letter from a constituent who highlighted a problem he had encountered with his son. He said that approximately three weeks ago he received a quote to renew his insurance with his 18-year-old son on the policy, and to say that he was shocked at the price would be a gross understatement. The price quoted was £2,488.92, which he simply could not afford. He rang a number of insurance companies and was quoted between £2,800 and £4,000 to cover his son. The first company told him that it would drop the price to £2,200, but it was still beyond his means to pay such an amount.

My constituent said that the sad part of the situation is that his son has now been forced off the road due to the exorbitant price of car insurance in Northern Ireland. He will not be able to stay on in his part-time job, as his father’s working schedule does not allow him the time to leave and collect him when he requires transport. My constituent feels strongly that something needs to be done to help young drivers to stay on the road and travel to their jobs, even if they are part-time, or even if they are students pursuing their studies, and thereby do their bit to help get the economy in that part of the world up and running again. He says that it was tough to have to sit his son down and tell him that as from 15 November he will not be able to allow him to drive. That young boy not only showed remarkable courage but is a very sensible young adult, and he is being penalised by insurance companies for the actions of others. It has been suggested that those companies are quick to label some young drivers as boy racers, and that needs to be addressed.

All these 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, working with others, to remove any barriers to companies that wish to enter the market, particularly those in Northern Ireland. Obviously, that means working with Ministers in the Northern Ireland Executive.

Two fundamental arguments are put forward to justify the high costs of motor insurance in Northern Ireland: first, that Northern Ireland is a case apart because its demographics and road layouts bring an increased risk of incidents on our roads; and secondly, that Northern Ireland’s legal system places a higher burden on insurers. 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 many regions in Britain. Likewise, a lack of motorway coverage has been cited as a reason for increased premiums, because statistically motorways are the safest road type. However, maps show that Northern Ireland has a relatively consistent motorway density compared with regions in Britain and in 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 minds when considering the claimed justification for the increased cost of premiums, which are rising at a time when we in Northern Ireland are experiencing a decline in the number of road traffic accidents. The numbers available for the latest year, 2010, show 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 again to give detailed consideration to this fundamental point. All these facts weigh heavily against the argument that the demographic or topographical factors in Northern Ireland justify the increasing cost of insurance. Those factors are difficult to relate to the draconian rise in the cost of insurance premiums.

[Sammy Wilson]

The hon. Lady has done some impressive research into the fall in accidents. It is clear from the statistics on road accidents and deaths that there has been a dramatic improvement even since four or five years ago. For that reason, we should agree that this issue is not about the number of accidents, the demography or the level of claims, but about the lack of competition in the market. It therefore needs to be addressed by the Department for Business, Innovation and Skills and the Office of Fair Trading. They must find out whether collusion between the insurance companies has increased the price of insurance in Northern Ireland.

[Ms Ritchie]

I thank the hon. Gentleman for that helpful intervention. I agree that the research shows clearly that the lack of competition in Northern Ireland has driven up the cost of insurance premiums. That is an area that the Office of Fair Trading should focus on in its investigation. It should drill down on the nature and cost of insurance premiums in Northern Ireland. We, as Members of Parliament for Northern Ireland, will look at that. The hon. Gentleman, wearing his other hat as a member of the Northern Ireland Executive, is no doubt working with Ministers in Whitehall to address those issues. The hon. Member for Strangford has highlighted the legal issue, so I do not need to elaborate on that.

Many people living on low incomes or in rural areas can simply no longer afford to keep a car on the road. As I have said, many young people and their parents in my constituency have told me of their struggle to secure affordable insurance. They are understandably concerned about the discrepancy in insurance prices between Northern Ireland and other regions in Britain. Households feel that by having to pay excessive insurance fees, they are being unduly discriminated against. That unfair practice has been in place for too long. It adversely affects the young and the old who depend on their cars for work, particularly in areas where public transport provision is limited. Essentially, that means rural communities. There are, shall we say, certain locational issues.

The broader context is that the economy is suffering, with record numbers of young people out of work. That is exacerbated by people’s use of motor vehicles being restricted. At this time of economic recession, we need a dynamic, mobile work force. Car insurance being so expensive puts up a barrier to economic success, especially for the young. The unemployment rate among young people is estimated to be 18%—almost one in five cannot find a job. That compares with an overall unemployment rate in Northern Ireland of 7.6%. Excessive insurance premiums adversely affect young people and prevent them from offering the skill of driving to potential employers. In these extremely challenging times, I ask the Minister to consider any measures that would make insurance more affordable for young people, particularly when driving relates to their employment.

In conclusion, insurance costs have a real impact on people, both young and old, who need to be mobile for social and economic reasons. I hope that my short contribution has made clear the scale of the problem faced by motorists. I hope that I have given examples that illustrate that parents are suffering from the undue burden of being quoted high insurance costs for their sons and daughters. They are not able to pay those costs because of the limited financial means that they now have. I believe that the insurance industry must stabilise its premiums so that hard-pressed motorists get a fair deal when they purchase their motor vehicle insurance. I seek assurances from the Minister that he recognises the problem and will act on a cross-departmental basis, as the motion suggests. Supplementary to that, in the case of Northern Ireland, I ask him to work directly with Ministers in the Northern Ireland Executive to address its particular problems in light of any recommendations that come from the Office of Fair Trading report later this year.

Equitable Life (Payments) Bill

Debate between Baroness Ritchie of Downpatrick and Sammy Wilson

Tuesday 14th September 2010 Commons Chamber

[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.