Cross-border Crime

Ian Paisley Excerpts

Wednesday 11th March 2015 Commons Chamber

[The Parliamentary Under-Secretary of State for Northern Ireland (Dr Andrew Murrison)]

I am very grateful for this timely debate. The motion, tabled in the name of the right hon. Member for Belfast North (Mr Dodds) and his DUP colleagues, is a good one and we support it. I am conscious that many in this House have given a great deal of attention over the years to the various issues under discussion. For example, I am happy to acknowledge the work of the Northern Ireland Affairs Committee in its 2012 report on fuel laundering and smuggling. I also pay tribute to the work of the British-Irish Parliamentary Assembly, whose committee report, “Cross-border Police Cooperation and Illicit Trade”, which was published last month, the Government are studying closely. I also congratulate the hon. Member for South Antrim (Dr McCrea) on presenting his remarks in typically robust fashion. I will try to address the points he has raised as far as I can.

The motion lists a schedule of serious criminal activity, but before I address each of them in turn I want to put on the record the fact that crime rates overall in Northern Ireland are low and that Northern Ireland is a safe place to be. I say that because it is important to pay tribute to the various agencies that operate in Northern Ireland for the work they do in ensuring that safety, and to give a message to those who are looking at Northern Ireland as a good place to invest and a good place to be. Many of us grew up in the 1970s and ’80s and, although we did not live in Northern Ireland, every night we saw images on our television screens that portrayed a very different Northern Ireland. That is, mercifully, a thing of the past and, in order to foster the economic security that goes hand in hand with security, we need to give the right message to those who may be seeking to invest in Northern Ireland. I know that the hon. Gentleman feels as strongly as I do about that.

The DUP is right, however, to bring the issues under discussion to the attention of the House. Northern Ireland has particular issues regarding criminality. It is a very particular place and the challenges are peculiar to Northern Ireland, and we cannot ignore them. We owe it to people in Northern Ireland to address them to the best of our ability.

The hon. Gentleman effectively described the situation of fuel laundering, which is a clear and present danger that is particular to Northern Ireland, given that it has the United Kingdom’s only land border. Fuel laundering and fuel smuggling come at a great cost to the Exchequer, honest businesses and the environment. The hon. Gentleman also touched on the possible cost to security. The Government take the problem of oils fraud and crime very seriously indeed. The hon. Gentleman should be assured of that and I hope to be able to give him some examples of the efforts we have made to drive it down. Moreover, with the assistance of the agency to which he referred, I hope we will have further successes in the months and years ahead.

Fuel duty plays an important role in a range of Government objectives—social, environmental and fiscal. Fuel duty is also the fifth largest revenue stream for the Government at around £27 billion a year. Clearly, we cannot ignore it. The rates of fuel duty for all of the UK are set by the Chancellor, taking a wide range of factors into consideration. To support motorists and businesses, the Government cut fuel duty in March 2011 and have cancelled all subsequent planned increases until the end of the Parliament, a point I touched on during Northern Ireland questions earlier today.

The Government have a comprehensive strategy in place to tackle fuel fraud and crime. The oils anti-fraud strategy was originally launched in 2002, as the hon. Gentleman has said, and has driven down the estimated illicit market considerably in both Great Britain and Northern Ireland. Indeed, the latest tax gap figures published by HMRC indicate that the estimated illicit market share for diesel for Northern Ireland has fallen from 26% to 13%. By any measure, that is quite an achievement. The strategy was aimed at making it much harder for fraudsters to obtain rebated fuels, and to track and analyse the supplies of them, including a requirement for all dealers to register and submit returns. The registered dealers in controlled oil scheme has been a key weapon in our fight back against fuel fraud.

In Northern Ireland, the Government have close and productive co-operation with the Northern Ireland Executive and with the authorities in the Republic. Co-operation and intelligence sharing through the Organised Crime Task Force and the cross-border fuel fraud enforcement group has been invaluable in applying multi-agency pressure to tackle oils fraud, including fuel smuggling and laundering.

[Ian Paisley (North Antrim) (DUP)]

On combating fuel fraud, will the Minister confirm that the new fuel marker that is about to be introduced in Northern Ireland has no roadside test capability whatsoever and that, therefore, the Government are about to put in a marker that cannot be tested on our roadsides?

[Dr Murrison]

The road marker has been a long time in the making. It has been trialled both in the UK and in the Republic and both countries are happy with it. I am assured that it will be robust and that it is extremely difficult to remove.

[Ian Paisley]

I will have an argument with the Minister about its capability in a moment, but I am asking a specific question about roadside testing. We cannot combat crime if we are not able to stop someone who has the fuel and test it at the roadside. One of the requirements of the IMS test was to have roadside capability, so will the Minister confirm that the Dow marker has no roadside capability?

[Dr Murrison]

What I can confirm is that the marker is capable of being discovered; otherwise, frankly, there would be no point in having it, would there? What would be the point of going to the expense of putting in a marker if it was not possible for criminal justice agencies to determine whether the material was illicit or not? [Interruption.] Perhaps I will be able to come back to the hon. Gentleman’s remarks later, but if I cannot deal with them satisfactorily perhaps the Under-Secretary of State for the Home Department, my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), who will be in the hot seat shortly, will be able to shed some further light to his satisfaction.

In the financial year 2013-2014 alone, HMRC dismantled 38 laundering plants, closed 79 huckster sites and seized more than 500,000 litres of illicit fuel in Northern Ireland. I accept that the hon. Member for South Antrim is frustrated by the failure to eradicate this particular form of criminality, but that is quite an achievement and it represents considerable downward pressure on organised crime in Northern Ireland. Although we are all impatient for more, we sometimes have to celebrate successes as well as take note of failures.

--- Later in debate ---

[Dr Murrison]

I will in a minute.

Hon. Members might be aware that the UK has worked closely with Ireland to identify a new fuel marker. It will come in in May and represents a significant improvement on the current fuel marker. It gives much more protection against fraud.

[Ian Paisley]

Will the Minister give way?

[Dr Murrison]

I think that we have exhausted this particular point, and I did say that I would come back to the hon. Gentleman. However, I said that I would give way to my hon. Friend the Member for Amber Valley (Nigel Mills).

--- Later in debate ---

[Ian Paisley (North Antrim) (DUP)]

At the outset, I congratulate my hon. Friend the Member for South Antrim (Dr McCrea) on securing this very important debate and on introducing it in such a powerful way. I thank all Members from across the House who have spoken, but I pay particular tribute to the hon. Member for Birmingham, Erdington (Jack Dromey), the Labour Front-Bench Spokesman. He has put on the record some incredibly startling facts that require answers.

Last week, Alan Bennett, the famed playwright, when interviewed on “World at One”, was asked to outline for us the most important achievement of this nation. After pondering on whether it should be the National Trust or our physical heritage, he said very clearly that it was English hypocrisy.

I am sick, sore and tired. We have heard a unified voice from this side of the House, whether nationalist or Unionist. We are sick, sore and tired of the hypocrisy that is fed to us by the shovel-load: that we are somehow thick Paddies who have no idea of what is going on in our country when it comes to crime, and that if we dare to expose anything about it, we are told, “Hush, hush, you’ll tip the criminals off.” Anyone would think we were a bunch of suckers when it comes to dealing with crime, but we have lived among these criminals for decades. We see how they work. We see the evil they bring upon our society. We want it dealt with and we want it dealt with now. We are saying that with a unified voice on this side of the House, across all parties. We are no longer prepared to be fed, quite frankly, the bull that we are being fed: that this matter is being dealt with by officialdom.

Alan Bennett was right when he pointed to hypocrisy. I see it in the officials that I meet and have met daily since 2009 and since entering this House. We have tried to deal quietly and discreetly with the issue of how we can tackle serious and organised crime in our society. All we get, frankly, is this hypocrisy: it will be dealt with, it will be dealt with. Well, five-and-a-half years later it has not been dealt with. Since 2009, when I came off the Organised Crime Task Force board, I have not seen one single inch of progress. I have heard a lot of platitudes. We on this side of the House are sick, sore and tired. We want something done. We want something done urgently. We want something done that is effective and actually makes a difference. I believe we are all on the same side and want to see the criminals beaten, but officials are dragging their feet when it comes to sorting out this problem. I hope they can get to grips with it.

Last week, a national newspaper report by Brian Flynn dealt with a number of crime issues and I want to address those listed in the motion. The first is the smuggling of tobacco products and the impact it has on our economy. Every crate of smuggled tobacco products puts £1 million into the coffers of the criminals, and 40% of all cigarettes smoked across the United Kingdom are either counterfeit or smuggled. The vast majority of that money goes into the coffers of the IRA. In fact, last year it was estimated that it achieved about £22 million from that enterprise.

Some of us take a different view of plain packaging, but under new regulations it is estimated that the profit margin will increase to €120 million, which is £87 million. That is enough money, as we would say locally, to choke a donkey. The people engaged in this serious organised crime are rubbing their hands in glee at the prospect of plain packaging after today’s vote because, whether we are for or against plain packaging—I respect the views of those who support it for health reasons—the legislation is defective on the issue of tracking and tracing.

At present, the manufacturing of cigarette boxes involves placing an electronic track-and-trace system in each box. The legitimate manufacturer of the cigarette packet gives those track-and-trace numbers to the police and customs, and the police can at any time place the packet on a hand-held machine in order to see the date and location of manufacture. Under the defective delegated legislation that went through the House today, that has been removed and packs cannot have track-and-trace. The Government have told me privately, “We’ll introduce it later on,” but apparently the earliest it can be introduced under the delegated legislation is in about three years. There is a bonanza coming for the next three years, because cigarette packets will have no track-and-trace capability. Criminals out there are rubbing their hands in glee because an effective security measure has now been removed from cigarette packets. The hypocrisy stinks to heaven.

The second issue that has taken up a lot of time in this debate is that of fuel laundering and fuel fraud, and it is a most serious crime. The hon. Member for Birmingham, Erdington asked some very serious questions. Indeed, he and my hon. Friend the Member for Upper Bann (David Simpson) asked 13 specific questions that have not yet been answered, and this House is entitled to answers.

Why would the Government continue in January 2015 to designate in legislation the Dow fuel marker when they knew a year ago that it was not fit for purpose, being completely launderable using basic science? The Hydrocarbon Oil (Marking and Designated Markers) (Amendment) Regulations 2015 will come into force on 1 April and they indicate the precise ingredients of the Dow marker. Under law, believe it or not, we have to tell the world what makes up the Dow marker. That is how pathetic the hypocrisy of our country is: we have to tell the criminals that publicly. The Minister said tonight that the Labour Front-Bench spokesman, the hon. Member for Birmingham, Erdington, should not have read out a letter as it could have tipped certain people off, yet we publish in black and white the exact ingredients that go into the Dow marker. The statutory instrument is well timed, because it comes into effect on 1 April, April fools’ day. What fools we are for just going along with that and accepting the regulations, which publish what will be in the fuel and tip off scientists, legitimate and otherwise, about what is in the recipe for the Dow marker and what they therefore need to do to remove it.

If the marker was effective, that would not matter, because we would have those people and could prevent them from doing that. However, it is not effective and the Government knew that it was not effective a year ago. The Opposition spokesman put on the record the letter from 9 July 2014 from the then Treasury Minister, the right hon. Member for Loughborough (Nicky Morgan), to the Chairman of the Northern Ireland Affairs Committee, the hon. Member for Tewkesbury (Mr Robertson), telling him that the information about the theoretical weaknesses in the fuel could alert fraudsters. The idea was that he should just hush it up and not tell anyone and the Government would keep working on it. The Government then went on to say that there was insufficient evidence to show that the process of distilling the fuel was

“a viable option commercially on a large scale for effective laundering of rebated fuels, although HMRC are continuing to investigate these claims.”

I will come to the question of whether that can be done effectively and economically, but let me turn first to the question of hushing things up. Members of the Northern Ireland Affairs Committee were prepared to sit for some time and give the Government the opportunity to change things and to make a move. We waited from last July and promises were made through August, September and October. Bigger promises were made in December and, at the turn of the year, we were told that things would be changed. They have not been changed and the April fools’ day legislation will be put in place without a single jot or tittle removed from it. The legislation, which will be pushed through, will push through a defective marker that the criminals will welcome and that they know they can remove.

How do I know that it can be removed? Today, we have placed in the Library a report that was confidential until yesterday, written by four academics, one from Queen’s university. The report, entitled “Distillation of fuel markers”, makes a number of startling claims, which I want to put on the record. In its opening section, it states:

“Distillation is a very simple and highly cost-effective way of removing a marker and has a key advantage over many of the methods cited above in that there is no laundering residue for the criminal to dispose of.”

My hon. Friend the Member for East Antrim (Sammy Wilson) can rest tonight in the knowledge that in future when criminals distil fuel and remove markers from it there will no longer be terrible sludge and waste pumped into our rivers. This marker is so simply removed that it can be distilled off the top of fuel without creating any terrible after-pollution. The simplicity of the distillation process is incredibly beneficial to the criminals.

The report goes on to state:

“Given the simplicity of distillation it is apparent that an authority would be foolhardy to employ a marker whose boiling point fell just in or entirely outside the boiling range of the fuel to be protected.”

That is exactly what Dow has done. It has created a marker that is effective until just below boiling point, so people can boil the marker away without causing any harm and it vanishes up into the heavens. It is the devil’s share. He gets his share and the criminals get theirs. That is what is happening as a result of the new fuel marker.

The report stated that the academics took a British piece of scientific equipment, a marker that was found worthy of being put into British fuel, and tested it against the Dow marker. It stated this, after testing both markers:

“These results clearly indicate that the Dow marker can effectively be removed by simple distillation and successfully separated from the diesel distillate.”

In other words, the fuel can be separated completely from the marker and sold as unabated fuel that is no longer marked.

[Dr Murrison]

The hon. Gentleman is making a speech in his usual robust fashion, but it is important to put on the record the difference between a laboratory analysis and scaling up to field operations. I think he needs to reflect that in his contribution.

[Ian Paisley]

I am delighted by that, because I am going to reflect that point now and I thank the Minister for encouraging me to do so. The then Treasury Minister said that there was insufficient evidence that the process was a viable commercial option, which I think is the point the Minister has just made: “Yes, you can do this in a lab, but could you really do it in the field?” Well, the report that is now in the Library goes into this, under a section entitled, “Economics of distillation”:

“The capital cost of a distillation plant suitable for laundering out a marker from fuel is low. Cost for off the shelf plant can be as little as…£12k”.

For an initial outlay of £12,000 for a small plant, the criminals could make about £16,000 per day, after they have laundered the product, or 5.8 million quid a year—that is pretty economical in my books; that is pretty cost-effective. I will come to the in-field testing in a minute, so I hope the Minister will brace himself, because it gets even better.

The report goes on:

“Even taking into account the worst case scenario presented above, a 160kW distillation laundering plant would generate huge profits with a payback in just under a fortnight. If this process was refined with heat regeneration and vacuum distillation, it would be quite feasible to double the capacity of this system. A small 1MW industrial unit could operate 6 of these 160kW systems, generating clear profit of approximately £92,000 per day and a payback period of less than 2 weeks. Such a 960kW laundering facility would be capable of generating an annual profit of approximately £33.5 million.”

This is a feasible, cheap alternative for gangsters and criminals. This report, which is in the Library of the House, is by a credible group of scientists and, critically, presented in such a way that if it is wrong, the Dow Chemical Company could sue the pants of these people. But it won’t go near it—it won’t even address the points made.

I understand that in-field testing was carried out on four occasions. The one at Bellingham, which my hon. Friend the Member for Upper Bann (David Simpson) mentioned, was not a small test; it was a test of 30,000 litres of fuel distilled successfully—it was just distilled off. Another test was carried out in Northern Ireland, and another test of a similarly large quantity, carried out by a scientist, Professor J. J. Leahy, in the Republic of Ireland, also proved that this material could be distilled off. Queen’s university also carried out a test, but sadly, after it reported privately to officials last year, the official response to the professor at Queen’s university was this: “You’d better tell us where that illegal plant you’ve just set up is, because we want to put it out of business.” I can take a joke, but I do not think that was a joke—it is almost like they were telling him for daring to undermine what officials were doing. It is hypocrisy.

[Kate Hoey (Vauxhall) (Lab)]

As well as congratulating the Select Committee on Northern Ireland Affairs, I congratulate the hon. Gentleman on the huge amount of personal commitment he has put into this issue. Will he explain why, despite the evidence that the Select Committee saw, the Government, officials and the authorities have been so singularly afraid to go down the route we suggested?

[Ian Paisley]

I think that deserves a more detailed answer than a brief response at this point, so I will come back to the matter. The hon. Lady, my friend, puts her finger on a very important and worrying point. This was a worrying trend that we watched with our own eyes when we tried to deal with this matter.

I asked the Minister earlier whether there was roadside capability in detecting this marker in our fuel, but he did not quite get the right end of the stick. I must deal with this critical issue. The head of the oils fraud section takes the lead in dealing with fuel laundering in Northern Ireland. He is an important official in the department. He gave evidence to our Select Committee in 2013, and he told us that the IMS tendering process for the new fuel marker was incredibly important. Although a specific roadside test was not specifically asked for, his view was—and he is the expert—that it was critical because it was the one measure through which the system could be policed.

One of the companies that tendered brought forward a roadside test capability—a kit that is the size of a laptop. If a drop of fuel was put on to a pad, the kit could detect within two and a half minutes where and when the fuel was bought—both the location and time. That is how sophisticated the marker was, and the roadside test could be done in two and half minutes.

The Dow marker has no roadside capability. In fact, after the April fools’ day legislation comes into place, let me explain what will happen. If an official stops a vehicle and takes a sample from it, he will have to send it away to the Government’s own plant. Three weeks later, the sample will be returned and the result on whether the Dow marker remains or has been removed will be provided. Why should we have to wait three weeks? Unless someone has a very efficient car, as my hon. Friend the Member for East Antrim (Sammy Wilson) does, the fuel will be evaporated within days.

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

The hon. Gentleman is making a technical argument on this issue, displaying a lot of knowledge that is obviously garnered from the Northern Ireland Affairs Committee inquiry. Is he aware of the level and number of prosecutions resulting from illegal fuel laundering? Is it documented on a year-on-year basis?

[Ian Paisley]

I understand that the level of prosecutions is woeful—zero. That is one of the driving forces that show why we need a marker that actually works, and it explains why some of us are so passionate about this issue. We know the type of villains and individuals who are carrying this out, and it would be valuable if we could get them behind bars or at least stop them in this particular aspect of their criminality. Yes, they will turn to something else, but at least we would have blocked off one section of activity for them. The hon. Lady is absolutely right. The prosecution level is woefully zero, and it will remain zero because of this defective marker.

My hon. Friend the Member for Upper Bann (David Simpson) asked why the Government would not support their own world-leading British science company whose fuel markers are the only recommended IMS-proven indelible markers. This is important. The final report on the IMS procedure, which was a tendering process between the Republic of Ireland revenue authorities and our own HMRC, provided two options. One was to implement the Dow marker—it listed what it was—and the other was to introduce two markers: the Dow marker and the British company’s marker, which would provide something with which to confuse the criminals. There would be a choice of markers, allowing consideration of which one went in one month and which one did not go in. That was one of the options provided, but that course of action was not chosen, but it could still be chosen today.

The Government could amend the April Fool’s day legislation. They could introduce another statutory instrument tomorrow, providing for a different marker, and I hope that they will. I hope that, following today’s debate, they will see how foolish they have been in following the line they have followed. Some of us never wanted this debate to take place. We wanted the Government to take action and solve the problem, but unfortunately we have been pushed to this point. I think it will be clear from the anger that has been expressed today by members of several parties that we are all rightly concerned about what is going on.

The hon. Member for Birmingham, Erdington asked why, given that the IMS had been a joint United Kingdom-Republic of Ireland process, an IMS for a single launderable dye marker had been awarded when the Government knew that they needed a minimum of two indelible markers. Why—this is another question that was asked today—was technology awarded to Dow when no roadside test was available?

Who has the contract for HMRC fuel marker testing, and did the testing company have anything to do with the evaluation and final recommendation group? That very important question goes to the heart of the IMS procedure. The allegation that something went awry between whoever was carrying out the evaluation of the tests and the company that was awarded the final contract is very serious, and deserves to be answered by Ministers.

We have seen the answers to those questions. We know what has gone on. I actually feel sorry for the Minister, because he has been dropped into this debate without having been properly briefed about what has gone on and how serious the position is.

In 2012, the HMRC director Mike Norgrove gave evidence to the Select Committee. He had been offered the chance to see the new marker being used in Brazil. Why did he turn down that opportunity? I believe that that question was asked by my hon. Friend the Member for Upper Bann.

Why would the Government cover up a £1 billion fraud when a British scientific solution already exists?

One of the last questions that were asked was: the Government must be aware that the Dow Chemical Company was fined $1.1 billion in 2013 in a fraudulent bribery case, so why was the company allowed to continue to engage in the IMS tender process?

Opposition Members have asked important and pertinent questions that deserve to be answered. In an intervention, the hon. Member for Vauxhall (Kate Hoey) asked me why this was happening. I think that there has been a deliberate turning of a blind eye. The hon. Member for Foyle (Mark Durkan) put his finger on it when he said that a company had operated illegally in his constituency, and that it was based in South Armagh. I have the same problem in my constituency. North Antrim could not be any further from South Armagh, but we have a fuel station that changes its name regularly to avoid tax, and regularly sells illicit fuels to unsuspecting motorists. Sometimes it changes its name to “Taxco”, just for a laugh, to rub the officials’ noses in it. On other occasions, it changes its name to “Taxnoco”. It looks like “Texaco”. The name is spelt like that deliberately to embarrass officialdom, and nothing is ever done about it.

My hon. Friend the Member for South Antrim spelt out loud and clear the problem of pollution that was associated with this crime—the leaking of waste into our lakes and river courses. With the new Dow marker, that will no longer be a problem, because it is now evaporating from our fuel. In the words of Alan Bennett, the hypocrisy will continue.

I think that we deserve answers to those questions, because we have waited long enough. We have pushed this issue for five years—we have pushed it in the Select Committee—and we have expected answers, but, to date, we have been let down.

--- Later in debate ---

[Ian Paisley]

The Minister refers to some of my party colleagues. My hon. Friends the Members for South Antrim (Dr McCrea) and for Upper Bann (David Simpson) mean no discourtesy to the Minister, whom I know they are very fond of, but they have had to leave the Chamber because of a meeting tomorrow morning with a Minister in Northern Ireland. I hope the Minister will appreciate that they had to catch their flight.

[Karen Bradley]

I appreciate that intervention, apart from anything else because I am not going to have to answer yet another question from those hon. Gentlemen, who gave me a significant number to try to address. I do understand completely the time pressures we all face, however.

I understand that HMRC is making sure it has the best and most appropriate roadside marker testing equipment, further to strengthen testing capability. From day one of the new marker implementation, its road fuel testing units will be able to use their existing battery of tests to identify suspicious samples, and I should repeat the point that this is not a replacement marker initially; this is a running-alongside marker with the existing marker, to ensure we have full evidence and information. I also understand that, in addition, HMRC expects to have ground-breaking roadside testing equipment by the summer.

The hon. Member for North Antrim made a number of points and I understand that HMRC has written to him on many of them, in particular the point about the new marker being easily laundered and that that can be done on a commercial scale. I urge him to provide details of any trials about which he believes HMRC may be unaware. It does want to review the report he has laid in the House, and it will respond to him. The Government will of course review the report as well, and HMRC has investigated whether this can be done on a large scale. The hon. Gentleman says he has seen the test to prove that that is the case. If he provides that evidence to HMRC, it will review the report and write to him, but the only large-scale test that we are aware has been undertaken, which was with 25,000 litres, fully supported HMRC’s conclusion that this is not easily translated to large-scale operations in the field. We do take these claims very seriously, however, and HMRC will look at any reports that the hon. Gentleman provides.

The hon. Member for South Antrim talked about the number of arrests and prosecutions for this crime. In the period 2011-14 there was a total of 56 arrests for fuel fraud, and 47 of them were in Northern Ireland, while just nine were in the rest of the United Kingdom. We have not, of course, yet got the full figures for 2014-15, but the latest information is that there were 25 arrests, 13 of which were in Northern Ireland and 12 in the rest of the UK. That shows that we take this crime very seriously, including in Northern Ireland.

Confiscation was also mentioned. In 2013-14, the last year for which we have figures, £113,001 was applied on confiscation orders relating to this type of crime, of which £113,000 related to confiscation orders in Northern Ireland, with only £1 relating to the rest of the United Kingdom. The hon. Member for Birmingham, Erdington and I have enjoyed many debates on the topic of asset recovery, and we agree that we want to see more confiscation orders and more recovery. The Government take this issue seriously and progress is being made.

HMRC’s anti-smuggling strategy is effective, and we continuously adapt it to accommodate changes in criminal behaviour. Since it was first launched, we have reduced the illicit cigarette market by half and the illicit hand-rolling tobacco market by a third, but we all recognise that more can be done. The hon. Member for East Antrim contributed to yesterday’s debate on the order to bring the National Crime Agency into Northern Ireland. I want to put it on record that, in regard to the priorities for policing and the NCA in Northern Ireland, the Northern Ireland Policing Board will agree the NCA annual plan. That will allow key crime types, which may include fuel laundering, to be prioritised for the NCA in Northern Ireland.

One of the blockages to having full support in Northern Ireland has been the limit to the NCA’s ability to provide support to HMRC and the PSNI in Northern Ireland. That related to the powers issue, and thankfully that issue is now resolved. Yesterday, we debated and approved in Committee here, and in another place, the draft Crime and Courts Act 2013 (National Crime Agency and Proceeds of Crime) (Northern Ireland) Order 2015. The order will enable the NCA to operate with police powers in Northern Ireland from around the end of May. It puts in place accountability arrangements for the NCA that have been agreed with the Northern Ireland parties. It also extends civil recovery provisions and civil recovery investigation provisions under the Proceeds of Crime Act 2002 to Northern Ireland. This will increase activity and improve performance, alongside the efforts of other accredited financial investigators in Northern Ireland, such as the Serious Fraud Office, the PSNI and the Environment Agency. Perhaps that will answer the question from the hon. Member for Foyle about waste crime.

We are also strengthening the provisions of the Proceeds of Crime Act through the Serious Crime Act 2015. The hon. Member for Birmingham, Erdington and I served on the Committee that considered that legislation. Its provisions will make it harder for criminals to move, hide and use the proceeds of crime through the better enforcement of existing court orders and the better recovery of hidden assets overseas. These steps are important, as denying criminals the proceeds of crime is one of the most effective ways of disrupting their activities. We agree that, so far, not enough has been recovered, but with these enhanced powers, the NCA, working with law enforcement, will be able to recover more. I urge the courts to ensure that confiscation orders are applied whenever possible, and that compensation orders for victims are also put in place.

The hon. Member for Foyle also raised concerns about engagement with communities. The Crime and Courts Act 2013 (National Crime Agency and Proceeds of Crime) (Northern Ireland) Order 2015 that we approved yesterday provides that the Northern Ireland Policing Board must make arrangements for obtaining the co-operation of the public with the NCA in the prevention of crime. The hon. Gentleman will recall that, as part of the Justice Minister’s proposal paper, there will also be a requirement for NCA officers to have a duty to secure the support of, and to act in co-operation with, the local community. Additionally, the order provides that the NCA’s director general must obtain the Policing Board’s prior consent to the Northern Ireland aspects of the NCA’s annual plan.

Serious and organised criminal groups do not respect borders or force boundaries. The PSNI estimates that there are around 150 organised crime groups active in Northern Ireland. Nearly a third of those groups are assessed as having links to international criminality, and another third are linked to criminality in the rest of the UK and the Republic of Ireland. HMRC operates across the UK as a whole, and the National Crime Agency has both national and international reach. They are working more closely than ever before with the PSNI and other partners to disrupt organised criminal groups undertaking fuel laundering and smuggling in Northern Ireland and to deny criminals the proceeds of that crime. As has been said, we will not oppose this motion, and I want to thank everybody for the debate. I look forward to Northern Ireland seeing the benefits of the NCA that the rest of the UK has benefited from since October 2013.

Question put and agreed to.

Resolved,

That this House notes with concern the continued prevalence of serious organised criminal activity in Northern Ireland on a cross-border basis in relation to fuel smuggling, fuel laundering and the counterfeiting of consumer goods; recognises that this has had a significant and detrimental impact on HM Treasury; regrets the lack of prosecutions in relation to this activity; and calls on the Government to ensure greater co-operation between HM Revenue and Customs, the National Crime Agency and the PSNI so that this criminal activity can be eradicated.

Corporation Tax (Northern Ireland) Bill

Ian Paisley Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mrs Villiers]

Careful consideration has been given to the devolution settlements across the United Kingdom. The Government have made it clear that the fact that Northern Ireland shares a land border with a low corporation-tax jurisdiction means that the case for reform is strong for Northern Ireland, but it is not made out in relation to the rest of the United Kingdom. Northern Ireland is different from the rest of the country, because the history of the troubles has left its economy with a high dependence on the public sector. That is another reason why Northern Ireland is different, and corporation tax devolution could provide a boost to growing the private sector in Northern Ireland. While there is a clear case for doing this in Northern Ireland it would not be the right move for other parts of the United Kingdom.

[Ian Paisley (North Antrim) (DUP)]

Has any assessment been carried out about the level at which Northern Ireland should set its new rate of corporation tax, given what the Minister has just alluded to—our competitiveness with the Republic of Ireland, which has a rate of 12.5%? Has any research been carried out by the Treasury on that?

[Mrs Villiers]

The principle of the Bill is that that becomes a matter for the Northern Ireland Assembly and the Executive. It is for them to make the choice and decide whether to go ahead with implementation of a reduced rate. Obviously, there is a great deal of support for bringing down the rate of corporation tax in Northern Ireland to the same level as in the Republic of Ireland. I know that the hon. Gentleman’s party colleague, Minister Foster, would like to see it reduced still further. Those matters are not provided for in the Bill because the Bill vests that choice with the Northern Ireland Executive once commencement has taken place.

As I was saying in response to the intervention, Northern Ireland has a unique position within our United Kingdom. The land border that it shares with a very low corporation tax environment in the Republic of Ireland puts it at a significant competitive disadvantage when competing for inward investment into the island of Ireland. Northern Ireland is also more dependent on the public sector than most other parts of the UK. Estimates vary as to the extent of this dependence, but it is generally accepted that around 30% work in the public sector, compared with about 20% in the rest of the UK. Some surveys put the dependence on the public sector at even higher levels.

Economic prosperity as measured by gross value added per capita is still some 20% below the UK average and has been so for a number of decades. Of course, Northern Ireland faces a range of difficult issues flowing from the legacy of the troubles. All these challenges need to be overcome if Northern Ireland is to compete successfully on the national and global stage for jobs and for investment. None of this is to say that Northern Ireland does not have some amazing entrepreneurs and some hugely successful businesses that are truly world-beating. Under this Government unemployment in Northern Ireland has fallen in every month for the past two years and the record of foreign direct investment is strong, not least because of the efforts of the Northern Ireland Executive.

But for all the great businesses we have in Northern Ireland, the blunt truth is that there are just not enough of them, so the Government are convinced that to boost the private sector and enable Northern Ireland to perform even more strongly in attracting inward investment, we need to go further. We need to provide stronger incentives for Northern Ireland firms to invest in growth. The Bill before the House today will give the Assembly a powerful tool to help them do this, enabling Northern Ireland to take a decisive step forward towards rebalancing its economy.

The Bill provides a further demonstration of this Government’s general commitment to devolution, which we have shown in many ways, including with the Scotland Act 2012. We are making progress on implementing the Smith commission proposals for further powers for Scotland over tax and welfare to be transferred to the Scottish Parliament. Draft legislative clauses were published on 22 January.

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[David Simpson (Upper Bann) (DUP)]

I thank the Government for keeping their part of the bargain in trying to push the Bill through the House before Dissolution.

I again pay tribute to the right hon. Member for North Shropshire (Mr Paterson), as I did in an intervention. He was very modest in what he said about his role. I understand that it was a team effort within the Government, but I must say that he was outstanding in the number of meetings he held with business organisations in my constituency, such as the manufacturing focus group and the chamber of commerce. He put across the case for devolving corporation tax very well, and all credit to him for his enthusiasm. He was also very enthusiastic about enterprise zones, as has been mentioned, and other parts of the different regions of the United Kingdom are starting to raise that whole issue.

The Chairman of the Northern Ireland Affairs Committee pointed out that we debated this matter and produced a report some time ago, and I remember what one of the economists said. People say that if someone brings 20 economists into one room and tries to get them to agree, they will find it very hard. My hon. Friend the Member for East Antrim (Sammy Wilson), who is an economist, is not in the Chamber, or I would certainly get a very smart response from him.

I asked one economist at what point between one and 10—given a clean sheet—he would put corporation tax, and he was quick to say that he would put it somewhere in the middle. We all agree that the measure is a great move for the future of Northern Ireland, but it is not a panacea or silver bullet, and we need to bring together a lot of things to make it work. The economist reckoned that other factors need to be looked at, including fast-track planning, which has been discussed, the whole planning structure, research and development, and education, which was also raised earlier. It has just been announced that we will get two new regional colleges—one in the town of Banbridge, and one in the Craigavon area—which will benefit my whole constituency. The colleges recently made a presentation about the number of courses and higher level apprenticeships that will be provided. As the hon. Member for Belfast East (Naomi Long) said, skills are vital for any organisation that comes to Northern Ireland, so there needs to be a skills base. A lot of elements therefore need to be brought together for the whole package to work.

Everyone in this debate has broadly welcomed the Bill, but it has been sensible of many of those who have spoken to put in caveats and not to make promises that we might not be able to keep in five or 10 years. The point was made that when companies decide to invest in other regions or sit down to write business plans, they do not plan for just six or 12 months, but for three, four or five years. We do not want to make rash promises, only for companies that plan to come into Northern Ireland to find, all of a sudden, that it does not work. Today we have the coalition Government, but things could change on 7 May. We might have another Government. Will they have the same principles and ideologies as this Government? It is therefore important that we do not make rash promises.

My constituency of Upper Bann is the second largest manufacturing base in the Province outside Belfast, with companies such as Moy Park, Almac and Thompson Aero Seating. It has a lot of good companies, such as bakeries and agri-food businesses. Many of those companies would benefit from the lowering of corporation tax. I declare an interest in the agri-food sector and refer to the Register of Members’ Financial Interests, because my family business would also benefit. The benefit will be felt across the constituency. At the worst economic times, unemployment in Upper Bann rose to 8.5% or 8.6%. As of last week, it was down to 5.2%. Even at the best of times, it never fell below 4% or 4.5%, so we are heading back to where we were in the good old days.

We need to encourage our young people to stay in the United Kingdom. The hon. Member for Foyle (Mark Durkan) made the point that every year we lose a campus to other countries. I still help young people on a regular basis to fill in forms and visas to go to Australia, New Zealand or China. We need to encourage young people to stay and protection needs to be put in place. We have heard about issues such as brass-plating. That needs to be definitive and there are a lot of issues that need to be teased out. That can be done as we go through the Bill over the next few weeks.

I broadly welcome the Bill. It will bring great benefits to Northern Ireland. It is important that every part of the United Kingdom and every country looks to its advantages over other countries. We have to look for the competitive edge. If this brings the competitive edge for Northern Ireland, that is good news, because we have sat alongside the Republic of Ireland, with its 12.5% rate, for many years. As was said earlier, throughout all the difficult economic times, with the Celtic tiger losing its buzz and all the rest of it, it still held on to the corporation tax rate. Even when the European Union threatened to take it away, the Republic of Ireland stood its ground and won the day. We need to continue with this proposal. I think there are good days ahead for Northern Ireland.

[Ian Paisley]

We were promised an economic bonanza after 1998. Whatever people’s interpretation of the Belfast agreement, there was no economic follow-through. It was like the ghost of Banquo—it was there, but it did not turn up. The ghost of economic benefit did not end up being delivered. This is the opportunity to deliver the economic benefit for Northern Ireland that has been absent for the past 15 years.

[David Simpson]

My hon. Friend is correct. This is an opportunity for Northern Ireland to deliver that economic benefit. We need to encourage not only businesses throughout the Province, but the next generation. I do not know about other MPs, but when I go to universities and schools in my area, people say, “What’s the point of staying in Northern Ireland? There’s nothing here for us. There’s no jobs; there’s no nothing.” We have to give them a reason to stay.

It is the role of Governments to create the environment and circumstances in which business can thrive and move forward. My hon. Friend is right that there is an opportunity to do that, and we need to grasp it, but we must do so in a balanced and measured way. We must not make false promises that may come back to bite us in the coming years.

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[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

It is a pleasure to wind up this debate on behalf of the Opposition. We have had an interesting and, I think, high-quality debate. It is an important issue which has been the subject of many discussions over a number of years. I am particularly pleased that so many Members from across Northern Ireland contributed, and I am pleased, too, that, unlike in more recent outings when the Minister and I have been opposite each other on Treasury matters, this has been a slightly longer and meatier debate, not over so quickly. It is a reminder of the good old days when this Parliament was a little busier. That was welcome.

We heard from the former Secretary of State, the right hon. Member for North Shropshire (Mr Paterson), who I thought was right to point out the potentially significant benefits of the Bill, which we also acknowledge. As my hon. Friend the Member for Bury South (Mr Lewis), the shadow Secretary of State, said in his speech, perhaps the former Secretary of State did not quite hear that part of my hon. Friend’s remarks. We say simply that the devolution of corporation tax will require some difficult choices to be made to fulfil the conditionality envisaged in the Stormont House agreement and the Azores judgment. There is a trade-off. We acknowledge that the economic benefits of the change cannot be fully realised without additional changes, particularly investment in skills and infrastructure, to which I shall return a little later. We certainly acknowledge the potentially significant benefits for the people of Northern Ireland through corporation tax devolution.

The hon. Member for East Antrim (Sammy Wilson) was absolutely right to highlight the risk of brass-plating. We need to ensure that these measures have a substantive effect—and I am sure we will return to those issues in the Public Bill Committee.

The hon. Member for Tewkesbury (Mr Robertson), the Chair of the Select Committee on Northern Ireland Affairs, spoke, and his Select Committee has done a huge amount of work on this agenda. I pay tribute to it for that.

The hon. Member for Foyle (Mark Durkan) was right to say that the devolution of corporation tax was not a magic bullet, and to point out that the successes achieved by the Republic of Ireland—particularly from the mid-1990s onwards—had as much to do with higher education funding and investment as with a lower corporation tax rate.

I was pleased that the hon. Member for Redcar (Ian Swales) asked about transfer pricing and profit shifting, and I echo his questions to the Minister. I am sure that we will return to them in detail in Committee, but it would be helpful if the Minister set out some of the Government’s early thoughts about ways of ensuring that the Bill does not provide more opportunities for the exploitation of transfer-pricing and profit-shifting rules.

There was much talk of the dependence of the Northern Ireland economy on the public sector, but, as the hon. Member for Belfast East (Naomi Long) rightly observed, the private sector in Northern Ireland is also heavily dependent on public sector contracts. That is one of the systemic issues with which we shall need to get to grips if we are to achieve a true rebalancing of Northern Ireland’s economy.

The hon. Member for Amber Valley (Nigel Mills) highlighted some technical details to which I hope the Minister will return, probably in Committee rather than today. He spoke of the interplay between the behavioural change among businesses responding to what will potentially be a much lower corporation tax rate and other changes that the Government envisage, particularly in relation to the diverted profits tax.

The hon. Members for Upper Bann (David Simpson) and for South Down (Ms Ritchie) made powerful points about the importance of encouraging more young people in Northern Ireland to stay there, because they are the future of Northern Ireland. The hon. Member for Strangford (Jim Shannon) rounded off the debate very well by pointing out that, while businesses are very much in favour of the measure, we must ensure that the reform delivers for the whole of Northern Ireland and that the benefits are shared throughout the population.

As the shadow Secretary of State said, peace and stability in Northern Ireland are inextricably linked with the increased economic and social progress that Northern Ireland needs. There is an interdependence between the economy and the peace process. I think that there is consensus in the House that if the peace process is to thrive, Northern Ireland will need more private sector growth and investment as part of a long-term rebalancing of its economy. It has long been argued by some that devolution of corporation tax to Northern Ireland so that it can ultimately set a lower rate in order to compete with the Republic—given the sharing of a land border—would enable Northern Ireland’s economy to be rebalanced more quickly, and would lead to sustained economic growth.

Labour Members are committed to supporting measures that increase inward investment in Northern Ireland and support the rebalancing of its economy, and we acknowledge that the devolution of corporation tax could play an important role in the achievement of those objectives. However, as I said earlier, it will require a trade-off between corporation tax reductions and spending cuts. It is important for us to give proper consideration to the long-term as well as the short-term implications for Northern Ireland and for the United Kingdom as a whole. We agree that the 2017 timetable set out in the Stormont House agreement allows time for that consideration, and we will not oppose the Bill. We will co-operate with the Government to ensure that it can be scrutinised appropriately and dealt with speedily during the current Parliament.

The Bill will devolve the rate-setting power for corporation tax in Northern Ireland to the Northern Ireland Assembly for trading profits only, and subject to a commencement order. It will devolve the power to set a corporation tax rate, but will not devolve control of the base. The Northern Ireland rate would apply to all the trading profits of a company if that company was a micro, small or medium-sized enterprise, and if the company’s employee time and costs fell largely in Northern Ireland. In that context, “largely” is defined as at least 75%. In the case of large companies, the rate would apply only to profits that are attributable to a Northern Ireland trading presence. The Northern Ireland Assembly will not be able to set the rate for non-trading profits, such as income from property.

[Ian Paisley]

Earlier in the debate, I asked the Secretary of State if she had taken any advice or guidance about what level of corporation tax Northern Ireland should consider. Does the Opposition spokesman have any view on that? Indeed, is the current inquiry set up by the Labour party in Northern Ireland even considering that?

[Shabana Mahmood]

I am afraid that on this occasion I must give the hon. Gentleman a similar answer to that from the Secretary of State. This Bill is looking at the devolution of this power. It is not for me to say to the Northern Ireland Executive, or Northern Ireland politicians of any description, what that rate should be. Once this Bill passes and we hit the 2017 timetable, that will be a matter for the representatives in Northern Ireland and nobody else.

There are a number of issues, and they have been touched on by Members. We all need to consider them deeply as this progresses both through the House and in the further discussions that will take place as a result of the Stormont House agreement.

First, as has been said, the impact of the Azores decision is important. The devolution of corporation tax needs to be done in a way that ensures it is not caught by EU rules on state aid. In order to meet the third of the three conditions set out in that judgment regarding fiscal autonomy, the Northern Ireland Executive would need to bear the full fiscal consequences of changes in tax revenues resulting from a new corporation tax rate so the block grant would be adjusted to reflect the fiscal costs of a reduction in the corporation tax rate. That is an important issue, and we heard from the hon. Member for South Down about amendments she and her colleagues might want to introduce to address the impact and the modelling behind how some aspects of that would work in practice. There will be a trade-off with public spending cuts and some difficult choices will therefore have to be made, and it is important that those impacts are fully considered and thought through, particularly because, as I said earlier, even the private sector in Northern Ireland is highly dependent at this stage on Government contracts.

The £300 million adjustment that might be required is a burden that may well increase if Northern Ireland were to have a much lower corporation tax rate that then increased the cost and the offsetting from the block grant. The hon. Member for East Antrim asked some questions about the formula that will be imposed in order to calculate the forgone tax by the rest of the UK. It would be helpful to have some clarification from the Financial Secretary on how that formula will operate in practice. I am sure we will address the detail in Committee, but we would like an outline of his thinking now.

Conditionality is attached to the Stormont House agreement. The financial annex adds conditionality to the progress of this Bill, in order to ensure that any changes are fiscally sustainable, stating that there must be

“a clear commitment to put the Executive’s finances on a permanently sustainable footing for the future.”

The Secretary of State did not in her opening speech labour too much the issue of putting the Executive’s finances on a stable footing for the future. There is some detail in the financial annex to the agreement, but that is an important condition that has not necessarily been well ventilated in the debate we have had thus far. Again, however, I am sure we will return to that issue in Committee.

Many Members highlighted the fact that the headline rate of corporation tax is not a panacea. It does not in and of itself result automatically in economic growth, and it was only one of a number of reasons, as many commentators and academics have said, why the Republic of Ireland experienced its economic miracle from the mid-’90s onwards. None of us in this House should see it as a panacea. Investment in skills in particular is just as important, as is investment in infrastructure and, as Members have said, looking at planning rules. All these issues will be crucial. It would be a mistake to think that Northern Ireland’s economy will automatically rebalance just because it has a lower rate of corporation tax—a rate more on a par with that in the Republic of Ireland. That alone will not achieve what we all want, which is a thriving and growing Northern Ireland economy. Other changes will be needed, and it would be helpful to hear from the Financial Secretary the Government’s thinking on some of them.

We have talked a lot about corporation tax not being the only way to achieve economic rebalancing, but as the hon. Member for South Down pointed out, the Institute for Fiscal Studies said in its 2013 green budget that it is a tax which, over time, can vary substantially in revenue terms, and much more so than total receipts from national income. We will need to hear more about how the volatility of corporation tax might impact on the Northern Ireland economy, and particularly about any modelling the Treasury has done on its impact on Northern Ireland’s finances.

As I have said, we recognise that there are potential gains for the people of Northern Ireland from this measure. However, we want responsibly to consider and ventilate the risks it also poses, which we will carefully scrutinise as we progress. We will also carefully consider anti-avoidance measures, to ensure that the Bill does not simply become an opportunity for businesses to brass-plate and base themselves in Northern Ireland, with no other economic benefits for the people of Northern Ireland. I look forward to the debate in Committee.

On-the-Runs Scheme

Ian Paisley Excerpts

Tuesday 27th January 2015 Commons Chamber

[Ian Paisley (North Antrim) (DUP)]

(Urgent Question): To ask the Secretary of State for Northern Ireland to make a statement about recent developments relating to the on-the-run letters which have permitted a second fugitive to evade justice.

[The Secretary of State for Northern Ireland (Mrs Theresa Villiers)]

On Monday 26 January, the coroner conducting the inquest into the death of Mr Gareth O’Connor, who disappeared in May 2003, directed that the inquest should be stayed pending an investigation by the Police Service of Northern Ireland into one of the suspects in Mr O’Connor’s murder. The suspect was part of the administrative scheme dealing with so-called on-the-runs, and was in receipt of a letter from the Northern Ireland Office informing him that he was not wanted for arrest by police forces in the United Kingdom. This case is specifically covered on pages 107 and 108 of the Hallett report on the on-the-runs scheme, where it is described as “error 2”. The fact of the error has therefore been in the public domain for some time, and the case is not a new development.

The Police Service of Northern Ireland is investigating the suspect’s case, and will be considering whether charges can be brought against the individual concerned. I spoke to the Chief Constable of the PSNI yesterday, and I understand from him that this is a live police investigation. I also briefed the Justice Minister—in brief—on the case. The police will investigate where the evidence leads them. In the circumstances, it would not be appropriate for me to comment further on the specifics of the case.

As for the OTR administrative scheme, I set out the Government’s position fully in my statement to the House on 9 September. That followed detailed consideration of the report by Lady Justice Hallett, which was published in July. I made clear in my statement that the scheme was at an end, and that there was no basis for any reliance on letters received by so-called OTRs under the scheme. There is no amnesty, immunity or exemption from prosecution. Those who received letters under the scheme should be in no doubt: if there is considered to be evidence or intelligence of their involvement in crime, they will be investigated by the police, and if the evidence is sufficient to warrant prosecution, they will be prosecuted.

[Ian Paisley]

I thank the Secretary of State for her answer. The most disturbing aspect of what she has told the House today is the fact that the O’Connor murder relates to a post-1998 murder that occurred in 2003. We have been consistently told that the names of the OTRs were critical to securing a 1998 peace agreement, yet this murder post-dates that. Will the Secretary of State now agree to publish all the names with all the letters? Will she publish correspondence between Baroness Scotland and the right hon. Member for St Helens South and Whiston (Mr Woodward), whom I informed earlier I would be mentioning in the House, in terms of the relationship between that correspondence and the murderer of Mr O’Connor? Will the Secretary of State estimate how many other errors there are in this catalogue of errors and accept that the Government and the Hallett review conclusion that there is a single error is now without foundation?

Will the Secretary of State now consider legislation formally to annul the value of all these letters, to put meat on the bones of what she has said: that these letters are without value? Does she agree that Gerry Kelly must be formally investigated for how these letters have been distributed and for whom these letters have been requested? What compensation is now being considered for the families of those who have suffered as a result of Mr Downey’s activities and as a result of the actions by the murderer of Mr O’Connor, because these people cannot get justice by any other means and must now be entitled to some form of compensation?

[Mrs Villiers]

As is clear from the conclusions of the Hallett report, this letter should not have been issued; it was issued in error. For a number of reasons I do not think it would be appropriate to make public the names of the individuals who received letters under the scheme, not the least of which is that doing so could prejudice a future prosecution and make it more difficult to secure a conviction.

In relation to the number of errors, Lady Justice Hallett identified in her report two errors in addition to the one made in the case of Mr John Downey. She also identified a further 36 cases considered by Operation Rapid where she believed there was a risk that the wrong test had been applied. She did not conclude that there were actually errors in these cases, but she proposed that they should be a priority for further investigation because the risk of error in those cases was higher than in others.

In relation to legislation, as I briefed the House in September, it is clear to me that the most effective means to guard against future collapses of trials and future abuse of processes defence is to issue a clear statement indicating to anyone who received a letter under the scheme that it is not safe to rely on those letters—that they should not be relied on—and that is what I did. The option of legislating on these matters was carefully considered, but the conclusion is that legislation would not be as effective as a clear statement at the Dispatch Box that the scheme is at an end and these letters should not be relied on, not least because of a risk that errors have been made in other cases.

Stormont House Agreement

Ian Paisley Excerpts

Wednesday 7th January 2015 Commons Chamber

[Mrs Villiers]

On rebalancing the economy, as I have said, the devolution of corporation tax—assuming that the conditions are met—could have a transformative effect. In addition, the economic pact sets out other means to deliver the competitiveness that Northern Ireland needs to rebalance its economy. It will require reform of the planning system—that was proposed in the Assembly, but has not progressed as yet; crucially, a strong focus on skills and education; and measures to reduce red tape, which is why the pact contains a commitment by the Executive to a reduction of red tape. The Enterprise Minister has followed that up with some important work.

[Ian Paisley (North Antrim) (DUP)]

I welcome the advance copy of the statement that the Secretary of State gave us, but I am rather perplexed at the attitude towards corporation tax of the Labour Front-Bench team. We have worked hard to achieve this, and for it to be delayed would be a shame.

On the financial agreement, the Secretary of State said that she would allow the proceeds of specific agreed asset sales to be retained entirely by Northern Ireland. What are those assets? Will she confirm whether they include the port of Belfast, Translink, the water service and/or Northern Ireland car parks?

[Mrs Villiers]

It is important that the Executive give proper consideration to those and all other assets of a similar nature, but it would not be right for me to prejudge what sale proposals the Executive might develop. Each asset will be considered in relation to the provision in the agreement’s financial annexe.

Oral Answers to Questions

Ian Paisley Excerpts

Wednesday 29th October 2014 Commons Chamber

[Mrs Villiers]

I believe that of the £87 million of savings forgone for this year, around £16 million relates to the spare room subsidy, which is all about fairness to ensure that the rules for the social sector are the same as those for the private rented sector. I do not think that is an unreasonable position. The reality is that our welfare reforms are about encouraging people into work, reforming the system to ensure that work always pays and ending the perversities and arbitrary cliff edges that saw people trapped on benefits under the old system, which Labour manifestly failed to reform.

[Ian Paisley (North Antrim) (DUP)]

Sinn Fein MPs claim to be fighting welfare reform. When did the Secretary of State last directly challenge Sinn Fein MPs to come to this House, to take up their places and to fight it from these Benches? If they are not prepared to do that, when is she going to remove the £600,000 a year they receive for not coming to this House?

[Mrs Villiers]

I think it would be far better if Sinn Fein took their seats. That would give them the opportunity to debate these important Northern Ireland matters. I know that the contribution of all the Northern Ireland parties who take their seats in this House to the debate on welfare reform was very much welcomed. Now is the time to get on with this. Failing to implement welfare reform is putting severe pressures on departmental spending in a range of other areas for the Executive, including policing.

JTI Gallaher

Ian Paisley Excerpts

Monday 27th October 2014 Commons Chamber

[Ian Paisley (North Antrim) (DUP)]

On 7 October, my constituency received the devastating news that a 150-year-old manufacturing industry was to be brought to an end.

JTI Gallaher employs 900 people in Ballymena. It has existed in Northern Ireland since its foundation 150 years ago in the city of Londonderry, and it has been a mainstay of employment in Northern Ireland. It has stood along with key industries such as linen-making, textiles, rope-making and shipbuilding, and it has itself been part of one of the key industries in Northern Ireland. In my constituency, it alone employs those 900 people. It is regarded as one of the largest employers in the constituency, and, indeed, in Northern Ireland as a whole.

Let me put this into a local perspective. In a country of 1.8 million people, that employer’s wage input into my local economy is £60 million, and it puts a further £100 million into the entire Northern Ireland economy through transport, packaging and other associated industries.

In philanthropic terms, the company supports—and indeed is the lifeblood support of—key charities, including Age UK, the Harryville partnership in Ballymena and the Ulster orchestra. We are hearing much locally about the future of the Ulster orchestra. Let us be absolutely clear about this: without JTI Gallaher there would be no Ulster orchestra.

I want to put the 900 jobs into a UK-wide perspective. If those jobs were lost here on the mainland of the United Kingdom, it would be the equivalent of 32,000 people being told that their jobs are over. I welcome the fact that we have a Minister at the Dispatch Box, but I have been totally underwhelmed by the response of this Government to that blow to our economy. There has been no statement from that Dispatch Box about it. The Secretary of State has not come to that Dispatch Box. To say the sense of betrayal in my constituency is palpable would be an understatement.

[Sammy Wilson (East Antrim) (DUP)]

Does my hon. Friend agree that the Government have surrendered to the lobby from those who oppose smoking? They have put people out of jobs and yet their very objective will not be achieved, because all that will happen is that people will move over to an illegal market, with far more dangerous tobacco products and the financing of criminal gangs?

[Ian Paisley]

I thank my hon. Friend for his intervention.

There are three reasons why this factory is going to be closed. The first of the two main reasons is over-regulation. I am the first to say that smoking needs to be regulated—I do not smoke, I do not want my children to smoke, and the product is harmful so it has to be regulated—but to over-regulate it to such a degree that we close the industry down without stopping people smoking is just foolishness.

The second key issue is the illicit trade. As a result of over-regulation—my hon. Friend pointed to this—one in four cigarettes smoked across the whole of the United Kingdom is an illicit cigarette that has been smuggled in. That damages not only the economy and the country, but these jobs.

[Sir Gerald Howarth (Aldershot) (Con)]

Does the hon. Gentleman agree that the Government’s absurd proposal for plain packaging of tobacco will not only be dangerous to tobacco smokers, but is partly instrumental in the loss of jobs in his constituency?

[Ian Paisley]

The European tobacco directive has undoubtedly helped to kill this industry, but let us be absolutely clear: the betrayal of the Government in putting in place plain packaging has said to an entire industry, “There’s no point staying in this country. There’s no point continuing to manufacture in the United Kingdom.” All it has done is driven—and it will continue to drive—those jobs to eastern Europe while cigarette smoking continues in Northern Ireland.

[Jim Shannon (Strangford) (DUP)]

Europe clearly has a reason for the directive that is coming through, but does my hon. Friend recognise the good work MEPs Diane Dodds and Jim Nicholson did on behalf of JTI? Does he think Europe could have done more, and does he feel that the Minister should have more interaction with Europe?

[Ian Paisley]

My hon. Friend raises an interesting point which I want to address slightly later by talking about how Europe has played a devastating role in this development.

[Mr Nigel Evans (Ribble Valley) (Con)]

Does the hon. Gentleman agree that the Government caving in on this one, and indeed leading the charge on plain packaging, interferes with the intellectual property of companies, which is a dangerous precedent, and that we will end up not with more people giving up smoking, but with the exporting of jobs and the importing of tobacco products?

[Ian Paisley]

The hon. Gentleman is absolutely right when he says that plain packaging will not do what it sets out to achieve. It will not reduce consumption; it will simply help to destroy an industry.

I appeal to the Government tonight. They could help me to save jobs in my constituency and help me save this industry by indicating firmly that they will review immediately their decision to implement plain packaging, allowing me to go back to the company and argue that it is worth its while staying in a country that wants to encourage, not discourage, manufacturing.

[David Morris (Morecambe and Lunesdale) (Con)]

Does the hon. Gentleman agree that it is not just his constituency that would feel the economic impact of the closure of the JTI factory, but the whole of the north-west of England? Located in my constituency is Heysham port, which is the reserve port for JTI’s goods. My port will lose out on business from JTI should the factory close.

[Ian Paisley]

It is not only that the 900 directly employed people in my constituency will lose their jobs. The hon. Gentleman mentions associated companies. Yes, I will lose £60 million from my local wage economy, but approximately a further £100 million will be lost from the local economy in terms of the costs associated with transport, haulage firms and packaging companies. All those other aspects of associated business and trade will be gone. It is therefore no wonder that the hon. Gentleman is concerned about the impact that the closure will have on employment in his constituency.

[Mr Aidan Burley (Cannock Chase) (Con)]

Does the hon. Gentleman agree not only that the decision by JTI, based on the tobacco products directive, shows why the Government must immediately cancel their plans to proceed with plain packaging for tobacco products, but that all the evidence from Australia shows that this will simply drive more customers into the illegal trade, where there are none of the health benefits the Government want to see and none of the money coming into the Exchequer that they would wish? Moreover, it will lead to even more of the job losses he is suffering in Ballymena.

[Ian Paisley]

I thank the hon. Gentleman for that. Government policy should be based on evidence. If there were evidence to show that plain packaging will reduce consumption, the Government would have every right to attempt to implement the policy. But given that it is basically guesswork, and that the trial on the ground in Australia shows that consumption is not decreasing as a result of plain packaging, but that illicit trade is increasing, the Government should take stock immediately.

[Mr Laurence Robertson (Tewkesbury) (Con)]

rose—

[Ian Paisley]

I give way to the Chairman of the Northern Ireland Affairs Committee.

[Mr Robertson]

As a fellow member of the Select Committee, does the hon. Gentleman remember that when we looked into the illicit trade issue and interviewed the head of the relevant department in Her Majesty’s Revenue and Customs, his view was that plain or standard packaging would actually increase counterfeiting and the illicit trade?

[Ian Paisley]

The hon. Gentleman is making my case for me. He is clearly demonstrating, through his knowledge of this subject and what HMRC has told him that the Government’s policy is wrong-headed and will not prevent people from smoking. I say again: I want to see a reduction in smoking, but we have to have a policy that works and is proven to work. The evidence is not there to achieve the Government’s policy.

[Dame Angela Watkinson (Hornchurch and Upminster) (Con)]

Does my hon. Friend agree that when this Government sent their draft regulations to the EU indicating their intention to introduce standardised packaging, that created the uncertainty in the industry that has affected Gallaher so badly—it is now unable to forward-plan—and yet no ministerial decision has been made and no debate has taken place in this Chamber? We have passed enabling legislation, but we did not make a final decision.

[Ian Paisley]

I thank the hon. Lady for bringing me on to a key point—the impact of the European directive and, importantly, the Government’s betrayal of this industry. The Prime Minister answered a parliamentary question earlier last year on minimum pack size, which is what the tobacco directive is all about. He said:

“It does not, on the face of it, sound a very sensible approach. I was not aware of the specific issue, so let me have a look at it and get back to my hon. Friend.”—[Official Report, 9 October 2013; Vol. 568, c. 160.]

The Prime Minister was answering a question from a Government Member, and I believe that he has been let down by a failure of his party and colleagues to negotiate the matter appropriately in Europe.

While the then public health Minister, the hon. Member for Broxtowe (Anna Soubry), had control of tobacco products directive negotiations for the UK Government, she was required to keep Parliament informed of developments via the European Scrutiny Committee. When she was brought to that Committee on 17 July 2013, she had to apologise for poor political practice, saying:

“I do not hesitate to apologise for the fact that this Committee has not been fully informed. I only wish that, as a Minister, I was aware of all the things that happen within my portfolio.”

That is an appalling indictment of a Minister who took her eye off a brief and allowed the policy to be rammed through with the consequences that we are feeling today. We will reap a terrible harvest in Northern Ireland as a result.

The provisions under the TPD on the minimum pack sizes that may be manufactured have the direct impact that 82% of the output of my constituency’s factory will be made illegal. The Government have done that with the sweep of a pen—it is little wonder that 900 people are being told that it is over for them. The Government could have said, “Let’s continue to manufacture, but not sell in the United Kingdom,” or looked at other options, but instead they implemented a policy even though their Minister said that she was not fully aware of what was happening. That is a betrayal. It is a scandal that the Government were not paying proper attention.

The Government cannot say that they were not warned. I have spent three years in the House warning the Government about their actions. I was able to attract 82 signatures to an open letter to the Secretary of State for Health from Members on both sides of the House, including former and current Cabinet Ministers. The letter stated that if the Government continued with the tobacco directive and plain packaging, it would have

“disastrous consequences for independent retailers, consumers and those employed in the legitimate tobacco supply chain.”

It said that the products affected involved

“a very significant level of employment in UK factories.”

It said:

“Should these packs disappear, the machinery needed for them will be made redundant alongside the workforce who are employed to operate them. In the current economic climate, can the Government afford to put so many UK manufacturing jobs at risk?”

My constituents got the answer on 7 October: they were told by this Government that they could be put at risk, that they did not matter, and that their jobs and livelihoods were over.

What frustrates me most is that the Government had warning upon warning upon warning from not just me but colleagues. The Chair of the Home Affairs Committee visited my constituency and the factory to find out about smuggling. The shadow Secretary of State for Northern Ireland visited the factory, as did the previous Northern Ireland Secretary. The Minister’s predecessor has visited the factory, as have my Northern Ireland colleagues and other MPs, including members of the Northern Ireland Affairs Committee. However, when I asked the Government to come and to say, “This fight is on. This is about saving jobs,” I got the terrible message that they did not want to be associated with the industry. I can represent jobs in my constituency without being associated with smoking. It is a pity that there was not just a wee bit of strength—a wee bit of backbone—in the Government when it was needed. They could have stood up to Europe and said, “We’re not implementing that. That’s the end of our jobs.” Instead, they have stubbed those jobs out, just like a fag end, and my constituents are facing the terrible consequences of that tonight.

There are some things that the Government could do, and I want to turn to those briefly in my closing remarks. First, I think that they could look afresh at the issue of plain packaging and recognise that it offers them a negotiating opportunity with the company. Removing the proposals for plain packaging and the threat to the industry for the next five years would provide an opportunity to stretch those jobs out a little longer. I have managed to help negotiate a two-year stretch for those jobs. If we could push that to five, six, seven or even eight years, because the Government are prepared not to roll over on plain packaging, that would help considerably in defending and keeping those jobs.

[Dame Angela Watkinson]

Like my hon. Friend, I am a non-smoker, but I never miss an opportunity to ask smokers whether their tobacco purchasing habits would change if plain packaging were introduced. They find the idea laughable, so the whole thing is based on a false premise.

[Ian Paisley]

I agree with my hon. Friend.

Secondly, I want the Government to help the work force via the European globalisation fund, because many of my constituents currently in employment will need to be retrained. The skilled engineers, for example, could work on oil rigs or do other engineering work, but the certifications needed cost thousands of pounds. The globalisation fund, if accessed by Her Majesty’s Government, would allow for those certificates to be paid for and help those employees under a restructuring deal.

Finally, if the work force come up with an alternative plan to help save some of those jobs, I want the Government to assist them by allowing them access to Invest Northern Ireland and other skilled business planners so that they can put in place an alternative plan that will hold water and can be put to the company’s headquarters in Geneva. That way, they can see for themselves that there may be a viable alternative. If that happens, we might be able to postpone what is happening in Northern Ireland, but I am really concerned that the Government have put out these jobs for ever.

Hallett Report

Ian Paisley Excerpts

Tuesday 9th September 2014 Commons Chamber

[Mrs Villiers]

I am happy to confirm what I have said on many occasions: this was not an amnesty, and that has been confirmed by all those who have appeared in front of the Northern Ireland Affairs Committee. I believe it is confirmed by Lady Justice Hallett, and it was confirmed by Sir Nigel Sweeney in the Downey judgment. The Government have always strongly opposed amnesties, which is why they opposed the Northern Ireland (Offences) Bill. If we had inherited a scheme that involved an amnesty, we would have stopped it immediately. This was not an amnesty, and we will not be introducing an amnesty under any circumstances.

[Ian Paisley (North Antrim) (DUP)]

I welcome the Secretary of State’s statement and the fact that she made it in the House after discussions with the Northern Ireland Affairs Committee. I think that is appropriate, and I know a lot of people will appreciate the statement today. I also welcome the clarion certainty of the statement that this shameful episode is now over. Many people in Northern Ireland will welcome the fact that a line has been drawn under this.

Last week at the Select Committee the Secretary of State reiterated her appropriate and contrite apology for this matter—indeed, that was echoed by the Labour Front-Bench spokesman. In the Committee yesterday, however, the former chief of staff of the then Prime Minister, Mr Jonathan Powell, refused to apologise. Does the Secretary of State agree that it would be appropriate of the author of the scheme also to recognise that it was wrong and apologise?

[Mrs Villiers]

The hon. Gentleman has obviously taken a close interest in this matter, and he is right to view today as drawing a line under it and reaching an end to what has been a painful episode for many people. On the evidence given to NIAC by Jonathan Powell, I think it is a matter for him whether he chooses to apologise. As I said in relation to the scheme, although I would not necessarily have done everything in the same way as the previous Government, or necessarily agreed with their overall approach to OTRs, I recognise that they were striving for a peaceful settlement in Northern Ireland, and dealing with an extremely difficult situation and difficult judgments.

Hallett Review

Ian Paisley Excerpts

Thursday 17th July 2014 Commons Chamber

[Mrs Villiers]

I am afraid the legal advice is that it is almost impossible for circumstances to arise where that stay could be lifted, so I am afraid that decision is irreversible. My hon. Friend is right to characterise this as an extraordinary scheme—that is how it was characterised by Lady Hallett. What I would emphasise is the point made by almost all hon. Members: this was not an amnesty. In describing what it was, I could do no better than use the terms summarised by Lord Reid, who said that this was a scheme to inform

“people who were not wanted”—

for arrest by the police—

“that they were not wanted”

for arrest by the police. It was not a scheme to send letters of comfort to people who genuinely were wanted.

[Ian Paisley (North Antrim) (DUP)]

Does the Secretary of State agree that it would be a travesty heaped upon an injustice if a single police officer was to be made a scapegoat for this error while Tony Blair was to be elevated to near sainthood by some people? Does she agree that the systemic failures identified in this report clearly show that the Northern Ireland Office made significant errors in the management of all this? Will she go further and recognise that the entire OTR scheme was a gross insult to victims? Pages 204 and 210 of the report contain two lists with redacted names on them. Given that Gerry Adams’ personal solicitor was not able to confirm or deny whether Gerry Adams is in receipt of one of these letters, does the Secretary of State consider it appropriate that if a political leader is in receipt of one of these letters, she should inform this House?

[Mrs Villiers]

On the last point, I only reiterate that I have no plans to publish the names of the individuals concerned, for the reasons I gave before. I have a lot of sympathy with the hon. Gentleman’s characterisation of the position of the PSNI officers. The report is very clear that there were significant systemic failings in the way the NIO at the time ran the scheme. It was certainly well intentioned, and I think civil servants made strenuous efforts to act appropriately, but the reality is that at a senior level—Ministers at the time will of course take responsibility for this—as the Hallett report makes clear, the scheme was not gripped properly, the risks were not assessed properly, and there were opportunities to identify errors and correct them but those were not taken. All of that means it would be wrong to characterise the result of the Downey case as just being down to the actions of an individual PSNI officer. If the scheme had been run in an appropriate way, it is highly likely that those facts would never have arisen in the first place. That of course is a matter for which all those Ministers in office at the time will take responsibility.

Oral Answers to Questions

Ian Paisley Excerpts

Wednesday 11th June 2014 Commons Chamber

[Mrs Villiers]

Both the UK and Irish Governments will continue to support the efforts of party leaders to reach a conclusion on the Haass issues. Like the hon. Gentleman, I urge everyone, as we approach the height of the parading season, to comply with the rule of law to ensure that all protests and all parades are both peaceful and lawful, and that the Parades Commission’s determinations are complied with.

[Ian Paisley (North Antrim) (DUP)]

Does the Secretary of State agree that getting Sinn Fein to tell the truth about the past is like hoping that Nick Clegg will be the Deputy Prime Minister after the 2015 election? Does she agree that the best way to deal with the past at this precise time is for her Government to annul the letters to the on-the-runs?

[Mrs Villiers]

As I have said many times in relation to those letters, they did not confer an amnesty; they were merely a statement of fact about an individual’s status with regard to the police and prosecuting authorities at a particular point in time, and that was confirmed by the Director of Public Prosecutions for Northern Ireland in the Northern Ireland Affairs Committee yesterday.

High Court Judgment (John Downey)

Ian Paisley Excerpts

Thursday 27th March 2014 Commons Chamber

[David Simpson]

The hon. Lady is absolutely right.

No unionist would be surprised by the role the Northern Ireland Office at the time had in the design and implementation of the scheme. At the time, its pandering to republicanism and its contempt for Unionism and its representatives were a permanent feature of direct rule. However, it drew the Police Service of Northern Ireland into its dirty deals as well. In a question to the assistant chief constable—I believe it was Assistant Chief Constable Harris—my colleague on the Policing Board, Mr Thomas Buchanan, asked about the OTRs. The PSNI’s response was this:

“At this moment in time, there are no on the runs we are aware of residing in Northern Ireland, and if there was information to suggest there were individuals who are wanted for crime living within this jurisdiction, then we would be very anxious to learn of that.”

That was in 2010. That gave the impression that there was a desire to catch criminals, but the scheme was doing exactly the opposite.

[Ian Paisley (North Antrim) (DUP)]

My hon. Friend knows that the former deputy chair of the Policing Board, Mr Bradley, has publicly stated that the board was briefed about the on-the-runs and knew all about it. Will my hon. Friend go further today and dismiss that as a fantasy?

[David Simpson]

Yes, I certainly will. It was an absolute fantasy, as the evidence that has come from Policing Board representatives over the past few weeks confirms.

At the same time the OTR scheme was running, the PSNI established the Historical Enquiries Team. It was supposed to be a systematic approach to give every victim the opportunity for justice. The OTR scheme now draws a long shadow over all the HET’s work. Some will conclude that as one section of the PSNI tried to put people before a court, another was helping them to avoid it.

I will not speak for long, because I know that many other Members wish to speak.

--- Later in debate ---

[Lady Hermon (North Down) (Ind)]

It is very kind of you, Madam Deputy Speaker, to call me in this very important Back-Bench debate. I am happy to put on the record my thanks to the Backbench Business Committee for allocating such an extensive period for it. I am very grateful to right hon. and hon. Members who have taken interventions throughout the debate. I will try to contain my comments to less than 10 minutes, so that those who have been so generous to me have an opportunity to speak at length.

[Ian Paisley]

Will the hon. Lady give way?

[Lady Hermon]

Of course. I will put into practice what I have just said.

[Ian Paisley]

Given that the hon. Lady is an esteemed and very skilled legal expert, will she refer to the possible opportunities that now pertain to try to get someone such as Mr Downey with his experience—an alleged mass murderer—back into our courts, whether by warrant, extradition or whatever?

[Lady Hermon]

I am most grateful to the hon. Gentleman for intervening so early. That is a really interesting question. My honest and frank answer, as he would expect from the hon. Member for North Down, is that Mr Downey of course resides in Donegal. That is his place of residence and his domicile. Frankly, after the Downey case and its revelations, I have absolutely no confidence that this British Government would request the extradition of Mr Downey. I would love the Secretary of State to intervene now to say that I am completely wrong.