Fuel Prices

Lord Dodds of Duncairn Excerpts

Tuesday 15th November 2011 Commons Chamber

[Mr Nigel Dodds (Belfast North) (DUP)]

I am grateful to be taking part in the debate and I congratulate the hon. Member for Harlow (Robert Halfon) and his colleagues on having secured it. I also congratulate the many individuals who signed the e-petition and those others who managed to persuade the Backbench Business Committee to have this debate today.

This issue is one of our constituents’ major concerns; indeed, surveys have put it right at the top of that particular poll. The fact that households in the United Kingdom pay on average £677 a year purely on fuel duty illustrates the extent to which this issue affects ordinary working people and those in the poorer sectors of society. The poorest 20% are generally paying twice as much of their income on fuel duty as the richest 20%, which cannot be right. It is clear that the impact is not just on poorer people but on those in rural areas, as has so eloquently been pointed out already, and there is also a disproportionate impact on younger people. We had a debate in the House not long ago about car insurance and it is clear that younger people face a big premium for car insurance. As a result, they are finding it very difficult to stay mobile, to get jobs and to stay in employment.

[Tessa Munt]

Just two Fridays ago in the Youth Parliament debate, transport was identified as a main issue of concern for the Youth Council's campaigns over the next year. I hope that the Minister will take that into account when she responds to the debate.

[Mr Dodds]

Yes; transport is a big issue for young people, because in order to get jobs, stay in employment, get around and socialise they need to be mobile. In rural areas and poorer areas it is difficult for people to sustain that at the current price of diesel and petrol.

[Jim Shannon (Strangford) (DUP)]

We are urging people to get into work, but people who live in rural areas in Strangford and who travel to my right hon. Friend’s constituency of Belfast North will find that a two-hour round trip costs £10 a day. That is £50 a week or £250 a month, which is a large chunk out of anyone’s wage packet. Does my right hon. Friend agree that a reduction in the price of diesel and petrol would help the unemployed to get a job and would help the employed to stay in work?

[Mr Dodds]

I am grateful to my hon. Friend, who makes a good point and illustrates it with the facts. I will come on to the situation in Northern Ireland, but it is clear that a car is a necessity, not a luxury, for many people in his constituency, so he makes a valid point.

The fact is that Northern Ireland has the highest-cost fuel of any region in the United Kingdom. The Automobile Association’s October fuel price report showed that of the 12 regions of the UK, Northern Ireland was, on average, the most expensive for unleaded petrol, diesel and super-unleaded. On top of that, its energy prices more generally are among the highest in the United Kingdom. I mentioned car insurance; Northern Ireland’s car insurance premiums are by far the highest in the United Kingdom. They are, on average, 83% more expensive per person than in the rest of the United Kingdom. Earlier, someone mentioned a double whammy for their constituents; in Northern Ireland, we have a severe triple whammy when it comes to energy, fuel prices and car insurance. Those issues have to be addressed. Some will have to be addressed by the devolved Administration, and there are Ministers working on the issues, here and at home, but there are also issues that can be addressed only at the level of the Westminster Government.

I hope that this debate will contribute to focusing the Government’s mind on this serious problem. Some 83% of people in Northern Ireland go to work by car, van or minibus, compared with only 70% in the rest of the United Kingdom. That shows the rural nature of much of Northern Ireland, and the fact that we have an underdeveloped public transport network; for example, large parts of the west of the Province are not served by the railway network. Clearly, the car is therefore a necessity there, not a luxury.

[Claire Perry (Devizes) (Con)]

The right hon. Gentleman and I normally talk about pig farming, but on this occasion, we can talk about the fact that in our very rural areas—particularly in my constituency of Devizes—the issue is the lack of competition among petrol stations and heating oil providers. None of us is on a grid; we are all reliant on heating oil. My area has similarities, in microcosm, with the right hon. Gentleman’s area.

[Mr Dodds]

Absolutely. We in Northern Ireland have a higher dependence on off-grid energy supplies than other places in the United Kingdom, but there are many similarities. We in Northern Ireland have a unique situation: we share a land border with the Irish Republic. As the per-litre price for petrol is, on average, 5p cheaper in the Irish Republic—15p a litre cheaper for diesel—we have the problem of fuel smuggling, which costs the Exchequer about £200 million to £300 million a year. One way to deal with that is for the Serious Organised Crime Agency and others to be tougher in tackling the problem, but there also needs to be an extension of the rural fuel pilots to Northern Ireland. That would not only reduce the cost of petrol and diesel and boost the economy, but increase the tax take for the Revenue. That has been clearly shown.

People in my constituency tell me all the time that they are appalled by massive oil company profits; BP had profits of £3.2 billion in the second quarter of this year. They want those profits passed on to people in difficulties. They are appalled by the difference in petrol prices across the Province. They cannot understand why supermarkets—I will mention supermarkets—in my constituency charge one price in one area and another elsewhere, simply because they can get away with it. People in my constituency want the planned fuel duty increases for next year to be scrapped to boost the economy, reduce costs and boost the tax take, which is only at 66% today, compared with 81% in 2001-02; that shows that the current policy of ramping up tax and fuel duty increases is not working for the Government. People in my constituency want the measure of inflation used to upgrade fuel prices changed from the retail prices index to the consumer prices index, which is used for everything else.

European Budgets 2014 to 2020

Lord Dodds of Duncairn Excerpts

Tuesday 8th November 2011 Commons Chamber

[Mr Nigel Dodds (Belfast North) (DUP)]

It is always a pleasure to follow the hon. Member for Stone (Mr Cash). I well recall when the House, not that long ago, passed an amendment in his name under which there was to be no annual increase in the EU budget. It was a wise amendment, and I was delighted that the House supported it.

I want to reflect on what happened last year—the Financial Secretary mentioned this—when the proposal was for a 6.2% increase in the annual budget. Despite all the tough talk, we ended up with an increase of 2.9%—at a time when budgets are being slashed in many areas vital to our constituents—and people were mystified about why, after all the tough talk, we had agreed to an increase. Today the Financial Secretary has spoken those dreaded words—“qualified majority voting”—and I am worried that we will end up in a similar position this year, despite all the tough talk. I am particularly concerned because I recall the tough talk not just on last year’s increase, but when the question of the European External Action Service came before the House and we were told that it would mean no increase in the budget. It transpired, however, that there would be a £400 million spike increase in the budget for that.

I was also worried when I saw that, after the European Parliament debated the matter on 26 October in Strasbourg, 52 of the 120 MEPs who voted against the annual increase were UK Members. It does not augur well for gathering together a coalition of those who are prepared to stand against this increase, when more than 420 MEPs voted for it.

I am glad to say that the Democratic Unionist party Member of the European Parliament was among those who voted against, and I am delighted that, on this occasion, every single member of the UK delegation to the European Parliament who actually voted, voted against. I have to note, however, that five Lib Dems, one Plaid Cymru Member and two Greens abstained, which I think is amazing on a vote that attracts such consensus in this House. I am sure that their colleagues here will want to ask their European colleagues exactly why they decided to abstain rather than vote against.

The proposal for an increase of £834 million in the UK contribution, which would bring our overall contribution to more than £14 billion indicates just how out of touch are the Eurocrats and many in the European Parliament. It also illustrates why we need a referendum on our relationship with the European Union. We have a situation in this House today where we are going to agree to what I think is an excellent motion signed by many excellent Members and it will be passed unanimously. People in the country will think, “That’s it, then. The sovereign Parliament of the United Kingdom has declared its position.” Yet, there have been hints, and the Financial Secretary is already paving the way for a further statement at some point, about some increase because we are subject to a qualified majority voting process. We are not masters of our destiny in respect of something as vital as the spending of almost £1 billion of taxpayers’ money.

That goes to the heart of the debate about our relationship with Europe: the incapacity of this House, of Members on all sides, even when they agree, to implement something on which the vast majority agree —virtually everyone apart from a few Lib Dem and Green MEPs, it appears—and yet we cannot do anything about it. This illustrates far more eloquently than anything any of us could say why we need this referendum sooner rather than later, so that we can address these fundamental inadequacies in the entire process, which leaves us sitting here today, talking about an issue, passing resolutions but powerless in this sovereign Parliament to do anything about it. I hope that the Government and all Members will take that on board.

Credit Institutions and Investment Firms

Lord Dodds of Duncairn Excerpts

Tuesday 8th November 2011 Commons Chamber

[Harriett Baldwin]

I can see that if I carry on giving examples, I will only encourage my hon. Friend to find more passages of gobbledegook to read into the record, but it is indeed the most appalling document.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Lady makes powerful points on subsidiarity. We have had some fun at the expense of the document, which is long, convoluted gobbledegook, as the hon. Member for Stone (Mr Cash) said. However, the reality—this makes my heart sink too—is that unless we get enough countries in Europe to agree with us, the document will become directly applicable law in the UK. That is how serious the matter is. When one considers the amount of scrutiny that we rightly give to legislation in the House, one realises that the amount of scrutiny given to the document is appallingly low.

[Harriett Baldwin]

What adds to the power of the right hon. Gentleman’s argument is the fact that this week, of all weeks, we have seen how completely inadequately the euro countries have managed the governance of their budgetary arrangements and affairs over a matter that is causing serious problems for the world economy.

I wish to conclude by making one further point. I was completely gobsmacked by the chutzpah—if that is a parliamentary word, Mr Deputy Speaker—of the Opposition spokesman, the hon. Member for Nottingham East (Chris Leslie). Although I welcome the fact that he agrees with the motion, I noted that he did not refer to the previous Labour Government’s role in signing us up to the Lisbon treaty without a referendum. It displayed a stark lack of acknowledgement of his party’s role in getting us to this position.

I have spoken briefly because there is important business to follow, but I want to reiterate how important it is that the Financial Secretary be armed with the maximum political support for his trip to argue our case against this ridiculous 1,200-page document.

Public Service Pensions

Lord Dodds of Duncairn Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

The hon. Gentleman is right that the poorest in society end up paying the price for the loss of financial control that we saw in this country under the previous Government. He referred to the liabilities in public service pensions. Those liabilities are, on the latest figures, more than £1.1 trillion. That is the entire education budget for more than 20 years.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the flexibility that the Government are showing today in moving this whole issue forward. Where the statement dealt with the Government’s revised offer, the Chief Secretary provided some examples of the benefits that will accrue to some workers. Will he outline some examples of where people will be worse off? To press him on the point about the consumer prices index, he must surely have the facts and figures, but by how much on average will people be worse off as a result of the switch from RPI?

[Danny Alexander]

The right hon. Gentleman asks who will be worse off, which is a fair question. One flaw with the current final salary arrangements in the public sector is that the contributions of low-paid workers go towards subsidising the pensions of the highest earners. That is one reason why we want to move to a career average basis. Some of the losers from that would be the highest paid, particularly those such as chief executives of local authorities, who receive a large jump in salary at the end of their career and then get a pension as if that were their salary for their whole lifetime.

European Union Fiscal Union

Lord Dodds of Duncairn Excerpts

Wednesday 14th September 2011 Westminster Hall

[Mr Binley]

The problem is serious, and I simply want to hear what the Minister has to say about it, because we expect our Government to recognise the impact on business and to do something about it. But that does not mean being involved with or part of the creation of a fiscal Europe in the eurozone. That is not the way to go, and I would rather go the other way: free up British business and restore some of the ancient and traditional markets that we have neglected for some time.

[Mr Nigel Dodds (Belfast North) (DUP)]

I have listened to the debate from the outset. The truth of the matter is that there is no pain-free option, and that whatever happens there will be difficulties, but to continue with the old, failed approach and carry it forward to fiscal unity would be an even greater disaster than the alternative. We must inject some common sense and democracy into the argument. That is the alternative that faces the British people.

[Mr Binley]

I am grateful to my right hon. Friend, and that leads me to my final words.

British business is important. We must help the eurozone to come to a sensible conclusion, but that does not include our being part of a fiscal union. We must help to ensure that we renegotiate a relationship with Europe that is much more sensible than we have had for a very long time. If necessary, we must come out. We face a tough time, whatever occurs, and we must use that time in the interests of Britain, not of the eurozone, which is the creator of its own downfall.

Oral Answers to Questions

Lord Dodds of Duncairn Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Osborne]

We are giving a much greater role to local communities in determining their own local plan. We are also protecting the green belt and areas of outstanding natural beauty—of which I am sure there are a number in my hon. Friend’s constituency. I would make this point: these are sensible protections for the countryside, but we must also allow economically productive development in this country. We have to simplify a planning system that is completely unintelligible to most citizens. That is precisely what we are doing and I hope we will be backed on both sides of the House.

[Mr Nigel Dodds (Belfast North) (DUP)]

T6. Will the Chancellor give a categorical assurance to the House that the Government will swiftly and robustly reject any proposal from the European Commission, the European Parliament or any other European institution for a trans-European revenue-raising measure?

[Mr Osborne]

I can assure the right hon. Gentleman that I am certainly opposed to any new European tax.

Civil List

Lord Dodds of Duncairn Excerpts

Thursday 30th June 2011 Commons Chamber

[Mr MacShane]

I do not really want to get into discussions about German lineages. I recall a previous German President who actually walked the length and breadth of Germany in his summer holiday, and he did not receive anything remotely like what we pay our official Head of State.

It is interesting to note that Scotland’s First Minister, Mr Salmond, has ditched his party’s original republicanism and now asserts that an independent Scotland—if that unlikely event were to take place—would keep the monarch as its Head of State. However, I would like to see any future monarch living a lifestyle in tune and in touch with that of the nation. We can see the Duke of Cambridge, who serves with RAF officers, and his wife living a lifestyle much closer to that of the rest of the nation.

[Mr Nigel Dodds (Belfast North) (DUP)]

The right hon. Gentleman has referred to people who have ditched their republicanism. Will he join me in welcoming the decision of the Sinn Fein mayor in the Irish Republic who welcomed Her Majesty and shook her hand—despite Gerry Adams’s advice to do otherwise—showing an increasing acceptance of the monarchy everywhere?

[Mr MacShane]

A law throughout my entire life has been that if Mr Gerry Adams advises anybody to do anything, they will be on the safest ground if they do the opposite.

I do not know whether my right hon. Friend the Member for Barking (Margaret Hodge), the Chairman of the Public Accounts Committee, or the Chair of any other Select Committee could examine the high levels of expenditure that we have discussed this afternoon. I am sure that the Bill will go through without opposition, but if the monarchy is to continue in future years—after the time of Her Majesty—some things will have to change.

I welcome the Bill and the way in which it is being presented, and I think that the Opposition are handling the matter as they should, but a wider debate is needed. Let me say again—not on my knees—that there is nothing that can be discussed in our newspapers, pubs and meeting rooms that cannot also be discussed, in full detail, in this our House of Commons.

Finance (No. 3) Bill

Lord Dodds of Duncairn Excerpts

Tuesday 26th April 2011 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

As a Member who represents part of the United Kingdom that has seen the highest increase in unemployment and that will see £4 billion taken out of public spending over the next four years as well as a 40% reduction in capital spending, may I say that I trust that the Chief Secretary was right to say what he did about the purpose of this Finance Bill, the objectives the Government have set for it and their hopes for it? That might seem strange from someone on the Opposition Benches, but if we consider the impact of the recession and the absence of growth on my constituents and on the public across the United Kingdom, we can only hope to get back on to a growth trajectory as quickly as possible. I am not so sure, however, given the proposals in the Finance Bill and the Budget, that that will be the case.

As the shadow Chief Secretary said, there is a lack of ideas on the demand side. Indeed, over the next five years, the Bill will put only £20 million additional money into the pockets of businesses and consumers, which is hardly a big increase that will allow the public and businesses to spend money. We know that Government spending is curtailed. As for investment, I believe that it will not have the impact that the Government hope that it will. The Government are relying on one other aspect of aggregate demand—exports. As I shall point out, some policies in the Bill will make it much more difficult for firms to be competitive. On the supply side, firms will invest only if there is a degree of confidence, if there is consumer demand and if there is the infrastructure that can give them that confidence. With cuts in the capital budget, in particular, I am not sure that that will be the case.

I do not want to get into a macro-economic analysis of the Finance Bill, as I want to follow on from the theme taken up by the hon. Member for Linlithgow and East Falkirk (Michael Connarty) and to consider the impact of some of the environmental taxes. Specifically, I want to consider the distorting impact that they will have on growth, industry and consumers in places such as Northern Ireland.

Some Members will know that I am not a great fan of green taxes—indeed, for many reasons, I do not believe that the adjustments that such taxes will make and their impact on CO₂ output in the United Kingdom will save the world or have a great impact on the climate in 100 years’ time. They are not designed to be behaviour changing and, as the hon. Member for Linlithgow and East Falkirk has pointed out, some that have been claimed to be behaviour changing have resulted in nothing but stealth taxes. If we consider the Government’s predictions for the revenue from such taxes, it is clear that the Budget is dependent on their not changing behaviour. Otherwise, revenue predictions will be short of what the Government anticipate. The final reason why I do not support the taxes was shown in the illustrative example about the oil industry. Rather than helping to achieve the objective set out by the Government, namely to make our tax system the most competitive in the G20 and to encourage investment and exports, these taxes will make industry less competitive.

Let me deal with one tax to start—the carbon price floor. We have heard from the hon. Member for Linlithgow and East Falkirk about the impact on the oil refining industry. If one considers the Budget figures published by the Government, one can see that over the next five years firms will, as a result of the reduction in corporation tax, save approximately £1.1 billion in year five. As a result of the imposition of the carbon price floor, they will pay £1.4 billion. All the gains from the reduction in corporation tax will be wiped out and more by one specific environmental tax. Of course, that cost will fall more heavily on the very industry that the Government hope will lead the charge for growth, namely manufacturing, which is one of the biggest consumers of energy. As energy prices go up as a result of the carbon price floor, it will have an impact on business costs. We have heard the example of what will happen in the oil industry. The Government have published figures showing that for some heavy energy consumers, such as firms that make glass, tyres or metal products, the impact will be a rise of as much as 9% on their energy bills.

The carbon price floor will also have an impact on consumers. If the Government’s figures are anything to go by, electricity prices will have gone up by 6% by 2015. Let me put that into context: it means an increase of £30 a year on an average household electricity bill of £500. However, as a result of the Budget and the tax changes in it, households with income at the 10th decile—the lowest-income households—will receive an increase in household income of £1.42 a year. So, the impact of this tax, which the Chief Secretary has proudly said we are the first in Europe to impose, will be to increase fuel poverty among the lowest-income households and to make manufacturing industry less competitive at the very time when we want it to lead the charge for growth.

The tax has specific connotations for places such as Northern Ireland, because we are part of a single electricity market that links us to the Irish Republic, which has not gone down this route. The way in which the single electricity market runs means that electricity is drawn from the cheapest producer first and then, as demand increases during the day and at peak times, it is drawn from more expensive producers. The impact of the tax will be that the cheapest producers will be in the Irish Republic, which will have two impacts on people in Northern Ireland. First, our security of supply will become imperilled, because we will become more reliant on producers from the Irish Republic. Secondly, as the tax will be imposed on gas, which is used in Northern Ireland mainly for electricity generation, the cost of extending the gas network in Northern Ireland will fall on consumers as the consumption of gas goes down. The whole purpose of exempting Northern Ireland from such measures for a number of years was, first, to try to deal with fuel poverty by increasing gas distribution across Northern Ireland, thereby making businesses more competitive by ensuring there was a gas network, which enabled them to use cheaper fuel, but the carbon price floor is likely to put all that in jeopardy.

I welcome the discussions with the Treasury and the fact that it wants to investigate more fully the impact of the carbon price floor on places such as Northern Ireland. I hope that there will be a revision once the full extent of that impact is seen in terms of what it does to the electricity market, to the cost of energy for consumers and businesses and to the ability to increase the gas distribution network. Those who are concerned about carbon dioxide output and production will find it ironic that the tax could drive power production towards coal-fired power stations in the Irish Republic—so it will not even achieve, on a European basis, the objective that the Government have set out for it.

The second tax that I want to consider, which has been frozen for this year, is air passenger duty. The tax was designed to cut air travel and, in doing so, supposedly to reduce the amount of CO₂ produced by people who fly around the world. One of the problems in a region such as Northern Ireland is that the Government of the Irish Republic, who received a loan of £7.5 billion from the Government here in London, have used part of that to reduce their air passenger duty to €3 and intend to reduce it to zero. That has an impact on the one international flight from Northern Ireland. Members may say, “Big deal—one international flight,” yet a large part of our economic strategy involved attracting investment from north America. We have succeeded in getting Citibank, the New York stock exchange and a range of other big investors into Northern Ireland, bringing high quality, highly paid jobs on the basis that there was a direct transport link between Northern Ireland and north America, as north American business men wanted.

As a result of the distortion of the air passenger duty, we are likely to lose that Continental Airlines flight, our only link with north America, as the airlines find that it is much more competitive to fly from Dublin, 100 miles down the road. That is one of the ways in which an ill-thought-out tax can cause distortion. It is not as though there is not an answer to it. Recognising that air passenger duty caused problems for areas away from the centre, the Government have already introduced an exemption for the highlands and islands of Scotland. An exemption could be made as part of the rebalancing of the economy of Northern Ireland. I look forward to the discussions with the Treasury on the impact of the tax, which may or may not be beneficial. I leave Members to make up their own mind about it. It may reduce air travel, or simply make it more difficult and more expensive for our constituents, but the distorting effects must be taken into account.

The third topic is the aggregates levy credit scheme—

[Mr Nigel Dodds (Belfast North) (DUP)]

Before my hon. Friend moves on to that, does he agree that the carbon issue, as well as the issues of air passenger duty and corporation tax for Northern Ireland, arises because Northern Ireland has a land frontier with the Irish Republic, which is a unique circumstance within the United Kingdom? [Laughter.] That is not special pleading, but a recognition of the special circumstance in which Northern Ireland finds itself, because it shares a common land frontier. England, Scotland and Wales do not; we do, and therefore people find it easy to go down the road and fly out of Dublin, as opposed to Belfast. Government Members may laugh at these matters of fact and economics, but they are harsh realities for those of us who live in Northern Ireland, who try to make the economy work and who are trying to grow the private sector. All we are asking is that a Government committed to the private sector should help us in that, not diminish us or reduce our efforts to do so.

[Sammy Wilson]

One can see the mirth of Government Members. I can understand why the Liberal Democrats are keen to see regulation, interference and high taxation, but I would have thought that Members on the right wing of the Conservative party would sympathise with the case that I have been making, which is that less regulation helps to grow the economy and that less of the distorting impact of the influence of Government can help to improve the economy of Northern Ireland and enable people to stand on their own two feet.

Amendment of the Law

Lord Dodds of Duncairn Excerpts

Wednesday 23rd March 2011 Commons Chamber

[Sammy Wilson]

That probably puts it all in perspective. The measure looks good in the Chancellor’s speech, but, when one looks at the resources that it releases, which in turn are supposed to increase the willingness of firms to invest and the productive potential of the economy, one sees just how miniscule it is, and we have to judge whether it will make a very great impact.

[Mr Nigel Dodds (Belfast North) (DUP)]

My hon. Friend speaks with great expertise as the Minister for Finance in Northern Ireland, and I congratulated him on the production of his budget there just a few weeks ago. Does he share my concern at the response from the Secretary of State for Northern Ireland, during Northern Ireland questions? When asked about the enterprise zone and the real substantive changes, he said that it was really a phrase he had been using to “cover”—that is the word he used—the idea of Northern Ireland being more open for business in relation to corporation tax. Does my hon. Friend share my concern that, in Northern Ireland, there might not be much substance to that phrase?

[Sammy Wilson]

My fear is that, not just in Northern Ireland but throughout the United Kingdom, the measure will be more like a branding exercise and good for a soundbite, rather than something that will have any real impact. I hope that the measure has an impact, but, if I look at the amount of resources that will go into the zones, and at what really is required to lift such areas, I fear that it will not.

Other changes have been mentioned, such as those to the tax structure, and I noted what the Chancellor said, but some of them might not include extensive consultation—the issue is complex—and might be years away. So, again, they look good in the Budget, but what is the immediate impact going to be?

--- Later in debate ---

[Sammy Wilson]

Of course, the earlier growth figures were also OBR-ified, if one wants to use that term, yet they did not prove to be realisable over a six-month period. We cannot simply rely on the assurances that the OBR has looked at the figures and thinks they are okay, as there could well be a revision. I am merely pointing to some aspects within the Budget document that give me cause for concern as to whether these growth figures can be achieved. If they cannot, there are implications for the deficit, for employment, for living standards, and for the ability to provide public services in future.

Let me turn to some of the measures that apply to Northern Ireland. As we heard in an earlier intervention, tomorrow morning an announcement will be made about the corporation tax proposals for Northern Ireland. I am waiting to see that. I have no doubt that the ability of the Northern Ireland Administration to reduce corporation tax could be a useful lever. As a Unionist—I know that the hon. Member for Dundee East (Stewart Hosie) will probably be totally appalled that anyone from a devolved Administration should say this—I do not want to see huge fiscal powers devolved to Northern Ireland. I am part of the United Kingdom, I want to remain part of the United Kingdom, and I wish fiscal powers to stay part of the United Kingdom.

There has been a groundswell of opinion for some variation in corporation tax; indeed, the Secretary of State for Northern Ireland has been very enthusiastic about it. However, there is no point in devolving corporation tax if the price tag attached is such that it savages public expenditure, which has already suffered a huge cut as a result of the Budget decisions made last October. There would be a gestation period between a reduction in corporation tax and the impact on jobs on the ground, whereas any cut in public spending or in the block grant would take immediate effect. There would be no increase in private sector employment, together with an immediate decrease in public sector employment, and that cannot be good for economic recovery.

I fear that the figures in the document that we have tomorrow will be neither a fair reflection of the cost of devolving corporation tax to Northern Ireland nor the kind of opportunity and offer that would be attractive to the Northern Ireland Administration. We will want to see that the Treasury and the Government have not made a savage reduction in the block grant even though it bears no relation to what the real cost of devolving corporation tax might be.

[Mr Dodds]

Does my hon. Friend agree that there is a supreme irony in the fact that as part of the conditions for the bail-out of the Irish Republic—£6 billion of UK taxpayers’ money—the Irish Republic insisted that its corporation tax rate would stay at 12.5%, yet Northern Ireland, which, uniquely within the United Kingdom, is in direct competition with the Irish Republic, would be allowed to reduce its corporation tax but would not receive any similar subsidy from the UK Treasury, whereas the subsidy is going directly to the Irish Republic?

[Sammy Wilson]

We can see how the bail-out of the Irish Republic conflicts with what is happening in Northern Ireland. My hon. Friend the Member for South Antrim (Dr McCrea) mentioned air passenger duty. I am disappointed about this because the Chancellor could have done something about it. In particular, the one flight between Northern Ireland and North America is very important in attracting not only tourists but inward investment. A sum of £2.1 million would have ensured that that flight continues, yet the Chancellor did not find that he could allow for regional variation. There are precedents for that because regional variations are allowed for Scotland. The irony is that the Irish Government, using the £7.5 billion that was obtained from the United Kingdom, are now going to abolish air passenger duty, which places them at an even more positive advantage regarding the service that flies from Northern Ireland.

Court of Auditors 2009 Report

Lord Dodds of Duncairn Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

Thank you, Mr Deputy Speaker. I just hope that my maths is better than that of the European Commission, so that I know how long to speak for. There is one thing that everybody seems to know about Europe, which is that the European Commission’s accounts are not being signed off—this is the 16th year running that that has happened. What most people do not know and what never gets reported is that after the Court of Auditors gives its opinion, a very long process starts, which lasts at least nine months and gives MEPs and the Council of Ministers the power to look into every euro and cent that the Commission has spent in the previous year.

The plain fact is that the Court has no power over the European budget. I shall say that again: the headlines we read every year about accounts not being signed off refer to an institution that has no power over the institution it is checking. The European Parliament and Council, by contrast, have genuine power. If either of them refused to grant discharge—to sign off the accounts—or even if they questioned strongly the measures that the Commission had taken, the Commission would, although not compelled to resign, be under considerable pressure to sort out the problems within its accounts and accounting systems once and for all. There is a ton of jargon around the budget discharge process, but the process itself deserves a lot more scrutiny from the press, public and parliamentarians alike.

The Court of Auditors seems almost embarrassed about its refusal to sign off the Commission’s accounts and give that positive statement. It is amazingly difficult to find that information in the Court’s own report. As soon as the Court publishes its report, a debate is held in the plenary session of the European Parliament, the Committee on Budgetary Control considers the report, various questions are asked and eventually the European Parliament and the Council of Ministers decide whether to refuse or grant discharge.

The European Parliament has never decided not to grant discharge, so for the past 16 years the Court has refused to sign off the accounts and the Council and the European Parliament have refused to take the Court’s advice. They have just said, “Carry on chaps; it’s all going pretty well.” Let me give a political example. Back in April 2008, when I was still a Member of the European Parliament, Labour MEPs voted, as usual, as they always have, to let that farce carry on, whereas Conservatives MEPs voted against it. We numbered over half the entire opposition in the European Parliament and the discharge was given by 582 votes to 49.

Concurrently, there is also a debate in the European Council among member state Finance Ministers, and the results of that discussion are reported back to the European Parliament, which is why lucky people such as me know about them. That debate rarely lasts longer than a few hours and very few countries seem to care. Rarely does anyone question why money cannot be accounted for correctly, and the purpose of that meeting is pretty much to rubber stamp the accounts. To give credit to the Dutch Government, a few years ago they decided to take a stand against the waste of their citizens’ hard-earned cash and they have been finding a few friends more recently. However, I am very wary that what the Minister has said is very similar to what her Labour predecessors have said. This year, the discussion and the vote take place on 15 February.

Alas, the same cannot be said of the British Government as of the Dutch Government. In all the time that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was the Chancellor of the Exchequer, neither he nor his Department ever raised any questions about the state of the Commission’s accounts in those meetings. He nodded through the accounts like everyone else. The amount of money that is estimated to go missing each year is between £3 billion and £8 billion, which roughly corresponds to the UK’s net contribution to the EU every year.

[Mr Nigel Dodds (Belfast North) (DUP)]

If these vast sums of irregular, fraudulent or wasteful expenditure were being talked about in relation to the UK, the Chamber would be packed with people on both sides who would be outraged. Would the hon. Gentleman care to speculate on why more Members on both sides of the House are not more concerned about this ongoing waste, fraud and irregularity? Why does he think that the accounts are just passed on the nod?

[Chris Heaton-Harris]

I shall come back to that in a moment, but I think it is because the money is spent so far away in such a disjointed fashion. It goes up through a system: it goes through our taxes, goes to the European Commission and is spent by third parties. It is all very confused and distant and I think that people are just bored by the fact that the accounts are not being signed off. It is a huge shame.

The Court of Auditors bowed to political pressure a long time ago and no longer gives a figure on the percentage of money it thinks is being spent incorrectly or wastefully, so for years now we have not had any solid figures with which to work. As a former Dutch member of the Court of Auditors, who retired recently, said:

“There was a practice of watering down if not completely removing criticism...All these abuses never came out in the open because of the Kremlin-style information we provided. But it didn’t enhance our reputation one bit...I had to threaten to resign as head of the investigation and to inform the outside world”

to get some of this information out. We have some real problems.

The accounts are pretty poor. People compare the problems with those accounts with the problems that the Department for Work and Pensions has with its accounts, but EU accounts involve perhaps between 2% and 5% going missing each year through fraud and irregularities, if not a lot more, while the Department for Work and Pensions qualifies about 1% and deals with millions upon millions of transactions. The European Commission simply does not.

What is our money being spent on? We would all be excited to know. Last year, Open Europe brought a number of things to the public’s attention: €411,000 for a dog fitness and rehabilitation centre that was never built, €16,000 to Tyrolean farmers to boost their connection with the landscape and €7.5 million of EU funding for a PR campaign for more EU funding for a region of Spain.

In a time of tight budgetary constraint, the Government should make it a proper priority to use our financial clout to sort out the problem once and for all. I believe that we should threaten to withhold even a small part of our contribution until we see some action that protects UK taxpayers’ hard-earned cash.