Corporation Tax (Northern Ireland) Bill

Owen Paterson Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mr Owen Paterson (North Shropshire) (Con)]

I was never quite sure that we would see this day. I heartily congratulate my successor as Secretary of State and the Financial Secretary on following this proposal through from the dark days when it was knocked on the head.

For the benefit of the shadow Secretary of State, I will go over the history of the proposal, because he does not realise the enormous benefit that it could bring to Northern Ireland. I see it as the coalition Government’s opportunity to deliver a long-term benefit to Northern Ireland as big as that brought by the Belfast agreement.

When I was appointed shadow Secretary of State for Northern Ireland, most of the major negotiations had gone through, although we had not quite got policing and justice through. I made it my business to go to Northern Ireland every week. I found an economy that was dependent on public spending for 77.6% of its GDP. We all know the horrible historical reasons for that, but it was clearly unsustainable.

On my weekly visits, I found world-class businesses and very skilled people. There were businesses that had come in, often tempted by the generous grant regimes, that were very pleased with the quality of the work force and the education of the staff. However, time and again, we found cases of large investment opportunities being missed because of corporation tax. The hon. Member for East Londonderry (Mr Campbell) is not here, but I remember a very clear case where a big investment could have gone to East Londonderry, but it went to Letterkenny. With the deepest respect for Letterkenny, it is quite a small provincial town.

[David Simpson (Upper Bann) (DUP)]

I pay tribute to the right hon. Gentleman for all the work he did in Northern Ireland as Secretary of State and before that. He had several meetings in my constituency with companies. I want to put it on the record that he was a great enthusiast for this proposal, which has eventually arrived.

[Mr Paterson]

I thank the hon. Gentleman for his kind comments.

I would like to stress that this has ultimately been a team effort. I will list the people who have been involved. This proposal came from a black moment. I have cited the examples that I saw on the ground in Northern Ireland. At the time, a parallel process was going on. The last Government had asked Sir David Varney to conduct a report on the benefits of introducing a lower rate of corporation tax for Northern Ireland. In parallel, significant major figures in the business community were involved. The sadly late Sir George Quigley, to whom we should all pay tribute, had made significant representations. The Northern Ireland Affairs Committee had been involved, as had the Institute of Chartered Accountants in Ireland, led by Eamonn Donaghy.

Varney came up with a lukewarm response. He said, quite rightly, that corporation tax was not the only answer and that a skilled work force was also needed, as had been successful in the Republic. However, he missed the big picture that, time and again, major investment projects went to the Republic because of a lower rate of tax. The late Brian Lenihan, who was the Irish Finance Minister when I was shadow Secretary of State, said that the corporation tax rate was the “cornerstone” of the Republic of Ireland’s “industrial policy”. It therefore seemed bizarre that Varney looked not at the real advantages, but at the disadvantages.

I remember the crushing disappointment when the then Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), knocked the proposal on the head. There was a conference at Stormont and then a bigger conference at Hillsborough. I remember Sir Tony O’Reilly waving his arms around and making a great burlesque speech about the advantages of lower corporation tax. Sir George Quigley was also there. Then the Chancellor knocked it on the head and came up with a number of palliative measures that were typical of him. I remember writing letters in subsequent weeks to try to get to the detail. He had stood up in public and said, “These measures will bring the same advantages as lower corporation tax,” but frankly, there were a lot of fiddly little deals that did not deliver. That was a black moment.

I remember sitting next to the late Sir George Quigley, by complete chance, and going over the matter. He was bitterly disappointed because the whole business community had been looking to the proposal. One reason why it had been knocked on the head was that the British state could not afford the forgone tax. At about the same time, we had the Azores judgment by the European Commission, which we could pray in aid. It said clearly—Varney took this conclusion—that corporation tax could be devolved. Lisbon had tried to reduce a tax arbitrarily in the Azores region and was told firmly that there were three conditions.

First, there had to be a democratically elected assembly with a clear jurisdiction over a defined geographical area. Northern Ireland qualified. Secondly, that assembly had to have complete decision-making powers, which could not be interfered with by central Government. Thirdly—it is a pity that the Scottish nationalists are not here to listen—there could be no compensation from central Government for the forgone tax, which had to be borne by the local assembly. For the record, Scotland pays about £2.5 billion in corporation tax, so if it dropped to the rates we are talking about it would have to find £1 billion. Perhaps the Scottish nationalists might consider that when they come back into the Chamber. Sadly, the figure is much lower for Northern Ireland because there are no FTSE 100 companies. Corporation tax is currently about £500 million.

We therefore came up with the idea, in accordance with the Azores judgment, of knocking the forgone tax off the block grant. Government spending in Northern Ireland is £23 billion—£13 billion raised locally and £10 billion from the block grant. If tax went down to Republic of Ireland levels, there would be a reduction of £200 million in the block grant. That is a very small investment to bring to Northern Ireland the sort of businesses that would come in.

That idea began to take shape. Following the dark days after it had been knocked on the head at the conference that I mentioned, two things happened. First, we set up a report by the TaxPayers Alliance, the investigation group, on corporation tax. Secondly, and I think more importantly, Sir George Quigley got together with others and pulled together a key group of people, to whom I pay tribute. There was Sir George, who at the time was chairman of Bombardier; Victor Hewitt, the head of the Economic Research Institute of Northern Ireland; Eamonn Donaghy, the head of tax at KPMG, who has been tireless throughout; Graham Gudgin and Neil Gibson, economists at Oxford Economics; Professor Mike Smyth, professor of economics at the university of Ulster; and finally Mike Hall, a tax partner at Ernst and Young. They formed the key Northern Ireland Economic Reform Group, and their report, which came out in February 2010, said categorically that if corporation tax in Northern Ireland changed from 28% to 12.5%, it would result in the creation of 80,000 new jobs over a 20-year period.

The previous year, there had been the terrible murder of Police Constable Stephen Carroll in Craigavon, which was an appalling event. We all know how divided the communities in Craigavon, Portadown and Lurgan have been. I remember clearly during one of my visits going to the great pharmaceutical company Almac, which employs about 2,000 people. The chief executive said, “If you can get this through and get corporation tax rates down to the level of the Republic, we’ll double the business and we’ll double the work force.” My direct response to the shadow Secretary of State and doubters in the Labour party—I am delighted that they have come on board today and said that they will support the Bill—is that they should think of the benefits to Northern Ireland, not just economically and socially but politically, of a further 2,000 people being on pharmaceutical-level wages and injecting money into their communities. The Labour party should get its head around that long-term benefit.

On that basis, and with strong support from the Prime Minister, I committed in March 2010, on behalf of the Conservative party, to devolve corporation tax. That became a manifesto pledge in our Conservative and Unionist manifesto. Although we did not quite win the election, that pledge was continued as part of the coalition programme. At the same time, there was real enthusiasm for the idea across the business community. In October of that year, Grow NI was formed, involving pretty well every business organisation—the CBI, the Institute of Directors, the Federation of Small Businesses, the chambers of commerce, the Northern Ireland Independent Retail Trade Association, Manufacturing Northern Ireland and about a dozen others. They lobbied people not just in Westminster but in Stormont, and importantly they got support from all five political parties in Northern Ireland. I pay tribute today to all those parties—I had endless discussions with them at that time, and they all came together. I think it was a unique event—I am not sure whether we had ever got all parties allied on a single policy before.

Key to that process was the Financial Secretary to the Treasury, who was then the Exchequer Secretary—I am pleased that he is in his place. He completely got on board with the long-term benefits not just for the Northern Ireland economy but for the UK economy. To pick up on the comments of my hon. Friend the Member for Amber Valley (Nigel Mills), if we can make Northern Ireland more economically viable, it will be of real benefit to our constituents in Shropshire and the east midlands. It will reduce the need for the block grant if the economy prospers and grows well. There is a massive UK-wide reason for supporting the devolution of corporation tax, and the then Exchequer Secretary really got that point.

My hon. Friend the then Exchequer Secretary and I went to Kelvatek, a splendid example of a Northern Ireland business, led by John Cunningham. All five political parties came along and we launched the consultation. It is important that the shadow Secretary of State understands that there was a lengthy consultation throughout 2011, and there were further launches for Grow NI, including the big launch at the Lyric theatre. There were about 750 responses to the consultation, and they were overwhelmingly in favour of the idea of devolving corporation tax.

That autumn, with the help of the then Exchequer Secretary, we began joint meetings involving the Northern Ireland Office, the Treasury and the Northern Ireland Executive. The first was in December 2011, and the last one in which I was involved was in June 2012. After that, I was delighted that my successor took up the baton. She has manoeuvred around Whitehall with great skill, because there was considerable hostility to the idea and real nervousness about it among significant elements of the establishment here. It is a tribute to her skills that we have the Bill today.

The Bill is quite something. This is a day that we will remember—as I said, in the long term, the benefits will be equivalent to what the last Government did in the Belfast agreement. It could help to create long-term prosperity and bring to disadvantaged communities the wealth that the shadow Secretary of State mentioned. The key thing is to get the message across. I would like members of the local parties to go back to Northern Ireland tonight with a clear message. The start date in the Bill is April 2017, and it is incredibly important that not only local businesses but UK and foreign businesses have a clear signal of what will happen on that date.

[Mr Ivan Lewis]

I pay tribute to the right hon. Gentleman for the work that he did in Northern Ireland. People have a great deal of respect for the contribution that he made.

May I ask the right hon. Gentleman a specific question? If, at the same time as corporation tax is devolved, the skills budget is slashed and there is inadequate investment in Northern Ireland’s infrastructure, what will the consequences be for the foreign direct investment that he keeps going on about?

[Mr Paterson]

I have cited the figure that state spending in Northern Ireland is £23 billion, which is a significant amount from public funds. With his obsession with public expenditure, the hon. Gentleman does not understand the concept of growing the cake. The reduction in corporation tax will lead to an increase in private activity. I have mentioned the figure of a £200 million reduction in the block grant, but the hon. Gentleman assumes that the size of the cake will be static, which it will not.

The local parties must grab this opportunity and make a clear statement that there will be a dramatic reduction in corporation tax from April 2017. I would happily go below 12.5%, but it must be that at most, to answer the question that the hon. Member for North Antrim (Ian Paisley) asked. The bigger the drop, the bigger the message that will be sent out around the world. My message was that I wanted to turn the whole of Northern Ireland into an enterprise zone. If we do that, the cake will grow, so the figure of £200 million is for the birds. There will be significant internal investment from companies such as Kelvatek, significant investment from the rest of the UK, and foreign direct investment. There will be more economic activity, which will rapidly make up for that modest reduction of £200 million. That money will stay in Northern Ireland hands, but it will be in business and private hands rather than state hands.

I therefore hope that the local politicians will go back to Northern Ireland with a clear determination to build on today. Although this is a dramatic day, all that the Bill does is provide the powers. The real trick in the long term is to make a clear statement that, as in the Republic of Ireland, there will be absolute determination to keep corporation tax low. That was what the Republic did through its most difficult time, and we can see the benefits there.

This is a great day for Northern Ireland, and I congratulate everybody involved, including all the political parties. I am delighted that the Labour party has come onside, and I congratulate the people in the Northern Ireland Office and the Treasury who have come up with a fiendishly complicated-looking Bill. I wish it well.

--- Later in debate ---

[Sammy Wilson]

That is one of the reasons, of course, that some people say the public sector accounts for as much as 62% of employment in Northern Ireland. Some of it is disguised in the way the hon. Lady suggests.

We have to consider whether we can simply sit on our hands. However, there is a second consideration for the Northern Ireland Executive. Yes, there is some risk attached to the policy; all economic policies carry some risk, but in measuring and trying to balance that risk, we have to consider the impact of the policy elsewhere, especially in areas similar to Northern Ireland. I have already mentioned the approach of the Republic of Ireland Government.

As the changes to the rules on accounting and disclosure come forward, I know that some of the financial services issues might be addressed, but we have not touched on the ongoing cost of the devolution of corporation tax, which is currently reckoned to be about £300 million. However, as the economy grows, a formula will be imposed in respect of the loss of revenue, and given that there could be a substantial reduction in corporation tax in Northern Ireland, the formula must not be draconian. For example, if it was set at an unrealistic rate, based on the performance of better performing regions or of the UK economy as a whole, the burden could become substantially higher as time goes on. We need clarity on that issue.

The right hon. Member for North Shropshire said that from this day on the Executive should be proceeding with this matter, but we cannot do so because the Bill has not yet been passed. I know he is enthusiastic, but I think his enthusiasm has run away from the reality: the Bill has to pass its stages as normal.

[Mr Paterson]

I said that the Northern Ireland parties should make an announcement now about what they intend to do with the powers once the Bill has passed. If such an announcement were made, in the two years between now and April 2017, local businesses, UK businesses and, above all, foreign business could begin to plan in the knowledge that they would benefit from a much lower rate of tax. The hon. Gentleman is right—we have to pass the Bill, and I am delighted it has the support of the Opposition—but it is vital that, from today, the local parties say what they would do with these powers, on the basis that the Bill will pass before Dissolution.

[Sammy Wilson]

On the last point, given that the ongoing cost is not known yet, there remain some issues to resolve.

There is a challenge, not for politicians, but for the businesses that have campaigned for the devolution of corporation tax. As the shadow Secretary of State said, those businesses have a responsibility not to use their profits simply to pay higher salaries for managers, for shareholders or for vanity projects. Having campaigned for this change, and given its implications for expenditure in Northern Ireland, they have a responsibility to ensure that the additional money that results from forgoing tax revenue is invested in their companies to increase productivity, make them more competitive and create better-paid jobs. Only then will this campaign have been a success.

Stormont House Agreement

Owen Paterson Excerpts

Wednesday 7th January 2015 Commons Chamber

[Mrs Villiers]

I assure the right hon. Gentleman that the Prime Minister has been closely engaged with this process, and the visit he made along with the Taoiseach was significant in moving things forward. The financial package that he was able to agree with the Treasury was a crucial part of our progress. This Government have delivered significant achievements on some of the most difficult issues that Northern Ireland faces, and that is in large part due to work done by the Prime Minister.

I have acknowledged that there is more work to be done on the difficult issues of parades and flags, and no one would say for a moment that this agreement is the last word. I will be working, as will my officials and colleagues in government, to find a way forward on those matters, and ensure that they are not long-grassed and that we make real progress. As the right hon. Gentleman pointed out, those issues can cause huge disruption in Northern Ireland and poison the political relationships that are crucial to making the Executive work effectively. He says that corporation tax devolution is not a silver bullet. I agree that on its own it will not transform the Northern Ireland economy, but combined with other economic reform, a focus on skills and competitiveness, and economic reform across the board, it can have a significant and transformative effect. That is why I am disappointed that Labour is not supporting it.

[Mr Owen Paterson (North Shropshire) (Con)]

I congratulate the Secretary of State on her statement, and all parties involved on showing real perseverance through some intractable negotiations. On the past, I pay tribute to all those at the Historical Enquiries Team who produced reports on cases that may have been low profile but nevertheless presented a real agony to relatives and friends of murder victims. I hope that the successor organisation will continue to publish such reports as they are of immense importance to those individuals. Looking to the future, the decision to introduce a Bill on corporation tax is tremendous and a tribute to all parties—the Opposition should remember that all political parties wish for it. Grow NI has overwhelming support from the business community in Northern Ireland, and estimates a cost of £200 million to £300 million if the tax were dropped to the level of the Republic. That is a very small investment in total Government spending of £23 billion in Northern Ireland. What issues does the Secretary of State believe might impede the progress of that Bill on to the statute book before March?

[Mrs Villiers]

I agree with my right hon. Friend about the importance of reports by the HET. Paragraph 30 of the agreement provides that the historical investigations unit will continue to provide those types of reports to families as part of its work. I pay a warm tribute to the work my right hon. Friend has done on corporation tax. He championed it alongside Grow NI, business groups and Northern Ireland’s political leaders, particularly the Democratic Unionist party, and it is a tremendous achievement that the Bill is now so close to being presented to Parliament. That is a real tribute to my right hon. Friend’s work as Secretary of State for Northern Ireland.

Northern Ireland (All-party Talks)

Owen Paterson Excerpts

Monday 15th December 2014 Commons Chamber

[Mr Owen Paterson (North Shropshire) (Con)]

I congratulate the Secretary of State on her perseverance, working with the local parties on matters that we know are of intense interest and concern to them. Does she think they have really got the message that the devolution of corporation tax, bringing economic benefits which have so dramatically helped the Republic of Ireland, would be of enormous significance and would in many ways measure up to the level of the agreement years ago, and that we really are in the final hours? As I understand it, a Bill is ready to be laid, but it has to be laid this week. If the local parties blow this opportunity, they deserve to have the obloquy of future generations descend upon them—they must not fluff this opportunity.

[Mrs Villiers]

I agree that one of the most urgent matters at stake is the devolution of corporation tax, and the clock really is ticking on that. If we are to pass legislation within this Parliament, we need to introduce it as soon as possible, not least because the Opposition Front-Bench team has not yet been prepared to give its support to the potential devolution of corporation tax.

Hallett Report

Owen Paterson Excerpts

Tuesday 9th September 2014 Commons Chamber

[Mrs Villiers]

I thank the shadow Secretary of State for his support for the statement. Like him, I think that the concerns of victims must lie at the heart of our response to the OTR scheme, and I apologise to them for the error that was made and the pain that the Downey case has caused. I am happy to reiterate that apology. As the hon. Gentleman said, I also recognise that the First Minister’s comments today in the Belfast Telegraph are an important statement to which I will give careful thought. It is important that these matters are discussed with care across the Northern Ireland political parties. As I said in a speech to the British-Irish Association last week, it is important that progress is made on welfare reform, as well as on flags, parading and the past.

In response to the last question by the shadow Secretary of State, I say clearly that the Government will continue to do all we can to bring all the parties back to the table on those matters, and facilitate and push for an agreed way forward.

How long it will take the PSNI to assess all the cases processed under the scheme is primarily a matter for it, and it would not be appropriate for me to speak on its behalf. It has indicated, however, that it could take years and will not be done in a matter of months. We also had a recent statement by the Chief Constable that his resources will impact on his ability to deal with legacy issues of this sort, and the resources available to the PSNI are affected by the current debate on welfare reform. It appears that the in-year cuts being made to the PSNI’s budget will have an impact on its ability to deal with legacy cases, so I expect they will also impact on the speed with which it can consider these cases.

[Mr Owen Paterson (North Shropshire) (Con)]

I thank the Secretary of State for her statement. On matters to do with OTRs we should always consider the victims, and victims’ families will welcome her statement today, confirming the view of Lady Justice Hallett that the letters could never have been considered in any way to represent an amnesty, and that should fresh evidence come forward those who received letters will be subject to the full force of the law. Will the Secretary of State confirm the Government’s robust view that an amnesty was never appropriate, and that all applications for the royal prerogative of mercy received by the Government have been refused by the Government?

[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.

Hallett Review

Owen Paterson Excerpts

Thursday 17th July 2014 Commons Chamber

[Mrs Villiers]

I agree with the shadow Secretary of State that this is an important opportunity to remember the victims of the Hyde Park bomb. I think it would be appropriate to read out their names. Those murdered were Lieutenant Anthony Daly, aged 23; Trooper Simon Tipper, aged 19 who died at the scene; Lance-Corporal Geoffrey Young, aged 19 who died the following day; and Squadron Quartermaster Corporal Raymond Bright, aged 36 who died two days after that. A total of 31 other people were injured, a number of them very seriously.

I welcome much of what the shadow Secretary of State said. I think it was appropriate for him to issue the apology that he did. I, too, apologise in clear terms to the Justice Minister and the First Minister for not briefing them on the scheme. It is a concern that the scheme operated in a way that was not as transparent as it should have been, which is one reason why the hurt was caused and why there has been such a great deal of misunderstanding about what the scheme actually involved. That is why I offered that apology, which I repeat today, for not briefing Ministers in the Executive on these matters.

I welcome the fact that the Hallett report shatters myths, as the hon. Member for Bury South (Mr Lewis) said. It emphasises that the scheme was not an amnesty and points out that the Downey ruling depends on its facts and would not necessarily provide a precedent for other cases.

The hon. Gentleman asked me to comment on the two cases in which errors occurred. I reiterate that the Government will follow the advice of the recommendations and work with the police, the prosecuting authorities and the Department of Justice to do everything we can to ensure that errors are corrected and that any barriers to future prosecution are removed. In that regard, I draw attention to paragraph 10.72 in which Lady Justice Hallett comments on the gravity of the mistake and the serious consequences it had for the Hyde Park families. She goes on to say:

“Other mistakes have been made and need correcting. But this can be done in a measured and proportionate way.”

At this stage, it would probably be unwise to comment on the specifics of the cases because it would be the worst possible outcome if anything were said in Parliament to jeopardise future prosecutions in these cases.

The ombudsman and PSNI investigations are independent matters for them, but I have been in close touch with the Chief Constable and know that the PSNI is very much aware of the content of the Hallett report and the mistakes identified. I know, too, that it is taking very seriously the exercise of checking all the cases that went through the scheme. In Northern Ireland questions we discussed concerns about the resources available to the PSNI. I hope these matters will be given the priority they deserve.

The shadow Secretary of State asked wider questions about the RPM. I can confirm that no pre-conviction pardons were issued. The investigation of the records for 1987 to 1997 is continuing. Our conclusion is that, in all likelihood, no central list of RPMs issued during that period was compiled. I am afraid that it may be a case not of a missing document, but of the fact that a document was not compiled in the first place, and that records of the RPMs were kept in the individual cases of the prisoners concerned and were destroyed according to normal routine records management.

I agree with the shadow Secretary of State that this episode reinforces the need for progress on agreeing a process for dealing with Northern Ireland’s past. I hope that the Hallett report will provide an opportunity for all the parties to return to the table and the debates on flags, parading and the past, and that an agreed way forward on these important matters can be found.

[Mr Owen Paterson (North Shropshire) (Con)]

I welcome both the statement and Lady Justice Hallett’s report. I confirm emphatically, as did Lady Justice Hallett, that if we had felt when we took power in May 2010 that there was a whiff or a hint that an amnesty might have been involved, we would have stopped the scheme immediately. A small number of cases remained, and I was content that there was no question at all of an amnesty. I am very pleased to learn that Lady Justice Hallett has confirmed that.

I think that today is the day on which we should remember the victims. More than 3,500 people were killed. Will the Secretary of State please confirm that police and law enforcement authorities throughout the United Kingdom will continue to pursue the perpetrators of many of these terrible crimes, in order to bring some satisfaction to the relatives of the victims that they will be brought to justice?

[Mrs Villiers]

I commend my right hon. Friend for all the brilliant work that he did as Secretary of State for Northern Ireland. What he has said is absolutely right.

I hope that Lady Justice Hallett’s report will reassure victims of terrorism that there were no get-out-of-jail-free cards. This was not an amnesty, and if we had inherited a scheme that involved such an amnesty, we would of course have rejected it, as we rejected the Northern Ireland (Offences) Bill. It is, indeed, crucial that police services the length and breadth of the land are rigorous in their pursuit of terrorists, and rigorous in their pursuit of justice for all who have suffered at their hands.

Northern Ireland Security (Update)

Owen Paterson Excerpts

Monday 16th July 2012 Written Statements

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

The Government are committed to putting greater information in the public domain about security threats to the United Kingdom generally. At the time of announcing the winding-up of the Independent Monitoring Commission, I made a commitment to provide bi-annual updates to this House on the security situation in Northern Ireland. I made the first of these statements in February and this is my second such update.

Shortly after coming to office the Government reviewed the security situation and developed a new strategic approach to tackling Northern Ireland related terrorism. We agreed in 2011 an exceptional additional £200 million of investment for the Police Service of Northern Ireland (PSNI) over four years. This is producing results.

There are still a small number who favour violence and reject democracy. They have no respect for life, no respect for human rights and no respect for the will of the people in both Northern Ireland and the Republic of Ireland.

As a result of their activities, the threat level in Northern Ireland remains at “Severe”, meaning that an attack is highly likely.

The threat level in Great Britain is “Substantial”, meaning that an attack is a strong possibility.

While the overall threat levels remain the same, however, progress has been made. The excellent work of the PSNI and other partners tackling the current threat has led to some considerable successes in recent months, with some significant arrests, charges and convictions.

There have been a total of 76 arrests so far this year, including arrests by An Garda Síochána in the Republic of Ireland. There have also been 37 charges against those involved in national security attacks brought since January 2012, including a number of charges for serious terrorism related offences. A number of weapons and improvised explosive devices have been seized. These combined efforts have had a positive impact. Despite this, however, attacks continue and the intent of groups engaged in Northern Ireland related terrorism remains high.

The Real IRA (RIRA), the Continuity IRA (CIRA), and the group that refers to itself as Óglaigh na hÉireann (ONH) all continue to be very active, as do a number of “unaffiliated”, but no less dangerous, individuals. In June, the paramilitary organisation Republican Action Against Drugs (RAAD), which regularly conducts brutal shootings against people in Londonderry, attacked the PSNI with a pipe bomb. The PSNI is pursuing a strategy to tackle the actions of both this group and other reckless vigilante organisations, which command little support from the wider community.

Terrorists continue to seek access to funding and weaponry. They have been undertaking training as well as targeting. Paramilitary groups also continue to be involved in a range of criminal activity, often at the expense of their own communities—both to fund their activities and their individual lifestyles.

Since my last statement on 27 February 2012, Official Report, column 16WS, there have been nine confirmed national security attacks (bringing the total to 14 confirmed attacks so far this year). All but one have been pipe bombs, which have primarily been used to attack PSNI officers or their families. These included a device thrown at a property where PSNI were attending a call out and a number of pipe bombs, which were thrown at PSNI officers while carrying out a clearance operation of a suspicious object. In the most recent confirmed national security attack, a pipe bomb was thrown at a PSNI vehicle patrol; the device functioned but did not cause any injuries or damage to the vehicle. The other attack was a large improvised explosive device containing over 600 lb of home made explosive which was abandoned near the Irish border at Newry. This was successfully defused by ammunition technical officers. It was destined to be an attack on the community in Northern Ireland and would certainly have endangered lives.

In addition to the attacks outlined above, during rioting in North Belfast on 12 July a number of shots were fired at police officers who were there to ensure compliance with the legal determination of the Parades Commission and to facilitate the rights of both loyalist and nationalist members of the community. This should be considered nothing less than the attempted murder of police officers.

There have been no serious injuries as a result of national security attacks this year. We cannot, however, be complacent. The devices used have all had the potential to cause death or serious injury. The community in Northern Ireland have had their daily lives disrupted as a result of terrorist activities.

In addition to direct attacks, terrorist groups seeking to attack the police in Northern Ireland have continued to use hoax devices, acts of criminal damage or orchestrated disorder to create fear in the community and draw police into areas in order to attack them. This tactic is designed to make it harder for the PSNI to provide a good community policing service and should be roundly condemned by all. Despite that, confidence levels in policing across Northern Ireland have continued to rise. The chief constable continues to place community policing at the heart of his policing plan.

As I noted in my last written ministerial statement on the current threat in Northern Ireland, the UDA and UVF leaderships remain committed to their ceasefires, although individuals associated with these groups continue to be engaged in criminal activity.

Both republican and loyalist paramilitary groups continue to carry out paramilitary style assaults. Republican paramilitary groups also continue to carry out shootings on members of their own community. These attacks are both cowardly and sickening. They show a complete disregard for the human rights of their victims and for their families.

The overwhelming majority of people in Northern Ireland stand by the principle that Northern Ireland’s future will only ever be determined by democracy and consent, as established by the Belfast agreement. This is a settlement that requires all those involved in the political process to pursue legitimate goals through exclusively peaceful and democratic means.

Cross-border co-operation in the area of security is vital. I keep in very close contact with the Northern Ireland Justice Minister, David Ford, and the Irish Minister for Justice and Equality, Alan Shatter TD. The levels of co-operation between the PSNI and An Garda Síochána to tackle the threat is unprecedented and has almost certainly saved lives.

In conclusion this Government remain committed to tackling the terrorist threat in Northern Ireland. It is vital that we continue to do this in pursuit of our objectives of a peaceful, stable and prosperous Northern Ireland in which everyone has a genuinely shared future.

Boundary Commission

Owen Paterson Excerpts

Thursday 12th July 2012 Written Statements

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

I have today placed a copy of the Boundary Commission for Northern Ireland’s annual report for the period 2011-12 in the Libraries of both Houses. Copies are also available on the Boundary Commission website at: www.boundarycommission.org.uk.

Oral Answers to Questions

Owen Paterson Excerpts

Wednesday 4th July 2012 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

1. What discussions his Department has had with HM Treasury on loss of revenue as a result of fuel laundering in Northern Ireland.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

My Department has regular discussions with HM Treasury on a wide range of issues. Fuel fraud is primarily an excise offence and, therefore, an excepted matter that falls to Her Majesty’s Revenue and Customs, which works closely with the Department of Justice for Northern Ireland and its counterparts in Ireland.

[Sammy Wilson]

Despite the fact that over the past six years more than £2 billion has been lost in revenue as a result of criminal activities through fuel laundering, HMRC has taken only 28 cases to court, and there has been only one custodial sentence, which was suspended. Does the Secretary of State believe that that is an adequate response from HMRC or the court system in Northern Ireland?

[Mr Paterson]

I thank the hon. Gentleman for his question and I appreciate his knowledge of this subject, as Minister of Finance and Personnel. He makes a very good point, which I have discussed with David Ford, the Minister of Justice. We have agreed that we should work together so that Northern Ireland sentences can be appealed against if considered too lenient.

[Mr Laurence Robertson (Tewkesbury) (Con)]

In the Select Committee’s recent report, we identified as a major problem the fact that a marker had not been developed sufficiently quickly. Has the Secretary of State had any discussions with HMRC about the development of that marker, which would make fuel fraud and laundering far more difficult?

[Mr Paterson]

I am grateful to the Chairman of the Select Committee for his question and congratulate him on a very interesting report, which showed that real progress had been made—£250 million lost in forgone revenue down to £70 million, which is a major improvement. He makes a very good point about marking. There is an HMRC strategy and there is also a memorandum of understanding that has been signed with the Irish Revenue Commissioners. We keep in close touch on this matter.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

2. What assessment he has made of the effects of welfare reform on Northern Ireland.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

The reforms that we have introduced give us a rare opportunity to transform our welfare system into one that is fair to all, looks after the most vulnerable in society, and above all, always rewards work.

[Mr Clarke]

In view of recent criticisms of the Work programme and the Prime Minister’s view that housing benefit for the under-25s should be discontinued, can the right hon. Gentleman tell us what the Government’s policy is for youngsters? Is it to create jobs or simply to tolerate their exploitation?

[Mr Paterson]

I think the right hon. Gentleman underestimates the fact that the issue is devolved, and we are working closely with the devolved Minister with responsibility in this area and other Ministers in the Executive on the arrangements which will be debated shortly as the Bill is taken through the Assembly. It is very important that local circumstances are taken into account so that the Bill that emerges from the Assembly suits the circumstances in Northern Ireland.

[Mr Philip Hollobone (Kettering) (Con)]

When does my right hon. Friend expect the Welfare Reform Bill to be introduced by the Executive?

[Mr Paterson]

I am in regular contact with Nelson McCausland, the relevant Minister, and he is optimistic that he will stick to the schedule, which will enable Northern Ireland to come on stream, as planned, with the Department for Work and Pensions here.

[Jim Shannon (Strangford) (DUP)]

Many people in Northern Ireland view changes caused by welfare reform with increasing concern. Northern Ireland has had 30 years of a terrorist campaign. That has led to many people suffering disability, both physical and mental; 15,000 people in Northern Ireland are on incapacity benefit and employment and support allowance, and 180,000 people are on disability living allowance. Can the Secretary of State assure us that every step will be taken to ensure that the unique position of Northern Ireland is taken into account when it comes to the benefits system?

[Mr Paterson]

Nobody underestimates the terrible damage the troubles did to people physically and mentally, but it is worth reflecting on the fact that high rates of DLA are not unique to Northern Ireland; Merthyr Tydfil has a rate of 13%, which is very similar to that of Belfast. What I think is important is that for the first time each person will be treated as an individual, his circumstances will be taken into account and rehabilitation, re-education and training will be offered. That has not come about before.

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

Given that many benefit claimants in Northern Ireland have their payments paid directly into Ulster bank and, because of the ongoing debacle caused by the IT problems, have therefore been unable to access their only source of income and their own money, what assurance can the Secretary of State give that he has had robust discussions with RBS, his colleagues in the Treasury and the Department for Work and Pensions, and the Northern Ireland Executive, to find a long-term solution to this agonising problem for many people, which has heaped on them misery upon misery?

[Mr Paterson]

The hon. Lady is absolutely right to raise the very real problems that people both in and out of work are suffering due to the IT breakdown. I raised the matter with the Chancellor of the Exchequer and the Secretary of State for Business, Innovation and Skills yesterday. Sir Philip Hampton, the chairman of RBS, was in Northern Ireland on Monday and my right hon. Friend the Minister of State talked with him yesterday and is keeping in close touch. Ultimately, this is a problem for RBS to resolve internally, through Ulster bank, by getting the computer technology right, but the hon. Lady is right to raise the matter. This is causing horrendous problems not just for benefit claimants, but for those in regular employment.

[Mark Durkan (Foyle) (SDLP)]

3. What discussions he has had with his ministerial colleagues on the likely implications for Northern Ireland of banking reform and financial service regulation.

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[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

11. What recent discussions he has had with Ministers in the Northern Ireland Executive on economic development.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

My right hon. Friend the Minister of State and I meet regularly with Northern Ireland Ministers in support of their efforts to promote economic development and to help rebuild and rebalance the economy.

[Alok Sharma]

What discussions has my right hon. Friend had with the Northern Ireland Executive to encourage them to set up enterprise zones?

[Mr Paterson]

I have regular discussions with the First Minister, Deputy First Minister and Minister of Finance. Last year’s Budget, which became the Finance Act 2011, made that facility available. There are 24 enterprise zones in England, four in Scotland and seven in Wales. They have the capacity also to have enhanced capital allowances. I am in favour of them as a benefit for Northern Ireland, but this is a devolved issue and a devolved decision.

[Eric Ollerenshaw]

Does my right hon. Friend agree that economic development in Northern Ireland would be much assisted by greater competition on the ferry routes in the Irish sea? A good start would be the restoration of the ferry link between Fleetwood and Larne.

[Mr Paterson]

I wholeheartedly endorse what my hon. Friend is doing in trying to improve ferry links across the Irish sea. I cannot think of a better place to expand to than Fleetwood.

[Dr William McCrea (South Antrim) (DUP)]

Does the Secretary of State accept that economic development is being hampered in Northern Ireland by the lack of willingness among the banks to assist businesses through these difficult economic times? Surely the Government can do more to force the banks to assist our economy, bearing in mind that taxpayers are the ones who helped them in their hour of crisis.

[Mr Paterson]

The hon. Gentleman makes a very good point. No one could have worked harder than my right hon. Friend the Chancellor and the First Secretary, who have been working with the banks ensuring that credit is freed up. Above all, let us not forget the complete mess that we inherited—the biggest deficit in western Europe. Through the robust measures that we have taken, we have kept the confidence of the international markets and have the lowest interest rates since the middle ages.

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

7. What assessment he has made of the likely effect on Londonderry of becoming the UK’s first city of culture; and if he will make a statement.

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[Nick Smith (Blaenau Gwent) (Lab)]

8. What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

The threat level in Northern Ireland remains at “severe”. The Government remain fully committed to countering violence in all its forms and supporting the overwhelming majority of people who want to live without fear and intimidation.

[Nick Smith]

The Secretary of State is aware of the so-called punishment attacks by paramilitaries on young people in Northern Ireland. These attacks are increasing, particularly in Derry, by a group styling itself Republican Action Against Drugs. What every community needs is strong policing, not vigilantes. Will he proscribe this group? [Interruption.]

[Mr Speaker]

Order. May I remind the House that we are discussing the security situation in Northern Ireland? This is a matter of the utmost seriousness, and I think that some display of attention would be appreciated by the people of Northern Ireland.

[Mr Paterson]

The hon. Gentleman makes an important point. These attacks are barbaric and inhumane and have absolutely no place in a modern Northern Ireland. The only legitimate police force enforcing law and order is the Police Service of Northern Ireland, and it is for it to work with the community. On proscription, I keep all these issues under review.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

13. The Chief Constable of the PSNI, Matt Baggott, recently said that the Northern Ireland Executive must do more to tackle disadvantage in the areas where dissident republicans hold sway. Will my right hon. Friend encourage the Executive to address this issue?

[Mr Paterson]

My hon. Friend makes an important point. The second layer of our strategy in bearing down on these groups is to get into those communities, but nearly all the projects are in the hands of local Ministers. We strongly support the CSI—cohesion, sharing and integration—strategy, which we want to be published as soon as possible, because we believe that the future is a shared future, not a shared-out future.

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

12. Last night we had a briefing from senior retired police officers about the threat to national security from evidence that is being given in inquests in Northern Ireland that opens up the whole modus operandi of our security forces and security services. What do the Government intend to do to protect national security from this threat?

[Mr Paterson]

The right hon. Gentleman raises a very serious issue. A whole number of legacy inquests—up to 32—are coming down the track. I would like to assure him formally that measures are in place under the existing arrangements that allow an inquest to go ahead fairly, but information that might be dangerous if released to individuals can be held back. There are measures that can be worked out, but the final decision rests with the coroner. Until now, these arrangements have worked well, and they will continue in their current guise.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

Given that many of those historic inquests will doubtless require the disclosure of highly sensitive national security intelligence, what discussions has the Secretary of State had with the Justice Secretary about his decision not to provide for a closed material procedure in relation to inquests?

[Mr Paterson]

I thank the right hon. Gentleman for that question. I have regular meetings with the Justice Secretary. I talked to him on the telephone this morning. [Interruption.] If the right hon. Gentleman would wait, I treat each case individually and remain in close touch with the local Justice Minister on such issues.

The Prime Minister was asked—

Corporation Tax

Owen Paterson Excerpts

Monday 21st May 2012 Ministerial Corrections

[Philip Davies (Shipley) (Con)]

I know that the Secretary of State is, like me, a great believer in low taxes to stimulate the economy. What discussions has he had with the devolved Administration in Northern Ireland, and with the Treasury, to try to lower the corporation tax rate in Northern Ireland?

[Mr Paterson]

My hon. Friend will be pleased to hear—and the Leader of the Opposition will be delighted to hear—that, thanks to the reductions in corporation tax introduced by my right hon. Friend the Chancellor, 57,000 more people are in jobs in Northern Ireland than were in jobs before the election. The ministerial group is working closely with Ministers in the devolved Administration, the Northern Ireland Office and the Treasury to establish whether further steps could be taken to reduce corporation tax and devolve it to Northern Ireland, and we will report later in the summer.

[Official Report, 16 May 2012, Vol. 545, c. 538.]

Letter of correction from Owen Paterson:

An error has been identified in the oral answer given on 16 May 2012 to the hon. Member for Shipley (Philip Davies).

The correct answer should have been:

[Mr Paterson]

My hon. Friend will be pleased to hear—and the Leader of the Opposition will be delighted to hear—that, thanks to the reductions in corporation tax introduced by my right hon. Friend the Chancellor, 27,000 more people are in jobs in Northern Ireland than were in jobs before the election. The ministerial group is working closely with Ministers in the devolved Administration, the Northern Ireland Office and the Treasury to establish whether further steps could be taken to reduce corporation tax and devolve it to Northern Ireland, and we will report later in the summer.

Security

Owen Paterson Excerpts

Thursday 17th May 2012 Ministerial Corrections

[Mr Paterson]

I am grateful to the hon. Gentleman for his question and I also thank him, on the record, for his great support in our teamwork with the devolved Ministers in bearing down on criminals in Northern Ireland. Let me reassure him that support for the ATOs—ammunition technical officers—is very much a feature of the £200 million programme that we put together two years ago.

[Official Report, 16 May 2012, Vol. 545, c. 534.]

Letter of correction from Owen Paterson:

An error has been identified in the oral answer given on 16 May 2012. The response should have reflected the fact that the work of ammunition technical officers in Northern Ireland is funded directly through the Ministry of Defence.

The correct response should have been:

[Mr Paterson]

I am grateful to the hon. Gentleman for his question and I also thank him, on the record, for his great support in our teamwork with the devolved Ministers in bearing down on criminals in Northern Ireland. Let me reassure him that support for the ATOs—ammunition technical officers—is very much a feature of our approach to tackling the threat in Northern Ireland.