Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Osborne]

We have introduced various tax changes, including our seed capital scheme, creating the most tax-advantaged start-up environment almost anywhere in the western world. Indeed, it is more attractive than that in the United States. On credit easing, I can confirm that subject to final EU state aid approval, which we expect to get in the next week, we will have the scheme up and running before the Budget.

[Sammy Wilson (East Antrim) (DUP)]

Is the Chancellor aware that while fiscal policies are being used to create jobs, HMRC, through its hard-line attitude towards many small businesses with cash-flow problems, is driving people out of jobs and firms to the wall? What can he do to avoid the continuation of the situation in Northern Ireland, where 55% of bankruptcies in the past four years have been initiated by HMRC?

[Mr Osborne]

I think the figure that the hon. Gentleman cites, across the whole UK—I shall come back to him with the specific figures for Northern Ireland—has been roughly the same for many years. Many bankruptcies are ultimately caused by the taxpayer because the tax bills are the last thing that a company cannot pay, and that has been true in good times and bad. We have continued with the time to pay scheme, which was introduced by the previous Government during the recession, and we are making every effort to help viable businesses with their cash flow and to help them pay their taxes, which benefits everyone, in a way that keeps them afloat.

Living Standards

Sammy Wilson Excerpts

Monday 5th March 2012 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

There is a general acceptance in the House that if we are to increase living standards, it has to be done through economic growth. Apart, perhaps, from the Green party, which appears not to consider economic growth desirable, there is a recognition that it is the way forward, although there is considerable debate about how we do that.

I say to the Government Front-Bench team that I cannot understand why our triple A rating will not be affected by huge borrowing to pay for the unemployed, but would be affected if we borrowed for projects that showed an economic return—for some reason financial markets would apparently take a dim view of that. When we consider how to get out of the current problem, we must think about growth, spending and borrowing in those terms.

If we consider the sources of the increase in living standards over the past years—the Institute for Fiscal Studies has looked at the past 40 years—we see that the biggest contribution has come from the increase in economic activity rates, particularly those increases resulting from bringing women into the workplace and work force. If we are going to increase economic activity rates, including among young people in Northern Ireland, 44% of whom are not economically active—there are various reasons for that, one of them being the huge rise in youth unemployment—there has to be economic growth to create jobs and attract people from inactivity into economic activity. There is an important message for Labour Members from that, because it will mean having to implement some of the welfare reforms that the Government are introducing. Those reforms are good, because they give people the incentive to work. However, there is no point introducing such reforms if there are no opportunities open for people, which is why economic growth and job creation are so important.

The second thing that the Institute for Fiscal Studies identified as being associated with rising living standards over recent years is tax credits. The point has been expressed well this evening, so I will not dwell on it, but if tax credits are so important, I have to say that I find it very odd that, at a time when jobs are short and hours are being cut, the Government should think that it is a step forward to take tax credits away from people who cannot find extra hours in the week to work, even though they want to, or that this will help with current living standards.

The last point I want to make is this. One of the big things that has affected people’s living standards is increasing energy bills. Indeed, it is a bit bizarre that we should be debating this motion after the previous one. We have been encouraging the Government to pursue and invest further in the most expensive form of energy available, namely wind power. Those high-cost energy sources have already added 20% to energy bills, and the previous Government’s predictions, as well as the current Government’s predictions, are that by 2020 they will add 43%, thus increasing costs and reducing living standards.

Northern Ireland Economy

Sammy Wilson Excerpts

Thursday 1st March 2012 Westminster Hall

[Mr Robertson]

Indeed, that was one of the points that we made in our report. We were astounded that the Treasury did not have a figure that we could use to assess the cost. I will explain the background. Because of the Azores judgment in Europe, it appears that if corporation tax is reduced for one area of a jurisdiction—not for all the jurisdiction—that part has to take the hit in terms of the outcome. In other words, if the tax take drops by, say, £100 million, it cannot be made up by Westminster. It has to be part of the block grant. We were astounded to find that the Treasury did not have that figure. Our report urges the Treasury to put a mechanism in place that will tell the Assembly—not so much us—what it will cost.

Corporation tax across the United Kingdom is on its way down. At the moment, it is 26%. In the Republic of Ireland, it is 12.5%. It is important to note that Northern Ireland is the only part of the United Kingdom to share a land border with another European Union state—the Republic, where there is a massive tax difference. The location of Northern Ireland is also important. It is an island off an island; it is peripheral. In my view, it certainly needs something that it can wave and advertise to attract inward investment, otherwise it may be easier to invest in other mainland areas or countries with lower tax rates. It is not immediately obvious why one should come to Northern Ireland, but it is easy to see why people go to the Republic of Ireland. It is possible that Google, Facebook and Twitter were attracted to Dublin because of the very low rate of corporation tax. Of course, inward investment is extremely important, but if a company is making a profit and paying a percentage of that in taxation, it has less money to actually spend on reinvestment.

As I said, not all Committee members agreed, but interestingly the Irish Government agree. The present Taoiseach has said publicly that he would approve of Northern Ireland reducing its corporation tax to 12.5%. That is an amazing situation to find ourselves in. We are competing with the Republic and we want to compete even more strongly, and they are in favour of that. Perhaps it is a mark of the progress that has been made in the incredibly good relations that exist between the Republic of Ireland and this country. It is certainly to be welcomed.

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Mr Robertson]

I am happy to give way to the Minister.

[Sammy Wilson]

Does the hon. Gentleman also accept that perhaps the Irish Government are keen for the rate to be reduced in Northern Ireland because it gives them some defence when it comes to their argument with Europe about whether their rate of corporation tax should be increased?

[Mr Robertson]

I am sure the hon. Gentleman is right, and there may be political reasons why the Irish Government want the same rate. There may be political reasons why they want a lot of things the same across the island of Ireland. As the hon. Gentleman knows, I speak as a strong Unionist. However, the issue is bigger than any of those problems. The hon. Gentleman may be right in that case. He leads me to an important point.

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[Sammy Wilson (East Antrim) (DUP)]

It is a pleasure to take part in the debate. As the leader of the Democratic Unionist party in Westminster, my hon. Friend the Member for North Antrim (Ian Paisley), said yesterday, all is not gloom and doom in the Northern Ireland economy; indeed, according to the Office for National Statistics, Northern Ireland is a happy place, and its people are the happiest in the whole United Kingdom. I do not know whether that is to do with the fact that my party is the biggest and therefore has control of the Executive.

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[Ian Paisley]

No—that’s why she’s happy.

[Sammy Wilson]

She is happy because she has such a wonderful public representative.

We should take those figures with some scepticism. If we use the same criteria, we find that the person who is typically happiest is a white male with five children who works only part time, and I am not so sure we want that as a recipe for the work force in Northern Ireland.

However happy people in Northern Ireland might be, there is a need to rebalance the economy. I should, however, make one point to the hon. Member for Tewkesbury (Mr Robertson). He talked about reducing the size of the public sector and increasing the size of the private sector. The truth of the matter is that any economy needs—

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On resuming—

[Sammy Wilson]

I will not go back over the happy bit, because we have got that dispensed with, and I think we are all suitably happy.

My first point is that when we talk about rebalancing the Northern Ireland economy, there is a misconception that that means contracting the public sector and filling the gap with the private sector. If that is all we did we would be no better off. We would still have a cake the same size, but it would be divided differently. At present in Northern Ireland the public sector is too large relative to the private sector; but that is not a function of the public sector being too big. It is a function of the private sector being too small. If we are to improve the well-being of people in Northern Ireland we must grow the economy, but the part that must grow fastest is the private sector, because a certain level of provision for health, education, roads and so on, will always be required.

[Naomi Long (Belfast East) (Alliance)]

I agree with the hon. Gentleman on that point. Does he agree with me that if the public sector is cut too quickly, without growth in the private sector, much of the good work to try to get people into employment is undone, perversely? Also, more demand for the public sector is created, because people become reliant on benefits and other things that require servicing by the state.

[Sammy Wilson]

That is correct. In the past three years when I have been Finance Minister in the Northern Ireland Executive we have cut spending on consultancy by 56%. That is a good result, as far as I am concerned, but of course many private sector consultancy firms do not see it as a good idea at all, because people have been laid off. That bears out the hon. Lady’s point.

I am not complacent about the relative size of the public sector vis-à-vis the private sector, but we must avoid a simplistic view of how to go about things. It should not be a case of squeezing out the public sector and filling the gap with the private sector. We should grow the private sector and use what we can, and the resources of the public sector, to encourage that.

[Mr Laurence Robertson]

I think that the hon. Gentleman would accept that my speech was based on the idea of growing the private sector. The Select Committee felt—not unanimously, but by and large—that cutting corporation tax to attract inward investment was a way of doing that. As a result of that the public sector would become a smaller percentage of the whole, without necessarily getting smaller.

[Sammy Wilson]

I am glad that the hon. Gentleman has clarified that, because I noted down his remark about reducing the size of the public sector. If he was speaking relatively, we are both arguing on the same lines.

My second point is that Northern Ireland still has a strong entrepreneurial spirit, despite all the years of trouble and how that put off private investment, and even drove out some of what was there. Indeed, the hon. Member for South Down (Ms Ritchie) talked about the level of self-employment in Northern Ireland, which is higher than elsewhere in the United Kingdom. That strong entrepreneurial spirit is growing, and many firms have weathered the current recession. The Business Secretary has visited Northern Ireland to see the work of Bombardier. That is a leading firm, internationally, in carbon fibre use in aircraft production, and it is growing; it is one of our biggest manufacturing employers. In my constituency there is F. G. Wilson, which sends generators around the world for Caterpillar, and is now back to its 2008 production levels, and Schrader Electronics, which provides a high proportion of the computerised valves for high-value motor cars, which tell drivers the car pressure. All the steel work for the Shard, which is being built down the road from here, is supplied by a firm in the back of beyond in County Fermanagh. It takes the steel in and ships it out, and because of the excellence of its manufacturing and engineering skills it can still compete for high-prestige jobs such as those that we can see from this building. I could go on.

The news is not all bad, and despite the recession there are many firms that have looked for ways to keep their work force together. One of Northern Ireland’s big advantages is that by and large work forces tend to be very loyal, and employers recognise and try to reward that. For example, Creagh Concrete just outside Toomebridge lost 90% of its business in the Irish Republic and had to lay off half its work force. It started to look for new business and is now back practically to the same level of employment, despite being in the construction industry, by making prisons that are like Lego kits. In fact, when I visited, there was half a prison sitting out in the yard and the other half was being produced. It is then taken on site and put together with all of the facilities inside it. The firm is changing from low value to high value concrete products. I could go on—there are many other examples of the desire of firms in Northern Ireland to grow.

What I say to the Minister today, I say in that spirit. We do not come to this place pleading special cases for a basket case, or as fiscal Oliver Twists holding out our hands, always wanting more and not prepared to do anything to help ourselves. People in Northern Ireland, entrepreneurs in Northern Ireland, want to help themselves and want to grow the economy. However, certain matters, as was pointed out by the hon. Member for South Down, rest with the Government at Westminster and therefore need attention.

Of course, there are matters on which the Northern Ireland Executive can act. It is not my place here to talk about them, or to talk about how adequately or inadequately they have been done. However, I have to respond to the hon. Member for South Down, who somehow thinks that the money allocated to Northern Ireland is not sufficient, not well spent and could be easily added to. She mentioned the fantastic document that her party produced on how we might raise revenue. I know that her first name is Margaret, but when I read the document I thought it was Margaret Thatcher reincarnated in Northern Ireland—the iron lady, though in the hon. Lady’s case it might be more like the tin foil lady.

The document included a list of privatisations from which money could come. Let me just list some of them: the sale of allotments; the sale of the Speaker’s house—I do not think it is his personal house, but there is a house in the grounds of Stormont; the sale of an airport that we do not own; and money from developers who are not building anymore. I could go on. Not one of them stacked up. We get the easy answers.

[Dr Alasdair McDonnell]

Does the hon. Gentleman accept that he has adopted many of those proposals in his current budgetary strategy?

[Sammy Wilson]

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

[Ms Ritchie]

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

[Sammy Wilson]

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

[Ms Ritchie]

Will the hon. Gentleman give way?

[Sammy Wilson]

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

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

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

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

[Mr Laurence Robertson]

May I point out that devolving that power would cost absolutely nothing at all? The Select Committee’s proposal for it to be devolved costs nothing. The action that the hon. Gentleman’s Committee then takes is for him to judge.

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[Sammy Wilson]

Of course that is true, but there is no point in devolving corporation tax if we are not going to do something about the rate of corporation tax. The whole idea is to try to give us the same advantage as there is across the land border in the Irish Republic. The estimated cost so far is approximately £500 million. However, we will be meeting the Minister and other Ministers soon to discuss this matter. There are ways of alleviating the cost of it. Built into it are indirect costs, for example assumptions about profit movements that Europe does not expect the Government to build in at this stage and, indeed, says could be looked at retrospectively once we see what happens. That would bring the bill down considerably.

No consideration has been given to the secondary effects, which my hon. Friend the Member for North Antrim mentioned, such as increased VAT, national insurance contributions and income tax. I am not holding out the begging bowl, but those are legitimate things that the Government could consider if they wish to aid and abet those of us in Northern Ireland who believe that it is important to change the balance in our economy. We must become less dependent on the public sector, and our economy must be more balanced and able to grow because of a strong, healthy, vibrant private sector that is not disadvantaged by a tax rate that is different from the one in other parts of the island.

The hon. Member for Tewkesbury rightly mentioned energy costs, which shows that he and his Committee have good soundings on the ground in Northern Ireland. High energy users in Northern Ireland are finding that we have the highest energy costs of any part of the United Kingdom. I do not want to name the high energy users: many are well known. I do not wish in any way to raise alarm about the situations in which they find themselves, but many are at present looking hard at their operations because of the rising cost of energy in Northern Ireland, with the carbon price floor being set by the Government. We can argue about whether all this is necessary: I am not getting into that debate, because hon. Members know that I probably take a different stance on these issues from many others. We could debate all day whether setting a carbon price floor is necessary to save the world in 50 years. All I can say is that when it does not exist in the Republic of Ireland or in many of our competitor countries, we are placed at a grave disadvantage.

Hon. Members should not forget that the Government are encouraging us to consider export markets, which we are doing, which means opening ourselves up to competition and competing in markets with firms that do not face these additional costs. I am not the only one saying this. Representatives throughout the UK are saying that it is having the same impact in their constituencies.

[Mr Robertson]

Does the hon. Gentleman agree that, if the energy is not produced in Northern Ireland—and assuming demand stays the same—it will just be produced somewhere else?

[Sammy Wilson]

Having two of the major power stations in my constituency, I know this already. They are considering what their investment will be in future. In a single electricity market and with that interconnection with the Irish Republic, of course, we could find ourselves increasingly at the mercy of what happens in another country, with all the difficulties that that causes. The Government should consider what can be done with energy costs, because that is important.

On devolution of other tax powers, there may be occasions when we look specifically to have control over some things. I want to put on the record my appreciation, and that of the Northern Ireland Executive, for the work done by the Government on air passenger duty, particularly on direct long-haul flights from Northern Ireland—especially to north America—which was going to have an impact on our economy. Hon. Members have mentioned the importance of tourism, but it was not just about that; it was much more about the impact on foreign direct investment and inward investment, which was worth an awful lot in respect of our economic strategy. Around summertime last year, Northern Ireland Office Ministers worked with Treasury Ministers in the middle of the recess to get this thing resolved. It would be churlish not to show our appreciation for that work and for the way that it will now go through. That was an important measure.

I am not a great fan of devolution of more fiscal powers to the Northern Ireland Executive, but there will be occasions when we perhaps need to consider specific issues. I hope that a response will be forthcoming.

It is important to mention that the banking structure in Northern Ireland is not the same as in any other part of the United Kingdom. Some 95% of banking in Northern Ireland is done through Irish banks, which are in a poor state, or through Ulster Bank, which is an annexe of RBS. Many of the other banks that people have access to in the rest of the UK do not operate in any significant way in Northern Ireland. As a result, all the surveys about how businesses are faring in respect of banking show that Northern Ireland falls well below other parts of the UK, in respect of the terms that are offered, the availability or restriction of credit, or calling in loans.

If anything will crush the ability of the private sector to grow in Northern Ireland, it will be the absence of liquidity. The Northern Ireland Executive have considered various things, including loan guarantee funds, which the Department of Enterprise, Trade and Investment operates. We are considering how we can attract equity funds and what we can do to put some money into equity funds to get venture capital, especially for start-up businesses in Northern Ireland.

It is important that the banking sector operates properly in Northern Ireland. For example, here are some things that the Government could do. Why do we not have regional figures for how well Project Merlin is operating? I suspect that, although banks are meeting their targets throughout the UK, proportionally those targets are not being met in Northern Ireland. Could the Government do something in respect of credit easing? What could the Government do to ensure that the liquidity, which is generally pumped into the banking system, is reflected in the liquidity available to banks in Northern Ireland and, therefore, available to customers?

[Naomi Long]

The banks tell me how few people they turn down when applying for loans. However, the small businesses that say they cannot access finance say that they are dissuaded, at the first hurdle, from applying for loans and are told that, if they did, they probably would not get them. A circular argument develops, with banks saying no one is asking and small businesses saying no one is getting.

[Sammy Wilson]

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

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

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

[Ms Ritchie]

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

[Sammy Wilson]

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

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

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[Dr Alasdair McDonnell (Belfast South) (SDLP)]

I welcome the chance to speak in this debate under your chairmanship, Mr Scott, and to put some of the challenges facing the Northern Ireland economy on the record of the House of Commons. I am very conscious of the time, so I will try to make my points without being quite as long-winded as some of my colleagues—[Interruption.] I am not talking about my hon. Friend the Member for South Down (Ms Ritchie)—[Interruption.] No. I was talking about the right hon. and hon. Gentlemen sitting to my right, who were eloquent but very long-winded.

The SDLP has long argued for—and indeed published—a series of constructive proposals and policies, which we believe go some way towards helping to build a reconciled, socially just and more prosperous society in Northern Ireland. Central to delivering sustained economic prosperity is the need for significant growth in the private sector. We are all agreed on that and I have not heard anyone here today saying anything different. However, as the hon. Member for East Antrim (Sammy Wilson) and the right hon. Member for Belfast North (Mr Dodds) have said, the banks are killing the private sector, and that includes Ulster bank, which is part of the RBS. Like others here, I get at least two or three problems a week relating to Ulster bank and RBS. Our private sector is shrinking.

One other issue that we need to consider—sometimes in the political context, this is difficult for some of my colleagues—is a much more proactive approach to building stronger business and trade links with business in the Irish Republic. We have not fully exploited every potential there or taken full advantage of every economic opportunity that exists in the island of Ireland as a whole. I want to see Northern business being able to take advantage of any market on the island. That does not preclude our belonging to the British market; the two things are not incompatible, but synergistic.

Achieving the growth in the private sector that we all so much desire is extremely challenging, particularly in the current financial climate, but it is a challenge that we must face and a problem that we must surmount. We cannot duck it, because it will not go away.

I am absolutely delighted to say that my friend, the hon. Member for East Antrim and the Minister for Finance at Stormont has complimented us on our fantastic documents—[Interruption.] Fantastic was the word he used. We appreciated it and we will return the favour in due course. Our documents, “New Priorities in Difficult Times” and “Partnership and Economic Recovery”—[Interruption.] No, no, the word was fantastic. The hon. Gentleman may have meant fantasist but he said fantastic. We are not looking for the negative; we are taking the positive. In those documents, the SDLP genuinely identified some of the tough choices and decisions that have to be made. We faced up to them and we should have been given credit for that rather than being abused for it. We pointed out the many opportunities for making public savings and how various types of jobs could be sustained and others could be created.

If we want to maximise the potential benefits that exist in the economy, we need to be ambitious and to exercise vision. In our document, we identified opportunities and potential for growth in education and skills training, finance, tourism and new technologies, including the biotech and nanotechnology areas.

The one area that I should like to bring to the Chamber’s attention is agrifood, which is a sector that we often forget about. It is an old industry. It is remarkable that the current Minister in the Irish Republic, Simon Coveney, has a plan, which he inherited from the previous Government when Brendan Smith was Minister for Agriculture, to double food exports within 10 years. There is no reason why we in Northern Ireland cannot take a leaf out of that book and do the same thing.

There are other aspects of the economy, such as renewable energy, which will help drive the expansion of the private sector. Others have already referred to the conversion of the old Harland and Wolff shipyard site in which many renewable energy machines, wind turbines, are being developed. That will not only reduce Northern Ireland’s dependence on fossil fuels, but put us in a stronger and more sustainable position economically in 10 or 15 years time.

If we are to attract greater foreign investment, we must invest in preparing our people, because that is the basic building block for rebalancing any economy. Others, particularly the hon. Member for Belfast East (Naomi Long), have also made reference to that. The key is the STEM subjects— science, technology, engineering and maths—in our schools, because they are our bridge to creating exciting and interesting careers for our young people. We also need to increase university places to stop the brain drain. At the moment, people are leaving; they go to England, Scotland, Wales or elsewhere to university and they never come back. We need whatever brainpower we have if we are going to lift ourselves out of the situation that we are in.

On that point, I appeal for a significant expansion of the Magee campus of the university of Ulster. That campus has worked very well, it is working well and it can work even better, providing an engine to drive forward the economy, particularly the economy west of the River Bann.

Huge opportunities for innovation exist in the renewable sector, which I will discuss briefly. Northern Ireland is perfectly placed to harness wind and wave energy, and biomass and biogas. And God knows, Mr Scott, that if you were in Stormont you would understand why an industrialist has a plan to harness all the hot air coming out of Stormont on Mondays and Tuesdays. There is a conviction that much renewable energy can be captured there, but I will leave that to the future.

[Sammy Wilson]

Most of it is recycled in the first place—[Laughter.]

[Mr Dodds]

Does the hon. Member for Belfast South have any intention of leaving Stormont and devoting himself full-time to Westminster?

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[Ian Paisley]

The hon. Lady is crying “nonsense”, but she invited people to come to St Patrick’s country. In fact, the only place where St Patrick put his feet was on Slemish mountain, so I welcome her to come to North Antrim any time, and I also welcome those tourists who want to come to North Antrim.

The golf resort that has been mentioned fits in with our Department for Regional Development strategy, our tourism strategy and the various economic strategies that have been put in place. It offers vast potential, but it does so 10 years after that potential was first identified. It offers that potential at a time now with approvals, when the economic climate has changed quite dramatically. But I believe that people are up to meeting the challenge, and I hope that Government will encourage them.

Again, those people who would talk that project down and say, “Oh, it’s not the time for that type of proposal,” or, “It’s destructive of our natural environment,” really have to be put in their place by our national Government, who can say to the likes of those organisations that may be opposed to the project, “Look, do you want Northern Ireland to go forward? Are you on the side of Northern Ireland? Or do you want to be in that bank of people who talk the place down?” I hope that we can get a collective view, and I congratulate the SDLP Minister who was able to get the case over the line, but he addressed, and people must address, the fact that many misnomers have been identified.

Some people said, “Oh, this is being built on the Giant’s Causeway.” It is not. It is closer to Bushmills than to the Giant’s Causeway. A public representative today issued a statement that houses would be dotted all over the causeway. That is rubbish. They are being built in the curtilage of Bushmills village. The previous Environment Minister, my hon. Friend the Member for East Antrim (Sammy Wilson), made sure that that was in the proposal.

[Sammy Wilson]

There is a certain irony in the National Trust objecting to a golf course that will attract hundreds of thousands of visitors to the area, when it has no difficulty raising revenue on its own estates by erecting 300-foot wind turbines.

[Ian Paisley]

I agree that someone might identify that as hypocritical. I do not know whether my hon. Friend is calling the National Trust a hypocrite, but it has not yet publicly objected. There could be suggestions of an objection. That would set things back, and we must avoid that at all costs. I welcome the fact that there will be even more holy ground in the golf mecca of North Antrim.

The hon. Member for Belfast East (Naomi Long) rightly, and with pride, mentioned Wrightbus in my constituency. When I walk down Whitehall in the morning and I see dozens of bits of Ballymena passing by in bright red, it fills me with pride that that represents 1,000 jobs in Ulster. I hope that the Minister will go to Boris, the Mayor of London, and say, “Increase that order. Get the 200 buses out there. Make sure that those buses continue to roll off the production line in Northern Ireland and generate more jobs.” It fills me with pride.

A couple of years ago, I had the opportunity to visit Hong Kong, where I saw double-decker buses that were made in Northern Ireland. We were not importing from but exporting to Asia, and that is fantastic. That is the way in which we want to get our companies to work.

On the agri-sector, the hon. Member for Belfast South (Dr McDonnell) is right. It is the backbone of our economy. No matter which way we cut it, we are part of a £20 billion industry in food production across the United Kingdom. That is not to be sniffed at, but we have huge problems at a national level with regulation that unfortunately comes from Europe. Our Government must stand up to and address such regulation. I welcome some of the steps that are being taken by our Department for Environment, Food and Rural Affairs Ministers, but much more must be done to cut the red tape to allow our poultry and red meat industry and our value-added sector in food production to move forward and develop.

EU regulations, for example, on the number of fish that someone can land are destroying coastal jobs up and down the south and north Antrim coast of Ulster. That should be addressed at a national level. I hope that we will do more to help the 20,000 farm businesses in Northern Ireland. I hope that the Minister will join me to encourage our DEFRA Ministers to organise a round table discussion in Northern Ireland with all the agricultural stakeholders, so that we can put together a common agricultural policy reform plan that will help move our agri-economy forward.

We look forward to the national remedy that could be identified soon in our Select Committee report on fuel laundering and other forms of smuggling. For example, tobacco smuggling and fuel laundering in Northern Ireland accounts for some £200 million every year. That money could be far better spent by the Treasury in Northern Ireland or other parts of the UK if it was not stolen from the pockets of the people of this kingdom. We have a duty to ensure that those issues are addressed.

I hope that the Government will drop their White Paper suggestion and potential policy for plain paper wrapping on tobacco products, as it could destroy 1,000 jobs in my constituency. That is a national matter—it has to come from here. Such a proposal must be dumped, because it will be disastrous for local jobs. I hope that we can come up with some positive suggestions to address fuel laundering and recoup some of the money that is lost.

This week started badly for my constituency, with the loss of 50 jobs in the construction sector at Patton Homes. Construction and house building is a measure of economic confidence. Whenever it slows down or stops, it shows that confidence is waning. We have to make sure that we encourage our developers, our house builders and the construction industry in the ways that have been identified by my hon. Friend the Member for East Antrim and my right hon. Friend the Member for Belfast North (Mr Dodds). I hope that we can do that.

In conclusion, we should have the ability and the capacity to envision a better future for our economy and our country. We have a responsibility to do that. We should have the ability and the capacity as a country to cope with more than one major development project at a time. Sometimes, there is a view that we can deal with only one thing at a time. We must be able to adapt and show that we can deal with multiple, complex economic opportunities simultaneously.

As my hon. Friend the Member for East Antrim ably suggested today, we need to introduce significant reforms to our banking structure. I hope that in our next Select Committee report, after our aviation strategy, we will examine banking sector reform and consider whether the structure disadvantages Northern Ireland. If it does, as many of us believe, I hope that we can try to change it. Our economy has a chance. We are on the verge of writing a new chapter for our economy, but it will happen only if we are prepared to put our hands on the plough and drive it forward. The Democratic Unionist party will not be found wanting in that endeavour.

Remuneration of EU Staff

Sammy Wilson Excerpts

Tuesday 21st February 2012 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Gentleman agree that the situation he has so clearly described is just one example of how incestuous the EU system has become? One layer perpetuates and supports the other. If we are to get to grips with such arrangements, the only thing the Government can do is make it clear that we will not continue to finance them?

[Jacob Rees-Mogg]

I have great sympathy with what the hon. Gentleman says. We ought to start thinking about withholding money. I have long had doubts about how the EU works and the ratchet, but I had the idea that the judges—though they may have a political objective, though they may be in favour of a federal Europe, and though they may push the law to the most extreme point to make the case for a federal European state—would not break basic principles of natural justice. The principle is “nemo iudex in causa sua”—a famous principle judged on and upheld in this country for centuries, and not just in this country—but abrogated in the EU.

I am glad to say, Mr Deputy Speaker, that the requirement not to be rude about judges applies only to judges in this country. It does not apply to judges in the EU, so let me be rude about them. Let me indulge in the floccinaucinihilipilification of EU judges and quote from the book of Amos about them:

“For I know your manifold transgressions and your mighty sins: they afflict the just, they take a bribe, and they turn aside the poor in the gate from their right.”

Those are the judges of the EU. Her Majesty’s Government are right to stand up to them. They do not deserve their money and it is iniquitous that they have allowed themselves to be judges in their own cause. It is a breach of justice; it ought to be criminal.

[Sammy Wilson (East Antrim) (DUP)]

It is a great joy to follow the hon. Member for North East Somerset (Jacob Rees-Mogg)—although, I must say, I do not think that I can follow his eloquence, knowledge and so on.

I want to put on the record where the Democratic Unionist party stands on this issue. Members on both sides of the House have expressed their opinion on the decision to increase salaries and remuneration for those who work in the European Union. That will be financed by taxpayers from the United Kingdom at a time when we are imposing austerity measures on our own population, when our own public servants are being asked to accept pay freezes and when many people in the private sector are taking pay cuts. At the same time, the countries of the EU are telling the people of Greece, Italy and the Irish Republic that their Governments must cut back to the point that jobs are lost and salaries are cut. So for those who make and impose these decisions to then say, “By the way, we’re exempt,” will strike many people as grossly unfair and grotesque.

[Bob Stewart]

There must be huge anger in all EU states, which are all going through exactly the same problems as we are. I just do not understand why other countries in Europe are not as angry as we are in the Chamber about the suggested increase in salaries.

[Sammy Wilson]

That is quite right. Any objective observer is bound to be angry about the fact that there seems to be one set of rules for those cosseted within the structures of the EU, and another for the millions ruled by them and on whom it imposes its wishes. Social disorder is now appearing on the streets of Greece, Italy and other European countries. One can understand why people are angry at the imposition of rules by people who seem totally out of touch and by institutions that, as the hon. Member for North East Somerset clearly explained, are so incestuous in their decision making—they collaborate with each other, supporting one layer of the institution with another layer—so we are bound to get the kind of reaction we have seen.

[Stephen Phillips]

The hon. Gentleman says that the institutions of the EU are out of touch, but of course, in the case of judges, they are also unelected and, it would seem, unanswerable to anybody. Does he agree?

[Sammy Wilson]

That is one reason why we get the kind of decisions we get from EU judges—whether they are about whom we can deport from the UK or about pay structures for EU civil servants.

Some will say that those who take my stance simply want to have a go at Europe. I have absolutely no hesitation in saying that I am a member of the Better Off Out group. I believe that we ought to loosen our ties with the EU so that it is what was originally intended—a free trade area, not a political entity. But I want to leave my political views aside for a moment. I am pleased that the Prime Minister has taken the stance that he has in recent days on Europe, and I hope that he does not weaken it. I hope that he keeps the strong backbone that he has shown. However, one way of hurting the EU is for us to say, “We’re not prepared to finance this grotesque behaviour in the face of the austerity affecting all the EU nations.”

[Kate Hoey (Vauxhall) (Lab)]

The hon. Gentleman need not feel alone. Does he not realise that 50%, if not more—a majority—of the public want a referendum on the EU, precisely because they want to return to the relationship that they thought they were voting for when they voted to join the original Common Market?

[Sammy Wilson]

I thank the hon. Lady for her intervention. If the Prime Minister wants his hand strengthened in his arguments with Europe on budgetary issues, and Europe’s interference with our courts and the rules affecting this country, one way of doing so is to have the backing of the people, in a referendum, for a different relationship with Europe. When one sees this kind of insular attitude being adopted, one understands why there will be increasing support for a referendum allowing for a change in the relationship.

[Stephen Pound]

As one who voted enthusiastically yes in the early ’70s, swept away, intoxicated by Margaret Thatcher’s endorsement of it, I can tell the hon. Gentleman that many people seeking a referendum simply wish to underline once and for all that this is no longer a question that we should return to every year, and that many of those seeking a referendum are pro-Europeans—a group among whom I proudly number myself.

[Sammy Wilson]

Ironically, the pro-Europeans are the people who have most vigorously opposed such a referendum. If the hon. Gentleman believed what he was saying, he would join me in saying, “Let’s have a referendum. Let’s hear what the people say,” although I suspect that he and many like him are afraid of what the people’s verdict might be. The one thing that I can be sure of is that this issue will reinforce the case that many of us in the House are making—that we ought to consider how our relationship with Europe can be altered so that we do not end up financing this kind of nonsense.

The Economy

Sammy Wilson Excerpts

Tuesday 6th December 2011 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

First, I welcome a number of things set out in the autumn statement, such as the increased money for infrastructure that will come to Northern Ireland. It will not make up for the 40% cut in capital spending announced in the Budget, but it will fill some of the gaps. Secondly, I wish the Chancellor well in his battle with the Secretary of State for Energy and Climate Change, and perhaps the Prime Minister, as he takes on the green lobby and seeks to strike a balance in the economy and redress the damage that many green policies are doing to industry.

I will focus on some of the points that have been made on the need for growth. All the problems that have been identified as impeding growth in the UK economy overall are magnified in Northern Ireland. First, there is the heavy dependence on the public sector, which means that public sector spending cuts have a greater impact. Secondly, there is the difficulty businesses have in obtaining finance from banks in an economy that is heavily dependent upon failed Irish banks and where penetration by UK mainland banks is not great. Of course, the problems in the eurozone have been magnified because we live next door to, and are heavily dependent upon, an economy that has been greatly affected by what has happened in the eurozone and the austerity measures that the Irish Government have had to take. Indeed, many more such measures were announced yesterday in the Irish budget.

One of the things the Chancellor has focused on, and rightly so, is the importance of keeping interest rates low, and I do not think that any Member disagrees with that. It has an impact on businesses and mortgages and on those who have taken out loans, so it is correct that we should be following policies that keep interest rates low. However, I do not accept that they have been kept low in the UK only because of his plan A and his austerity measures. Looking at the reasons, one sees that of course economic management and confidence in it is important, but so too is the fact that the Bank of England has been buying up £220 billion-worth of Government bonds as a result of quantitative easing. That has injected confidence that other European countries that have been mentioned today would perhaps not have had because the European Central Bank has not done the same.

Secondly, we also have the flexibility to adjust our exchange rate and so have a way of stimulating some growth, whereas many European countries that are tied to the euro do not have that. Thirdly, even though the Government have admitted that their plan for getting rid of the deficit will not be fulfilled in the set period and that they will have to borrow more than expected, the financial markets have not deserted the UK. In fact, they have remained solid. I believe that one of the reasons for that is that we are not regarded in the way that some of the other European countries are, for the very reasons I have given. If anything, the Government ought to capitalise on that. If the markets are prepared to lend to pay for unemployment, would they not be even more willing to lend to pay for investment in infrastructure that could give growth which, in turn, could provide the ability to pay back the debt we already have? Rather than walking away from borrowing, and from borrowing—perhaps only modestly—to do the things that Members have mentioned today, the Government should capitalise on the reputation that their management and our flexibility outside the eurozone gives the Chancellor when it comes to borrowing money.

There are already signs that the Government know their plan is wrong: they are engaged in quantitative easing, which is a way of stimulating the economy by monetary means; and in the autumn statement they indicated that they were prepared to spend more money on infrastructure. They ought then to look at what they can do and at what borrowing they can undertake not to pay to leave people sitting at home, but to pay to get them into work, growing the economy and generating tax revenues.

The hon. Member for Gainsborough (Mr Leigh) said that he did not want to see the public sector increase, but such borrowing would not have to be for the public sector. Indeed, the hon. Member for Ochil and South Perthshire (Gordon Banks) mentioned VAT cuts for the building industry. That would not increase the size of the public sector; it would stimulate the private sector and grow the economy.

[Mr Anderson]

In reality, can the two sectors not work together? My hon. Friend the Member for Bishop Auckland (Helen Goodman) mentioned a classic example, Building Schools for the Future, for which we had money earmarked in our constituencies. In my constituency, there was £80 million, and it would have gone not to the public sector but to Gateshead council, which would have passed it straight on to private sector builders to build the schools that we need. Is that not the way we should be working our way out of this crisis?

[Sammy Wilson]

That is exactly the point that I am trying to make. Borrowing does not necessarily have to mean a bigger, bloated public sector; it can be directed in many other ways that would meet the demands of even some Government Members. In Northern Ireland, tourism is a huge industry, and selective cuts in VAT could stimulate spending there and help the Finance Minister to realise the potential to increase tourist numbers by 3.5 million over the next two years, thereby generating private sector growth and helping us to rebalance the economy.

Things can be done and there is potential. The Government have more flexibility than they accept, and if we are to deal with the social strain, the economic hardship and the impact on businesses we need to see examples of that flexibility in order to get back on to a path to growth and back into a position where we can repay our debts.

--- Later in debate ---

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

It is great to follow such passion from the north-east, but I would say to the hon. Member for Blaydon (Mr Anderson) that the problem is that my electorate remember 13 years when they were promised that there would be an end to boom and bust, and they are still waiting for an answer from his party as to what went wrong.

I want to make a few observations about what is happening in my constituency and generally in the north-west, and perhaps to have the temerity to suggest something to the Treasury, but we will see how I get on with that. The key focus for my area is on growth and how we get through this crisis. My electorate accept that the deficit reduction programme is delivering low interest rates for businesses, mortgage holders and many others, and that is seen as a good thing. They also see what is happening in other countries across the world and recognise that this Government are delivering by keeping us out of the mess that there has been in Ireland and in Greece.

Many hon. Members constantly see the kinds of businesses that I see in the north-west that have the potential for growth and have the orders, but cannot manage to bridge the gap and buy the extra machine or the extra shed that they need to get things moving. That is why I, like my hon. Friend the Member for Amber Valley (Nigel Mills), am behind the Chancellor’s support for infrastructure, the national loan guarantee scheme of £20 billion and the business finance partnership. I was pleased that earlier in Treasury questions, the Chancellor said that he hopes to get that up and running in January. That will be vital for small businesses.

[Sammy Wilson]

The hon. Gentleman has given a list of reasons why businesses are not investing. Does he also accept that one reason is that businesses lack confidence because they see an economic policy being pursued that will not release the kind of growth that is needed to sell the goods once they have made the investment?

[Eric Ollerenshaw]

I am grateful for the intervention. I was going to go on to say that some of these things are actually working.

One of the biggest employers in Lancaster, Northern Tissue Group, is halfway down the line of achieving extra support from the regional growth fund. That will lead to extra jobs. Oaktec, a small company that is developing innovative energy recovery from vehicles, has just got a grant from the Technology Strategy Board to take that innovation further. Those are small beginnings, but the innovation is there.

I want to suggest how we can develop that through the local enterprise partnerships and the new enterprise zones that hon. Members have talked about. One problem that my part of the north-west has had with all Governments is that every time they look at the north-west, they look at Greater Manchester or Merseyside. Although I welcome Lord Heseltine’s intervention, or should I say re-intervention, in the north-south divide and his talk of city hubs, which we are all behind, my part of the north-west also has businesses that have potential, as you will understand, Mr Deputy Speaker. With a bit of extra investment, which I hope is coming following the Chancellor’s announcements in the autumn statement, those businesses could provide a good return. I have cited two small examples—Northern Tissue and Oaktec—but there are many other possibilities in the area.

My area also has two universities, Lancaster university and the university of Cumbria, and Lancaster university does a great deal in terms of innovation. My suggestion draws on two developments that we already have. The first is technology innovation centres, which are planned for Warwick, Strathclyde, Bristol, Rotherham and Sedgefield. In 13 years, the Labour Government delivered none of them. At least we are now getting five. Germany has 59 of them. Their mission is to bridge

“the gap between research findings and outputs, and their development into commercial propositions”.

The second development is enterprise zones, the mission of which is

“to support genuinely additional growth and create new businesses and new jobs”.

The original concept envisaged only one zone per local enterprise partnership. Perhaps that idea was developed by some Treasury mandarin who had to calculate the hypothetical loss in taxes due to the hypothetical creation of the new businesses and jobs. As they will be new, I am yet to understand how they can calculate that. Obviously, I am just a simpleton when it comes to the Treasury.

In a nutshell, my suggestion is that we should allow all universities to bid to designate mini-enterprise zones on their campuses. Perhaps not all universities would take that up, but it might fulfil the other Government objective of ensuring that there are more direct outcomes for the economy from universities. It seems to me that there is nothing in the practical definition of an enterprise zone that most universities cannot fulfil.

I suggest that there would be savings to the taxpayer, because universities would not need all the investment that is required for the planned enterprise zones. By their nature, the zones would be incubators for new start-ups that would eventually have to move off campus on reaching a certain size. A mini-enterprise zone on a university campus would therefore create a quicker turnover than the planned enterprise zones. The hypothetical loss in taxes calculated by the Treasury mandarin would therefore be far less, because once a business on a campus got to a certain size, it would feel restricted and would have to move off quicker than those in the planned enterprise zones.

--- Later in debate ---

[Sheila Gilmore]

The ongoing effect of creating construction jobs would ripple far beyond the jobs themselves. That is what we mean by investing to grow the economy. We will not always borrow money for such things, but if we borrow on a short-term basis, we would still be borrowing for a purpose. Borrowing is not always bad. Many Government Members and others bemoan the fact that small businesses cannot borrow to expand. The Government can quite legitimately borrow to grow the economy. That is what we should be doing, but we have not been doing it for the past 18 months.

[Sammy Wilson]

There is an additional ingredient that is needed in the hon. Lady’s proposal. Not only do the Government need to borrow, but banks need to be willing to lend to people the mortgage side of the purchase of the house so that the shared ownership can be effective.

[Sheila Gilmore]

Indeed. Despite the fact that the Chancellor has assured us that he has entered into arrangements with the banks so that they would provide loans, we still have this mystery of why that has not been happening. If we do not do these things, we will see ourselves going further and further into decline. What the previous Government did to help us climb out of recession is worth repeating. That is why we are urging this Government to invest, to grow and to spend the money that is needed to get people back to work. We are talking about real people and real jobs that can be created. We should not be placing families in such hardship. Those who think that because we have high-end restaurants expanding in central London the economy is doing okay should move themselves out of central London and see the real world.

Fuel Prices

Sammy Wilson Excerpts

Tuesday 15th November 2011 Commons Chamber

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

rose—

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Andrew Griffiths]

I will not give way again; I have given way a few times.

I must tell the House what motorists and families in my constituency tell me about the high price of fuel and how it is impacting on them. They, like the constituents of many right hon. and hon. Members, are suffering because they have had pay freezes and, in some cases, pay cuts, because of inflation, and because they have had to cope with large rises in electricity and gas prices. So spiralling fuel prices are starting to impact on their quality of life, and on their ability to survive in these difficult times.

More than one constituent has told me recently that they have had to choose between doing regular maintenance on their vehicle and filling it up every month to get to and from work and to pick up the kids. We have to look at the impact, because our constituents have only so much to spend on motoring every month and every year, and, if we do not do something to help them soon, they will have to find savings elsewhere, and that could affect road safety.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

I welcome the opportunity to speak in the debate, because the price of fuel is an important concern for many of our constituents. I will start with two observations. First, I am glad that there has been little evidence today in the House of the green zealotry that drove the increase in fuel prices—a point we must not forget, because it was argued that that was a way of weaning the population off fossil fuels. Secondly, although Members have talked about the role of petrol and oil companies, let us not forget that 60% of the cost of fuel is accounted for by Government action. Therefore, this is the appropriate place to debate what can be done about it.

The Government’s record on this differs from what they said in opposition. They had many fine ideas in opposition. Indeed, in “A Fair Fuel Stabiliser” they indicated that any reform should help families when the cost of living is rising and reduce the inflationary impact on the economy—but what has the record been since they came into power? In Northern Ireland, fuel bills for families have increased by an average of £254 a year for those using diesel and £284 a year for those using petrol. The Government promised in opposition to do something for families when the cost of living was rising, but their actions have been different.

They made clear in opposition what they thought about an increase in VAT. Indeed, in an intervention in this House in 2008, a Conservative Member asked the then shadow Chancellor:

“Does my hon. Friend not agree that Labour’s plans to increase VAT to… perhaps even 19.5 per cent…. after the next election will hit hard-working families hardest? Should the Government not be ashamed of themselves?”

The answer was “absolutely”, and that the Conservatives would keep reminding the then Government of that

“every…day between now and the…election.”—[Official Report, 26 November 2008; Vol. 483, c. 741.]

The Conservatives did that, but as soon as the election was over and VAT went up to 20%, it all went quiet on the Government Benches, and we did not hear much from them about VAT hitting the poorest families hardest.

During this debate, Government Members have said, “Ah, yes, but we reduced fuel duty.” On the one hand, fuel duty was reduced; on the other, VAT was put up. The Chancellor gave, and the Chancellor took away. That is the truth for hard-working families.

[Jim Shannon]

I thank my hon. Friend for his passionate speech. As he represents a rural constituency similar to mine, has he been contacted by farming communities regarding the effect of fuel prices on food production, which affects everybody in the country? There is the price of the fuel for their machinery, but the increased fuel prices also get passed on to them in the price of fertiliser and other things that they use on the farm. Is he concerned about that, and about its impact on food prices?

[Sammy Wilson]

That just illustrates the inflationary impact of the situation, not just on individual families but throughout the economy, and the Government ought to bear it in mind as they ask themselves, “What shall we do to regenerate the economy?”

Various reasons why it is difficult to do something have been given. The first, which we have heard from Government Members, is that if we try to reduce VAT Europe will intervene. That is another reason for renegotiating our position on Europe—but leaving that aside, I note that 75% of the tax is not VAT but fuel duty, so even if there is a problem with Europe, the Government have another way of dealing with the problem.

The second reason that has been given has involved asking, “What about deficit reduction?”, but there does not seem to have been any difficulty with deficit reduction when it has come to bailing out the euro, with £12.5 billion having already been pumped into it and the Government talking about more money going to the International Monetary Fund. Indeed, as Government Members have said, the measure could almost be self-financing anyway: if, for example, it led to a rise in demand, there would be more duty; if it cut costs, more corporation tax would be paid.

[Mark Durkan (Foyle) (SDLP)]

Does the hon. Gentleman recall that previously, whenever the Scottish National party or Plaid Cymru moved their various motions, Labour voted them down and the Tories abstained, and then the Tories voted them down and Labour abstained? Does he believe that there must be something particularly volatile in fuel prices on the road to Damascus to bring about such changes in outlook?

[Sammy Wilson]

I believe in Damascus road experiences, and if they help the consumer that is a good thing, so I look forward to that. I hope that the Government will have a Damascus road experience on this issue. Consumers would be pleased if they did.

In opposition, the Conservatives made promises. Now that they are in government they hold in their hands the levers to help consumers, and from this debate will come the expectation that promises made in the past will be delivered by those who hold the levers and have the ability to use them in the present.

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 1st November 2011 Commons Chamber

[Mr Gauke]

May I just make the point about the 1945 Government that they were running surpluses from 1948 onwards? If memory serves, the debt in 1945 was 232% of GDP and by 1951 it was 178% of GDP, so they brought debt down. That is not a bad thing to do and this Government want to do it, whereas the Labour party wants to put debt up.

[Sammy Wilson (East Antrim) (DUP)]

Given the increase in debt caused by the lower growth rates and the impact that that is likely to have on the Government’s deficit reduction plan, what impact does the Minister believe that will have on the United Kingdom’s credit rating? Does he believe that steps need to be taken to inject growth into the economy?

[Mr Gauke]

It is worth pointing out what Standard & Poor said recently when it confirmed our triple A credit rating. It said that if we abandoned our fiscal plans—if we borrowed more—that credit rating would be at risk. The best way of keeping our triple A rating is by sticking to the plan.

Arch Cru Compensation Scheme

Sammy Wilson Excerpts

Wednesday 19th October 2011 Westminster Hall

[Tom Greatrex]

The hon. Gentleman is right to say that Capita group is involved in a range of businesses across the world. Capita Financial Managers, however, was regulated by the FSA and was supposedly in a position to provide assurance in this case. That is where questions need to be asked.

[Sammy Wilson (East Antrim) (DUP)]

The hon. Gentleman makes the important point that whatever management inadequacies there may have been in Capita, it was regulated by the FSA. It oversaw what was supposed to be a prudently managed fund. Money was being put into totally illiquid assets and very dodgy assets, yet that was never identified. Was there not a regulatory failure in that regard?

[Tom Greatrex]

The hon. Gentleman makes an important point. I want to come on to the role of the FSA as the regulator and I particularly want the Minister to respond on the potential role of the Financial Conduct Authority in the future as the FSA is wound up.

--- Later in debate ---

[Alun Cairns]

I pay tribute to my hon. Friend for the role he has played in uncovering many of these issues. I will come on to the Serious Fraud Office in a moment.

[Sammy Wilson]

I accept the hon. Gentleman’s defence of the independent financial advisers. None the less, the only interface that many investors have is with an independent financial adviser. Is there not an obligation upon them at least to check out the funds on which they advise? Is there not some responsibility there?

[Alun Cairns]

I am grateful for that valid point. Clearly, IFAs cannot be excluded from all responsibility, but we need to bear in mind the context in which they are working. If they are looking at the strategy and pricing of a fund classified as cautious managed, we need to recognise the context in which that advice is being given. Therefore, the failure of the FSA to set the right context in which an IFA can make recommendations is fundamental to the issue.

There is another conflict. The FSA regulates the authorised corporate directors and Capita acts as the authorised corporate director for more than 300 firms. Taking action against Capita could create difficulties, leading to panic in the marketplace. The FSA has powers under section 166 of the Financial Service and Markets Act 2000 to instigate an independent investigation into organisations that take such responsibilities. Will the Minister tell us whether any such action has been taken by the FSA?

The Arch Cru affair is a minefield of accusation and counter-claim. My hon. Friend the Member for Hexham (Guy Opperman) referred to the Serious Fraud Office. I was alarmed to discover that two of the three main directors or partners who established the Arch Cru funds—Robin Farrel1 and Robert Addison—are still operating, albeit under a new name of Arch Global. Allegations have been made to the Serious Fraud Office about how Arch funds were invested in a property company with common directors. Student accommodation was bought on the open market at one price, only to be sold to the Arch investors shortly afterwards for an inflated sum. I have no knowledge of whether or not those points are true, but they clearly need to be investigated.

As for compensation issues, the auditors and the Guernsey Financial Services Commission certainly need to be pursued by some authority, be it the FSA, the Minister or other parties.

Finally, in view of the FSA’s actions and the associated conflicts, I am troubled that section 404 of the 2000 Act can bind the financial services ombudsman to the FSA’s judgment on the level of compensation. The FSA has made its view of the 70% figure quite obvious in its statement. Therefore, even if investors seek to make a claim involving the financial services ombudsman, or if they follow other routes, the FSA can limit the compensation to 70% at a later stage.

Jobs and Growth

Sammy Wilson Excerpts

Wednesday 12th October 2011 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

I will not tax your brain, Mr Deputy Speaker, by getting you to guess about job creation or anything like that; I would like to make just a couple of points.

First, I sometimes approach a debate such as this with a degree of unease. There is always a tendency either to pretend that there is no problem because the existing policy has to be defended or else to magnify the existing problems and in doing so to have an impact on confidence. One thing I have found from speaking to business people in Northern Ireland is that although we are going through difficult circumstances, which everyone recognises, there is no point in further impacting on consumer and investment confidence by, through political point scoring, making the situation appear worse. We need to try to avoid that in a debate such as this.

Secondly, I have looked at the statistics on Northern Ireland and found that we have seen no growth in the economy over the past 24 months. We have had an increase in unemployment and, of course, given our heavy dependence on the public sector, the public spending cuts of £4 billion over the next four years—40% of the capital budget—are bound to have a deflating impact on the economy.

In listening to today’s debate, to the Chancellor’s reaction and to some of the Opposition’s proposals, we have to consider whether the rigid battle lines that have been drawn are of benefit to the economy in the long term. I accept what the Chancellor has said today—there is considerable risk in changing position—but any economic strategy is bound to carry risk with it, as it involves trying to project and look into the future on the basis of many different variables, such as how markets will react and what will be the impact of a decision. We do not have perfect knowledge about those things, so sticking rigidly to the current plan carries a risk.

We do not know how the markets are going to react to the increased borrowing that will be required as tax revenues fall and spending on unemployment and other benefits rises. Currently, the markets seem prepared to accept that there might well be an increase in the deficit because of what is happening, but that the Government are still on plan to reduce the deficit. Where is the tipping point when the markets begin to say, “Do we really have a credible plan?” Equally, if we go down the path of increasing spending and reducing taxation, at what stage will the markets say, “You are deviating from the plan”?

One thing that I suppose has come out of the debate so far—at least from the IMF, the OECD and even some of the credit agencies—is an acceptance that there can be some flexibility. Even the Chancellor is beginning to accept that demand in the economy needs to be stimulated. I suppose his attitude and approach to quantitative easing is an indication that he sees demand stimulated by monetary policy but equally that good fiscal policies and ideas may also be considered as a means of trying to stimulate growth. I am not so sure, when I look at what is happening to bank lending in Northern Ireland, that quantitative easing is having an impact. The British Bankers Association has published its quarterly figures. From the last quarter of last year to the second quarter of this year, bank lending to small businesses fell by 30% in Northern Ireland. With the Chancellor telling us that there is sufficient liquidity in the banking system, one has to ask whether simply making money available is going to be the answer.

Some fiscal measures have been suggested here today. It has been suggested that we need not increase spending and reduce taxes to create extra demand. Instead, we could direct extra spending towards the activities that create the biggest multiplier effect—for instance, spending on housing and reductions in VAT, whether for extensions to houses or for the tourist industry. There are measures that do not cost a penny, such as reducing regulation. I welcome the Chancellor’s announcement that he will not stick to the carbon reduction targets. As one who voted against the Climate Change Act 2008, I am pleased to observe that some reality is now entering that debate. Why should we impose a 40% increase in energy costs on our industry when that is not being done elsewhere, with the aim of reducing carbon emissions into the atmosphere and thereby somehow or other affecting the climate?

There are many suggestions to be considered. I believe that the Chancellor has more leeway than he claims, and I hope that we shall see some movement as a result of today’s debate.

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Gauke]

I am delighted that one of the two enterprise zones in the south-east local enterprise partnership will be in my hon. Friend’s constituency of Harlow; 100% of business rates collected on the Harlow site will be retained for 25 years and are to be spent on local economic priorities. This will be possible from April 2013, once the necessary legislation is passed. Businesses will also benefit from simplified planning and Government support to ensure that superfast broadband is rolled out throughout the zone.

[Sammy Wilson (East Antrim) (DUP)]

One proposal subject to consultation, which has now finished, for reducing costs in Northern Ireland is the devolution of corporation tax so that the rate can be reduced for that part of the United Kingdom. Will the Minister assure us that the devolution of corporation tax will not be set at a price that makes it impossible for the impact on the economy to be positive?

[Mr Gauke]

As the hon. Gentleman said, the consultation process is now completed. I know we will be in contact with the Northern Ireland Executive to discuss the results. No decisions have been taken, but we have clearly made progress in this area. I look forward to having future conversations with the hon. Gentleman, including about the particular issue of cost that he mentions, but it is right for the cost as well as the powers to be properly devolved.