Northern Ireland (Welfare Reform) Bill

Alasdair McDonnell Excerpts

Monday 23rd November 2015 Commons Chamber

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

Thank you, Mr Deputy Speaker, for the opportunity to contribute to this debate. It provides us with a brief opportunity to examine the provisions of the Bill in some detail, but I cannot help thinking that the much more appropriate place for such a debate and decision making would be the Northern Ireland Assembly. It is no secret that welfare reform has proven a contentious issue not just in the last round of talks, but for some time. The Secretary of State and the Under-Secretary will be familiar with the many arguments that I and colleagues made, not only over the past 10 weeks, but in the annual crisis talks that we have held over the past three years.

On a point well made by the shadow Secretary of State, focusing on welfare reform in isolation and neglecting the serious challenge of joblessness will simply fail. It will not work. Punishing and sanctioning people for a failure to get a job that does not exist, without looking at the wider economy, is economically illiterate. The Secretary of State will no doubt assure us that the proposed changes to corporation tax will solve all our problems, but I do not believe they will and a large number of experts agree with me. Corporation tax is a valuable tool at our disposal, but it is not the silver bullet. It will not solve all the problems. The SDLP has always agreed with the need for welfare reform, but never at the cost of crucifying some of the most vulnerable and marginalised in our society.

Over 10 long weeks of negotiation the Secretary of State has heard me and other colleagues repeat the need to move away from welfare reform and start to address the serious issue of joblessness. Although our hard-won peace process helped transform Northern Ireland, it was never meant or expected to be the final chapter. The majority of sensible people believe that if we are to see our society and its people fully emerge from conflict, we need another kind of transformation. We need a prosperity process that produces training, skill development and economic opportunity. We need to do something about the vicious downward spiral of low skills, low wages and low productivity that strangles much of our economic hope.

At the core of our prosperity process has to be strong collaboration between business and third-level education, linked in turn to research and development investment, in line with best practice in Britain, the south of Ireland and right across Europe. It never ceases to shock me that Northern Ireland has a population of 1.8 million and a mere 700,000 of them—much less than half—are economically active. We are falling much too far behind our neighbours on this side of the Irish sea, in the south of Ireland, and across Europe. A massive programme of sustainable economic regeneration is urgently needed to generate the revenues we need to build prosperity in Northern Ireland. If fewer than half of our population are economically active, how can that not have a devastating impact on living standards for so many?

We must tackle the low level of economic activity in that adult population by seeking to provide a wide range of regionally balanced economic opportunities. Our goal must be to get at least 1 million of those 1.8 million people across Northern Ireland into meaningful and worthwhile work. Lifting our economy is one of the best ways of helping those on welfare to get the hand up that they are promised. We must put meaningful economic regeneration at the heart of our devolved Administration. Only then can our people realise their hopes, aspirations, ambitions and full potential.

I am deeply disappointed that the “Fresh Start” agreement made no reference to job creation, economic development or prosperity, despite these issues being raised repeatedly at every plenary session of the recent talks. The biggest challenge that we face is getting people into work or into meaningful apprenticeships and genuine skill improvement as a pathway towards jobs. I repeat that we are caught in a vicious downward spiral of low skills, leading to low wages, and, in turn, to very low productivity. This cycle has to be broken.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does the hon. Gentleman agree that low skills and unemployment would hardly be helped if this Bill were to be stopped and £10 million a month of penalties reinstated?

[Dr McDonnell]

I welcome the hon. Gentleman’s comment, but the point I am making—I hope he would take it because it affects his constituency as well as mine—is that it is all very well to talk about moving people from welfare into work in places like the south-east of England or London, where there are jobs, but we cannot move people from welfare into work if there is no work for them to go to.

The vicious cycle has to be broken, but it will not be broken by pious platitudes or wishful thinking; it can be broken only by active intervention by both the Government here and the Executive at Stormont. I repeat my previous calls to the Secretary of State and to the Northern Ireland Executive to honour commitments that we have discussed across the negotiating table over the past 10 weeks, and plead for each of us to play whatever part we can in generating prosperity. If we fail to create prosperity, we run the risk of the institutions failing again, with recurrent crises and a return to the process through Stormont House 3, which none of us wants.

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

I think it is worth reflecting on the fact that there are 30,000 more people in work in Northern Ireland, compared with 2010. The Northern Ireland economy is growing again—it is recovering—and the Executive should take some pride in that because they have obviously contributed strongly to it.

[Dr McDonnell]

I welcome the Secretary of State’s comments and the commitments she has made. I know that she probably has empathy with much of this.

This is not just about my constituency. The hon. Member for North Antrim (Ian Paisley) is sitting behind me. I look at a town such as Ballymena, which will apparently lose some 5,000 jobs in the next two or three years. That is horrific to me; I grew up not far away from it. That is the problem I am looking at. These people need our attention and need some hope, because there is nothing there but despair. However, I leave it to the hon. Gentleman to make that point, as he has done so very well on many occasions.

The SDLP has tabled amendments that would provide some flexibilities. They are a reflection of, and very compatible with, some of the amendments we made during the consideration of the Welfare Reform Bill at Stormont that was voted down by Sinn Féin and the DUP. These flexibilities would limit the Secretary of State’s power and influence in making a benefit cap in Northern Ireland and reduce the maximum period of the sanction from 18 months to six months. We are deeply concerned by the outcome of the sanctions in Britain, which have treated claimants extremely unfairly. We feel that this is a matter properly to be dealt with in the Northern Ireland Assembly.

It is now time that this Government recognised the unique circumstances of people living in Northern Ireland, who are crying out for fair play and an economic opportunity. Put simply, they are crying out for hope and a better future for themselves and their children. Seventeen years after the Good Friday Agreement, it is time to make good on the promises made at that stage of prosperity, peace and hope for all our people.

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

I want to take the hon. Gentleman back to his point about the amendments. Clearly, if they went through, that would again break parity, so there would be a financial cost to all that, and the IT systems in Northern Ireland would have to compensate as well. Who would pay for that?

[Dr McDonnell]

I think the amendments are cost-neutral and do not break parity, and they would work for all our constituents—not just mine but the right hon. Gentleman’s.

--- Later in debate ---

[Jim Shannon]

The battle is truly on, and the battle for us, as MPs, is to ensure that the jobs come to Northern Ireland, and that is what we will do. With Northern Ireland enjoying relative peace and a highly educated and motivated workforce, we now have the power to revolutionise its economy.

[Dr Alasdair McDonnell]

The hon. Member for Upper Bann (David Simpson) misconstrued my argument. I said that corporation tax was a useful tool but not a silver bullet and that we could not continue to do without the necessary skills, apprenticeships and general training. Major companies, including Almac in his constituency, are having to move abroad. Does the hon. Gentleman accept that, along with corporation tax, we need the necessary third-level education and skills?

[Jim Shannon]

For the record, the money to upskill the workforce to do those jobs is provided in the agreement. When it comes to further education or upskilling in companies or factories, the agreement gives us the chance to do something. We have to realise the good things about the agreement. My right hon. Friend the Member for Lagan Valley (Mr Donaldson) talked about people in the House and outside too often talking down Northern Ireland. That talk frustrates and scunners me. We need to consider the positives.

The Northern Ireland economy needs to bring in the quality and world-class jobs that too often our young people seek on other shores. We need to bring them home and give them the chance to do those jobs in Northern Ireland. The agreement does just what it says on the tin: it gives us a fresh start. Let us finish the job and keep Northern Ireland on that motorway to a better future. Moving forward, we do not want Northern Ireland to be a special case under any circumstances. Building the new and leaving behind the old still remains the aim, but it is hard earned, and provisions such as corporation tax and others in the deal will facilitate the transformation of Northern Irish society.

In conclusion, no Northern Ireland Member is enamoured with the proposed welfare reform legislation, which is why we opposed most of it, but we have to be realistic. Social security in Northern Ireland has always operated on the basis of parity with Great Britain. Refusal to enact reforms will come at a cost. Northern Ireland can and will pay a price to protect the most vulnerable, and the “Fresh Start” agreement does just that. It is time for sense to prevail. Northern Ireland will have the most generous welfare system in the whole of the United Kingdom of Great Britain and Northern Ireland. We will also put our public finances back on a sound footing, not least by unlocking a sizeable financial boost from Her Majesty’s Government. Most importantly, however, we will have saved devolution.