Northern Ireland Economy

Baroness Ritchie of Downpatrick Excerpts

Wednesday 11th May 2016 Westminster Hall

[David Simpson]

My hon. Friend is correct. We need to get our fair share of that in order to push this forward. I recently visited my local training centre in the Craigavon area. I have visited it many times, and in recent times it hosted a regional skills competition. I spoke to one of the instructors there, who told me of one young man who came to him—I think it was three years ago—as a trainee plumber. The instructor knew when he saw the young man working that he had something special. That young fellow lives in a village called Katesbridge outside Banbridge.

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

That is in my constituency.

[David Simpson]

He is in his early 20s, and is a constituent of the hon. Lady, and he is the world champion plumber. He went through all the heats, he went to Brazil, he won the heats in Brazil, and he is now the world champion plumber. That is some achievement for a young lad from Katesbridge in—I emphasise this again—the hon. Lady’s constituency. For a young man like that who has come in and developed a skill, the world is his oyster. He can do whatever he likes and demand his price. That is what we want to see: more young people getting into those skills, including the basic skills. It has to be realised that, while parents want all their children to be Einsteins, brain surgeons, dentists, GPs and so on, that is not going to happen, but there is still a lot of money to be earned with those skills, which we lost during the economic crisis.

Lastly, I want to focus on the agri-food sector. I have come from the Select Committee on Environment, Food and Rural Affairs just now, and we had a very interesting debate. This sector plays a significant role in the Northern Ireland economy. It contributes £1 billion of added value per annum and has demonstrated a strong track record of export growth, employing over 100,000 people, but the outlook for our farming community remains grim. Dairy farmers have witnessed their incomes fall by over a third in the past year. The realisation is that they are producing milk well below the cost of production. Something more needs to be done to help them. They cannot continue on this ongoing basis of haemorrhaging money and cash flow.

My party wants the industry to bring forward supply contracts that minimise price fluctuations and seize a greater share of their profits along the entire food chain. Six years ago in Northern Ireland, we were doing approximately £60 million of food exports. This year, the figure will be £95.5 million. That is a clear testimony to the quality of our food and drink, which is an essential part of our tourism industry. Our industry target is £1 billion by 2020 and we are already well on our way to achieving that.

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[David Simpson]

It is my understanding that that is the opinion of the Ulster Farmers Union, but everybody has their problems. I think that the National Farmers Union may have come out in support, but I am not sure; it could still be sitting on the fence. We do not know which way it will go. However, the Ulster Farmers Union has come out with that silly statement.

The year 2016 is the Northern Ireland year of food, and fantastic work is underway through Food NI. The hon. Member for South Down (Ms Ritchie) and I hosted an event on St Patrick’s day in this House. It was the second time that an event had been held in this House to promote Northern Ireland food, and it was a fantastic success. This week, the fancy London outlet Fortnum & Mason is promoting Northern Ireland produce to help local retailers. Today, a lot of VIPs and other invited guests have been there to sample some of that food.

[Ms Ritchie]

I congratulate the hon. Gentleman on securing the debate. Does he agree that a large proportion of Northern Ireland’s agri-food industry is dependent on exports? In that respect, it is important that we achieve a direct export capacity to China, Taiwan and north America.

[David Simpson]

I absolutely agree—I think the hon. Lady raised the point in the Environment, Food and Rural Affairs Committee previous to this debate—and that needs to be achieved quickly.

It is humbling to hear all the success stories—sometimes, there are stories of not so much success—especially coming from a wee country that was deep in conflict for many years. To me, that shows a strong work ethic from the Northern Ireland community and the business community to keep trying. Our economy is settling into a reasonable state of stability, but we must acknowledge the unease of local businesses, farmers and investors as the referendum looms.

I am appalled by some of the scare tactics that have been put forward by those in the remain campaign. Membership of the EU costs £350 million a week. Combined with red tape, bureaucracy and many EU laws taking precedence over UK law, we have reached a point at which the costs have outgrown the falling benefits.

Nine years ago, devolution was restored to Northern Ireland. In that time, we all faced many local, national and international challenges. We faced up to them and overcame them. However, we cannot take our foot off the gas. The incoming First Minister’s five-point plan prioritised spending on the health service, creating more jobs and increased incomes, protecting family budgets, raising education standards for everyone and investing in infrastructure. That is what we are about and what we need to do to deliver for all the people of Northern Ireland.

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

I am pleased to serve under your chairmanship, Mr McCabe. I again congratulate the hon. Member for Upper Bann (David Simpson) on securing the debate. Like him, I congratulate everyone who was elected to the Northern Ireland Assembly on Friday and Saturday of last week. There is a major job of work to do, and I am sure they will get down to that as part of their preliminary work tomorrow.

I will focus my contribution on the role that tourism and the visitor economy can play in bringing prosperity to Northern Ireland, but first I want to echo the comments of the hon. Member for North Down (Lady Hermon) about education. Clearly, education, skills and training are directly linked to the economy. However, on 23 March, schools received a letter from the Minister saying that their budget would be at a certain level. It a major cut, which will have an impact on the delivery of the curriculum to many pupils throughout the schools sector. That will have an impact on our economy in the long term, which needs to be addressed as a priority.

[Sammy Wilson]

rose—

[Ms Ritchie]

The hon. Gentleman will appreciate that two other hon. Members wish to take part in the debate, but I give way to him.

[Sammy Wilson]

Will the hon. Lady accept that, given how the block grant works, the only way more money can be found for education is through reform of the education system in Northern Ireland? I am talking about holding less money at the centre for Department-inspired initiatives and instead giving it to principals, and about showing less favouritism to certain growing sectors of education at the expense of other sectors, some of which are already working under capacity.

[Ms Ritchie]

I thank the hon. Gentleman. I agree that there needs to be investment in schools and education. That is the priority, because investment in well-developed children’s education will lead to better outcomes for training and our economy.

Northern Ireland is undoubtedly a beautiful place, and our appeal has been strengthened by our growing position as a world-leading location for films and television. In that respect, tourism is an important revenue generator. In the year from October 2014 to September 2015, it brought total expenditure of more than £700 million to our economy. That helps to support jobs and gives communities new livelihoods.

As a co-chair of the all-party group for the visitor economy, I am anxious, as are many members of the group, for the Government to bring forward proposals to reduce VAT on tourism on a UK basis. That fiscal incentive would have a deep and generous impact on the Northern Ireland economy. We need only look at the south of Ireland, where VAT on tourism has been levied at 9% over the last number of years. As a consequence of that measure, about 9,000 jobs were created in the two years after it was introduced. We are part of the UK, which is one of only two of the 27 countries in the European Union that do not have a lower rate of VAT on tourism, so that immediately places us at a disadvantage.

The hon. Member for Upper Bann also raised the issue of Brexit. Obviously, I take a very different view from him and his colleagues in the Democratic Unionist party. I and my colleagues in the Social Democratic and Labour party believe that we should remain in the European Union and I give a little warning based on evidence direct from Danske Bank. This week, it said in the quarterly sectoral review for 2016 that the economic growth forecast for Northern Ireland had been revised down to 1.6% from 1.8%. Angela McGowan of Danske Bank was reported in the business press yesterday as having indicated that that was due to the threat of Brexit, austerity and slower global growth, which takes us back the global commodity markets. She said:

“The message remains that Northern Ireland’s economy continues to expand, but the pace of growth is slowing. While the continued reduction in the public sector jobs will weigh down overall growth in the short to medium term, by far the biggest risk to growth this year is Brexit which has lowered investment and growth in the first half of this year…but there is no reason the private side of the economy should not bounce back”

after the referendum, which I hope will produce a remain vote.

Those on the leave side have not produced any evidence on which to base their arguments, and they do not know what the far side of a leave vote would look like. However, I know that there will be a severe impact on our local economy. I firmly believe that there is a future for the Northern Ireland economy and for our young people, but that depends on several factors. One is staying in the European Union, otherwise we will close easy access to the 500 million potential tourists in the EU and block off one of our biggest areas of growth.

I once again congratulate the hon. Member for Upper Bann on securing this important debate. I hope that the Northern Ireland Executive will get down to work and ensure that new areas of growth can be tapped into and that new areas for visitors can be created. That can happen only in a context in which we are totally open for business and totally open to new markets. That means remaining in the European Union.

Further to that, I want our agri-food sector to grow—

[Jim Shannon]

Your five minutes have gone.

[Ms Ritchie]

Yes; I will conclude by thanking the hon. Member for Upper Bann for securing the debate, but I remind hon. Members that we are better inside the European Union than outside, and I ask the Minister to comment on the need to lower VAT on tourism.

[Steve McCabe (in the Chair)]

I thank the hon. Lady for her co-operation.