Northern Ireland Economy and Innovation: Government Support

Emma Little Pengelly Excerpts

Tuesday 29th October 2019 Westminster Hall

[Emma Little Pengelly (Belfast South) (DUP)]

I beg to move,

That this House has considered Government support for the economy and innovation in Northern Ireland.

First, may I say what a pleasure and privilege it is to serve under your chairpersonship, Dame Cheryl? I am particularly pleased to finally secure the debate. The Minister will be aware that I had secured the debate twice previously, and that it unfortunately fell twice because of the proroguing. I am glad to be here, particularly at this moment in time, to talk about the business and innovation community in Northern Ireland, which is such an important issue.

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

Will my hon. Friend join me in being extremely grateful that she did not succeed in securing the debate for next week?

[Emma Little Pengelly]

Absolutely. Even when I saw that the debate was scheduled, I thought that I had jinxed the entire thing, and that it certainly would not be third time lucky. However, it is, and I am really pleased to be here, because I am passionate about supporting the economy and businesses in Northern Ireland.

The issue is particularly important at this pivotal time for Northern Ireland and our United Kingdom, of which our businesses are very much part. I will touch on a number of issues relating to business, innovation and the economy in Northern Ireland, and I will raise questions and issues on particular elements. I am grateful to the Minister for being here to respond.

First, I want to paint the broader picture in Northern Ireland. Northern Ireland has an incredibly proud industrial and manufacturing history. We have been world leaders. Many companies that were created and thrived in Northern Ireland, and have been world leaders, will be well known to many across the United Kingdom and the world. Northern Ireland has contributed in a valuable way, including to the economy of pre-partition Ireland and of this United Kingdom. We have been world leaders in manufacturing and industry.

Many generations in Northern Ireland have worked, created, innovated and led the way. They have been critical to our economy and the tens of thousands of jobs they created, changing lives. The mighty companies of the past put Belfast and the rest of Northern Ireland on the map. However, as we are all aware, times have changed, and some of those huge, mighty industries of the past have faded away or are disappearing. This is common not only in Belfast and Northern Ireland, but across the United Kingdom and in many other countries.

However, we must build on our incredibly strong foundation to move forward. Having spoken to businesses, universities, and people in my constituency and across Northern Ireland, I believe there is a huge appetite to do that. It is often said that we stand on the shoulders of giants, and that is true when it comes to the economy and business in Northern Ireland. We have a bright and optimistic future if there is application, support and the right environment to help our businesses, economy and companies grow.

--- Later in debate ---

[Dame Cheryl Gillan (in the Chair)]

I remind hon. Members that interventions must be brief.

[Emma Little Pengelly]

I thank my hon. Friend for that intervention, which was so good that I almost intervened on him. I absolutely agree. We have incredible companies. Politicians from all parties, but particularly the Democratic Unionist party, have always been proud to showcase and promote those companies, in London, the UK and across the globe. I have had the privilege and pleasure of accompanying many of those businesses on trade missions across the globe. I can see the huge interest in the innovation and creativity of those companies.

The Democratic Unionist party has often been referred to as the party of business in Northern Ireland. Some may disagree with that, and we do not always agree with business on everything, but one thing is clear: the Democratic Unionist party is a proud pro-business party. We recognise that supporting business is critical to supporting our economy, and growth in our economy is critical to getting new opportunities for young people and building a better future for them. We know that shared prosperity in Northern Ireland will bring shared stability. That is essential for Northern Ireland as it emerges from decades of trouble and division, and their legacy, which we still deal with; we know that growing the economy is key.

That is why, in 2007, when the Northern Ireland Assembly was restored, the Democratic Unionist party made growing the economy in Northern Ireland the No. 1 priority. We do so by building a coalition with all the other parties that agree that growing the economy is the best way to get a bright and better future for all in Northern Ireland, across all communities: Catholic and Protestant, Unionist and nationalist, and new and other communities that do not define in that way. We want everybody in Northern Ireland to succeed, and to have the best opportunities, and we recognise that one critical way of doing that is to have a robust, growing and strong economy in Northern Ireland.

[David Simpson (Upper Bann) (DUP)]

My hon. Friend is making a very good speech. She mentioned large companies, but the backbone of Northern Ireland is small, family businesses. We have helped those in manufacturing with rates relief and other measures. Regarding innovation, we have the Young Enterprise programmes, which are coming through into small businesses to give them some initiative. I am sure she will also welcome that.

[Emma Little Pengelly]

I absolutely agree. Later in my speech, I will come to the various aspects of our economy in Northern Ireland, and the particular issues, challenges and opportunities they face.

Northern Ireland is the smallest region of the United Kingdom, making up just 3% of the UK, but we still make a mighty contribution, and have a mighty story to tell. All of us here from Northern Ireland want it to play an even greater part in what is often referred to here as global Britain, but we would like to see a truly global United Kingdom agenda, in which every part of this United Kingdom is fully integrated and promoted and each region pulls its weight.

[Sammy Wilson (East Antrim) (DUP)]

Does my hon. Friend accept that one of the downsides of the current withdrawal agreement is that although we are a major exporting region of the UK, we might find ourselves prevented from taking part in trade deals that the Government might strike with other parts of the world because of the way in which we are tied into the EU?

[Emma Little Pengelly]

As a member of the International Trade Committee, I am very aware of the opportunities, challenges and barriers that full participation in international trade entails. It will come as no surprise to hon. Members to learn that I will mention the ‘B’ word—Brexit—later in my speech, and specifically the dreadful proposal for the Northern Ireland economy. My right hon. Friend’s points are valid; that constitutes a real and present risk to our economy.

Northern Ireland, just 3% of the United Kingdom, relies hugely on trade with the rest of the United Kingdom. Great Britain is the biggest market by far for Northern Ireland—bigger than the Republic of Ireland, the European Union and the rest of the world combined. Over the past 10 to 20 years, and certainly since the restoration of the Assembly in 2007, huge effort has been put into increasing our exports, and the market for our exports in other countries in the European Union and across the world, but Great Britain remains our biggest market, which we rely on hugely. Any barriers to trade with it would have significant impacts. I will touch on that later.

A factor that is discussed less often in this debate is consumer choice. Consumers in Northern Ireland rely hugely on the Great British market for goods, from the supermarket goods that we see in common high-street shops, to bespoke and craft products in smaller, family-owned shops. Many of those goods come from Great Britain, and there are real concerns about how people will access them. Many people today access goods through online marketplaces, such as Amazon, eBay and Etsy; that, too, gives rise to concerns about consumer choice and access. Many of the companies in those marketplaces are based in Great Britain, and many are very small producers; barriers might prevent them from posting their products to shops and consumers in Northern Ireland.

As a small region of the United Kingdom, we rely heavily on its economy, but Northern Ireland has a really strong case to make. As we have gone round the world trying to attract new businesses and, particularly, foreign direct investment to Northern Ireland, we have been able to showcase the fact that we have the highest skills in the United Kingdom. We have three excellent universities: Ulster University, Queen’s University in the heart of my Belfast South constituency, and the Open University, which does a huge amount of work. We also have high skills and a good education system. That is not to say that we do not have challenges—I have spoken about the challenges of trying to support every child to succeed in getting skills—but we are one of the highest-skilled regions in the United Kingdom.

We have relatively low staff turnover, which is very attractive to businesses moving to Northern Ireland, because they know that if they take those staff on, train them and invest in them, they will show loyalty. Indeed, I think we have the lowest staff turnover in the United Kingdom, which is comparatively unique. A company looking to come to the United Kingdom will also find relatively low set-up costs in Northern Ireland, as well as people who can support it through the process, and comparatively low recurring running costs.

We have a strong case to make, but of course there have been challenges. Over the past 15 years, the Republic of Ireland has cut its corporation tax time and again to make it even more competitive, knowing that our corporation tax rate is tied to that of the rest of the United Kingdom, and is therefore significantly higher. The Republic of Ireland has created tax incentive packages that I would describe as innovative, particularly to attract big US companies such as Facebook and Apple. We want to be able to attract those companies, too. Since 2007, working closely with Invest NI, Northern Ireland has had a very strong record; in fact, for some years, it attracted more FDI than any region of the United Kingdom outside London and south-east England. For a small region with the challenges that we had, that is a really strong story to tell. It is a story that we should be proud of—but we want more. We want to do better, and we need to do better, because we still have challenges and we still do not have the types of jobs that we want for our young people: high-value, stable jobs that young people with the right skills can move into, creating happy, healthy lives for themselves and their families with the prosperity that we want to bring.

[Sammy Wilson]

My hon. Friend is right that it is not just jobs that we want, but good-quality jobs. Does she agree that when the Assembly was working properly, one of its successes was in attracting such jobs? Indeed, about 50% of the jobs attracted through FDI paid wages above the average wage in Northern Ireland.

[Emma Little Pengelly]

I absolutely agree. Statistics released in recent days indicate that although we have had growth in the average wage, it has now slowed down, and there has been a slowdown at the high-value end of jobs. In Northern Ireland we have comparatively low unemployment, but those statistics do not necessarily show the whole story. My constituency of Belfast South has one of the lowest unemployment rates not just in Northern Ireland, but across the United Kingdom—but too many of those jobs are at the lower end. We need high-value jobs that pay people better, because there is significant in-work poverty. The best way to get out of poverty is with a well-paid job. People need jobs with stability to help them to support themselves and their family.

We also have persistently high levels of economic inactivity. Although people point to that inactivity, the reality is that right now we cannot just match it with jobs growth. We need good programmes to support people, regardless of why they are economically inactive. In Northern Ireland, we have a higher than average percentage of students, who are currently defined as economically inactive, but those are not necessarily the people we are worried about; we are worried about those who have been economically inactive for some considerable time. Even more worrying are people in families who suffer from transgenerational unemployment. They need the right support and skills programmes, at the right level.

This is not just about getting people entry-level jobs; we want them to skill up and make progress. I have heard House of Commons statistics about how many people go into an entry-level job and stay at that level for their entire career. Social mobility and support for people throughout their career, so that they can increase their wages and their family income, are essential to the shared prosperity to which we are committed.

Let me touch on a few particular aspects. I have already mentioned foreign direct investment. Northern Ireland’s economy is still very much one of small to medium-sized, largely family-owned businesses, as my hon. Friend the Member for Upper Bann (David Simpson) said. The Democratic Unionist party absolutely wants to support those businesses, but many of them are understandably reluctant to take risks in order to grow—people are content with the strong business that they have built not just for themselves, but for their children and family. We want to encourage those businesses because we need them to grow, but they should be able to take those risks in an environment in which they feel confident and positive. I will say a little more about family and small businesses in a moment.

I know that the Minister will have had meetings with Invest NI and received briefings. I pay tribute to the incredible work of Alastair Hamilton, who I worked with many years ago. He has done a fantastic job in very difficult circumstances, particularly in the past few years, to keep increasing foreign direct investment and high-value jobs. Since the collapse of the Northern Ireland Assembly more than 1,000 days ago, one of the small glimmers of light has been the fact that Invest NI has been able to continue to make jobs announcements, including in my constituency, and to create the opportunities that we really need. Under the framework set by the Northern Ireland Assembly, Alastair Hamilton and his Invest NI colleagues were able to continue going into the global marketplace, winning contracts and attracting companies to Northern Ireland. We want to build on his incredible work; as he moves on from the job, we are all thankful for the amazingly competent work that he has put in.

We are keen to continue to play a full role in attracting foreign direct investment. We can do so much through our regional organisations, such as Invest NI, but as the Democratic Unionist party has pointed out to the Government on a number of occasions, our sell in Northern Ireland must be fully integrated into what the United Kingdom does on a global scale. We want to be fully included in what is being offered, including trade fairs, engagement with countries, and trade missions. Some progress has been made, but we want more. I am sure that Members of Parliament from Scotland, Wales, the north of England and other regions also feel that, historically, their region has not been fully included and integrated in the sell of the UK Government. I have raised that issue on many occasions with the Secretary of State for International Trade, and with the Department for Business, Energy and Industrial Strategy. Progress has been made, but we want to build on it, and we want more of our companies to take part.

We know that innovation is the way forward. Northern Ireland will never be a low-cost manufacturer, but we have been, can be and will be high-quality, innovative and creative in our manufacture, industry and services, and in the skills that we bring to them. Investment in innovation is therefore very welcome. Some investment in research and development has been affected by constraints around state aid and other aspects of the European Union. As we move forward from that, we want a continuation of the investment in innovation, research and skills that we have had before.

The Government have spoken on this issue on a number of occasions, and I certainly welcome the very warm words that they have used. However, we would like concrete proposals on how Northern Ireland will get its fair share from any central programme to support innovation, research and development, and on how Northern Ireland can be more successful in bidding for central funds, to try to get the help and support that our businesses need to grow.

I have mentioned a number of universities, but as the Member of Parliament for Belfast South, I will of course mention once again Queen’s University, which does fantastic work in innovation; in fact, it is leading the way in a number of areas.

I am very conscious that we need to identify the potential growth areas. In what areas can Northern Ireland show unique creativity and innovation? In terms of the UK as a whole, what can we do to be particularly attractive to foreign direct investment and growing businesses? We have done huge amounts in areas such as cyber-security and finance.

[David Simpson]

I thank my hon. Friend for giving way again. An issue raised with me time and again is research and development assistance from Invest NI, because small companies are very much hands-on, so they do not have the manpower or staff to handle research and development. Maybe we could look at another way to deliver R&D.

[Emma Little Pengelly]

Absolutely. The Northern Ireland Executive and Assembly were in a really good place to listen to businesses about their needs, and the challenges that they found when trying to apply for those types of funds––the red tape and other difficulties. In future, particularly post-Brexit, we will need a Government who are responsive to the question of how we can support businesses to grow in a way that works for them and their owners, because those owners have enough to do running those businesses, and focusing on what they are good at. The Government need to support firms in a flexible way, and give them the right tools and encouragement to grow.

I will briefly refer to our small and family businesses, particularly retail businesses on our high streets. I mentioned this issue last night in a debate in the main Chamber. As is the case across the United Kingdom, our high streets are under a huge amount of pressure, but unfortunately, we have not been able to access the same amount of support as other areas. I welcomed the Government announcement of additional support for high streets through the future high streets fund, but of course Northern Ireland was not able to use that money, because it went into the Northern Ireland block grant as an unhypothecated Barnett consequential, which meant that it was not ring-fenced for that purpose. As there is no Northern Ireland Assembly at the moment, there is no accountability; there is no way that elected Members and the people of Northern Ireland can push civil servants to spend that money on high streets.

We all know that our retail sector in our towns, villages, and small urban areas in cities is crying out for help; that is common right across this United Kingdom. Those areas are suffering from high business rates; they feel crippled by the bills that they receive. The shopping habits of consumers are changing, so small businesses are struggling. Very often, they are family-owned, and the owner actually works in the business. They need this help, but I met the head of the civil service to urge him to put that money towards retail, and there is no indication that that has happened.

That brings me to something that I have spoken about many times since I was elected as a Member of Parliament in 2017, namely that there is no Northern Ireland Assembly to listen to what the economy needs, and to do what it needs to do. That genuinely grieves me. The people of Northern Ireland, including our business people, are deeply frustrated. They want politicians to get back to work, to get back into the Northern Ireland Assembly and to start investing to grow our economy.

That is my challenge here today to Sinn Féin. There is no impediment to all the parties going back into that building tomorrow and sorting out our problems around the table, like adults, in the Northern Ireland Assembly. I speak for very many people across the community when I say, “Just get back to work and do what you need to do, because our economy needs to grow.”

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

My hon. Friend is making a very important point. We are talking about the economy, but peace and prosperity go hand in hand. Does she agree that the current EU withdrawal agreement, which she touched on, has the potential to damage local businesses further? Those businesses bring many of the goods that they sell on the high street from Great Britain, and anything that adds to the cost of bringing in those goods risks the ongoing presence of those businesses on our high streets.

[Emma Little Pengelly]

Absolutely, and I—

[Dame Cheryl Gillan (in the Chair)]

Order. Before the hon. Lady resumes, I point out that I have one eye on the clock, three Members have indicated that they would like to make a contribution, and I want to start the wind-up speeches by the two Front-Bench spokesmen at 5.10 pm. It is, of course, up to the hon. Lady to decide what she does, but I thought it might be helpful to point that out.

[Emma Little Pengelly]

I will try to move on as swiftly as I can. I was coming on to the next section in my speech, which is on Brexit. Your comment is probably a good indication that I should not speak for very long on Brexit, Dame Cheryl; despite the fact that I could do so, I will not do so.

I absolutely agree with my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson). However, before I move on to speak very briefly about Brexit, I will mention business rates, because our smaller retail businesses and other businesses on the high street have been crying out for reform of business rates.

I was chair of the Finance Committee in the Northern Ireland Assembly just before the collapse of the Assembly, so I know that business rates were an issue that we were looking at, because Northern Ireland had led the way in rate support for small businesses. Unfortunately, however, since then, the rest of the United Kingdom caught up with us, and then moved past us, so our businesses are now suffering from business rates that are higher than those for small businesses across the rest of the United Kingdom.

The Democratic Unionist party wants fundamental reform of business rates; we recognise that there needs to be additional support for our small businesses. We are up for that challenge; we want to have that discussion; and we need a Northern Ireland Assembly back in action to do it. However, in the absence of the Assembly, I strongly urge the Minister to do what he can to listen to business, and to work within the regime that we have in Northern Ireland to give that much-needed support to small business.

I will very briefly touch on Brexit. A number of my right hon. and hon. Friends have already made contributions about it, and I will not repeat what they said, especially because I know a number of other Members still want to make a contribution about it. Nevertheless, it is absolutely right that any barriers between Northern Ireland and Great Britain—east-west or west-east—will create greater bureaucracy and disruption, and will threaten the economy that we rely on.

The fabric of that economy is complex. It encompasses everything from the large manufacturers and large businesses that have come in, to the supermarkets, right down to the business owner who runs a gift shop and brings in 10 or 20 pottery mugs, bowls or whatever it may be from a small supplier in Great Britain. When we work through all the detail, we can see where there could be significant additional costs and significantly more bureaucracy. These businesses may actually have problems in getting supplies. That is the difficulty for many, many businesses.

We have raised that issue, because the Democratic Unionist party will always stand up for what is good for Northern Ireland. What is bad for business—what puts up barriers—is bad for Northern Ireland. We know that, and we care about the people involved.

[David Simpson]

My hon. Friend touched on business rates. I understand that there will be a rate review next year in Northern Ireland; as a party, we should use our influence to try to do something for the retail sector.

[Emma Little Pengelly]

I absolutely agree with my hon. Friend. However, I am getting a huge amount of pressure on my right from my hon. Friend the Member for Strangford (Jim Shannon), who is very keen to speak; I know that because he never gets to speak in Westminster Hall. So I will wind up.

In conclusion, I am passionate about supporting the economy in Northern Ireland, and I hope that I have got that across very firmly today. I am passionate about making Northern Ireland work. I am passionate about helping Northern Ireland to thrive. That must mean creating jobs, opportunities and a brighter, more prosperous future for all in Northern Ireland, across all the communities. We recognise that. I recognise that happy, contented people in this Union—in this United Kingdom—will not vote for the chaos, change and decades of transition that leaving this United Kingdom would bring. Members of our party genuinely care about the people of Northern Ireland, and we want our businesses, economy, industry and people to succeed.

[Several hon. Members rose—]

--- Later in debate ---

[Emma Little Pengelly]

I will not go into any more detail about what we have discussed. I thank all hon. Members who turned up and I apologise for the fact that they had to make short contributions. As I said, there are a significant number of issues—I did not touch on city deals or some of the other issues. I ask the Minister to continue to work closely with us to help Northern Ireland to grow, thrive and succeed in the future.

Question put and agreed to.

Resolved,

That this House has considered Government support for the economy and innovation in Northern Ireland.