Northern Ireland Economy and Innovation: Government Support

Ian Paisley Excerpts

Tuesday 29th October 2019 Westminster Hall

[Ian Paisley (North Antrim) (DUP)]

It is an honour to serve with you in the Chair, Dame Cheryl. The wonderful speech of my hon. Friend the Member for Belfast South (Emma Little Pengelly) really put into perspective the fact that not only does Northern Ireland want to play its part in the economy of the United Kingdom of Great Britain and Northern Ireland, but it plays its part in the world. That is very important, because we have a great history. She mentioned standing on the shoulders of giants. Currently, 10% of all global financial exchange networks flow through Belfast, and 10% of all cholesterol tests for the world flow through Randox Laboratories in Northern Ireland. Northern Ireland plays a significant part in the world economy.

We are therefore anxious for Northern Ireland to do more, and for the Government to recognise and facilitate that, not cut us off from our mainstream economy. In simple terms, about £18 billion-worth of trade is done every year between Northern Ireland and the rest of the United Kingdom; and about £6 billion is done with the Republic of Ireland and the EU. I know which side of the fence traders in my constituency and across Northern Ireland want to be on. It is therefore critical that we get that balance right.

We have five very simple requests for the Government. First, reduce corporation tax in Northern Ireland. Stop footling around with other things in Northern Ireland and deal with corporation tax. Reduce it to 10%. Make Northern Ireland the attractive place that it should be for businesses to invest in. Secondly, remove airport passenger duty for our region and allow us to compete properly with Dublin airport, which is stealing customers, who do not turn left when they get off the aeroplanes in the Republic of Ireland but stay in the Republic.

We need those customers to come to Belfast. Thirdly, therefore, incentivise airline carriers to land in Northern Ireland so that we can have more tourism and more businesspeople. Fourthly, remove VAT on tourism and hospitality so that we can compete fairly with our land-border neighbour. Fifthly, build a bridge. Give us that connection between Northern Ireland and the rest of the United Kingdom. Let the constituents of my right hon. Friend the Member for East Antrim (Sammy Wilson) leave Larne and drive to Scotland, and then drive back again on the same day. Allow them to have that great opportunity, which they really need.

In the last few seconds of my speech, I want to thank the Government for their efforts to keep a brilliant manufacturing company, Wrightbus, alive in Northern Ireland. That will create tens of thousands of opportunities for people in the years ahead.

[Stephen Pound (Ealing North) (Lab)]

Let us agree on one thing: Northern Ireland is the home of innovation. There has been a long history of that, from the modern tractor through to the Sunderland flying boat, Wrightbus and Shorts Missile Systems. In fact, most of the ejector seats in modern fighter planes are made in Northern Ireland. There is no argument that we have that extraordinary history; that seedbed of innovation, which is flourishing.

When we go to places such as Lagan College and speak to young people who are working in completely new businesses and industries, we realise that the base material is there. So what can we do, as Government, to facilitate the flowering of that innovation and great skill? When, 20-odd years ago, we had a problem with the aggregates industry because of the fiscal harmonisation issue cross-border, the Government were able to work with the aggregates industry in Northern Ireland to equalise the rates of exchange on tariffs, in order to facilitate that local business. However, that is just a tiny bit of it.

We have a philosophical question here: how do we actually support industry and innovation? The days of DeLorean, of parachuting in large amounts of money and of top-down intervention are long gone. We have to work in an entirely different way. Look at companies such as Thales, based in my constituency.

[Ian Paisley]

Will the hon. Gentleman give way?

[Stephen Pound]

Am I allowed to take an intervention?

[Ian Paisley]

Yes, and you get an extra minute. I am delighted that the hon. Gentleman has given way, because he talked about the real innovation in Northern Ireland. This week I visited a company called Creative Composites in the constituency of my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson). They make the entire shell of the new London taxi.

[Stephen Pound]

That is an extremely interesting point, and I am extremely grateful to the hon. Gentleman—

[Ian Paisley]

They make the 720S body for McLaren. They make the Aston Martin shell. Those things are done innovatively in Northern Ireland because they cannot be done anywhere else in the United Kingdom. That is why we should invest in Northern Ireland.

[Stephen Pound]

Do you know, I have no argument with that. Thales employs nearly 1,000 people in Northern Ireland, and it is there for a reason. It took over Shorts Missile Systems, and it is there because of the highly skilled, highly motivated, highly trained and highly capable workforce. What can we, as Government, do to help? In my days in the Navy, the number of marine engineers who came from Northern Ireland was extraordinary, yet somehow we are unable to see that great tradition of engineering innovation and expertise flourish in Northern Ireland.

I could make many suggestions; I will make just a small one. The backbone of Northern Ireland industry is small and medium-sized enterprises. They have a problem with apprenticeships—I am not talking about the Apprentice Boys, but apprenticeships. A small company finds it very difficult to employ apprentices, simply because of the absence of economies of scale. In GB we used to have a thing called the MSC—the Manpower Services Commission—whereby the Government would underwrite apprenticeships or temporary employment periods. Would it not be marvellous if the Minister, a man of great decency and honesty, and who is extremely committed to the expansion of industry in Northern Ireland, could persuade some of his colleagues to loosen the purse strings and look at the Government supporting apprenticeships?

At the moment, most SMEs simply cannot afford to employ apprentices. The foreign direct investment is there. Northern Ireland has a great reputation, not just within the rest of Europe but in America. However, we need small companies to have the capability and elasticity to attract and work up those schemes. Apprentices would make a huge difference. Let us see whether we can do that, because when we see the amazing extent of innovation, intelligence, hard work and commitment in Northern Ireland, we think, “Why isn’t this place the powerhouse of Europe?” I think it could be again.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure and an honour to serve under your chairpersonship, Dame Cheryl, and I congratulate the hon. Member for Belfast South (Emma Little Pengelly) on securing this debate. It is third time lucky for her, and also for the House, because the speech with which she opened this debate was passionate, well-informed, comprehensive, and very moving in parts. I, for one, learned a lot from it.

I am proud to represent the party that helped broker the Good Friday agreement, and the current Government’s cavalier approach to preserving that agreement in the Brexit negotiations worries me. As hon. Members have said, the Good Friday agreement is the foundation of peace and prosperity in Northern Ireland, as well as the Republic. The absence of the devolved Government in Stormont is another issue that many hon. Members have mentioned. Labour’s approach rests on increasing local, regional and national democracy, and the lack of resolution to that problem clearly undermines efforts to improve innovation and the economy of Northern Ireland.

I will begin by outlining Labour’s approach to industrial strategy and innovation. It is not a top-down approach; as my hon. Friend the Member for Ealing North (Stephen Pound) said, that is not the right approach. We aim to provide support for a devolved Administration and local councils to make decisions in support of their industry and their workers. We have talked a lot in recent months about the differences between Northern Ireland and the rest of the UK, but there are also many similarities, particularly with my home region, the north-east of England. As the hon. Member for Strangford (Jim Shannon) likes to point out every time he intervenes in one of my Adjournment debates, there are many similarities between our regions, particularly our economies and the investment in making and building things over the centuries. The hon. Member for Belfast South spoke movingly about that in the context of Northern Ireland, as well as the years of deindustrialisation and under-investment in infrastructure and education that have left Northern Ireland with some significant economic challenges.

The legendary Harland and Wolff shipyard was recently saved from collapse because workers staged a nine-week sit-in in protest to show that it was still viable, but those who took redundancy face an uncertain future. Wrightbus has also been mentioned—a company that had been operating since 1946, but which closed its doors in September, threatening 1,200 jobs. It was recently bought by the Bamford family after going into administration, although we still do not know what its workers’ fate will be, particularly as the Government propose a Brexit deal that would place trading barriers between that company and the rest of the UK. The right hon. Member for East Antrim (Sammy Wilson) and the hon. Member for Strangford emphasised the negative impact that would have.

[Ian Paisley]

The business that the hon. Lady has alluded to is in my constituency. It was a very significant employer, equivalent to about 60,000 jobs if it were based here in the mainland, and I am delighted that the Bamford family have invested in it. It is a new chapter for the industry, bringing hydro technology to Northern Ireland. Hopefully, as a result we will get the cleanest, greenest public transport in not only the UK but the world.

[Chi Onwurah]

I thank the hon. Gentleman for his intervention, and I will return to that example. However, my point is that this does not reflect a sound industrial strategy, precisely because the old company collapsed because of its UK customers moving to electric buses and the new company will be making electric buses. A serious industrial strategy would have a plan for transport that could have incentivised the company to move in that direction without the chaos of administration and the sale to a Tory donor, in order to achieve the same outcome. That sort of creative destruction might excite certain Government advisers, but it puts workers under severe stress and often results in employment under worse terms and conditions, as the former employees are in a weaker bargaining position.

That process of collapse and asset stripping is related to the problem of the financialisation of our economy. The last decade has seen the UK economy centred on London and the south-east of England, with a focus on financial services rather than producing things. As the economist Mariana Mazzucato argues, the financial sector has stopped resourcing the real economy. Instead of investing in companies that produce stuff, finance is financing finance. Financialisation changes the motors behind economic activity, giving investors with short-term interests more control over firms, and its legacies are low productivity and low pay. Labour is committed to changing that and putting innovation at the centre of our economy, using our world-class universities—such as Ulster University, and Queen’s University in the constituency of the hon. Member for Belfast South—as drivers of growth, rather than putting off scientific talent from across the world with cruel immigration policies.

Labour’s “innovation nation” mission would raise research and development to 3% of GDP—almost twice what it is now—using science and industry to benefit the whole country. We need to maintain our current centres of excellence, but must also ensure that every region can benefit from innovation and growth. That is why we are committed to putting technology and innovation at the heart of the lowest-paid and least productive sectors. The hon. Member for Belfast South spoke movingly of the need for social mobility in work, which requires increased productivity. We want to restart manufacturing, but we know that most jobs are in the service sector. Some 17% of people employed in Northern Ireland work in wholesale and retail, in the everyday economy. That is why we have plans to create a retail catapult to support those workers.

Much of our additional R&D spend would be drawn on by our industrial strategy missions, such as investing in carbon capture and storage as part of our commitment to decarbonise our economy, delivering hundreds of thousands of green jobs in the process. We propose a £250 billion national investment bank, made up of a network of regional development banks that would properly put regional needs first and restore regional decision making. Earlier this year, the Northern Ireland Chamber of Commerce said that 77% of service sector firms and 74% of manufacturers were having difficulty recruiting staff. Labour’s national education service will support reskilling, delivering education free at the point of demand from cradle to grave and ensuring that we have the skills that businesses need.

Although the DUP might have secured £200 million in next year’s Budget through its deal with the Government, recent weeks have shown how quickly the Government can change their mind. Labour’s £250 billion national transformation fund would invest in transport and digital infrastructure across the UK without preconditions.

Finally, I will turn to the topic of Brexit. In the 2014-20 block of EU funding, Northern Ireland was allocated a total of €3.5 billion—significantly more than the Government’s offer to the DUP. As we have rightly opposed the Government’s shambolic Brexit deal, we have to question whether that funding will even be delivered. Will the Minister commit to publishing an assessment of the impact on the Northern Irish economy of putting extra tariffs on trade between Northern Ireland and the rest of the UK, and making sure that that impact is not negative? Will he also follow Labour’s plan and commit to maintaining the EU levels of structural investment as a minimum? Finally, given the current trade tariffs on EU exports after the row over subsidies to Airbus, what commitment will he give to aerospace workers in Northern Ireland?

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[Ian Paisley]

The way for the Minister to succeed in that is to ensure that the Government here put money into hydro tech and allow hydro companies to produce the resource. He must see the way ahead as not just battery power but hydro power.

[Mr Walker]

The hon. Gentleman makes his bid strongly, as I would expect. I will ensure that that is passed on to the Treasury and other relevant Government Departments. Indeed, we have heard a number of bids during the debate, not all of which I can necessarily answer. Obviously, however, there are a number of opportunities coming to deal with some of those things.

People in Northern Ireland also benefit from the changes that people throughout UK enjoy that have been delivered by the Government, including an increase in the national living wage that benefits about 75,000 workers, and a fuel duty freeze for the ninth successive year that saves the average driver a cumulative £1,000 compared with under the pre-2010 escalator. Following the terrible fire in Bank Buildings, owned by Primark, in August 2018, the UK Government provided £2 million to support the recovery and regeneration of Belfast city centre in the constituency of the hon. Member for Belfast South. I am pleased that much of the city centre has been rebuilt and has reopened after that fire.

As the hon. Lady mentioned, the UK Government announced a £675 million future high streets fund to support local areas in England to develop and fund plans to make high streets fit for the future. As high streets funding and business rates are devolved, the Barnett formula was applied to Northern Ireland in the usual way, as she noted. It is for the Department of Finance and Northern Ireland civil service permanent secretaries to determine how that money should be spent.

I join the hon. Lady in wishing that we had a restored Executive and in encouraging all the politicians in Northern Ireland to come together to bring the Assembly back, so that decisions can be taken on those issues and they can move forward. Hon. Members may be aware that the Government introduced the Northern Ireland Budget Bill today, which is required to place the Northern Ireland budget, presented in February 2018, on a legal footing. Delivering that legislation demonstrates the UK Government’s commitment to providing good governance for the people of Northern Ireland in the continued absence of the Northern Ireland Executive, but of course, we all want the Executive to be restored.

Businesses in Northern Ireland can benefit from UK Government initiatives, including the British Business Bank, which has supported more than 1,200 small and medium-sized enterprises in Northern Ireland with £80 million since November 2014. In the last year, more than 1,000 loans, valued at £7.3 million, have been granted to Northern Ireland businesses. Northern Ireland businesses also have access to UK Export Finance, which has provided nearly £33 million of support for exporters in Northern Ireland. I absolutely commend the collaborative efforts of Invest NI and the UK Department for International Trade to support Northern Ireland exporters to trade across the globe and to attract investment into Northern Ireland. I join the hon. Lady in paying tribute to the work of Alastair Hamilton and in wishing his successor every success in the years to come.

As the hon. Lady will recall, the UK Government’s Board of Trade met in her Belfast constituency earlier this year, which was the first time it had met in Northern Ireland in its 400-year history. The global success of Northern Ireland firms was celebrated, with several Northern Ireland companies receiving their well-deserved Board of Trade awards.

Our prosperity and ability to build a strong economy depends on how we encourage innovation, develop high-quality jobs and skills, and support businesses throughout the UK to thrive and grow. Innovative businesses across Northern Ireland are a huge part of its success, including Armstrong Medical, which I had the pleasure of visiting at a Causeway chamber of commerce business roundtable recently.

As we have heard, Northern Ireland has globally admired universities and research institutions, such as Queen’s University Belfast and Ulster University, because we have nurtured our intellectual powerhouses with public investment. The industrial strategy challenge fund supports innovation UK-wide and has allocated £12 million in Northern Ireland to date, including specific investments in Queen’s University Belfast.

Several hon. Members have touched on the controversies about EU exit. I do not have time to respond in detail to all those points, but I will say that we need to be absolutely clear that Northern Ireland leaves the EU with the UK, and we need to make sure that trade between us continues unfettered. The hon. Member for Belfast South made the point very well about the enormous importance of the UK internal market, which we absolutely want to protect. Northern Ireland continues to be a top destination for inward investment, and we will work with Invest NI to ensure that that continues.

I recognise the hon. Lady’s comment that shared prosperity is shared opportunity. She made the case extremely well on behalf of Northern Ireland business, and I commend her for her efforts.