Finance (No. 2) Bill

Ian Paisley Excerpts

Thursday 18th April 2013 Commons Chamber

[Mr MacNeil]

Mr Miliband will not be there long—do not worry about him.

Surely the SNP and Plaid Cymru will not be the only champions of economic growth and the travelling public, and particularly the less wealthy travelling public of Scotland, Wales, Northern Ireland and England. The travelling public seem to have no champions other than the SNP and Plaid Cymru for their businesses and holidays. I encourage other hon. Members to support the cut of the poll tax on our skies: businesses want it, hard-working families want it, and economic growth needs it.

[Ian Paisley (North Antrim) (DUP)]

When I arrived in the Chamber and listened to the speech of the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), I had to check that the debate was on the Bill and not on Scottish independence.

I am opposed to airport duty tax. It is a regressive tax and it is wrong. It is a tax on business and tourism, and on our skies and travel. It is wrong not just for little Northern Ireland and little Scotland; it is wrong for every citizen of the UK. I am certainly not taking the position that we should scrap it in parts of the UK. It should be scrapped for all of the UK—the UK Government need to get that message loud and clear.

[Mr MacNeil]

Given what the hon. Gentleman says, I assume he will support SNP Members in the Lobby when we try to strike down clause 183.

[Ian Paisley]

I will come to that in a wee minute. The hon. Gentleman will have to bide his time and be patient, or, as we would say, houl yer whisht. Perhaps he knows what I mean by that.

It is important to put on the record that Northern Ireland has an international connection and an international carrier from Aldergrove airport to Newark airport, which is just outside New York. It flies every day in peak season—one flight a day in, one flight a day out. We have no other international carrier. However, the same carrier operates from Dublin, which is 90 miles down the road, to Newark. In the last number of years, the business in Northern Ireland was put under threat for one reason only: the airport authority and the carrier had to subsidise one another to the tune of £1.5 million. Had they not done so, the business would not exist, and people would be forced to travel 90 miles down the road and pay a lesser tax.

The price difference was staggering—it meant that it was possible to travel 90 miles down the road. Filling a car with petrol or diesel and driving to Dublin costs about £50—there would also be a car park charge—but the APD for that international flight from Northern Ireland was £150. The duty in the Republic of Ireland was €3. The difference would have ruined that business. It was essential on those terms that we got rid of APD for that international flight. My position is that I want the duty removed for the whole UK. That is what the debate is about. The measure is about internal flights in the UK, including, of course, our glorious and noble Scotland.

I am concerned that there is an element, or even a huge big bit, of fudge, which we should avoid. The policy, which should be set out loud and clear, should be the scrapping of APD for all of the UK.

[Jonathan Edwards]

It is with pleasure that I introduce my new clause 4 and new schedule 1; I hope to press the new clause to the vote at the appropriate time.

The UK Government’s Commission on Devolution in Wales, headed by Sir Paul Silk, published the first phase of its report in November 2012. This phase concentrated solely on fiscal powers. Here we are, five months later, still waiting for the UK Government response, which was originally said to be due this spring. In a matter of a few weeks, the cricket season will be upon us and it will be summer, yet we are none the wiser about the intentions of the UK Government.

In short, the Silk commission recommended that powers over stamp duty land tax, the aggregates levy, air passenger duty for long haul, landfill tax and business rates be devolved in their entirety and as soon as possible. It also advocated a sharing arrangement for income tax. In addition, it argued—importantly—that should corporation tax be devolved to Northern Ireland, Wales should not be left behind. I reiterate the point that I made on the closing day of the Budget debate—that we are very interested to see the strong lobby, led by the CBI, coming from Northern Ireland. In total, the fiscal powers advocated by Silk for immediate devolution—the minor taxes—together account for about £1.2 billion of the Welsh Government’s budget.

--- Later in debate ---

Non-domestic rates, or business rates, are another minor tax that it would have been ideal to devolve to Wales in this Finance Bill, thereby incentivising local authorities in Wales to expand their economic bases. Long-haul air passenger duty was devolved to Northern Ireland in last year’s Finance Bill and the Silk commission has recommended the devolution of long-haul APD to Wales.

[Ian Paisley]

I appreciate that the hon. Gentleman is clarifying the matter. The power has been devolved but it has not yet been implemented and, like him, I would urge our Executive to implement it. It will help business and the whole of the United Kingdom could benefit, including Wales, Scotland and England, if they get on with it.

[Jonathan Edwards]

The hon. Gentleman makes a powerful point. That is especially the case in Wales, as the Welsh Government own our national airport.

It is clear that the Bill is the appropriate legislative vehicle to move this issue forward. There is a clear precedent and, as I said, I believe the Treasury should accept the amendment, as it includes all the minor taxes recommended by Silk.

The Labour Welsh Government have recently acquired Cardiff airport, and the ability to attract long-haul flights to Cardiff would significantly improve the airport’s competitiveness. Cardiff airport has 1.5 million people in its catchment area and long-haul flights could attract people from even further afield. The development of Cardiff airport could act as a spur to growth in the south Wales economy, bringing in greater foreign direct investment through better business links, in turn bringing jobs and growth.

Quite frankly, I am amazed that the Labour party has not tabled its own amendment. That goes to show that the First Minister has absolutely no influence over his bosses down here. On Tuesday of this week, he stood in the National Assembly telling the Members and the people of Wales that

“the most important thing is to ensure that Silk part 1 is progressed”.

I would expect Labour MPs to file through the Aye Lobby when we vote, or his authority will be fatally undermined—but as the Labour Whips have sent them home, that will not be the case.

The fact that the Treasury has not used the Finance Bill to implement Silk also shows once again that Wales is an afterthought in the machinations of the British state. Those powers should be devolved, yet there is delay even though it is apparent that there is broad consensus among the main parties who represent Welsh constituencies, as evidenced in the Grand Committee debate and despite the fact that the commission received representations from all parties. Each month that passes by without these powers being devolved, the Welsh economy further deteriorates with job and economic prospects diminished, hopes and dreams shattered and lives ruined.

Over Easter, I attended a major forum meeting organised by Carmarthenshire county council to move the proposed Llandeilo bypass project forward. Despite being high up the Welsh Government’s priority list as a transport infrastructure project, it is being held up as a result of the savage cuts to capital budgets in Wales. If the amendment is successful, it will enable the Welsh Government to access borrowing powers to move the scheme and many others like it forward. In Carmarthenshire there is cross-party support for the project, and I would like to close by kindly informing my political opponents that should they fail to support the amendment their grandstanding in supporting projects such as the Llandeilo bypass will be exposed and there will be a heavy political price to pay in my constituency—a constituency I believe the Labour party view as a target seat come the next Westminster election.

Public Service Pensions Bill

Ian Paisley Excerpts

Tuesday 4th December 2012 Commons Chamber

[Sajid Javid]

If the commission would like to have a meeting with me, I would be happy to do so.

However, we must not vilify defined contribution schemes either. There might be a small group of individuals who consider that their needs are better served by defined contribution schemes—for example, those spending a short time in public service roles who would prefer to use their employer contributions to maintain their existing defined contribution schemes. Approximately 7,000 people are already in that type of scheme by choice. There is nothing wrong with giving people such a choice. The Government believe that clause 7 already provides the right powers to allow the new defined benefit schemes to be set up while allowing alternatives types of scheme for those who want them.

I turn to amendments 19 to 28 to clause 16. I understand the concerns raised by the hon. Member for Nottingham East and others in Committee and this afternoon. We have provided reassurances on some of those concerns in correspondence. I hope that all hon. Members are now assured that the effect of the clause will not be to crystallise liabilities or to wind up any of the funded schemes. The amendments highlight those issues over which there are lingering doubts. As the hon. Gentleman set out, those relate to the extent and effect of the closure of the current schemes and the dates on which the changeover will take place.

[Ian Paisley (North Antrim) (DUP)]

I would like to thank the Minister for the clarity his letters provided on clause 16, which was helpful, because there was originally some confusion about that in the Bill.

[Sajid Javid]

I thank the hon. Gentleman for his kind remarks and hope that I can provide further such reassurance on the clause this afternoon.

Amendments 19 to 21 seek to provide that the reforms are made by replacing the existing regulations. The scheme regulations made under the Bill would therefore have to provide for both accrued rights and new service, which we do not believe is sensible. The hon. Member for Nottingham East has expressed concerns that the Bill, as drafted, could create two separate schemes and that that could create extra costs. The Local Government Association has further clarified its outstanding concern that members of existing schemes are treated as deferred members of the existing schemes when the new schemes are introduced. That is not our intention. We will look closely at that, with the Local Government Association and others, to see whether any changes are desirable or needed to put that beyond doubt.

With regard to amendments 22 to 28, the purpose of clause 16 is to prevent benefits from being provided under existing terms in respect of a member’s service after the schemes are reformed. It closes the existing schemes, but only by closing them to future accrual. Clauses 4 and 5 already provide for existing and new arrangements for each work force to be managed and administered together. The old and new schemes will be administered by the same scheme manager, who will be assisted by the same pension board. From a member’s perspective, the transition between their old and new pension rights and the administration of their pensions will be seamless.

The dates proposed in amendments 21 and 22 do not fit with the dates agreed for the reform of the schemes: 1 April 2014 for the local government schemes in England and Wales and 1 April 2015 for the other public service pension schemes. I appreciate that the date set out in clause 16(4)(b) might also look a little odd. It allows schemes that want to reform at the start of the public sector’s financial year—1 April—to do so while leaving the option open to make reforms at the start of the tax year instead.

Although I remain convinced that the Bill will deliver what we want, I am aware that others believe that the dates are confusing. It is a concern that I will continue to consider. I regret to say that we cannot accept these amendments, because I am afraid that they would not work. However, they are clearly well intentioned and we can see what they are trying to achieve. As I said in Committee, we will continue to work through the outstanding concerns. I will reflect further on the amendments and we might return to the matter in the other place.

I turn now to amendment 4, tabled by the hon. Member for Hayes and Harlington and others. I thank the hon. Gentleman for the amendment; its purpose is clear but the practical effects would be fraught with problems. First, in England and Wales the appointed person will be reviewing the valuation and employer contribution rates of 89 separate pension funds. The appointed person will not know who the employee representatives are for each of those funds. The clause already requires the appointed person’s report to be published. That is the appropriate course of action. We envisage that the appointed person will publish a single report covering each and every one of the local authority funds. The Bill rightly requires that a copy is sent to the relevant authority and to the scheme managers, because those persons might need to take action as a result of the report.

If the appointed person identifies a problem in a pension fund, under the Bill the scheme manager would be required to take remedial action. The Bill also allows the relevant authority to intervene if necessary. However, members and their representatives will not need to take any action. The management of local authority pension funds needs to be more transparent, and the clause achieves that. The information will be published and members, local authority residents, Parliament and others will be able to see and consider it. The amendment would add no value, but it would create unnecessary costs and burdens.

I will now speak to amendments 7 and 8. I have already reassured the House that the Government have no intention of replacing the current defined benefit schemes with different scheme designs. Clause 7 allows the necessary flexibility for future Parliaments and pension scheme members to decide on the most appropriate pension scheme design for future generations of public service workers in the largest schemes. Clause 28 allows the same flexibility for the smaller public body schemes made under clause 28(7) or other powers. The Government expect that in most cases employees of the bodies listed in schedule 10 will join the reformed civil service pension scheme and have the same choice that civil servants have now: whether to join a defined benefit or a defined contribution scheme. The amendments would deny the employees of the other public bodies listed in schedule 10 that choice.

Business and the Economy

Ian Paisley Excerpts

Monday 14th May 2012 Commons Chamber

[Mr Umunna]

I think that UKTI needs to do a hell of a lot better, as my hon. Friend suggests. Actually, I think that this Government need to work a hell of a lot harder before they start lecturing others. It is not that we disagree about the need to increase our exports, but let us take a step back. The Government’s economic policy is one of expansionary fiscal contraction. Their idea is to hack off parts of the public sector and take away things that the Government do, and they expect the private sector automatically to step in and fill the gap. I do not think that telling business people that they are whingeing and not working hard enough is a way to inspire them to do what the Government expect of them.

[Ian Paisley (North Antrim) (DUP)]

Was the hon. Gentleman as perturbed as I was, two weeks before the Gracious Speech, to hear another Cabinet Minister suggest that he wanted to put a certain industry out of business? That industry raises £12.5 billion a year for the Exchequer in customs and excise duty payments. Will the hon. Gentleman defend the tobacco industry, which employs 6,000 people in this country and generates millions of pounds in PAYE and revenue for the Government?

[Mr Umunna]

We want all those sectors that have a competitive edge to have a comparative advantage for this country, providing jobs and opportunities when more than 2.6 million people are out of work. We want to see those sectors thrive.

Given the recent omnishambles, one would have thought that Ministers might stop and think before attacking those to whom they look to grow our economy. Far from it, however, as so far we have mentioned only the Foreign Secretary. The Secretary of State for Communities and Local Government also waded in to the row, in typical diplomatic fashion, saying that he agreed with what the Foreign Secretary had said, while the Defence Secretary—it is a shame that he did not stay in his place after his statement—then accused businesses of being whingers. The problem is that Ministers seem to inhabit a different planet from the rest of us. It is not that our businesses are not working hard enough; it is that there is a lack of demand and weak confidence flowing from the Government’s mismanagement of the economy, which has helped to tip us into a double-dip recession.

Illegal Alcohol and Tobacco Sales

Ian Paisley Excerpts

Tuesday 27th March 2012 Westminster Hall

[Ian Paisley (North Antrim) (DUP)]

I, too, congratulate the hon. Member for Hereford and South Herefordshire (Jesse Norman) on securing this important and timely debate.

The House should face up to the reality that the smuggling of and trade in illicit cigarettes, tobacco and alcohol is a multi-million-pound criminal enterprise. It is not some car boot sale nonsense; it is a significant endeavour. The House will have its head in the sand if it does not recognise that fact. It loses the Treasury tens of millions of pounds in revenue, which could be spent on our schools, roads, hospitals and other areas, and we must recognise that.

I serve on the Select Committee on Northern Ireland Affairs, which recently took evidence on the trade in smuggled tobacco and alcohol. One company supplied evidence to show that, in Northern Ireland alone, 170 million illegally gotten cigarettes are smoked every year. That loses the Treasury £42 million every year and has lost the company whose product has been counterfeited £12.5 million. That is a staggering loss in one little part of the United Kingdom.

I thought that it was significantly bad that 17% of all cigarettes smoked in Northern Ireland had been illicitly traded, but in parts of England and the border counties the figure is 24%. In Devon and Cornwall, it is 13%, and in London, it is 20%. This is a massive criminal endeavour and some of the people who make money out of it are the worst, most cantankerous, nasty and evil people imaginable: as quick as they would sell people cigarettes, they would slit their throats. The House has to wake up to the fact that they are engaged in a serious, criminal endeavour. The Government should exercise the most serious measures against them, and we should encourage the Treasury and the Government in that regard.

As I have said, the timing of the hon. Member for Hereford and South Herefordshire in securing the debate could not be better. The Northern Ireland Affairs Committee today published its report on the smuggling of counterfeit cigarettes, tobacco products and alcohol and on the illicit fuel trade. This massive trade is central, so we need to take off our gloves and get stuck into countering it.

[Brandon Lewis]

I agree wholeheartedly with the hon. Gentleman. Does he agree that evidence from around the world shows that increasing regulation, whether via plain packaging or by putting up duty on cigarettes and tobacco, can simply increase the illegal trade? Ireland’s budget of 2010 recognised that by not putting up duty. Rather than increase duty or introduce plain packaging, the Government should follow the model suggested by my hon. Friend the Member for Hereford and South Herefordshire and use the UK Border Agency and other agencies to crack down properly on the illicit trade itself.

[Ian Paisley]

The hon. Gentleman will find that I am not arguing against his views—he is right—but we need to set out clearly how significant the problem is. Do we tax the product to the extent that it makes the smuggler’s job all the more easy, or do we recognise that there are things that the Government and we as a nation can do to address the problem?

The problem is not helped by the fact that I can drive my car to France or Belgium, fill it to the gills with cigarettes or alcohol and bring it back to this island and sell those products illegally. There should be a complete stop on a person being able to bring back a boot full of wine, alcohol and cigarettes and claim, “These are for me.” That is utter nonsense. Everyone knows that they are being brought back to be sold either on the street illegally or to their friends and neighbours. We have to make sure that such activity is stamped out.

The Government should be rigorous and ensure that, if people buy cigarettes and alcohol, they should buy them in this nation, pay tax on them in this nation and smoke and drink them in this nation, rather than allowing them to circumvent tax policies. It makes sense that I can probably buy twice as much legally in every other part of Europe than I can buy here because our tax policies are so severe. If they are severe, we need to make them work on this island.

[Kelvin Hopkins (Luton North) (Lab)]

I apologise, Ms Dorries, for my late arrival—cable theft means that the railways are in chaos.

I strongly agree with the hon. Gentleman. Does he agree that, if hundreds more staff were employed by Customs to seal our borders properly and ensure that such smuggling did not take place, they would not just stop criminality, but make many times their own salary for the Treasury?

[Ian Paisley]

I would have no difficulty with the deployment of more people in the worthwhile work of Her Majesty’s Revenue and Customs and other customs and border agencies, but our Committee took evidence from HMRC officials who said that they were satisfied with the money given to them by the Treasury and that they probably have enough people. If HMRC wants more people, it can argue its case, and it will not lack any support from me.

Some people argue that the plain or uniform packaging of cigarettes would solve the problem, but that is utter, total baloney. If people think that by simply uniformly packaging all cigarettes they will suddenly meet a public health objective, they are losing the plot. Plain or uniform packaging will not affect the problem. Every survey tells us that adults do not care if the package is gold, has a camel on it, or if it is red, white and blue. They care about price and taste. A person will smoke Camel lights because they prefer their taste to that of Marlboro. The colour of the stupid package does not matter—that goes in the bin. A person will smoke Benson and Hedges not because the box is beautifully gold with a pair of lungs on it, but because of the product’s taste and availability.

We have to wipe out the nonsense that plain packaging is the panacea to achieving a public health goal and to preventing smuggling. Plain or uniform packaging will just make it much easier for the smuggler, no matter what people say. Smugglers are rubbing their hands in glee at the prospect that someone would be so daft as to uniformly package all cigarettes in the same year as we are implementing a display ban so that we cannot see the daft things. We have to recognise that, if we are to have a display ban, we do not need plain packaging. It would infringe people’s rights and on trade laws, and it would jeopardise many legitimate businesses.

I do not hear the same lobby group arguing for the plain packaging of tins of beer, or for the uniform packaging of bottles of wine or spirits. We should remember that diseases as a result of drinking alcohol cause far more damage and create far more costs for our health system than those that result from smoking cigarettes. Moreover, on antisocial behaviour, there are far more fights on the streets of this city on a Friday night, not because someone has had too many fags, but because they have had too much to drink. We have to recognise that the plain packaging argument is, frankly, nonsense. It is not a panacea to solving the problems of counterfeit crime.

[Stephen Williams]

The hon. Gentleman has made several points that need to be knocked down, but I shall address only one. If he thinks that the introduction of plain, standardised packs is pointless, why does he think that the tobacco industry is going to fight it with all the resources at its disposal, and why does it put so much effort into providing attractive packs, colourful cigarettes, gold wrapping and all the other paraphernalia that goes with the marketing of cigarettes? Surely, it is wasting its money if that has no effect.

[Ian Paisley]

The tobacco industry is able to speak for itself, but one of the reasons why it is annoyed is that this is an infringement on its trading rights, its branding and all the things in which it has invested over the years. It would be wrong to turn around and say that we can just remove those things overnight.

The industry argues that it would damage the actual trade, so let us look at that and what it costs. In my constituency, more than 1,000 people are directly employed in the tobacco industry. In Manchester, another 800 people are directly employed in the manufacturing of cigarettes. If we are not careful, those jobs will go to eastern bloc countries and to Europe—they will move out of this country. Will that affect the number of people who smoke cigarettes? Not one jot. The same number of people will continue to smoke cigarettes, but they will be manufactured elsewhere. We will be the biggest losers, because we will have lost the jobs, the tax and the pay-as-you-earn tax.

[Brandon Lewis]

Again, I fully support what the hon. Gentleman is saying. The point that he has just made is backed up if we consider the packaging issue. A lot of the cigarette packaging around Europe is produced in this country, and therefore a huge number of jobs would be at risk if plain packaging were introduced. One of the reasons why companies are so protective of their packaging is brand protection. Bearing in mind that cigarette sales are legal and it is a legal product, unless the Government make cigarette sales illegal, companies feel that they have a right to protect their brand, as that is what protects sales and jobs. Companies argue that a clear definition of brand prevents some of the illegal trade that we are trying to stop.

--- Later in debate ---

[Ian Paisley]

The trading issues are very clear. For example, the value of the wage bill paid in my constituency alone to the people who manufacture cigarettes is £60 million a year. That is the figure paid in wages to engineers in the company. People might snigger at that, but if we remove those jobs from the economy, houses will not be sold and people will not buy food in Tesco and Sainsbury’s. The bottom line is that people will move out of the area. I am talking about high-paid, valuable jobs in my constituency that I am delighted about. Anyone would be envious of them and would try to achieve them in their own constituency. We need to recognise the importance of such jobs.

The hon. Member for Hereford and South Herefordshire made some very important points about how we should start to address the matter, and I want to pick up on one of them. He said that a cross-cutting Minister should try to take the lead on this. How should the Government go about doing that? If they have to put in place a specific cross-cutting Minister—I hate the word “tsar”—so be it. That is an excellent idea. There needs to be a joined-up golden thread running through all divisions, and we need to recognise that the issue must be tackled head on.

Although hon. Members from all parties have different views on the matter, the fact is that the problem is damaging our country in terms of loss of trade and loss of revenue. The people who lose out are those we all care most about: the ordinary citizens who could have that tax revenue spent on them and their needs. I am more than happy to support the need to deal with the matter.

Northern Ireland Economy

Ian Paisley Excerpts

Thursday 1st March 2012 Westminster Hall

[Mr Laurence Robertson (Tewkesbury) (Con)]

It is a pleasure to serve under your chairmanship today, Sir Alan. Usually, you and I jointly chair the all-party group on racing and bloodstock industries, so today’s debate is a diversion, but I am sure that it is extremely important, just as our other debates are.

It is a pleasure to open this debate on the Northern Ireland economy on St David’s day, and I am delighted to be doing so. I start by thanking all the members of the Northern Ireland Committee—both past and present—who have worked extremely hard in compiling the reports that we have produced, which I will refer to. I also thank the Committee staff, who work extremely hard.

This is a very important debate, as are all debates on the economy at this time. Just today, we have all seen bad unemployment figures throughout Europe. We hope that our own economy in the UK is starting to recover, but I think we all feel that there is a long way to go and that there will be some very difficult decisions to make, so, as I said, any debate on the economy is important. I am pleased to introduce this debate, which is about rebalancing the Northern Ireland economy.

As well as having the honour of chairing the Northern Ireland Committee, I have the privilege and pleasure of being joint chairman of the British-Irish Parliamentary Assembly. I am quite new to that role and I am the British chairman of the assembly. I mention that to demonstrate my friendship with the Republic of Ireland, given that I shall refer to that country in my remarks.

Of course, we are all aware of the difficulties that Northern Ireland has gone through. Most hon. Members would probably agree that those difficulties are due—at least largely and probably entirely—to the terrorism that existed in the Province for many years. There were 30 years of real, hard terrorism when people suffered terribly; lives have been shattered, and many lives were lost. If that was not bad enough, as a result prosperity in the Province has been a lot lower than it would and should have been otherwise. This debate is a contribution to the attempt to start turning that situation around.

When we discuss the economy in Northern Ireland, it is important to recognise that there are a number of bright spots. The unemployment rate is lower than in the rest of the UK and is falling, and there is a higher level of manufacturing production. Research and development investment in Northern Ireland increased by 6% last year, albeit from a low base. Belfast is the second most attractive city in the UK after London for foreign direct investment. For 16 to 18-year-olds in Northern Ireland, there are better educational outcomes than in the rest of the UK, although there is a lower level of qualification among those in the working age population. This year there are increased tourism opportunities, with the Titanic anniversary, and next year there will be celebrations with Londonderry being the city of culture. These are all bright spots, and there are others that I have not mentioned.

However, we would be derelict in our duty if we did not recognise that there are problems, and one of them is the size of the public sector. Let us just consider employment. Of those who are employed, 27.7% work in the public sector, as against an average of 20.6% in the rest of the UK, which makes Northern Ireland’s public sector the biggest of all the UK regions. Of course, that results in higher public spending, £10,706 per person in Northern Ireland as opposed to £8,845 in the rest of the UK—21% higher in Northern Ireland, which is a significant cost. There is no doubt in my mind that that increased cost is largely, if not entirely, due to the 30 years of the troubles.

If we look at the number of employed people, 67.9% of the working-age population in Northern Ireland are employed as opposed to 70.3% in the rest of the UK. That is another statistic that is not favourable for Northern Ireland. Productivity per job is only 85.3% of the UK average. If we look at gross value added, Northern Ireland, with GVA of £15,651, is again lower than the rest of the UK, which has GVA of £20,476. Indeed, Northern Ireland is the lowest region of the UK in terms of GVA, apart from Wales. The fall in GVA since the pre-recession peak has been more pronounced in Northern Ireland, and growth in Northern Ireland is projected to be slower than in the rest of the UK in the coming year.

There are a number of other problems. There will be a reduced rate of assistance from Europe from 2013, and there are also higher fuel and energy costs. Recently, the Select Committee visited the Coolkeeragh gas plant, which is just outside Londonderry. People at the plant highlighted a big problem that I hope the Minister will take on board; I have raised it in the Commons already. That problem is the carbon floor price. When it is added to the taxes and everything else coming from the EU, it could make Northern Ireland very uncompetitive in terms of energy production. I hope that the Treasury will take that point on board and consider what can be done to avoid penalising companies in Northern Ireland that are only doing the right things.

What do we need to do now? Obviously we must try to increase the prosperity of people in Northern Ireland, so that they are less dependent on taxpayers in the rest of the UK, and we need to do that not only to improve prosperity but to cement the peace that so many people have worked so hard to achieve. I am not for one moment suggesting that poverty is an excuse for violence or law-breaking of any kind—it certainly is not; but we must recognise that when people are unemployed, with time on their hands and nothing better to do, they are more likely to turn to activities that are not to be approved of. That is not an excuse, but we should recognise the fact that it is a likely outcome for some people. Increasing prosperity in the Province and giving people opportunities to work or to receive education and training will surely divert people who might just turn the wrong way. That is very important and it is one of the things that we have stressed in our reports.

What changes are needed to increase prosperity in Northern Ireland? I have a list of suggestions. We probably all accept that we need to reduce the size of the public sector and increase the size of the private sector. Again, that raises the question of how we do that. One of the things that the Select Committee has looked at is trying to make Northern Ireland more competitive, so as to attract more inward investment. I shall turn to the corporation tax proposals shortly, but there are a number of other issues that I want to discuss briefly.

A short while ago, the Select Committee carried out an inquiry, and produced a report on air passenger duty. One of our concerns at the time was that Continental Airlines, the one and only carrier from Belfast to New York, was in serious danger of pulling out and stopping those flights. That really was a threat to the economy in Northern Ireland. We conducted a short inquiry and came up with the proposal that the APD for long-haul flights should be reduced, and the Government responded by reducing it to £12 per flight, which is the APD for local flights. Before that it was £60. For a family of four flying to New York from Belfast, that was £240 in tax before they had even got on the plane. The airline was carrying that cost, which made it extremely uncompetitive, and was threatening to pull out. It was a serious threat, and we lobbied hard for the Secretary of State for Northern Ireland and indeed the Treasury to try to do something about it urgently. I congratulate Ministers and the Government on responding so quickly and reducing the tax. We hope that we can move forward in that respect.

We also suggested that the policy for setting the rate of air passenger duty for long-haul flights be devolved to the Assembly. I am pleased that that is now the Government’s policy and it will be enacted through the Finance Bill. I welcome that move, which is a step in the right direction.

We need to improve the planning situation in Northern Ireland. Again, that is a devolved issue, so I will not dwell on it too long. Everyone would accept that planning has to become more efficient. We have just heard of the new golf course near the Giant’s Causeway finally being given planning permission, but it took 10 years to get to that point. It is hardly an incentive for new businesses to try to do anything good when they face that type of planning process, although I am aware that there were several objections to the planning application.

[Ian Paisley (North Antrim) (DUP)]

The golf course is an important investment opportunity for Northern Ireland, and it does indeed turn the page for a part of the economy that has seen very dark days. Does the hon. Gentleman agree that the Government should encourage everyone in the public and private sectors, particularly the National Trust, which is a key stakeholder in the area, to get behind that tourism project in this year of tourism initiatives, and support a key investment in our locality?

[Mr Robertson]

I am grateful to the hon. Gentleman for his intervention. He is a very active member of the Select Committee. I entirely agree that the golf course is extremely important. It is a great investment and a great opportunity. I hope that Northern Ireland goes on to attract the Open Championship—not necessarily to that course, but to a course in Northern Ireland. It is important to move in that direction. I urge the Government to get behind the project. I know that it is a devolved matter, but there is great frustration with regard to the planning situation, as there probably is in most local authorities. There certainly is in mine, but it is particularly the case in Northern Ireland.

In about two weeks’ time, we shall publish our report on our inquiry into the smuggling of tobacco, alcohol and diesel. Obviously, I cannot go into detail at the moment, but I can reveal a couple of figures. Fuel fraud costs Northern Ireland £70 million and tobacco fraud costs £42 million, making a total of £112 million, which could be in the pockets of the health service or the education service. Indeed, it could help to reduce taxes in Northern Ireland. That is something that we are looking at. I cannot go into too much detail at the moment, but it is a real issue. Not only does smuggling cost the economy a lot of money, but it provides opportunities for paramilitaries, ex-paramilitaries and people who are up to no good to engage in activities that do the economy, Northern Ireland and the UK no good at all.

On creating a genuinely shared future and reducing the cost of division, we have made huge progress—let us not forget that—but we need to do more. Yesterday, I read a report on the BBC website that claimed that when the agreement was signed, there were 22 peace walls, but there are now 48. Segregation of housing and education is not only divisive in an area that needs to end division; it is costly as well. We need to find an affordable way of dealing effectively with the past. I do not want to get into a debate about what the Secretary of State calls costly and open-ended inquiries. This is not the time or the place, but we have to find a way of dealing with the past effectively and more affordably.

I turn to the corporation tax report that we produced. We spent a lot of time looking at corporation tax in Northern Ireland. To be fair to everybody concerned, I note that not every member of the Committee agreed with the proposals that were made. However, many members did agree.

[Ian Paisley]

Does the hon. Gentleman agree that perhaps one reason why there was not unanimity was because there was a cloud of judgment over exactly what the Treasury is asking for in terms of costs? It is essential that we get absolute top-desk clarity from the Treasury on what the measure is going to cost; we need to be clear about how it is going to make that calculation. It is important that it takes on board the fact that Northern Ireland will have increased income tax and increased national insurance contributions so as to make the cost less for us as an Executive.

[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.

--- Later in debate ---

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

I welcome the opportunity to debate the rebalancing of the Northern Ireland economy here in Westminster today. The Chair of the Select Committee on Northern Ireland Affairs has already referred to the report on corporation tax in Northern Ireland and the Government’s response to it. The report, which was fairly far-reaching, set the course on which we should look again at our economy, to rebalance it between the public and private sectors. We fully accept that the public sector forms more than 70% of the Northern Ireland economy, but we also caution, from a party perspective, that we should not throw the baby out with the bath water. We are dealing with the legacy of conflict, and we must take all those various issues into account.

It is important to give an overview of the economic situation in Northern Ireland. According to research produced by the Northern bank, the economy’s growth rate will struggle to reach 1.1% this year, compared with the UK average of 1.7%. The Northern bank’s survey, which lowered the chances of falling back into a deeper recession, warned that growth and recovery were still fragile in Northern Ireland.

Seasonally adjusted data for Northern Ireland estimated that 784,000 people aged between 16 and 24 are in employment. That figure has increased by 2.9% in the past year and is now higher than the pre-recession employment level, recorded three years ago.

The research indicates that the unemployment rate in Northern Ireland is below the UK average and the fourth lowest rate among the twelve UK regions. The seasonally adjusted Northern Ireland unemployment rate showed a quarterly increase of 0.1%. However, the Northern Ireland rate, which is around 7.3%, remained below the UK average and was the fourth lowest of all UK regions. It is interesting to note the high youth unemployment, with some 18% of people aged 18 to 24 not in work. Northern Ireland is experiencing a sevenfold increase in long-term unemployment among 18 to 24-year-olds since the recession.

The economic inactivity rate for all people aged 16 to 64 is 2.3% lower than the rate some five years ago, but it remains the highest of all UK regions. A higher proportion of economically inactive persons aged 16 to 64 identify sickness or disability as their main reason for not wanting or not being able to work. Northern Ireland is ranked fourth highest among UK regions in terms of self-employment rates from April to June 2011. The average for the UK was 13.6%.

Those figures characterise and set the scene for the economic situation in Northern Ireland. With that economic backcloth, it is important that we discuss today the need to rebalance the economy in Northern Ireland and that we do so here, notwithstanding the devolution of governmental powers to the north, because many economic levers that can deliver a step change in our local economy remain in the hands of the Treasury in London. For that reason, I am pleased to see the Exchequer Secretary to the Treasury here to respond to the debate. He was involved with us in the early days of the corporation tax issue and came to Belfast around the end of last March to launch an important consultation document, for which there was cross-party support and subscription, for want of a better word.

Devolution has given us one significant economic lever: public expenditure, for which the hon. Member for East Antrim (Sammy Wilson) has ministerial responsibility in Northern Ireland; we have had certain tours de force at certain times in another place with him. We can now determine how to allocate within the block grant ourselves. We therefore have the capacity, even though we may not have properly used it yet, to target more resources at economic priorities.

Naturally, moving resources into priority areas, such as tourism and agri-food, which can yield the best returns for jobs and economic growth, comes at a cost to other areas. We have been cautious and perhaps even—dare I say?—unimaginative to date. I hope that that will change. That is why my party has produced a comprehensive plan, called “Partnership and Economic Recovery”, which sets out in considerable detail how we could target more economic stimulus at priority areas.

We were unique for a political party in Northern Ireland in that we identified where the extra money could be found without looking to the Exchequer. However, while preparing “Partnership and Economic Recovery”, we realised how many economic levers were still in the hands of Westminster. For example, despite being the only part of the UK with a land border with the eurozone, Northern Ireland’s Government are powerless to intervene in the numerous situations that place Northern Ireland at a unique economic disadvantage. One of them—the vastly differential corporation tax regimes north and south of the border, to the advantage of the south and the disadvantage of the north—has clearly caught the attention of London, for which we are grateful.

The Secretary of State for Northern Ireland deserves some credit for advancing our quest for corporation tax-varying powers—we realise that there are different views about that—albeit at a price. We hope that we are somewhere near a positive end of the journey. The Exchequer Secretary is well aware of the cross-party support for latitude on corporation tax. Perhaps he can provide us with an update on the ministerial working group on the issue and advise us whether he and his group, of which others here are also members, have reached any conclusions. If so, what might they be?

There is a strong belief that that one lever can bring about a significant step change in the growth of our private sector. However, corporation tax is only the tip of the iceberg, as is passenger duty and the differential application of the EU aggregates levy and its impact on our construction sector. I questioned the hon. Member for East Antrim in another place the other day on that issue, but perhaps the Exchequer Secretary will provide us with an update about the European Commission and where exactly those negotiations are at. That exemption is very important to our local industry and could act as an important stimulus to the construction industry.

We have no powers in Northern Ireland to depart from the overall UK position on all sorts of other matters that adversely affect our economy. We have long suffered the competitive disadvantage of a much more favourable agriculture and food regime south of the border, while we have been tied to a UK policy broadly hostile to the common agricultural policy. I hope that the eventual reform of the common agricultural policy will accommodate the needs of not only the local farming community in Northern Ireland, but the wider agri-food industry.

We have no power to vary indirect taxation or such things as excise duty on fuel, alcohol or tobacco. Excise duty anomalies alone have led to a wave of filling station closures in the north and the resurgent problem of cross-border smuggling. The Chair of the Northern Ireland Affairs Committee has already referred to the forthcoming report on fuel smuggling. We look forward to that report. There is no doubt that fuel smuggling is a vexatious issue that needs to be redressed and resolved on behalf of the wider community in Northern Ireland.

We are also tied to UK rates of motor taxation, which is something that stops us from doing more to help ourselves. I have not even mentioned the differential economic impacts of a UK welfare reform programme that is designed around perceived norms in the south-east of England.

It would be right in the context of arriving at the right solution on corporation tax to look at all the areas where the rigidity of the overall UK position prevents Northern Ireland from helping itself in its own economic development. We are not afraid of further devolution or further devolution of tax-varying powers, but we acknowledge that that could have implications for the block grant. Other hon. Members present today have already referred to that. We would like to know the consequences, although we accept the point that the Office for Budget Responsibility will have an overall remit to undertake such calculations.

Of course rebalancing the economy goes beyond the vital task of growing the private sector. As the Chair of the Select Committee has already mentioned, we also need to right-size the public sector and make it perform better. For decades, public sector workers maintained normality in Northern Ireland, and we owe those unsung heroes a debt of enormous gratitude. However, with peace, there is an opportunity to redesign a public sector aligned to the precise services that citizens now need. We are prepared to be radical on public sector reform. The Northern Ireland Executive can do much more good for themselves, but they will need the co-operation of Westminster in that reforming endeavour.

In that context, I should like to pay tribute to the Environment Minister in the north—his work has already been referred to by the Chair of the Select Committee—because he has responsibility for planning and local government reform. He has blazed a trail in prioritising timely decisions for major planning applications. For example, the decision on the golf course announced last week, which was mentioned by the Chair of the Select Committee and the hon. Member for North Antrim (Ian Paisley), will have a significant economic and job creation impact.

[Ian Paisley]

Will the hon. Lady unite the House and call on the National Trust to support that magnificent project for Northern Ireland, because it will lead to more tourists in an area where it has an economic interest?

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. I am in no doubt that the planning application just approved, which took some 10 years to come to fruition, will have an economic impact on that part of North Antrim. I encourage my colleague the Environment Minister, who sits in another place, to try, subject to challenges and difficulties, to make similar decisions. It is important that all organisations act in the public interest for the people of Northern Ireland, so that there can be a sea change in terms of stimulants and economic development. There is no doubt that planning is playing its part as an improved public service that facilitates investment and growth. The tourist board can also make a contribution, as can Tourism Ireland.

Rebalancing the Northern Ireland economy is a necessary and worthwhile endeavour, but it will require a collective effort by not only the devolved Administration, but London, too. We need to develop an economic agenda that will empower rather than alienate our work force. Some of us might have different views about the degree to which corporation tax should be lowered to attract foreign direct investment. No doubt, the Scottish agenda and the English regional agenda will play their part in bringing influences to bear upon on the Treasury.

Small indigenous businesses must be encouraged as well to provide opportunities for all. Perhaps the Government should consider the establishment of another working group with the Northern Ireland Executive to examine other areas where Northern Ireland could profitably be released from the UK system to further rebalance the economy.

It would be remiss of me not to mention the high priority that I attach to tourism development in the overall task of rebalancing our economy and stimulating job creation. Two out of our five signature tourism projects in Northern Ireland—the Mournes and St Patrick’s—are centred in my constituency. Our open invitation to come to Downpatrick and walk in the footsteps of St Patrick is particularly relevant to both Britain and north America. In fact, the shadow Secretary of State, the hon. Member for Gedling (Vernon Coaker), will do just that next Friday. We very much welcome his visitation on that occasion.

That is why we were right to press for relief on the air transport duty issue. I note that that will be subject to provisions in the Finance Bill. We acknowledge that there will be reference to transatlantic flights and the Continental Airlines flight between Belfast International and Newark, New Jersey. What about flights that deal with the domestic market between Belfast City and Belfast International to airports in Britain?

To return to my original point about tourism development, I have often said that St Patrick was probably our greatest ever import and has the potential to be our greatest ever export. Our unique heritage can even help to rebalance our economy. May I say in the month of St Patrick’s festival that our invitation—and my invitation to all hon. Members—to visit St Patrick’s country remains open to all?

In conclusion, we very much welcome our participation in the debate today about rebalancing the Northern Ireland economy. We in the Social Democratic and Labour party want to play our part, along with the Government and the Northern Ireland Executive, to help to rebalance the economy. It is vital that we provide the necessary stimulus, seek to rebalance the economy and provide hope and expectation for this generation and future generations in Northern Ireland.

--- Later in debate ---

[Stephen Pound (Ealing North) (Lab)]

The hon. Gentleman will have noticed that the person who most represents the delightfully happy people of Northern Ireland is a 65-year-old mother of four living just outside Larne. I wonder whether he knows the lady.

[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—

--- Later in debate ---

[Ian Paisley (North Antrim) (DUP)]

I too will try to keep my remarks brief, to coincide with time as it runs out before us.

At the outset of my comments, I congratulate the hon. Member for Tewkesbury (Mr Robertson) on the very positive way that he introduced this debate. He did not put a foot wrong in making his comments about our economy. He also indicated that we are all signed up to these issues and that there are issues that we can find commonality upon and that we should be able to move forward on. If that is so, as I believe it is, we need to do that with haste and make progress. I welcome this debate on the economy and how we try to address some of the issues.

Many Members have referred to the fact that Northern Ireland is a happy region of the United Kingdom. Of course I agree with them, but I think that that actually says something about the potential of our country. The fact is that the political and constitutional issues that bestrode us for so long have been settled. We have a settled country now, and we have the ability to focus on our economic needs and the opportunity to flourish economically. We have an opportunity to seize the moment and take our country forward.

Those who talk down our economy should be dismissed. I do not say that lightly, but I believe that our First Minister was correct when he made the comment last week that we should not glibly talk down the economy and the advances that Northern Ireland has made. Northern Ireland has moved on in leaps and bounds, which are noticeable in our children and in economic terms. We should recognise and welcome that. I believe that we have a duty—nay, a responsibility—to realise and deliver the potential that Northern Ireland has, and constantly talking Northern Ireland down is bad for the economy. I believe that today is the day when we must stand up and be counted for Northern Ireland, and I hope that we can do so.

We must be honest in doing all that, however, and Members have said that there are difficulties, that there has been disadvantage and that we have a legacy of violence. Of course we have to build on the fact that Northern Ireland faced decades of under-investment because of that legacy of violence, and we must address that legacy. But we are turning the page.

I had the joy one night of trying to answer a question that my daughter put to me. She is a teenager and she said, “Daddy, what were the troubles?” What a question to be asked as someone who grew up in the troubles and who knew, as a 15-year-old, why soldiers were being killed and murdered on our streets, why businesses were being put out of business and why our country was being torn apart? Today, 15 or 16-year-olds ask, “What were the troubles?” The fact of the matter is that our violent history has now become a foreign country. That is a good thing, and we should see it as a building block and something that gives us the momentum to move forward. I hope that we can move forward.

We have a land border problem with the Republic of Ireland where there is competition, but again that is an opportunity that we should address. Many Members have talked about the energy costs that our country faces and about how they create major disadvantage. We know those things, and we have to work in the context of those things.

I am delighted that many Members have referred today to the economic and tourism initiatives in my constituency, which is the most tourist-friendly part of the entire United Kingdom.

[Naomi Long]

Nonsense.

[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.

Fuel Duty (Northern Ireland)

Ian Paisley Excerpts

Wednesday 22nd February 2012 Westminster Hall

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

I am pleased to have secured this important debate and I look forward to contributing under your chairmanship, Mrs Main. I am also pleased that the Minister is present, and I look forward to her response.

In the run-up to the Budget, it is more important than ever to bring into sharp focus the record high price of vehicle fuel, which has now reached a critical level. The increased cost of fuel, together with the correspondingly steep rise in inflation in the past year, has put individuals, families and businesses under increasing pressure. There is clearly an over-reliance on importing fossil fuels. Until that is cut, we will always be tethered to external forces. I note with great interest that the incoming Secretary of State for Energy and Climate Change placed an emphasis on energy production that is clean and green. I welcome him to the role, especially if he follows through with that commitment. My own party is committed to a green new deal in Northern Ireland providing jobs, investment and energy security. However, I recognise that that is a long-term goal and we must tackle directly the problems facing consumers and businesses now.

[Ian Paisley (North Antrim) (DUP)]

I thank the hon. Lady for giving way and say that that is the one green deal that my party would support alongside her party. [Laughter.] My hon. Friend the Member for Strangford (Jim Shannon) says, “The only green deal”, but it is a worthwhile point.

The hon. Lady will be aware that since we became Members of Parliament two years ago, the one issue we have debated most is fuel duty and the implications of its constantly rising cost. I am sure that, like me, she understands that the little piece of water between the mainland and Northern Ireland—those 17 miles—is the most expensive stretch of water in these islands, as it inflates prices of fuel disproportionately. For our rural constituencies, the smack is double, because rural areas suffer more. The luxury of car transport is a necessity to get kids to school, and people to work and into employment.

[Mrs Anne Main (in the Chair)]

Order. Will hon. Members please ensure that interventions are brief?

Fuel Prices

Ian Paisley Excerpts

Tuesday 15th November 2011 Commons Chamber

[Robert Halfon]

Let me just carry on for a bit.

The jobless, who are struggling to get off benefits and out of the poverty trap, cannot afford to drive to work. Fuel duty is a tax on hard-working and vulnerable Britons. I accept that the Government need to raise revenue, but let us at least be honest about who pays this tax. When fuel duty was first introduced in the 1920s, it was a third of its current level in real terms. However, as ever, tax increases have had the engine of a Rolls-Royce but the brakes of a lawnmower. The fuel tax escalator was introduced in 1993. Labour then accelerated it to 6% above inflation, and it was finally halted in November 2000, when massive fuel protests brought the country to a standstill. That was when petrol was just 80p a litre.

[Ian Paisley (North Antrim) (DUP)]

Like everyone else, I welcome this debate. Does the hon. Gentleman accept that rural areas and the regions of this nation—places such as Northern Ireland—have the lowest salaries per worker but the highest fuel costs? That means fuel pricing has a disproportionate impact on people living in those parts of the United Kingdom. Importantly, Government taxation policy is encouraging fuel fraud, fuel laundering and fuel smuggling, meaning that the Exchequer is losing hundreds of millions of pounds each year.

[Robert Halfon]

As ever, the hon. Gentleman hits the nail on the head. He sets out how fuel prices are creating a more unequal society.

Eurozone Crisis

Ian Paisley Excerpts

Tuesday 15th November 2011 Westminster Hall

[Mr Baron]

My hon. Friend is absolutely right. There is a real danger that we underestimate the extent of the debt and the defaults that could happen. One is not joining the bandwagon of warning signals. The debt that has to be rolled over is quite clear for all to see, but I do not think the Government are acknowledging that. Simply to fall complacently back on the fact that no money ever loaned to the IMF has been lost is to miss the point completely.

[Ian Paisley (North Antrim) (DUP)]

I congratulate the hon. Gentleman on securing the debate. He mentioned a number of times the bilateral loan, which is of significant interest to my colleagues and me. He may be interested to know that last December, I wrote to the Chancellor to suggest that Her Majesty’s Government should hold the deeds of all properties in the United Kingdom that are in the possession of the National Asset Management Agency, the Irish state bank, so that it cannot disproportionately influence our market by the unilateral sale of those properties. Does the hon. Gentleman agree that that is one way of protecting ourselves and our own local market against NAMA?

[Mr Baron]

That is certainly one option that should be explored more thoroughly. I referred to the Irish loans because the Government line to date has been that our liability to the eurozone crisis stops at the bilateral loan to Ireland and at our existing £6.5 billion contingency liabilities to the EFSM. That is simply untrue, given the additional contributions through the IMF.

Will additional IMF funding work? That will simply reinforce existing eurozone policy, which is itself fundamentally flawed. The existing policy simply does not address the core causes of the crisis, which are a lack of competitiveness and Governments spending too much. Debt is the problem, as I have said, not demand. We have had 14 or perhaps even 15 gatherings, conferences and summits to save the euro, but each has failed to address the core reason for the problem, which is a fundamental lack of competitiveness. Where are the swathes of cuts to regulation? Where is the introduction of measures to improve competitiveness? They simply have not been there. All that has happened, and all the concern there has been, is to put together more debt to solve an existing debt crisis.

--- Later in debate ---

[Mark Field]

I suspect that that says more about eurozone countries than about the fundamental health of the Argentinean economy, but if my hon. Friend will excuse me, I will continue.

With the failure of European leaders and Finance Ministers truly to grasp the nettle, the liquidity problems faced by Portugal, Ireland, Spain and Italy are becoming ever more deep-seated. It is very difficult for Angela Merkel in Germany—as someone who has German blood running through his veins, I accept that. I appreciate that her domestic political position appears ever more precarious, because the EU’s economic powerhouse should have ceded control of the deepening crisis to the European Central Bank. The ECB’s mandate could, and perhaps should, be to provide market intervention to restore and maintain confidence on behalf of all solvent eurozone economies, but in her actions to date, Mrs Merkel has indicated that the politics are just too difficult for her nation, which remembers the days of hyperinflation during the early part of the Weimar Republic. Furthermore, all this requires, as ever within the EU, bypassing democratic safeguards, and it potentially involves unfathomably vast quantities of central bank support, with potentially hazardous medium-term economic consequences.

[Ian Paisley]

Will the hon. Gentleman give way?

[Mark Field]

I hope that the hon. Gentleman will excuse me; I know that others want to speak.

The twin lessons of the economic depression in the 1930s are that avoiding catastrophe requires swift action and that once a process is under way we should not worry unduly about overkill. It is better to pump too much liquidity into the system, rather than inadequate amounts. A financial system in free fall requires active central bank intervention, however irrational the collapse of market confidence. Nevertheless, in the absence of a central bank for the 17-nation eurozone that has real political clout or, more important still, sufficient funds to provide comprehensive cover in a liquidity crisis, it is regrettable that the UK is now expected to stand ready to bolster the IMF. The IMF seems to be the only institution that can bail out countries that are close to default—Italy and Spain, for example. My hon. Friend the Member for Basildon and Billericay is absolutely right that there is disingenuous thinking and talking within the eurozone. The reality is that if Italy or Spain has a problem, the European Central Bank and the European financial stability facility cannot address it. Clearly, such a problem must be addressed by the IMF.

Without stable financial markets, there is little hope of the sustained growth essential to economic recovery. The UK economy is a global leader in the financial services sector, but it is especially prone as a consequence to the adverse impact of uncertainty on worldwide financial markets. No UK taxpayer will stand by and watch with any sense of satisfaction as unimaginably large sums of money or guarantees are given to bail out the banking system.

As has been pointed out, our Prime Minister and the Chancellor have repeatedly vowed that there will be no further bail-outs of the eurozone. However, in the event of a collapse in market confidence for Italy or Spain, the UK, as a founding member of the IMF, will almost certainly be expected to increase both its absolute funding and its guarantee facilities to the fund, which is an extremely unpalatable prospect. However, I also accept that a UK failure to act would not only have immediate, serious consequences for the global financial services sector, but amount to an abdication of our responsibilities as a mercantile nation in the international field of trade and commerce.

As MP for the City of London, I reluctantly accept that I have no choice but broadly to support the UK Government’s proposal to underwrite further funds to the IMF. Nevertheless, I regard that as a matter that must be addressed not by the Executive alone but also here in Parliament. If the UK taxpayer is to be further exposed to IMF loans and guarantees, that must happen only after a statement from the Prime Minister outlining why such a course of action is in the national interest, after a full parliamentary debate and as the consequence of an affirmative vote in Parliament. In my view, nothing less will do.

I know that many other Members want to speak. There is much more that I would like to say, but I will touch on a point that my hon. Friend the Member for Basildon and Billericay made regarding the wisdom behind the UK Government’s enthusiastic promotion of a headlong move towards fiscal union in the eurozone. I say to the Minister that we should be extremely careful what we wish for. Such a development would embolden the eurozone, even in its apparent weakness, to embark on a rapid and radical political power grab throughout the EU. Alarm bells would ring in the City of London. It would be very bad news for this country, and we should not stand by and let it happen without ensuring that our national interests are properly served.

--- Later in debate ---

[Mr Chope]

My hon. Friend makes a good point. We were told that the IMF would help Ireland and that we could help Ireland and influence its economic policy through the IMF. We were also told that we needed to give Ireland a £3 billion loan so that we could have even more influence, but I do not think that it is written in any agreement that to have yet more influence we need to reduce the interest below the rate agreed at the outset. The fact that the Irish have drawn down on the loan shows that they do not look a gift horse in the mouth. They realise that this is a great opportunity.

Let us consider the opportunities in Ireland. I got my assistant to research the interest rates available to small businesses in Ireland at the moment, so this information is from yesterday. Allied Irish Banks is offering loans of up to €100,000 to small businesses at a “competitive rate” of 4.4% variable. New and early-stage businesses under three years old can get that money. Now, I do not know what it is like for my hon. Friends, but in my constituency it is almost impossible for businesses to get a loan from the bank at a rate of 4.4%, if they can get one at all. We know that Allied Irish Banks is the beneficiary of a £3.5 billion bail-out. We are giving Ireland money that it is using to subsidise its banks, which in turn are subsidising its small businesses to compete unfavourably against ours.

[Ian Paisley]

I agree with the thrust of what the hon. Gentleman is saying. Does he agree that it is actually far worse? The Irish state bank, the National Asset Management Agency, holds £14 billion of property in this city, which it can dispose of any time it wants and put the money back into its own national coffers. Is it not time that we had a Select Committee inquiry into NAMA’s activities in the United Kingdom jurisdiction?

[Mr Chope]

That sounds to me like a good point. People should start selling their assets. That is what families must do if they get into difficulties. We have to think about selling assets, which is what countries in debt should be doing.

Another example is the Bank of Ireland, which received €5.2 billion in the banking bail-out, and which is offering interest rates of 5.24%. More than half of all loan decisions are made on the spot and 87% of applications are approved. Would that we had similar arrangements in the United Kingdom. By comparison, HSBC was offering small business loans yesterday with a starting interest rate of 7.9%, which is obviously only for the most favoured customers.

Can the Government explain why we are reducing the rate of interest on the Irish loan? When the Bill went through the House, I voted against it, but it passed on the basis that we would make a significant profit on the interest. Now that the Irish are drawing down on the loan, surely we should know what the interest rate is. Is there any other organisation that can go to the bank and get a loan while the bank manager says, “Don’t worry, we’ll agree the interest rate later”? It seems reckless in the extreme.

My final point deals with the treaty establishing the European stability mechanism. Most people do not realise that the European stability mechanism is a new international financial institution that will have international immunity, and that it will be funded by the 17 members of the European Union. What will Ireland pay? Its subscription will be €11.145 billion, which is about £10 billion. Another way of putting it is that we are lending money to Ireland so that Ireland can, in turn, pay its subscription to the European stability mechanism. It is a farce.

Eurozone Crisis

Ian Paisley Excerpts

Thursday 3rd November 2011 Commons Chamber

[Mr Hoban]

My right hon. Friend is absolutely right. We in the coalition Government have made clear our view that we do not want to be part of the euro, and therefore need not take part in any process of closer fiscal integration.

[Ian Paisley (North Antrim) (DUP)]

The Financial Secretary said that the Prime Minister would make a statement on Monday. Will it include the issue of the bilateral loan to Ireland, and will the Financial Secretary insist that if it does, it will address the way in which the National Asset Management Agency is now treating businesses here as a result of a soft loan from the United Kingdom?

[Mr Hoban]

I am not going to tell the Prime Minister what he should or should not say on Monday, but I am sure that he will have heard what the hon. Gentleman has said.

Sovereign Grant Bill (Allocation of Time)

Ian Paisley Excerpts

Thursday 14th July 2011 Commons Chamber

[Ian Paisley (North Antrim) (DUP)]

Members want to go back to 1700 and something. I am happy to go back to 1690. [Interruption.] Given the week that we are in, we are close enough. At home, we often say, “We won the battle, but they kept the river.” In this instance, I am happy to support the Government and go with the proposal.