Northern Ireland (Welfare Reform) Bill

Jim Shannon Excerpts

Monday 23rd November 2015 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in the debate and I thank you for calling me, Madam Deputy Speaker.

I am reminded of the passage in Scripture from Ecclesiastes chapter 3, verses 1 to 8:

“To everything there is a season”.

I believe the season for change is now and that the Bill can deliver that change for people.

I would like to start by paying tribute to the outgoing First Minister and DUP leader, the right hon. Peter Robinson. The DUP has been at the forefront of securing a new future for a new Northern Ireland, striking the right balance between bringing those of us more sensitive to the past along with those who found it easier to move on. It is thanks to people such as Peter Robinson who made difficult decisions and were willing to sacrifice themselves personally and politically, and even in terms of their health, that we have had the longest ever sustained period of power-sharing. We provided free travel on public transport to everyone over 60 and secured the single largest ever investment in Northern Ireland by supporting Bombardier’s £520 million investment in the new C-Series aircraft. In difficult economic times, when heating prices were escalating, we made payments totalling £22.5 million to 150,000 households, which each received a £150 fuel payment. Devolution, with the DUP and Peter Robinson at the helm, has delivered for Northern Ireland.

I put on record my thanks to the Secretary of State and the Minister for their patience, good temperament, energy and civility, and for staying the course. I say well done to the Secretary of State and to the Minister.

It is fair to say that the welfare reforms passed in this place in 2012 have plagued the Northern Ireland Executive and the Assembly over the past three years. Since the restoration of devolution in 2007, no other proposed legislation has had such a troubled passage through the Assembly, including other welfare reform. Indeed, the hon. Member for South Down (Ms Ritchie) guided a welfare reform Bill through the Assembly in 2010, despite the fact that it included some controversial changes to the employment and support allowance and the introduction of the bedroom tax for the private rented sector.

The failure to pass equivalent legislation to the Welfare Reform Act 2012 in the Northern Ireland Assembly has undermined political stability in Northern Ireland and threatened the very existence of devolution, largely because of the impact it was having on public finances and the sustainability of the Executive’s budget. Consistent with the statement of funding policy, Her Majesty’s Treasury began fining or penalising the Executive two years ago for the savings forgone as a result of the failure to pass welfare reform at Stormont. In 2013-14, £13 million was lost. Last year, the Executive’s coffers lost £87 million. This year, it has been approximately £9.5 million each and every month. In such tough financial times, that was money the Executive could ill afford to squander.

I am sorry to say that Sinn Féin and the SDLP failed to live up to their responsibilities. They even failed to live up to the commitments they made in the Stormont House agreement just last year. They were content to see the Executive lose more than £150 million, with one SDLP MLA even telling the Assembly that it was a price worth paying. Have we ever heard anything as nonsensical as that? A price was certainly paid, but it was paid by every person in Northern Ireland. It was paid by vulnerable people in Northern Ireland who were deprived of services for which the Executive could not afford to pay. The £9.5 million a month that the Executive have been losing could have paid for 1,800 knee operations and 2,100 hip operations. The self-styled defenders of the vulnerable—we have them here, sitting in front of us—were, by their inaction and irresponsibility, hurting and harming the vulnerable.

This past week, a way forward has been agreed. The “Fresh Start” agreement, forged after 10 weeks of talks, reaches a resolution on welfare reform. The agreement will see welfare reform enacted in Northern Ireland—what we are debating today—but recognises Northern Ireland’s particular circumstances via various flexibilities. The agreement explicitly rules out the introduction of the social sector size criteria, or bedroom tax as it has become commonly known. That is an appropriate reflection of the fact that Northern Ireland’s social housing profile has been skewed towards three-bedroom family homes and that in certain places, especially Belfast, moving from a three-bedroom home in one part of the city to a two-bedroom house elsewhere may involve crossing a peace wall. It is not, therefore, a simple or straightforward option for many.

The agreement also sets aside £345 million, an average of approximately £86 million a year over the next four years, to mitigate the worst impacts on Northern Ireland of welfare reform, including the bedroom tax. Professor Eileen Evason will head up a small working group to bring forward proposals within this financial envelope to maximise the use of those resources. The £345 million, and the very welcome £240 million set aside to compensate those hardworking people also adversely affected by the Government’s proposed cuts to tax credits, comes at a cost to the Executive, but we believe it will protect the most vulnerable. This party is out to ensure that we protect the vulnerable.

Some, in essence those who have resisted welfare reform from the start, have turned their attention to the fact that the Bill is passing into law through Parliament, as opposed to the Assembly. We have heard that from previous speakers. The Assembly, of course, passed a legislative consent motion last week. The argument that this legislation is not being scrutinised properly is false. In the past few weeks, it has been debated and debated and debated, in the Assembly, in its Committees and on the airwaves like no other issue in the history of devolution. The truth is that welfare reform needs to pass in Northern Ireland or else the existence of devolution will be in serious and immediate jeopardy. That is the fact of it. Without the enactment of the deal reached last week, the Executive’s budget will not work. More public money that could be spent on health and education will head back to the Treasury. Financial flexibility secured at Stormont House will collapse and the long-term sustainability of the Executive’s finances will be fatally undermined. On the whole, the agreement looks like a good deal for stability, for Unionism, for all parties and for Northern Ireland. We have a chance to go forth and build on all that has been achieved to date and to continue to build a new Northern Ireland for all our citizens.

I hope that the fresh start can be just that, but for now it is important that we make the transition from agreement to implementation as smoothly as possible. We have been waiting months for the agreement to cement Northern Ireland Assembly’s future, and today we are playing our part in that process, ensuring that—to use a recently used phrase—we are not on the wrong side of history. As our First Minister said in his last speech to the party conference as leader on Saturday, Ulster is no longer at the crossroads, but on the motorway to a better future. Building on the achievements of the Northern Ireland Executive, led by the DUP and Peter Robinson, we have secured the exemptions, subsidies and incentives we need to keep Northern Ireland moving forward: the promise of more than £500 million; formal structures that deal with the scourge of paramilitarism and confine that episode to the history books—where it belongs; more help for health, including financial commitments, including for those with mental health issues and other vulnerable people in our society; and, of course, the devolution of corporation tax, which, as many of us know, is a game changer.

[David Simpson]

My hon. Friend will have heard the speech from the hon. Member for Belfast South (Dr McDonnell), who said that corporation tax was not a silver bullet. Is it not ironic that during the negotiations on the financial bail-out, one of the things the Republic of Ireland held on to was the corporation tax level?

[Jim Shannon]

My hon. Friend is absolutely right. We know corporation tax is not a silver bullet, but it would make a big, big difference to Northern Ireland. We see it as the catalyst for more jobs, a better economy, improved opportunities and the wage packets that people need in Northern Ireland, so we would like that issue resolved as well. As he said, Northern Ireland has for too long been at a competitive disadvantage from the Republic of Ireland’s much lower rate of corporation tax.

[Mr Gregory Campbell]

The day after the agreement was signed, the headline in one of the main newspapers in the Irish Republic was that the battle was on for jobs. They obviously appreciate the nature of the competition and the advantage that Northern Ireland will now have over them.

[Jim Shannon]

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

[Dr Alasdair McDonnell]

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

[Jim Shannon]

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

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

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