Northern Ireland Economy

Jim Shannon Excerpts

Wednesday 11th May 2016 Westminster Hall

[David Simpson]

A source very close to me, yes. My hon. Friend the Member for East Antrim is right: despite all the nonsense that has been talked, the manufacturing sector certainly will continue if we leave the European Union.

According to reports this week, Northern Ireland’s growth is dependent on the retail and service sectors, as they

“continue to report the fastest rates of job creation.”

I have certainly witnessed that in each of the three towns in my constituency. Growth is slow, but small retail businesses—I am not referring to charity shops—are starting to move back on to the high street, which is a good thing.

We may be the smallest region in the UK, but we are powerful on the world stage. Some 30% of the famous London red buses are manufactured in Ballymena by a local firm, Wrightbus. That is of course a big contract in London.

[Jim Shannon (Strangford) (DUP)]

It supports Brexit as well.

[David Simpson]

We will move on from Brexit a wee bit; we will come to it later.

Some 25% of all computer read-write heads are made by Seagate Technology in Londonderry, at the UK’s largest nanotechnology site, and 40% of the world’s mobile crushing equipment is made in Northern Ireland. We have some of the largest pharmaceutical companies, which employ thousands of people across the Province.

It is evident that the people of Northern Ireland remain committed to helping to grow its economy. However, despite all the good news, we cannot ignore the significant job losses that have been reported by companies—two of the most high profile are Michelin and JTI, and some others face making redundancies—because of problems in the global market and sometimes because of energy costs.

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[Ms Ritchie]

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

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

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

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

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

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

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

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

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

[Jim Shannon]

Your five minutes have gone.

[Ms Ritchie]

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

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[Jim Shannon (Strangford) (DUP)]

I understand that the Minister, the shadow Minister and the Scottish National party’s spokesperson must start to speak at 5.10 pm, but I wondered whether it would be possible to have a couple of extra minutes, Mr McCabe—there are two other Members left to speak.

[Stephen Pound (Ealing North) (Lab)]

Just crash on, Jim.

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[Jim Shannon]

Okay. I congratulate my hon. Friend the Member for Upper Bann (David Simpson) on his clear presentation of the case. May I say for the record, and for the hon. Member for North Down (Lady Hermon), that I am a member of the Ulster Farmers Union and have been for more than 30 years? I hear what the farmers in my area are saying—they want out. The individual opinion of the president of the Ulster Farmers Union is one thing, but the membership is very different.

The Northern Ireland economy is a far cry from what it once was, but there is still a lot of work to be done to rebalance the economy. Growth is faster than the UK average across almost all sectors of our economy, which is testimony to the continued hard work, confidence and stability of the Northern Ireland Executive. We must be clear where that growth is coming from. We have record levels of job creation and more jobs than ever before in our Province. We have record levels of inward investment and more multinational companies and private sector jobs than ever before. The economy in Northern Ireland is going well at the moment.

The longest sustained period of devolved Government in Northern Ireland since before our troubles has delivered for the people of Northern Ireland, and will continue to deliver with the mandate we achieved last week. After all we have been through, Ulster is no longer at a crossroads. We are on a clear path on the motorway to a better future. Last month, Ulster’s private sector added its 12th consecutive month of growth to Northern Ireland’s economic engine. The rates of growth in new orders, business activity and employment among indigenous Northern Ireland firms have bucked the trend and exceeded the UK average. The new Northern Ireland is literally working at the moment. By contrast, last month the UK private sector as a whole expanded at its weakest rate in three years, with both services and construction posting subdued rates of activity. The economic engine may be roaring in Northern Ireland, but a continued UK economic slowdown could prove an obstacle on our clear path to a better future.

The pace of job creation continues to accelerate in the Province, with all sectors increasing their staffing levels. Manufacturing’s seven consecutive months of job losses have come to a welcome end, and the Province’s manufacturing sector is defying UK norms. Export orders expanded at their fastest rate for 21 months, with Northern Ireland’s exports to non-EU countries now at a record high, showing that Northern Ireland can compete and thrive independently on the global stage just like the rest of the United Kingdom.

Northern Ireland has seen unemployment drop from almost 59,000 in 2011 to just over 39,000 in 2016. My hon. Friend the Member for Upper Bann referred to the creation of some 40,000 jobs. The target was 25,000 jobs but we achieved 40,000, so it is good news again. He also referred to investment. We have had £585 million of research and development investment, almost double the target of £300 million, and 72% of new jobs are supported under the “Rebuilding our Economy” programme. Let us be clear about what is happening—there is almost an economic miracle in Northern Ireland at the present time.

The Northern Ireland Executive, led by the DUP and in partnership with industry, has delivered real advances. The ending of air passenger duty on long-haul flights was a DUP initiative, and we have had over 1 million more visitors in the past three years, with some £752 million spent by them in 2014. Cruise ships docking in Northern Ireland brought 145,000 guests in 2016. Again, those are great things.

The DUP has also continued the policy of industrial derating, which has protected jobs and encouraged investment. We have protected the small business rates relief scheme, which has benefited small businesses across Northern Ireland by approximately £18 million a year. We have delivered a Northern Ireland-wide rating revaluation, resulting in reduced bills for businesses, and 525 new business have benefited from the introduction of the empty premises rate relief.

We had a meeting today on broadband, which is an issue in my constituency and those of other Members. Broadband is not the Minister’s responsibility, but let us put a marker down right now—we need help and investment to make it happen so that we can move forward.

As I said, Ulster is no longer at the crossroads. We are on a path to a better future, with a clear mandate to go forth and continue to deliver and with First Minister Arlene Foster providing the turbo to reach the even better days ahead.