Northern Ireland City Deals

Lindsay Hoyle Excerpts

Wednesday 9th October 2024 Commons Chamber

[The Secretary of State for Northern Ireland (Hilary Benn)]

As the Chancellor set out in July, the Government have inherited a £22 billion black hole in the public finances. As a result, the Treasury is having to consider a range of measures to deal with this significant problem. Last month, the Treasury informed the Northern Ireland Department of Finance that the UK Government’s contributions to the Mid South West deal and the Causeway Coast and Glens deal would now be considered as part of the spending review. The Belfast regional city deal and the Derry/Londonderry and Strabane city deal are unaffected and proceeding as planned. Since the announcement of the pause on those two deals, I have met with the First Minister, the Deputy First Minister, the Chief Secretary to the Treasury and the Northern Ireland Finance Minister. I will also be meeting the chief executives of those two deals shortly.

Everyone in Northern Ireland understands the importance of the city deals to economic growth and encouraging investment, and this Government are committed to working with the Northern Ireland Executive and businesses to make the most of the huge economic opportunities that now lie ahead. That is shown by the progress being made on the Belfast region city deal and the Derry/Londonderry and Strabane city deal. I attended the Derry/Londonderry and Strabane city deal signing on 18 September. The UK Government’s £105 million investment will help to progress transformative innovation, digital and health projects, which will build on the region’s well-established research excellence. The Chancellor will set out the results of the first phase of the spending review on 30 October, which will include an update on the two outstanding city deals.

[Mr Speaker]

I call the shadow Secretary of State.

[Alex Burghart]

As the House will know, on the evening of Friday 13 September—the day after we went into recess—the Government took it upon themselves to make a number of announcements affecting Northern Ireland: the cancellation of the Casement Park project; the decision that Sean Brown’s family will not be given a public inquiry into his murder; and the subject of this urgent question, the pausing of four Northern Ireland city deals. It is quite something to instantaneously unite all the political parties in Northern Ireland, but that was the feat achieved by the Government on the evening of Friday the 13th.

The House will be aware of how crucial the city deals are, providing significant investment to boost economic growth, create jobs and enhance infrastructure and bringing together Westminster, Belfast, local councils and private investment. We are pleased that the following day, after considerable confusion, the Government U-turned and announced that the Belfast region city deal and the Derry and Strabane city deal would go ahead, but the other two regional growth deals—the Causeway Coast and Glens deal and the Mid South West deal—now sit in limbo.

Critically, those deals cover areas that have not had the same levels of investment in recent years as big cities. One need only look at the empty shops in Enniskillen and Armagh to understand that these deals are badly needed. Can the Secretary of State tell the House why was the decision to pause taken at such a time and why was it announced in such a way? Following that announcement, why was there then a U-turn on two of the deals but not the other two? What criteria were used to make that decision?

The Secretary of State has referred to money. He knows that the so-called black hole, for which the Government have provided no breakdown, is partially of Labour’s making, given the above-inflation pay rise that it has chosen to award to the unions. He will know that the money involved is, in the world of the Exchequer, not that significant and, crucially, will deliver major returns to Northern Ireland and to the UK.

I ask the Secretary of State for two things. The first is an apology for how the matter was handled; I know he would not have wanted it to happen in the way it did, but someone should take responsibility for how the House and the people of Northern Ireland have been treated. The second is that, in negotiating with the Treasury in the run-up to the Budget, he will be the lead advocate for un-pausing those city deals.

[Hilary Benn]

I am grateful to the hon. Gentleman for his response. On the matter of Casement Park, since he raised it, I will say that we took the decision for the reason we set out, and I think it is one that he supports. On the question of Sean Brown, I set out in my letter to the family why I had reached the conclusion that I did.

I would just correct the hon. Gentleman: the Belfast city deal was never affected at all—it is roaring ahead and is a great success. In the case of Derry, I was pleased to attend the signing of the deal, which will now progress to its next stage.

I would also simply say to the hon. Gentleman that the public finances inheritance the last Government left us—[Interruption.] Well, the last Government made a load of promises but never identified where the money to pay for them would come from, and then they were turfed out and left this Government to deal with the problem. That is the reason for the situation with these two city deals. He can rest assured that I, as Secretary of State, will continue to make the case for the two city deals, which is why I said in my opening answer to him that everybody in Northern Ireland, including me, understands their importance, and I will continue to make that case. But in those circumstances, the Chancellor has found it necessary to look at a whole range of commitments that were made by the last Government for which no funding had been identified, and the fault for that does not lie with us, and if any apologies are required, a belated apology from the other side for the mess they left us would be much appreciated.

[Mr Speaker]

I call the Chair of the Northern Ireland Affairs Committee.

[Tonia Antoniazzi (Gower) (Lab)]

Cities and towns in Northern Ireland have already missed out on levelling-up funding under the previous Government, as I saw at first hand as shadow Minister, so the uncertainty regarding the city deals has been quite a hard hit on the people in Northern Ireland. I seek further reassurances from the Secretary of State that the people of Northern Ireland will not be overlooked in the Budget.

[Hilary Benn]

I absolutely recognise the uncertainty that this has created and, as I have indicated, I will be meeting the chief executives of the two deals very shortly. Given the uncertainty while we await the outcome of the first phase of the spending review, the particular problem that they face is that a lot of effort goes into progressing these deals with the private partners, because the money comes from the Government and from the Northern Ireland Executive in the form of match funding, and then other partners, including the local councils, and they do find themselves in a difficult position— I will not hide from that.

The only other thing I would say is that those two deals are much further back in the process than those for Belfast and Derry; for the Causeway Coast and Glens deal the heads of terms had been signed in April of this year, and for the Mid South West deal the terms had yet to be signed—I think they were due last month. Then there is a further process under which the programme of the deal itself is developed to then get to the stage that Derry reached on 18 September, when the financial agreement is signed and then the business case and the projects are unlocked. So I recognise that it is difficult and, as I have already indicated to the councils, I will continue to argue for the cause of these deals.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Dr Al Pinkerton (Surrey Heath) (LD)]

The four city and growth deals for Northern Ireland are critical mechanisms in revitalising industries and creating new economic opportunities across key regions in Northern Ireland. The pause in UK Government funding has caused, by the Secretary of State’s own admission, uncertainty, anxiety and lost impetus in key investment projects under the city and growth deals framework. The Mid South West deal represents over £250 million of investment across the region. The decision to allow projects in Belfast and Derry to proceed while pausing those in the Mid South West and Causeway regions risks reproducing the very imbalances that these deals were designed to tackle, widening inequities and inequalities across Northern Ireland. I have had the opportunity to speak to the hon. Member for Lagan Valley (Sorcha Eastwood), who brought to my attention the risks posed to the agri-bio innovation centre in Dromore by the Government’s withdrawal of secure funding.

Therefore, on behalf of Northern Irish businesses, councils and residents, especially those in the poorest regions, I ask the Secretary of State the following questions. What actions are the Government taking to mitigate those regional economic imbalances and to tackle inequalities, especially in the Mid South West, and what assurances can be provided that rural areas will not be forgotten, again especially in the Mid South West and the Causeway Coast?

[Mr Speaker]

Order. You are allowed one minute and you are now well over that, so I am sure you are coming to the end this very second.