Northern Ireland: Economy

Lord Empey Excerpts

Wednesday 19th October 2011 Lords Chamber

[Lord Empey]

My Lords, like others, I thank the noble Lord, Lord Lexden, for securing this debate. One interesting point that has not yet been made is that this debate is about rebalancing the economy of Northern Ireland. It is not about the latest security atrocity or terrorism—something that we have been living with for so long—but how the economy can be improved. It is about time that we looked at this issue. At the end of the day, rebalancing and strengthening the economy is one of the tools that we can use to prevent further outbreaks of terrorism and maintain the isolation of those who are prepared to take up arms against the democratic wishes of the people. The noble Lord, Lord Lexden, has done a twin service in securing the debate.

I, too, am interested in the decisions on air passenger duty. The Treasury announced the formal process yesterday and of course there will be negotiations with the Northern Ireland Executive. It will not be a for-nothing negotiation on behalf of the Executive. They will probably find that, just as the same principle will apply to corporation tax, the loss of revenue will eventually come out of the block grant. Having been involved at the start of the route development fund in about 2000 or 2001 which helped us to secure the transatlantic service, I am obviously anxious to see it maintained. Only a year or so ago, we got the New York Stock Exchange to set up in Northern Ireland. What kind of message are we sending them if we suddenly say we are stopping the very aircraft that gets them to and from their headquarters? We want to remember, going back 10 years, that we had one international flight out of Northern Ireland. It went to Amsterdam. We are now competing with air passenger duty in Dublin of €3. The Executive will have to take the decision that is necessary to make up the shortfall in funding.

One sector that sometimes gets left behind is the agri-food sector. At present, it accounts for some 20 per cent of Northern Ireland private sector employment. Everybody had been saying that financial, hi-tech or IT services were the solution. The dotcom bubble burst, then the financial services bubble burst. Throughout the bad days after the crash in 2008, the agri-food sector and the land-based industries, which are a much greater proportion of the Northern Ireland economy than in the United Kingdom as a whole, kept on steadily going. Invest NI, which I had some part in creating, had taken a view in recent years that it would concentrate its activity on jobs that produced salaries of £25,000 a year or more. In most cases, the agri-food sector did not come across that. The average salary there is currently some £20,000 to £22,000. However, in light of current circumstances and given the plans that the Irish Republic has announced to grow its food sector by 40 per cent by 2020—Scotland has also announced that it intends to grow its food sector—if we were to do the same thing it would have a dramatic effect, creating between 7,000 and 8,000 jobs directly and a significant number in addition.

Given the circumstances that the world finds itself in, being a significant provider of food is not a bad place to be. In the current circumstances, while I accept the need for high-value-added jobs, we have to be more realistic in the current labour market and economic situation. I would be inclined to give significant support by having a major plan to develop the agri-food sector, not only on the food processing side but particularly in research. There is a lot of research money in Europe. We get just about—and no more—our share of it. I strongly urge the Executive to pursue this because we can collectively achieve a lot more by doing so.

Much has been said about corporation tax. I am not going to rehearse the arguments. I regard it as only one of a whole series of tools. I support the idea—I have always done so—but there is no silver bullet that will fix the problem. I know from my own experience on the skills side that, as a United Kingdom, there is still in excess of one-fifth of our population that is not adequately literate. Northern Ireland is actually slightly better off than the rest of the UK in that regard, but what a statistic for a country that prides itself on being one of the top economies of the world.

We saw the social problems in the summer during the riots. The common denominator by and large, with some exceptions, was the absence of basic skills. When we translate all of that back to Northern Ireland—the noble Lord, Lord Alderdice, made a number of very important points about the culture—we might say that people have been bred up on the benefits system. That is not where their natural home is, but to get away from it, when you add all the benefits—free school uniforms, dentistry, healthcare, opticians and so on—you would need nearly a bank manager’s wages to make it worth your while to work.

Given the combination of that with the lack of opportunity, what do we expect people to do? They have to put food on the table somehow, so it is up to us, in rebalancing the economy, to get the message across. I have been in the middle of Stormont for years, and have seen how the carve-up happens at the table whenever the money from London is put on there—everybody grabs their bit and that is the way it works. We have to realise that that endless flow that we have seen for many years is no longer endless and it will get progressively less. That is an inevitability as the economy of the United Kingdom faces up to the fact that we talk about deficit reduction but in fact we have structural debt and all sorts of debt, and it is going to take a generation to clear it. Northern Ireland is not going to be able to rely on very substantial amounts of public expenditure to survive.

Therefore, I entirely support the comments of the noble Lord, Lord Black. I believe very strongly in the creative industries. There is tremendous potential and we have some wonderful talent. Look at our golf. We have huge opportunities there to exploit that from a tourist point of view and in other ways. What other small province in the world could have produced so many talented people in such a short time? It is statistically almost impossible but we have done it. When we add in our land-based industries and our experience in food production, in those three areas alone there is potential for significant growth.

It is depressing in the current circumstances to see youth unemployment in particular rising, but I retain residual optimism that ultimately the entrepreneurial spirit and indeed the genes that were in the economic life of this part of the United Kingdom can be revitalised. It is a matter of concern that so far into the new Assembly progress has not been made. I know how hard it is to produce these programmes for government. It is a very tiresome process, but at the end of the day if we do not get on quickly, we are not giving the right leadership to the industry that is so necessary for our future prosperity.

[Lord Kilclooney]

My Lords, I should like to fill the gap—I was not aware of this debate until today, unfortunately. I congratulate the noble Lord, Lord Lexden, on having this debate. As the noble Lord, Lord Empey, says, the great news is that we are discussing the economy of Northern Ireland and not the security situation.

I declare an interest as chairman of the largest newspaper group in Northern Ireland and the Republic of Ireland, employing some 300 people, so I know something of the problems of business in both parts of that island. I am delighted to hear the noble Lord, Lord Black, mentioning the Tyrone Courier and certainly he will be well reported in the Tyrone Courier next week because it is the largest weekly newspaper in Northern Ireland. One thing I disagree with him about is that he says the small papers are in trouble. No way—small papers are succeeding. We have the largest circulation in Northern Ireland, with 75,000; the big papers, like the Belfast Telegraph, are down to 50,000. The weekly papers are succeeding; the daily papers are in decline right throughout the United Kingdom—so be careful at the Telegraph!

The noble Lord, Lord Lexden, said that devolution was successful. I was deputy leader of the Ulster Unionist Party at that time with the noble Lords, Lord Empey and Lord Trimble. We negotiated the Belfast agreement. To say it is successful is going a bit far. I am more inclined to agree with the present Secretary of State for Northern Ireland in his speech in Manchester a few weeks ago when he said it is getting to the time when they have got to make decisions. People in Northern Ireland are losing respect for the Northern Ireland Assembly, and if it collapses then the gap is filled by terrorism yet again. It is important that decisions are made.

Look at the decisions that have been missed. We mentioned golf; the great international football pitch—no decision; the extension of Belfast City Airport—no decision. The replacement of the 11-plus—abolished; now we have three 11-pluses.

[Lord Empey]

Five.

[Lord Kilclooney]

Well, there is one for integrated schools, one for Roman Catholic schools and one for state voluntary schools, which is amazing. On John Lewis’s planning application at Lisburn, there is no decision. There are no decisions being made and sooner or later the public in Northern Ireland will catch on, which will be very bad news there. As far as devolution is concerned, we should place on record our appreciation of the work of Senator George Mitchell, who some of us were with on Monday evening at King's College, and our thanks to the former Prime Minister, the right honourable Tony Blair. He is criticised very much these days in the media but we should place on record our appreciation of the time and effort he gave to bring devolution.

The noble Lord, Lord Lexden, said that GB taxpayers are subsidising Northern Ireland. He forgot to mention places called Scotland and Wales, and other parts of England. They are getting subsidised as well. We are actually quite successful now. We are not the poorest part of the United Kingdom any longer. Wales is—check the figures. Our unemployment in Northern Ireland is now less than the UK average. We have statistics to show that Northern Ireland is progressing and we should not always be on the back foot, trying to say that things are bad there.

I come to the issue of corporation tax. I have always been critical of the Northern Ireland Secretary of State in his campaign to have a lower level of corporation tax in Northern Ireland. If you look at the PwC accountants’ report on what attracts an investment, corporation tax is number 10 in the priorities —not number one but number 10. I know that from my experience in business in both Northern Ireland and the Republic. Other things come into account: national insurance contributions; other forms of taxation; education—there was some criticism of that this evening—and labour costs. The noble Lord, Lord Bew, mentioned Google but he did not happen to mention Dell, which left Limerick in the Republic of Ireland. Why? Was it the 12.5 per cent corporation tax? It stayed in the European Union and went to Poland, with its 19 per cent corporation tax, because that tax is not the main factor in deciding how you develop a business. There are many other issues: read the papers tomorrow and see what Aviva has announced in the Republic of Ireland today.

I am going to be told that my time is up. All I can say in closing is that, as a Unionist, I believe in equality of services, equality of taxation and equality of responsibilities.