Queen’s Speech

Lord Lexden Excerpts

Wednesday 16th May 2012 Lords Chamber

[Lord Lexden]

My Lords, perhaps I may turn your Lordships’ attention briefly to Northern Ireland and to Ireland more generally. Ninety-one years ago, famous words of great poignancy were spoken by King George V. He exhorted the divided peoples of Ireland,

“to stretch the hand of forbearance and conciliation, to forgive and forget, and to join in making for the land which they love a new era of peace, contentment, and good will”.

Exactly 90 years later, Her Majesty, acting on behalf of us all, stretched out the hand of reconciliation to the Republic of Ireland. She, too, used poignant words. She said that we can all think of things that might have been done differently or not at all, and she urged us to remember that, although we must respect history, we are not bound by it. Who can doubt that her historic visit to the Irish Republic in May 2011 ranks as one of the most conspicuous of all the multifarious services that she has rendered us over 60 years? It is surely appropriate that we should acknowledge its immense significance and thank her for it in the course of our debate on the humble Address in this Diamond Jubilee year.

After long years of direct rule from Westminster, Northern Ireland, once again, has its own system of devolved government, as it did at the time of Her Majesty's accession. However, it is a very different system. Power-sharing has replaced majority rule. As a result, more people in the Province today identify themselves with the institutions under which they are governed than was possible under the old Stormont system. That will lend added significance to Her Majesty's forthcoming visit to Northern Ireland as part of her Jubilee tour.

As regards the economy, the best known fact about Northern Ireland is that it is unduly dependent on the state. Public spending in the Province is equivalent to more than two-thirds of GDP; some put it closer to three-quarters. Grave disquiet has long been expressed about this state of affairs. With the recreation of political stability, it became imperative to set a new course in economic policy. Only substantial private sector growth can provide a basis for the enduring prosperity that our fellow countrymen and women in the Province have a right to expect. In this, as in so much else, my noble friend Lord Trimble and his courageous Ulster Unionist colleagues pointed the way.

Today, no one seriously dissents from the proposition that the Northern Ireland economy must be rebalanced in order to stimulate private sector business and jobs. The coalition Government at Westminster committed themselves firmly to the task in their agreed programme two years ago. My right honourable friend the Secretary of State for Northern Ireland has recently underlined its importance. Rebalancing the economy, he said in Dublin last month,

“is probably the biggest single contribution that the UK Government could make to sustaining peace”.

He also said:

“Just think of the impact that greater prosperity and jobs could have in parts of Northern Ireland where worklessness and generational unemployment are endemic”.

To remove what has become endemic will take time. My right honourable friend frequently refers to the need for sustained action over 25 years. In this he is at one with the coalition Executive at Stormont. It has recently produced an extremely ambitious strategy document, packed with detailed proposals and plans, all designed, in its words, to create,

“a prosperous local economy over the short, medium and longer term to 2030”.

If success is achieved, Northern Ireland will recover its long-lost prosperity. The document states:

“Our economic vision for 2030 is … an economy characterised by a sustainable and growing private sector, where a greater number of firms compete in global markets and there is growing employment and prosperity for all”.

There is a widespread but by no means universal view in Northern Ireland that a bold, unconventional initiative should now be taken to give the process of change powerful momentum. It would involve the transfer of responsibility for corporation tax to the Stormont coalition Executive, with a consequent reduction in the block grant that currently finances their work. This would enable them to cut corporation tax in Northern Ireland decisively. The case for such a dramatic change was discussed at length in the consultation document, Rebalancing the Northern Ireland Economy, published by the Treasury in March last year. It noted that,

“Northern Ireland has its own unique set of circumstances, not least a land border with the Republic of Ireland with one of the world’s lowest corporation tax regimes … Reducing the corporation tax rate in Northern Ireland would have a positive impact on both domestic investment and FDI”—

foreign direct investment—

“which could lead to increased economic growth and a stronger private sector”.

A corporation tax rate of 12.5%, matching that of the Irish Republic, would be in prospect if this unprecedented initiative were to be undertaken. A ministerial working group set up last October to examine the complex and technical issues that may arise is expected to report this summer. My noble friend the Minister may be able to comment on the progress that is being made.

Unsurprisingly, the issue has dominated all recent discussion of economic affairs in Northern Ireland. There is a danger that it could come to be regarded as a panacea for all the Province’s principal economic ills. The Northern Ireland Executive’s new economic strategy document helps most usefully to counter that danger by expounding the wide range of other measures that are needed, such as increased investment in research and development, and expansion of higher-level skills among young people.

Northern Ireland could also gain greatly from a profoundly important Thatcherite idea: the economic enterprise zone, whose time seems to have come again. It occupies no prominent place in the Executive’s economic strategy, but that is where it should be.

The gracious Speech states that the Government,

“will continue to work constructively and co-operatively with the devolved institutions”.

Nowhere is this more important than in Northern Ireland.