Oral Answers to Questions

Lord Swire Excerpts

Wednesday 15th September 2010 Commons Chamber

[Christopher Pincher (Tamworth) (Con)]

2. What recent discussions he has had with Ministers in the Northern Ireland Executive on the effects of the recession on the Northern Ireland economy.

[The Minister of State, Northern Ireland Office (Mr Hugo Swire)]

With your indulgence, Mr Speaker, I wish to add my thanks to the shadow Secretary of State and the shadow Minister for the assistance that they have given since we took office.

In Belfast last month, my right hon. Friend the Secretary of State and I met my hon. Friend the Exchequer Secretary and the Northern Ireland Ministers for Finance and Personnel and for Enterprise, Trade and Investment. We regularly meet Northern Ireland ministerial colleagues to discuss economic matters and how we can best work in partnership to stimulate economic growth and encourage inward investment in Northern Ireland.

[Christopher Pincher]

The economy in Northern Ireland remains delicate. Unemployment rose between March and May. Will my hon. Friend do all that he can to ensure that politicians and parties across the spectrum in Northern Ireland do not play politics when making economic decisions?

[Mr Swire]

My hon. Friend will not be surprised to hear that I entirely agree with those sentiments. I am pleased to say that these are matters for the Executive. However, I understand that, in his capacity as Minister for Finance and Personnel, the hon. Member for East Antrim (Sammy Wilson), who is present—at least, he certainly was earlier—will meet my right hon. Friends the Secretary of State and the Chief Secretary to the Treasury later today, along with representatives of the devolved Administrations in Scotland and Wales, to discuss financial matters, including the forthcoming spending review.

It is, perhaps, worth my adding that I echo the views of the hon. Member for East Antrim, who has said:

“In some quarters, there appears to be an unwillingness to address the serious financial questions that are being posed. Let us be clear: we cannot dodge difficult decisions in formulating a new Budget. Delaying the Budget process until next spring is not an option.”

That is the way in which to proceed.

[Mr David Hanson (Delyn) (Lab)]

What assessment has the Minister made of the impact of deep public spending cuts in the Northern Ireland Executive budget, not only for the public sector but for the private sector, which depends on many of the contracts that are let? What assessment has he made of the impact of the VAT rise on the ability of the Northern Ireland economy to escape from the recession?

[Mr Swire]

The right hon. Gentleman does not, of course, draw attention to his Government’s own cuts of £44 million, and he—and the House—would do well to remember that we are in the current economic situation as a result of the legacy of the previous Administration. There are a number of positive things to say about Northern Ireland, however: there is the increase in the enterprise finance guarantee scheme, and the waiving of national insurance contributions on the first 10 jobs created by a new business in year one will benefit more than 15,000 businesses in Northern Ireland, while reversing the most damaging part of the planned increase in employer national insurance contributions will add a saving of about £80 million in Northern Ireland. The situation is very serious, but it was more serious before the coalition Government put these measures in place. It is not going to be easy, but Northern Ireland must play its part, along with the rest of the United Kingdom, in confronting the deficit and getting the economy going once more, which must be the aspiration of every Member.

[Mr Nigel Dodds (Belfast North) (DUP)]

What meetings has the Minister or his right hon. Friend the Secretary of State had with Treasury Ministers—and what representations have they received from them—on public expenditure in Northern Ireland generally, and specifically on the level of block grant to Northern Ireland after the spending review?

[Mr Swire]

I repeat to the right hon. Gentleman that there will be a meeting this afternoon attended by his party colleague, the hon. Member for East Antrim (Sammy Wilson), the Chief Secretary to the Treasury, my right hon. Friend the Secretary of State for Northern Ireland and representatives of the other Administrations in Scotland and Wales, at which, no doubt, these matters will be discussed in the proper manner.

[Mr Dodds]

I asked the Minister what meetings he or his right hon. Friend the Secretary of State had had with Treasury Ministers, not what meetings there had been between Executive Ministers and the Treasury. However, does he accept that the circumstances in Northern Ireland are unique? It is the only country or region in the United Kingdom that is suffering from the dissident terrorist threat—a subject that has already been discussed—and that shares a land frontier with another country, and it is also the only area in the United Kingdom that is coming out of 40 years of violence and terrorism, which has greatly truncated the ability of the private sector to compete. It is also the only area that has already had 3% year-on-year efficiency savings, implemented by the Executive. Will the Minister ensure that the fabric of society and vital services in Northern Ireland are protected by making sure that everything is done to protect the level of the block grant after the spending review?

[Mr Swire]

Let me put the right hon. Gentleman straight: my right hon. Friend the Secretary of State and I meet Treasury Ministers regularly and have done of late, not least to discuss the issue that confronts us all to do with the Presbyterian Mutual Society, and we will continue to do so. The right hon. Gentleman makes a very good point, however, in that this issue brings to the fore once more the fact that it is completely unacceptable and unsustainable in the longer term for Northern Ireland’s economy to be so dependent on the state sector—the relevant figures are about 70% as opposed to 30% for the private sector. We have to address that, such as by looking at other ways to kick-start the private sector, not least through corporation tax measures. We have to look at enterprise zones, too. All those things we are doing—

[Mr Speaker]

Order. We also have to move on.

--- Later in debate ---

[Nicky Morgan (Loughborough) (Con)]

8. What recent discussions he has had with the Irish Government on cross-border economic co-operation.

[The Minister of State, Northern Ireland Office (Mr Hugo Swire)]

My right hon. Friend the Secretary of State held discussions on economic matters, which are largely devolved to Northern Ireland, with Irish Government Ministers when he was recently in Dublin. The trade and business development body, which aims to enhance the economy on both sides of the border, is a forum operating under the North/South Ministerial Council that also allows Northern Ireland and Irish Ministers to discuss those matters.

[Nicky Morgan]

I thank the Minister for his reply. Have he and his team considered what lessons can be learned from the economic successes of the Republic of Ireland in the 1980s and 1990s that could now be applied to the economy of Northern Ireland?

[Mr Swire]

Yes, we certainly continue to study that. It is worth pointing out that despite the economic slowdown experienced in recent years the Republic of Ireland continues to attract major foreign direct investment. Indeed, the Republic of Ireland’s stock of direct inward investment is five times greater than the OECD average. According to one leading accountancy firm, there have been well over 50 investment projects this year alone. It is significant, we believe, when spending is being cut and many taxes are going up, that the one set of taxes that are not being touched in the Republic is the low rates of corporation taxes.

[Dr Alasdair McDonnell (Belfast South) (SDLP)]

I thank the Minister for his answer. Does he accept and agree with me that cross-border co-operation is vital for economic recovery in border areas of Northern Ireland? Does he agree that because of the banking crisis there are major cross-border interests that we need to deal with at a British-Irish level?

[Mr Swire]

I most certainly do, bearing in mind that a lot of these decisions are up to the Assembly and the Executive. The hon. Gentleman will no doubt welcome, along with us, the forthcoming investment conference in Washington under the patronage of Secretary of State Clinton, as well as the advance trip to Northern Ireland by her husband, former President Clinton, at which representatives from Northern Ireland and the Republic of Ireland will be present hoping to attract inward investment, which will benefit the very cross-border communities to whom the hon. Gentleman has alluded.

The Prime Minister was asked—