Corporation Tax (Northern Ireland) Bill

Naomi Long Excerpts

Wednesday 4th March 2015 Commons Chamber

[Mark Durkan]

The hon. Gentleman is exactly right. I have to be honest that the slightly left-handed amendment I tabled in Committee could have introduced its own difficulties, as the Minister pointed out at the time. This less left-handed—I apologise to any cuiteogs in the House—amendment addresses the salient point in respect of credit unions and also takes in for the first time a point that I had overlooked in Committee: the position of a mutual building society based wholly and solely in Northern Ireland, such as the Progressive. This wider amendment, which thankfully has been seconded by the hon. Member for Belfast East (Naomi Long), is therefore designed to cater to both circumstances.

[Naomi Long (Belfast East) (Alliance)]

It is important to recognise—I think that the hon. Gentleman will agree—that the point of that exclusion was to prevent the kind of brass-plating whereby companies simply moved their headquarters to Northern Ireland without moving any economic activity or jobs. That is not the case with either credit unions or mutuals such as the Progressive, because they are based in Northern Ireland and work there, creating employment and investment.

[Mark Durkan]

I take that point fully. That is why I am so glad that the hon. Member has seconded the amendment and spoken so strongly to its main purpose.

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[Naomi Long]

I do not wish to detain the House for very long. I merely want to put on record my thanks to the Government for the work they have done in bringing this Bill forward, and also to the Opposition for their support for the Bill. I welcome the progress in this matter, which we have debated many times in this House, and we also talked about it for a long time when I was in the Assembly. Those of us on the Select Committee on Northern Ireland Affairs spent many hours discussing the issue of corporation tax and its potential positive impact on Northern Ireland and its economy, so I welcome the progress we have made in what is a relatively short period of time from the announcement. It is good to see this measure reach its Third Reading today.

Others have already said this is not a silver bullet for the economic challenges that face Northern Ireland, but it is a very important lever for the Northern Ireland Executive to have within their control to address the imbalances in the economy, to encourage further growth of our local companies and to encourage further inward investment. Even without corporation tax being reduced, Northern Ireland outperforms many other regions in attracting inward investment. This gives us another opportunity to raise our profile internationally and encourage more companies to look at Northern Ireland as a serious investment prospect, but also to see us as a competitive region where they can locate and do real business.

I look forward to seeing this Bill reach fruition. There will be challenges ahead for the Northern Ireland Executive as they go about the more complex work of setting a rate for corporation tax, particularly in terms of affordability at a time when resources are extremely tight. It will be difficult because there will be a gap between any benefits from the change and the amount they will lose to the Treasury in the interim. The Executive will have to look at that period very carefully in terms of affordability and how that is managed.

There is also a challenge in dealing with investment in skills, which are required if we are to see the full benefits of any reduction in corporation tax. There is no point in reducing corporation tax to get new businesses to come in and invest if we do not have the skilled workers to be able to take up employment in those companies. Part of the due diligence that any company will do before investment will involve looking at our skills base. That will be one of the key issues. We therefore have to see a renewed focus from the Executive on investing in skills, and particularly the right skills for the companies that we are encouraging to come to Northern Ireland.

We also face challenges in terms of infrastructure. As a civil engineer, it would be remiss of me not to mention that. It is not just our communications infrastructure, but also our physical infrastructure, which requires investment. Companies doing due diligence before investing in a region will look at such issues. It is hugely important that we are able to invest in infrastructure in a way that will both encourage and benefit companies locally who are already involved in growing their businesses and attract new inward investment to Northern Ireland.

Our connectivity will need to be defended. That is a role that both Westminster and the Assembly can have some regard to. It is hugely important that our air transport links, particularly those routes that allow us to cargo material from Northern Ireland for export markets, are protected. That should detain this House perhaps more than it has done to date.

If we are to benefit the economy and feel the true benefit of this change in corporation tax, we also need to create the kind of political stability in Northern Ireland that is conducive to creating economic growth.

[Mr Dodds]

On the economic issues and making the most of this devolved corporation tax power, does the hon. Lady agree that it is important that the Assembly and the Executive determine the sort of rate that is going to apply as quickly as possible so that Invest NI can get out into the marketplace and begin to sell Northern Ireland and the benefits of this as soon as possible? As she knows, there is a big lead-in time in terms of attracting investment?

[Naomi Long]

I am aware of the pressure to want to do that quickly, but it is also important that, as the Executive do that, the cost of it to the Northern Ireland economy is thoroughly assessed and we work out how we are going to pay for it in the interim. Otherwise, before we reap the benefits, we could leave a gap in our public finances that creates pressure, particularly from those that are already under financial pressure. It could lead to a push back against the corporation tax reduction. Getting that balance right is important. I agree that it would be wrong for people to be unnecessarily tardy, but I also think it is important that proper due diligence is done around what that level should be.

Reaping the maximum benefit from the changes under this Bill requires political stability. It requires people, when they look to Northern Ireland, to see the positive images that are so often broadcast, as opposed to some of the more negative images we have seen in recent years. If we want lasting prosperity, it has to be shared among everyone in our society. It is therefore hugely important that we see political maturing not just in terms of the Unionist-nationalist question and how that is handled politically in Northern Ireland, but in terms of the productivity of the Assembly.

[Ms Ritchie]

Does the hon. Lady agree that along with having corporation tax as a financial lever, and the need to create political and economic stability in Northern Ireland and the need to encourage people to come and visit, there is also a need for the Treasury to look at reducing VAT on tourism? That would enable us to be more competitive with the south of Ireland in terms of visitors and the economy.

[Naomi Long]

I am aware that the hon. Lady has long since advocated such a move, as have I. Unfortunately, the Treasury response has been that in some way reducing the VAT on leisure would encourage people to have a rather lackadaisical attitude to the workplace. In fact both inward and outward tourism generates a significant amount of money into our economy, so I think a future assessment would be valid.

Today marks a very welcome step forward in the potential for Northern Ireland to rebalance its economy and encourage further growth of the public sector. I hope that when the Executive meet, as they will do over the coming months, they will meet the challenge of setting the rate and stepping up around infrastructure and skills, as well as around stability and peace building. We will then be able to reap the maximum reward for the work that has been done.

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[Naomi Long]

The hon. Gentleman has said on a number of occasions that, as a result of the Stormont House agreement, one obligation was to sign up to welfare reform. Does he not agree that, more correctly, what was agreed was that we had to come up with a package on welfare reform that we could pay for? As it happens, that package was parity with a little bit of flexibility—

[Madam Deputy Speaker]

Order. Interventions are meant to be short. The hon. Lady has already spoken. It is perfectly in order for her to make an intervention, but it must be short, especially as she has, quite rightly, taken up the House’s time this afternoon. I politely indicated to the hon. Gentleman who has the Floor that he might consider drawing his remarks to a close. He chose to argue with me on the points I had made. I will speak less politely to him if he does not adhere to what I have said. He has spoken for a considerable time this afternoon. He is in order. He has the opportunity to conclude his speech. I am not saying that he must finish immediately now, but I am sure that he will give thought to other people in the Chamber.