Cross-border Crime

Naomi Long Excerpts

Wednesday 11th March 2015 Commons Chamber

[Dr William McCrea (South Antrim) (DUP)]

I beg to move,

That this House notes with concern the continued prevalence of serious organised criminal activity in Northern Ireland on a cross-border basis in relation to fuel smuggling, fuel laundering and the counterfeiting of consumer goods; recognises that this has had a significant and detrimental impact on HM Treasury; regrets the lack of prosecutions in relation to this activity; and calls on the Government to ensure greater co-operation between HM Revenue and Customs, the National Crime Agency and the PSNI so that this criminal activity can be eradicated.

It is a great pleasure to move the motion tabled by my right hon. and hon. Friends.

According to the Home Secretary, organised crime costs the UK at least £24 billion a year. In Northern Ireland, police assessments indicate that there are more than 140 organised criminal gangs in operation. We are all acutely aware of the audacious attempts by such gangs to carry out all sorts of crimes, including the laundering and selling of illegal fuel, and the counterfeiting of consumer goods.

Although the criminals respect neither borders nor victims in their illegal pursuits, Northern Ireland is unique within the United Kingdom in that it shares a land border with a foreign country. The findings of a recent British-Irish Parliamentary Assembly report show that law enforcement agencies in both jurisdictions work together; that illicit trade and smuggling are some of the largest challenges faced by cross-border agencies; and that the number of border area fuel laundering plants, and the number of filling stations selling illicit fuel, is alarming. The report called for a cross-border approach with a permanent multi-agency taskforce to deal with illegal activity and to tackle tobacco fraud, and for legal changes to prevent filling stations prosecuted in connection with illegal fuel from reopening within months of conviction.

I echo the comments made by Fine Gael TD Patrick O’Donovan when he spoke in a debate at the British-Irish Parliamentary Assembly on the report. He said that authorities were turning a blind eye to illegal activity in the border area, motivated by an “appeasement” process of replacing the cowardly butchery wing of the IRA with the racketeering wing, in what has effectively been considered a bandit area, which has helped to support claims that the Real IRA is the ninth richest terror group in the world.

Fuel laundering is currently worth around £400 million a year in lost tax revenues in Great Britain, and £80 million in Northern Ireland, where the problem is particularly acute. According to Mr Pat Curtis, a senior official at Her Majesty’s Revenue and Customs, organised crime gangs have established sophisticated laundering plants to remove the giveaway dye, sourcing chemicals from China and using the internet to improve their techniques.

Figures for 2012-13 indicate that the illicit market is worth 13% of the total. HMRC is responsible for investigating fuel fraud, including fuel laundering—as part of that work, it cleans any sites it uncovers—but in 2012 the Northern Ireland Environment Agency commenced a fly-tipping pilot in partnership with local councils. Between June 2012 and January 2015, Antrim borough council, which is in my constituency, had one fly-tipping incident. The cost incurred by NIEA was £346.76. In the same period and in stark contrast, Armagh city and district council had 114 incidents at a cost of £266,743.65, and Newry and Mourne district council had 198 incidents at a cost of £585,333.94. Those figures are startling.

In 2013-14, some 38 fuel laundering plants were dismantled in Northern Ireland compared with 13 plants in 2003-04. Although a fuel laundering plant is detected every 10 days in Northern Ireland, and despite the fact that this criminality is filling terrorists’ coffers and bankrolling the IRA and Real IRA, no one has been jailed for fuel fraud since 2002. Such statistics are preposterous, and the Northern Ireland public have a right to know whether that is the price of keeping republicans bought off for the sake of the peace process, or whether fuel launderers are tipped off ahead of raids.

[Naomi Long (Belfast East) (Alliance)]

One challenge is that the nature of the fuel laundering process means that people do not need to be present. Part of the difficulty is catching the right evidence. The Northern Ireland Department of Justice is trying to ensure that evasion of the duty becomes a criminal offence so that people can be put in jail for it. That is much easier to prosecute.

[Dr McCrea]

I thank the hon. Lady for that helpful comment. I trust that that will be a warning to those participating in that illegal activity.

--- Later in debate ---

[Naomi Long (Belfast East) (Alliance)]

I pay tribute to the hon. Member for South Antrim (Dr McCrea) for bringing this motion to the House today. This important issue is often overlooked because in many ways it is a hidden crime, and, as the hon. Member for Amber Valley (Nigel Mills) said, it is often viewed as a victimless crime. It is anything but. It is important that as well as trying to combat it through the various agencies that have a role in addressing organised crime, we communicate carefully with the public about their role in combating it and about the risk it poses to them. People often simply see cheaper goods and that is the only aspect they see of organised crime; they do not see the risks to them, the other criminality that goes with it, the danger, or the money taken from revenue that would otherwise be invested in services.

Obviously this is a complex area. Others have mentioned how difficult it has been to secure convictions, and I shall move on to discuss that. First, however, I pay tribute to the law-enforcement agencies for the work they are doing on both sides of the border. A complex collection of agencies has to deal with this complex area of crime. We have the Police Service of Northern Ireland, Garda Siochana and the National Crime Agency. We welcome the fact that we now have the additional resource of the NCA, because while we focus on one border, criminals operate across many borders, so having that national organisation involved is hugely important. Her Majesty’s Revenue and Customs, Revenue commissioners and Border Force work closely together in order to share intelligence, to disrupt those who try to perpetrate crimes and to ensure that they are eventually brought before the courts. When people are brought before the courts for participation in organised crime or for benefiting from taking goods that are clearly only available as a result of organised crime, the penalties should be a deterrent.

The impact of fuel laundering has been discussed at considerable length. The scale of the problem in Northern Ireland is undeniable. Fuel laundering is not just a cross-border issue: the uncollected revenue from fraudulent diesel in Northern Ireland was estimated by HMRC to be £80 million in 2012-13, which is 13% of the overall market share in Northern Ireland. That is a significant sum of money, especially when we compare it with the GB figure for illicit market share, which was about 2% in the same year. That gives us a clear indication of the scale of the problem, but it is not just a Northern Ireland issue, because that revenue is being denied to the UK as a whole. There is a genuine interest here in Parliament to address the issue robustly, because it is Great Britain’s schools and hospitals as well as our schools and hospitals that lose out as a result of the revenue not being collected.

The nature of fuel laundering means that sites themselves are not regularly attended, which can make it difficult to establish a clear link to the perpetrators. In Northern Ireland, we often say that everyone knows who does things, but knowing and proving are two different things when it comes to the law. Part of the strategy is to disrupt those who are involved in illegal activity, and part of it is to try to catch them. Trying to balance those two things can be very difficult. It is often hard to make that clear link to the perpetrators. It requires the seizure of records and the scene of crime work, which is complex and slow. Prosecutions in this field often do not come to court for many years after the breaking up of the illegal fuel laundering plant.

There has been an increase in the number of fuel laundering plants dismantled—the number has risen quite quickly over the past few years. There has also been an increase in the number of convictions, but the problem is that not one person has received a custodial sentence of more than 10 years, which seems ludicrous given the impact that the crime has on society.

The challenge in making arrests and obtaining the evidence is something of which the Department of Justice and my colleague David Ford are fully aware. As the Minister rightly said, the Department of Justice has introduced legislation adding the evasion of duty in relation to fuel and tobacco to the list of offences that can be referred by the Director of Public Prosecutions from the Crown court to the Court of Appeal when a sentence is considered to be unduly lenient. That does not resolve the issue entirely, but it does mean that there is a fall-back position when judges are seen not to have taken seriously enough someone who is brought before them in connection with these crimes.

[Dr McCrea]

Does the hon. Lady accept that there is another difficulty? In the instance I mentioned, laptops and documents were destroyed or burned before HMRC arrived at the scene. The concern was that there had been a tip-off.

[Naomi Long]

There is no doubt that that is a concern, and it has been a concern for some time. There is evidence that when HMRC or the PSNI has turned up on site, people have scattered and taken with them some of the critical evidence, which suggests that they were aware that those organisations were coming. Obviously, we can look at that in two ways. The first is that someone could be tipping off those launderers. The alternative is that these are complex organisations that have their own intelligence. They are observing the movements of the police, HMRC and others in the area and may well become aware that operations are moving against them. In some ways, we need the intelligence on the legal side of the fence to be much more robust than the intelligence on the other side. We should not rule out the possibility that the criminals themselves are gathering intelligence about what is happening in their neighbourhoods that helps them to evade capture.

I want to move on to the wider issue of the impact of this crime. I have referred to the fact that this is not a victimless crime, and it is worth talking now about some of the victims.

[Dr Murrison]

The point about intelligence is well made. It is important not to provide organised criminals with information if we can possibly avoid it, which recalls the letter from my right hon. Friend the Member for Loughborough (Nicky Morgan) to the Chair of the Northern Ireland Affairs Committee. I have not seen the letter so cannot comment on it in any detail, but I think it is probably wise not to put such a letter in the public domain if it would give succour to organised criminals. We must be careful not to display our tactics and what we do to those who might wish to make use of them in a way that is contrary to national security or good order.

[Naomi Long]

I understand the Minister’s point, but there is a wider point about how Members can raise their concerns about these issues. They have done so via correspondence and in private evidence sessions, as the Northern Ireland Affairs Committee has done here with Her Majesty’s Revenue and Customs and in other places. It appears not to have been taken seriously. That is the concern expressed by Members on this side of the Chamber. I certainly would not wish to put anything into the public domain that would give any succour or encouragement to any criminal; neither would I want to rely on a marker if there was evidence that it could be easily removed.

We also need to acknowledge that this is a multi-billion pound business for the people involved. Whatever marker is used, they will invest in the technology that will allow them to evade it. All that we are trying to do—all that we can ever do in these circumstances—is stay ahead in the game. We need to be realistic about the fact that when it comes to protecting the public, what we are trying to do is stay ahead of the criminals in the technology we use: they will no doubt be chasing that technology as soon as it is included as a marker.

As I said, I want to move on to the wider issue of the impact on the victims. I have already mentioned that this is not a victimless crime. I want to talk about the wider impact of fuel smuggling and fuel laundering and the wider counterfeiting of consumer goods. The motion ranges slightly wider than fuel, although fuel obviously exercises us all because of its significance. There are two separate but linked issues. The illicit and counterfeit goods themselves have an element of risk attached to them. They defraud the public. People often purchase inferior goods in the belief that they are getting the real thing, and that in itself can be extremely dangerous.

For example, when fuel is stretched rather than laundered or smuggled, it can seriously damage vehicles. Often the people who purchase it are unaware that it has been stretched. There are two classes of people in that regard: those who know that they are buying fuel at a ridiculously low price and that they are risking their vehicles; and those who stop at what looks like a reasonable petrol station and purchase fuel, only to find out subsequently that it has damaged their vehicles because it was illicit. That is a different issue, but it causes real damage to vehicles, and is the public need to be made aware of that. Frankly, it may well provide a bigger deterrent against buying laundered fuel than almost anything else we could say to motorists.

Counterfeiting also places the public at risk in other ways. Reference has already been made to the discovery that some counterfeit cigarettes contain asbestos. Counterfeit cigarettes sold in Northern Ireland in the past have been found to contain arsenic. The people who make these products do not really care what goes into them or what impact they might have on health. When people purchase counterfeit and illicit goods, they are placing themselves at considerable risk. Another example is that of products made of flammable materials being brought into the household. People might think that those products meet the regular standards, unaware that they are actually bringing materials into their home that could put their family at serious risk.

I also want to highlight the conditions of those involved in counterfeiting these goods, because often they are being held against their will in other countries, having been trafficked as slaves in order to produce them. The abuse often reaches much further than consumers and the public here in Britain; it also affects those producing the goods further afield.

As the hon. Member for East Antrim (Sammy Wilson) rightly, if rather surprisingly, said, significant environmental damage is caused when people get involved in fuel laundering. The mess that is left around the countryside in Northern Ireland not only costs millions of pounds to clean up but will take many years to be ameliorated. It will leave an almost indelible mark on parts of our countryside, on our water supply, and on many other things, so these illicit and counterfeit goods have a significant impact on the public.

The other aspect is smuggled goods—the stuff that is brought in through smuggling routes. Those who open up those routes do so not for one particular set of goods; once they are available they will use them for anything. When they have good routes for smuggling fuel, consumer goods or cigarettes, we can be sure that they will use the same routes for smuggling people and drugs—and all human misery is there. It is about opening up routes around the world so they can smuggle goods, and they do not care whether it is people or goods being trafficked.

In all cases, whether counterfeiting and laundering or smuggled goods, people are evading their tax and Revenue payments. That brings us back to the issue of robbing public services. Those who purchase cheap cigarettes or cheap petrol and diesel, and thereby counterfeit goods, may think that it makes no difference. However, when they turn up at the hospital and face long waiting times for accident and emergency services, or cannot get a bed and are lying on a trolley for 48 hours, they should realise that those problems are due to money not going to the Revenue. We have to be honest with the public and say: “You are only stealing from yourself when you purchase goods in this way; you are not doing anything to help your own situation.” We need to try to disabuse people of the notion that this is a victimless crime.

In Northern Ireland, as several hon. Members have said, this has a more sinister element in that much of the money raised in this way is being funnelled into further illegal activity and, in particular, paramilitary activity. That should be a matter of concern to us all. We want a stable and peaceful future, but most of all we want a safe and secure future for the people we represent. We need to say to people: “When you purchase smuggled goods at the petrol pump or elsewhere, bear in mind the fact that you are putting money in the pockets of people who are quite happy to set out with murder in mind and take lives for political gain. Those are the people who benefit from this.” It is not only republicans but loyalists who are willing, through organised crime, to work in drug smuggling, drug dealing, counterfeiting, and all the other things. Criminals will work together where there is money to be made. That will be more important to them than any political objectives they may claim to have, and much more important than the lives and the security of the people in their communities.

It is important in this debate that we spend a little time considering the fact that this is not a victimless crime but a complex and difficult one that requires a multi-agency approach. I have no doubt that the agencies are pushing very hard to bring it to an end, but we need to secure public support. With that support, it will be much easier to find those who are behind these smuggling rings, hold them to account in the courts, and see them serve jail time for what they are doing. I commend the hon. Member for South Antrim for bringing this motion to the House.

Oral Answers to Questions

Naomi Long Excerpts

Wednesday 28th January 2015 Commons Chamber

[Mrs Villiers]

These matters are crucially important. The crime figures in Northern Ireland continue to make it clear that Northern Ireland is one of the safest places in Europe and has some of the lowest levels of crime, but I know that the PSNI takes very seriously the regular crime that is the bane of people’s lives and is working hard to combat it, in addition to its duties in relation to national security.

[Naomi Long (Belfast East) (Alliance)]

The hon. Member for West Lancashire (Rosie Cooper) referred to the attack on PSNI headquarters in my constituency. In addition to being under threat when in uniform and on duty, officers are often under threat in their own homes. The PSNI needs resources to be able to provide adequate security measures at officers’ homes if it is to retain officers who have been trained. What can the Secretary of State do to allow additional funding for the PSNI to ensure that that happens?

[Mrs Villiers]

As I said, one way to do that would be to take burdens off the PSNI’s shoulders by implementing the NCA. Continued focus on trying to resolve parading disputes is also important, given their potential impact on police resources. It is crucial that we get the new institutions on the past up and running as soon as possible to provide that relief to PSNI funding, and, as we discussed in the House yesterday, we need to consider whether any of the £150 million for dealing with the past can be deployed prior to the establishment of the HIU to help on these matters for the PSNI.

Corporation Tax (Northern Ireland) Bill

Naomi Long Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mrs Villiers]

I emphasise that the new system is designed to deal with artificial avoidance. A number of measures are in place to prevent abuse of the new system; I will come to those in a moment. In relation to voting on taxation matters, my hon. Friend will be aware that ensuring that the devolution settlement is fair to the English as well as to the rest of the United Kingdom is an important matter under consideration by the House and by the political parties. I am sure it will be extremely important that we get the right outcome to ensure that the devolution settlement is fair across the board, but it is also crucial that we have a coherent and unified tax system.

[Naomi Long (Belfast East) (Alliance)]

I take on board the issue raised by the hon. Member for Amber Valley (Nigel Mills). Does the right hon. Lady agree with me, though, that Northern Ireland would want to avoid corporation tax devolution and any subsequent reduction by the Assembly leading merely to brass-plating of companies in Northern Ireland? For us to benefit from the economic out-turn of investment, we need people who are involved in creating employment and raising skills levels as well.

[Mrs Villiers]

As the hon. Lady will hear when I get further into my remarks, the approach in the Bill is to focus on genuine economic activity which generates jobs. We want to minimise the risks of matters such as brass-plating and artificial avoidance schemes, so the Bill maintains the coherence of the corporation tax system as a whole and also provides an incentive to bring genuine economic activity to Northern Ireland and assists in that rebalancing process.

The Wales Act 2014 came into effect on 6 January, providing the legislative framework to support the implementation of recommendations made in the first report of the Silk commission. As my right hon. Friend the Secretary of State for Wales has told the House, he continues to take forward discussions on the next steps for devolution in Wales. The debate continues on the most effective way to ensure that devolution operates in a fair way with regard to England, as one of the component nations of the United Kingdom.

Turning back to Northern Ireland matters, the devolved system for corporation tax rates set out in the Bill reflects the following overarching Government goals: we want to attract genuine economic activity to Northern Ireland, minimise additional administrative costs for business, keep the costs of a reduced rate for the Executive at a proportionate level, and ensure as much consistency as possible between the new NI provisions and the main UK corporation tax regime—and of course we need to comply with legal requirements.

The legislation does not cut off Northern Ireland from the rest of the UK tax system or establish a separate and distinct corporation tax regime for Northern Ireland. Control over what is taxed remains a matter for the UK Government and this House. The Bill devolves only the power to vary the rate, so Northern Ireland’s trading regime remains firmly and clearly within the overall UK corporation tax system. The Bill will insert new part 8B into the Corporation Tax Act 2010 and amend the Capital Allowances Act 2001. These changes would give the Assembly the power to set a rate of corporation tax for certain trading profits, based on a proposal from the Northern Ireland Executive. That would be a decision for Northern Ireland, independent of the UK Government or this House. It will give the Assembly and the Executive a powerful economic lever to drive potential growth and enable it to be exercised on the basis of the wishes of Northern Ireland voters, taxpayers and businesses.

Efforts are made to minimise the scope for artificial tax avoidance, as I said in response to interventions. Existing anti-avoidance measures will continue to apply, including the UK targeted anti-avoidance rules and the general anti-abuse rule, and further protections may be introduced before implementation. The overall structure of the devolved regime has been designed to limit the opportunities for avoidance, as I told the House in response to interventions.

A new Northern Ireland rate would cover trading profits, such as those associated with manufacturing and providing services. Other profits—non-trading profits, such as those associated with property income—that do not generate jobs or economic growth in the same way will continue to be subject to the UK-wide rate. Similarly, activities such as lending, leasing, and reinsurance offer significant scope for profit shifting without the benefits of bringing substantial new jobs, so these, too, will be excluded from the Northern Ireland provisions.

To promote continued success in Northern Ireland in attracting back-office functions, companies with excluded trades and activities may make a one-off election for the back-office functions of those excluded trades or activities to qualify for the Northern Ireland Office regime. This is an example of the UK Government’s responding specifically to areas of activity where Northern Ireland has demonstrated its great strength in attracting inward investment. It will not apply to the oil and gas or long-term insurance sectors, which have their own separate regimes and will not be included in the new devolved arrangements. Allowances and credits remain reserved to Westminster to help to maintain a common tax base across the United Kingdom and to prevent unnecessary new complexity from being added to the tax system.

However, a number of rules will be amended to reflect the new circumstances. For example, if there is a lower rate of tax in Northern Ireland, research and development tax credits, capital allowances and creative reliefs for the film, TV and computer game industries will be adjusted to ensure that they continue to be broadly equivalent in value to those in Great Britain. That means that Northern Ireland can continue to be just as attractive a location for successful projects such as “Game of Thrones” and other film and television productions.

The devolved tax regime will also operate differently for larger and small businesses. Larger businesses will need to divide their profits between Northern Ireland and Great Britain, as they do now between the UK and other countries. This effectively means that they will treat their Northern Ireland trading activity as a separate business from their activity in the rest of the UK and allocate the appropriate amount of profit to Northern Ireland. We recognise, however, that this would be burdensome for smaller businesses. Indeed, the issue of potential administrative burdens on small business was one of the key concerns brought out by the 2011 consultation, and the matter was raised by Northern Ireland Executive Ministers on a number of occasions at the ministerial working group. Therefore, if at least 75% of such a business’s staff time and staff costs relate to work in Northern Ireland, then all their trading profits will be chargeable at the Northern Ireland rate. If not, they will be chargeable at the UK corporation tax main rate. This simple in/out test will mean that the majority of small and medium-sized enterprises are spared the burden and cost of apportioning profits.

As I made clear in my previous statement to the House, the Bill’s progress through Parliament is dependent on the Executive parties delivering on their commitments in the Stormont House agreement. Those include agreeing and delivering a 2015-16 budget that works, legislating for changes to the welfare system, and taking the steps required to put the Executive’s finances on a stable footing for the long term. I warmly welcome the progress that is under way on those three crucially important matters, with, for example, the recent agreement on a budget for 2015-16. Given the practicalities of implementation, the earliest point at which reduced rates could come into effect is April 2017. The Bill contains a commencement clause meaning that these devolved powers will be switched on for the planned start date in 2017 only if the Executive can demonstrate that they have succeeded in the third goal of achieving sustainable public finances. This is in line with the approach used for other tax devolution measures in other parts of the UK.

The Government have been very clear that devolving corporation tax rates is not an end in itself. Certainly, on its own, it is clearly not the answer to all the economic challenges facing Northern Ireland. If the full potential benefit of corporation tax devolution is to be realised, a number of areas of economic reform need to be addressed, such as planning, skills and infrastructure. However, given the land border that Northern Ireland shares with a lower-tax jurisdiction, it is difficult to think of any one policy which, on its own, may potentially have such a transformational impact on the Northern Ireland economy—

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

I trust that I will do what the shadow Secretary of State did and give a balanced view, from a Northern Ireland perspective, of where we see the Bill taking the Northern Ireland economy and the impact that it will have on the economy.

It would be churlish if we did not acknowledge that considerable work has gone into the proposal. It has taken many years, and as the right hon. Member for North Shropshire (Mr Paterson) indicated, a large number of people have been involved in making the case for the devolution and then doing what was necessary to bring it about.

I pay tribute to the right hon. Gentleman for the role that he has played in this change, although I would point out that the cudgels were first taken up by the leader of my party, who was then Finance Minister in Northern Ireland and was convinced that the decision made after the Varney report was published was incorrect. He started the ball rolling on this issue in Northern Ireland. Many businesses also supported the campaign.

I also pay tribute to the work done by the Financial Secretary and his officials during the time that I was the Finance Minister in Northern Ireland. I know that sometimes we made progress and then were knocked back a bit, and it was frustrating at times. But many of the issues addressed during those discussions were essential if the issue was not to fall foul of European legislation or decisions by the European Court. Much of that groundwork was very necessary.

One of the things that drives this change is the desire in Northern Ireland to transform our economy. Our region has not always been in the economic doldrums. In fact, for a long time during the 20th century, Northern Ireland was a driver in the UK economy. We had world-leading, world-renowned industries that drove a healthy economy. Many of those industries declined because of changes in world demand, distribution patterns and global trends, which also coincided with the start of the troubles. As a result, major industries declined and Northern Ireland was an unattractive place for new private sector companies, resulting in an unhealthy increasing dependence on the public sector.

One of the aims of the Northern Ireland Executive is to rebalance the economy as well as to grow it. To do that we need the right economic levers, but—as the Secretary of State said and the shadow Secretary of State alluded to—there is no point having those levers in our hands if the right conditions do not exist. I agree with the Government—although some frustration is felt back home on this point—that it was right for them to insist that the Executive have a budget that showed the tax change was sustainable and that we could absorb its impact. It was right that we should not pay money annually to the Treasury because we had not concluded the welfare reforms, because that was of course a drain on the resources that were available to the Executive.

The conditions that were laid down were correct and the Executive has now proposed a budget, although it has not been supported by all the parties. Some parties, even though they are in government and their Departments would benefit from the savings in the budget, have taken an irresponsible attitude. They think they can benefit from the budget and at the same time distance themselves from the more difficult aspects of it—

[Naomi Long]

And you would never have done that.

[Sammy Wilson]

I seem to have hit a sore spot or at least the tender parts of the body politic among those parties that have engaged in such activity.

We have to get the welfare reform proposals through the Executive, but agreement has been reached and I hope that, as this Bill makes progress, we will also see the passage of the welfare reforms in Northern Ireland, albeit with changes—mostly secured by my party—to the Welfare Reform Bill that will make it less draconian. Indeed, I think that some of the changes in the Welfare Reform Bill will have to be revisited by this Parliament at some stage.

--- Later in debate ---

[Sammy Wilson]

Given the comments from the hon. Gentleman’s party and the Labour party, I suspect the grant will not be higher. Furthermore, we still have to deal with our dependence on public sector expenditure. It is being squeezed all the time, and therefore we need to look at rebalancing the economy.

[Naomi Long]

I agree that public finances will continue to be under pressure and that therefore we need to grow the private sector to counterbalance that. Does the hon. Gentleman agree, however, that Northern Ireland’s reliance on the public sector is even worse than the Secretary of State mentioned, because many of the privately owned companies are almost entirely reliant on Government contracts? It is not just about those directly employed in the public sector; it is about the number of private businesses that rely on the public sector for their employment.

[Sammy Wilson]

That is one of the reasons, of course, that some people say the public sector accounts for as much as 62% of employment in Northern Ireland. Some of it is disguised in the way the hon. Lady suggests.

We have to consider whether we can simply sit on our hands. However, there is a second consideration for the Northern Ireland Executive. Yes, there is some risk attached to the policy; all economic policies carry some risk, but in measuring and trying to balance that risk, we have to consider the impact of the policy elsewhere, especially in areas similar to Northern Ireland. I have already mentioned the approach of the Republic of Ireland Government.

As the changes to the rules on accounting and disclosure come forward, I know that some of the financial services issues might be addressed, but we have not touched on the ongoing cost of the devolution of corporation tax, which is currently reckoned to be about £300 million. However, as the economy grows, a formula will be imposed in respect of the loss of revenue, and given that there could be a substantial reduction in corporation tax in Northern Ireland, the formula must not be draconian. For example, if it was set at an unrealistic rate, based on the performance of better performing regions or of the UK economy as a whole, the burden could become substantially higher as time goes on. We need clarity on that issue.

The right hon. Member for North Shropshire said that from this day on the Executive should be proceeding with this matter, but we cannot do so because the Bill has not yet been passed. I know he is enthusiastic, but I think his enthusiasm has run away from the reality: the Bill has to pass its stages as normal.

--- Later in debate ---

[Naomi Long (Belfast East) (Alliance)]

I am pleased to be able to speak in support of the Bill. Much has already been said and I do not want to repeat the points that have been made; rather, I want to set out why I believe the Bill will be good for Northern Ireland. I also want to sound a note of caution on those issues to which we will need to give some thought here in Westminster and in the Assembly, in order to ensure that we maximise the Bill’s impact on economic growth.

We are all aware of the need to rebalance the Northern Ireland economy. At the moment, we are more reliant than any other part of the United Kingdom on the public sector, and our private sector often struggles to be competitive because of particular disadvantages. For example, the private sector companies that compete internationally are often at a significant disadvantage because of energy costs. So there are a number of issues that put us at a competitive disadvantage compared with our nearest neighbours, but despite that, we are one of the best-performing regions in attracting foreign direct investment, and we do an excellent job of getting those companies to come to Northern Ireland.

One of the issues that corporation tax might assist us with is ensuring that with those companies come with not just back-office jobs but jobs with good salaries, and good profits that will then be out-turned and benefit the wider economy. So there are real opportunities to change the kind of foreign direct investment we can attract and to build on the reputation we have been able to grow overseas for being a good destination for investment.

As others have said, Northern Ireland is unique in having a land border with another country, the Republic of Ireland, which has a much lower rate of corporation tax. It is right that we should seek to be competitive with that country, but we should also not forget that we have other advantages that it may not. So we should not always seek simply to balance our taxes against its taxes; we should look to be competitive on a range of fronts. When companies are coming to make their investment, they will look at not only tax regimes, but a host of other issues that will influence their decision. I want to focus briefly on some of those towards the end of my remarks.

Devolving corporation tax rate-setting powers to the Northern Ireland Executive, when complemented by other measures, has the potential to help transform our economy, increasing growth, productivity and exports. So the Bill is a timely move to facilitate that growth. When the Northern Affairs Committee dealt with the issue, we found strongly that not only business, but local politicians, particularly those represented in the Executive but also some outside the Executive, were in favour of this measure. I must pay tribute to the hon. Member for East Antrim (Sammy Wilson), in that, although he has been sceptical about the issue, he has today given reasons why there needs to be caution about the fiscal modelling on which people have based their projections for the future. Although we may be able to address corporation tax, we cannot control the global economic picture, which will also dictate the amount of foreign direct investment we can achieve. So we should not set our sights too high in terms of the number of jobs that that may create. We have projections we can use as a basis and we can look at the evidence from other regions, but we have to accept that other factors will influence how big an impact this measure will have.

It is important that we weigh those factors carefully when setting the rate—that will be a matter for the Assembly, which will need to give them due consideration. I agree with other Members who have said that we would want to do that quickly, I also think we need to carry out due diligence in setting the rate, to ensure that we know exactly what it will cost the Northern Ireland Assembly in block grant and exactly how we will manage the bridging period between making the cut to the block grant and seeing some reward from the economic investment that will follow. We will also need carefully to examine the long-term impact this measure will have on the wider economy. So although it is good that we are making these moves today—I commend the Secretary of State and her team for upholding their part of the Stormont House agreement at this stage, while, almost simultaneously, the Assembly is today upholding one of its parts of the agreement on the budget issues—I hope we will see an opportunity for the Assembly to take more responsibility over its financial measures.

I also wish to commend the Secretary of State for her work on the Bill, which will ensure that if the Assembly does not show a responsible way forward on the budget and if we are not able to get our finances in order in the next few years, this move will not go ahead. It is quite simple: we cannot continue with a situation where we make promises beyond the money we have to fulfil them and where we make commitments on public sector expenditure that are not covered by the block grant or by revenue raising that is available to us already. We need to get our financial house in order, so that we are able not only to make the corporation tax reduction, but convince the people of Northern Ireland that we have the capability to manage our finances in a way that is for their benefit. There is a gap between what the politicians would like to be able to do and what the Northern Ireland public trust them to do, particularly on financial matters. That gap needs to be closed quickly over the next few years, by dealing with the budgetary matters before the Assembly both today and over the next few weeks.

It is important that after the Stormont House agreement we have bought some more time in which to be able to make those transformations to the economy, but all parties will have difficult decisions to make. Where the money comes from to pay for the corporation tax devolution will be one of a number of difficult decisions that will have to be taken. Whatever the colour of the Westminster Government after the next election, it is clear that nobody is arriving with a pot of gold and none of us can expect that huge amounts of money will be available that are not available now for public sector investment. I accept that some in this House wish it were otherwise.

It is hugely important for us to be realistic in our projections and in the promises we make to the public we represent, and to recognise that corporation tax is only one of a number of avenues we can pursue to grow our private sector. A low rate of corporation tax alone will not attract all the investment needed to grow Northern Ireland’s economy. Other corresponding measures will need to be taken in order to make Northern Ireland an attractive place in which to base a business or company, so let me briefly discuss some of them. Some are relevant to Westminster, whereas others will ultimately be dealt with by the Assembly. It is important for us to consider them, because that mix will allow companies to have the confidence to come to Northern Ireland.

The first and foremost issue is stability and good governance. The Stormont House agreement offered us an opportunity to deal with some of the issues associated with political stability, but, as hon. Members know from my response, I believe many of those were, unfortunately, parked and could still be the undoing of the good progress made thus far. I want local parties to commit to dealing maturely with those issues, which are politically sensitive, so that we do not have the kind of situation we have had recently, where lots of years of talking to companies and encouraging them to come to Northern Ireland and consider us as an inward investment opportunity are written off on the basis of a few nights of rioting, which is projected worldwide and damages our reputation irrevocably.

We need to have stability and maturity around political decision making. The opportunity is there for that to happen, and I hope that all parties will grasp it. They should stop the petty arguments over peripheral issues and try to pull together to create the sort of stability that is beneficial for business, public sector growth, and small and medium-sized enterprises. Those SMEs suffer greatly when we have traffic disruptions as a result of bomb alerts and bomb hoaxes. Such an incident happened in my constituency just this week. The whole city, including the train service and local roads, was brought to a standstill. We cannot afford for that to continue, so we must deal with the politics to bring about that stability.

We also need to ensure that there is good governance. As I have said, the Stormont House agreement has given us an opportunity to look at right-sizing our civil service and to do so in a way that will not force people into compulsory redundancy. That agreement was good for Northern Ireland, but we still have to find other employment for people, which is where corporation tax could play an important role.

There are other issues to consider. Members have mentioned infrastructure and planning, and, as a civil engineer, it would be wrong of me not to address that matter. We need not just significant investment in that area, but reform, because we cannot deliver the infrastructure investments that are needed in Northern Ireland with the current amount of money that we receive from the block grant and the emphasis that the Assembly gives to the matter. Some restructuring will be required if we are to ensure that our infrastructure is not an impediment to further economic growth.

We also need to consider issues of connectivity. The challenge rests not just with the Northern Ireland Assembly, but with the Treasury and other Departments here at Westminster. The hon. Member for East Antrim mentioned the fact that, for a long time, Northern Ireland was a driver for the UK economy. In my constituency, we had the largest shipyard anywhere in these islands and the world’s largest roadworks. We were not in any way regarded as peripheral because, at that time, connectivity was largely through ports, and we had an excellent port in Belfast. The situation has now changed and most of our exports go by plane. We are reliant on air transport. Heathrow is the main cargo hub for the UK and the main cargo export point for goods and services going from Northern Ireland. Unless we resolve the situation at Heathrow, no amount of reduction in corporation tax will encourage people to invest in Northern Ireland.

We need to retain our connectivity to London, and also through London and beyond to other business destinations so that we are not remote for those who wish to come and invest and do business in Northern Ireland. It is crucial that decisions about airport and runway capacity in the south-east are resolved, because it is a matter of importance for the country as a whole and for Northern Ireland in particular. Being on an island and off an island, we are absolutely reliant on air transport for our connectivity.

It would be remiss of me not to mention air passenger duty since I have repeatedly complained about it. We are double taxed with air passenger duty, which has an impact on our connectivity and on the cost of doing business. Although the problem needs to be addressed UK wide, it has a much greater impact on Northern Ireland than on any other region. We have no alternative way to make our way to London, to the main hub, other than to use air transport, and we are penalised for that because of the lack of through carriers. We have to pay air passenger duty twice: once to get to London and then onwards to whatever destination we take.

Another area of concern is brass plating, which the Bill tries to address. Northern Ireland does not want to become simply a front for companies that are doing business elsewhere and creating economic growth and employment elsewhere but benefiting from the low tax regime in Northern Ireland. There is no benefit to us or to the UK from that. We want to encourage companies that will set up their main operations in Northern Ireland and create employment and real economic growth. Those companies will not be the only ones to benefit; all of the firms that service those companies that pay the corporation tax will also potentially benefit from being able to attract those larger companies in. It is important that we deal with actual economic activity, and I welcome the fact that work has been done on that.

Another brass-plating issue of interest to me and to the hon. Member for Foyle (Mark Durkan) is international tax transparency. I do not want to stand over any system that would allow people from other regions to create a false front in Northern Ireland that would result in money being taken out of other economies in need of funds, whether they are in the third world or other parts of our own country. That is not good for international development, and it is important that there is tax transparency at the heart of the measure. We want real investment and real economic growth, and we want real jobs to be created as a result. I am glad that that has been acknowledged and considered in the Bill.

Something else that is required is skills. If we do not have the right skill set we will not be able to attract the quality jobs that we seek to attract, and it is hugely important that we do that. My colleague, Dr Stephen Farry, is doing that very effectively through the Department for Employment and Learning, and there is a mechanism that would allow a small levy—about 0.6%—to be placed on those companies that benefit from the corporation tax reduction. The levy could be ring-fenced to pay for skills investment. Companies could draw down some of that money for in-house training and partnership training with universities, and the remainder could be used for other skills investment. That should be a consideration in the way in which the Bill is structured. No one will want to benefit from our tax laws if they have to pay something towards investment in skills unless they intend to have employment and training as part of the work they do when they come to Northern Ireland. Those are the kind of added-value jobs that we need and want, and some form of skills levy would be helpful to avoid brass-plating and to support the Executive’s emphasis on skills investment and development.

Finally, the Chairman of the Select Committee on Northern Ireland Affairs, the hon. Member for Tewkesbury (Mr Robertson), discussed the importance of differentiation in Europe as a way of attracting new business to Northern Ireland. People come to Northern Ireland because they see it as a good stop-off point between, for example, the US, the south American countries and the European Union. They see us as a gateway to European markets. When we debate the European Union in Parliament let us not forget that many of those who locate their businesses in Belfast, Derry and other places do so because they see Northern Ireland as part of the EU and a good way to make those connections. We need to be careful when we talk about withdrawing from the EU—I have no problem with differentiation within the EU—as we need to be conscious of the impact that that would have, despite what we may do on tax regimes.

All those things are important. Some of them are in the gift of Westminster; some are in the gift of the Assembly. However, we have taken an important first step with this Second Reading. As we proceed with a detailed consideration of the Bill I trust that we can look at how we ensure that we experience the maximum benefit in Northern Ireland. I stress again that unless we have a stable, integrated future in Northern Ireland it will not be an attractive place for large businesses. When the due diligence is done, one of the most important considerations is stability. We need to create that stability as a starting point, and from there this measure will give us an opportunity to make prosperity part of the package that the peace process can deliver.

On-the-Runs Scheme

Naomi Long Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mrs Villiers]

I am certainly happy to do that, and I discussed the matter with the Chief Constable yesterday. Just to reiterate, the Northern Ireland Office stands ready to take any further steps that might assist in removing barriers to prosecution. My current view is that the best way to guard against future problems in relation to abuse of process is a clear statement that these letters should not be relied on, and that is what I have made and issued to this House in September.

[Naomi Long (Belfast East) (Alliance)]

The PSNI has already confirmed that Operation Red Field will take at least three years, so I am glad the Secretary of State is looking directly at how she can assist with the funding. This was a Northern Ireland Office scheme, not a devolved scheme, and so the review should not come from the Northern Ireland budget. Is she in a position to shed any light on the allegations that have been made in the media that this individual was issued with a letter in respect of crimes that predated 1998 but which included a crime for which they were wanted in 2003, and that the tag of “wanted” on their file was then changed subsequent to the issue of that letter to “not wanted”, which would have made this incredibly difficult to detect?

[Mrs Villiers]

For the reasons I have given, I am reluctant to get into the specifics of this case. As I have mentioned, the hon. Lady will find some further detail on these matters on page 108 of the Hallett report. In particular, there is a real concern that the offence in question was a post-1998 offence.

Stormont House Agreement

Naomi Long Excerpts

Wednesday 7th January 2015 Commons Chamber

[Mrs Villiers]

My hon. Friend will be aware that the Conservatives are campaigning for a majority Conservative Government at the general election, not for coalitions of any sort. I will not comment on the history of the 42-day vote. I am keen to emphasise the crucial role played by First Minister Peter Robinson and the DUP in delivering a significant package of reforms for Northern Ireland.

[Naomi Long (Belfast East) (Alliance)]

I pay tribute to the Secretary of State and her team and to the Irish and American Governments, who were involved in the talks over a protracted period. On many of these issues, the Stormont House agreement provides a road map for Northern Ireland, particularly around finances, but much deeper reform is needed than simply filling the holes. I also believe in dealing with the past. However, on other key and volatile issues, such as parading and flags, this has simply become a parking garage where things will be left to sit until the difficult period over the summer. What will she do personally to remain engaged on those key issues? It is clear that there is not the will across all parties to come to a mature resolution on them.

[Mrs Villiers]

I welcome the hon. Lady’s comments and pay tribute to the sterling work done by her and her party in moving things forwards on all these issues through the cross-party talks and in other ways. She is right to describe the agreement as a road map. As ever with agreements in Northern Ireland’s history, this is a further staging post, and the next journey along the road will be implementation. Of course, I will be directly involved in keeping everything moving on implementation. Given the comments we have heard, I will no doubt be spending a lot of time on parading matters over the coming weeks.

Northern Ireland (All-party Talks)

Naomi Long Excerpts

Monday 15th December 2014 Commons Chamber

[Mrs Villiers]

I am afraid that I do not agree with the hon. Gentleman’s figures on the Northern Ireland block grant, which has actually gone up in cash terms. In real terms there has been a reduction, but it has been around only 1% for every year of the spending review. The reality is that the Northern Ireland Executive have a larger budget now than they did when they set their programme for government, because of Barnett consequentials. Those figures compare favourably with policing and the Home Office, for example, which have had to take a significant cut in England, and English local government, where the reductions have also been very significant.

[Naomi Long (Belfast East) (Alliance)]

I pay tribute to the Secretary of State, the Prime Minister and the Taoiseach for the work they did, and not just over recent weeks but in the run-up and on Thursday and Friday. Does she agree that there is a distinct difference between all parties recognising that an agreement is necessary and all parties having the will to deliver it? Does she agree that all parties recognised the need for an agreement even before Richard Haass and his team arrived 18 months ago, yet we are in practice no closer to such an agreement? Far from further devolution of corporation tax and other matters being at stake, what is actually at stake if there is no serious agreement in the next few days is the existing devolution that we have in Northern Ireland, because without a budget the Assembly simply cannot function.

[Mrs Villiers]

I agree that the credibility of the institutions is on the line. If the Assembly cannot get its budget right, it is very difficult for it to perform its basic functions, and it would be in for significant criticism if it cannot resolve these matters. As to the hon. Lady’s comment that the parties recognise the importance of delivery, and her question about whether they have the will to do it, I hope they do and I believe they do. Time is running out. It is crucial that we seize this opportunity because we will not get another one for months, if not years, to come.

Oral Answers to Questions

Naomi Long Excerpts

Wednesday 29th October 2014 Commons Chamber

[Mrs Villiers]

The Parades Commission faces a hugely difficult task in adjudicating on highly sensitive parades, and I think that it performs that task well. If the political parties in Northern Ireland want a different system for parading, that is open to them, but the only way in which to achieve that is to get round the table and consider future reform in the cross-party talks that are now under way.

[Naomi Long (Belfast East) (Alliance)]

11. What lessons have been learnt from the previous talks processes, and what outcomes she expects from the current round of talks.

[The Secretary of State for Northern Ireland (Mrs Theresa Villiers)]

Previous talks processes have demonstrated what can be achieved when political parties engage seriously and constructively, and are prepared to make difficult decisions in order to reach an accommodation.

[Naomi Long]

The lack of serious political engagement in the current round of talks, which is characterised by the fact that parties are still squabbling over whether or not they are attending the talks, does not bode well for the future. Meanwhile, in my constituency, a young man has been hospitalised with head injuries, police officers have been injured, and pensioners have been terrified in their own homes after three successive nights of violence. What sanctions will the Secretary of State impose on the parties that fail to show the will to resolve the outstanding issues in this process?

[Mrs Villiers]

It is important that all the five parties are engaging in this talks process, and I would encourage them to take this very seriously. It is crucial that we find a way forward on these matters. I wholeheartedly condemn what has gone on in the hon. Lady’s constituency not just over the last few days but over a series of weeks. There have been continuing problems with that interface. It is utterly disgraceful that the teenage boy was hospitalised as a result of this sectarian violence, and I hope it will be tackled with the full force of the law.

Hallett Report

Naomi Long Excerpts

Tuesday 9th September 2014 Commons Chamber

[Mrs Villiers]

I am afraid that I do not feel it would be appropriate to comment on individual cases or to share that kind of information. I would emphasise, however, that the oversight board to which the hon. Lady has referred is looking at all matters relating to the OTR scheme. While entirely respecting the independence of the police and prosecuting authorities, we are determined to ensure that we do not make the same mistakes again and that all those who have a role or an interest in these matters are looking carefully at how we take forward the Hallett recommendations. There will be a frank and full sharing of information within that policy board between the police and the Northern Ireland Office.

[Naomi Long (Belfast East) (Alliance)]

I thank the Secretary of State for her clear statement today, in which she reiterated that the scheme was never a devolved scheme. She has said in previous statements, too, that this matter was never devolved to the Northern Ireland Assembly or to the Department of Justice. Will she therefore explain the justification for transferring the financial burden of the review of the scheme and each of the cases to the devolved budgets, particularly given that the PSNI is already facing considerable pressures on its finances? This was never a devolved scheme; it was never within any budget; no budget line has been set aside for it—yet the costs are simply being passed on to the PSNI. Does the Secretary of State not agree that she should have discussions with the Department of Justice to resolve this matter in a much more fair and equitable manner?

[Mrs Villiers]

I can assure the hon. Lady that I have had many discussions about their resources with the Department of Justice and the PSNI, and indeed with the Department of Finance and Personnel. It is a difficult situation; the hon. Lady raises a very good point about the allocation of responsibility for funding the ongoing work. The reality is that these are now matters for the criminal justice system, so it is within the remit of the Director of Public Prosecutions and the PSNI. The lines between national security work and the rest of the criminal justice system are always blurred, which is why the Government have provided substantial additional funding to the PSNI to reflect the particular circumstances it faces. We have confirmed that for the current spending review and for 2015-16. This, of course, is an important part of ensuring that the PSNI can do its job both in current policing and on legacy matters.

Oral Answers to Questions

Naomi Long Excerpts

Wednesday 16th July 2014 Commons Chamber

[Dr Murrison]

Yes, I can only say that the Saville inquiry was set up under the previous Administration, under rules that existed at that time, and that Lord Saville was given free rein—rightly—in his independent inquiry. The hon. Gentleman is right to say that, so many years after this began, the costs are still coming in. Nevertheless, the value of the Saville inquiry is clear, and we need to understand that.

[Naomi Long (Belfast East) (Alliance)]

May I welcome the Minister to his new role? In order to deal with the issues of the past in a more comprehensive way, we obviously require some momentum to take the discussions between the parties in Northern Ireland forward. What role will the Northern Ireland Office play in trying to bring parties back together, when some have walked away from the challenge of dealing with the past in a comprehensive manner?

[Dr Murrison]

The hon. Lady is absolutely right that a long-term peaceful settlement relies entirely on co-operation between the parties. The Northern Ireland Office has done, and will continue to do, everything in its power to bring the parties together so that we can ensure a peaceful and prosperous future for the people of Northern Ireland.

Oral Answers to Questions

Naomi Long Excerpts

Wednesday 11th June 2014 Commons Chamber

[Mr Robathan]

I do not accept what the hon. Gentleman says. At its height, “Game of Thrones” has employed up to 800 people. As we heard from the hon. Member for Strangford (Jim Shannon), it employs people from around the Province—Antrim, Strangford and elsewhere. The Government have introduced high-end television tax relief that has brought very real benefits to the creative industries in Northern Ireland and elsewhere. We are bringing down unemployment and strengthening the economy. Frankly, the hon. Gentleman would be well advised to remember the state of the economy when he left office in 2010.

[Naomi Long (Belfast East) (Alliance)]

5. What role she plans to play in advancing a comprehensive process for dealing with the past and its legacy.

[The Secretary of State for Northern Ireland (Mrs Theresa Villiers)]

The Prime Minister and I have been engaged with Northern Ireland’s political leaders in recent weeks to urge them to make progress on finding an agreed way forward on the past. The Prime Minister’s article in the Belfast Telegraph made the case strongly for an agreement on all three Haass issues. We both welcome the fact that party leaders are meeting again and are planning to step up their engagement on these matters with a more intensive process. [Interruption.]

[Mr Speaker]

Order. The House can scarcely hear the Secretary of State. That is not her fault, but the fault of Members. We are discussing extremely serious matters. Let us have a bit of order.

[Naomi Long]

At the evidence sessions for the Northern Ireland Affairs Committee, we heard directly from victims sector individuals who expressed their disappointment and distrust—indeed, their profound upset—at what had happened with the on-the-runs, and their need to see closure on this issue. What can the UK Government bring to the table as part of the talks that are about to start to ensure a fully comprehensive deal on the past that is transparent and respects the sensitivities of victims?

[Mrs Villiers]

As I have said already, I believe that a way forward on the past has to put victims at its heart. I also agree with the hon. Lady that a new process needs to be transparent, balanced and accountable. As the OTRs issue has demonstrated, it is vital that we put any side deals behind us and that the way we approach the legacy of Northern Ireland’s past is balanced, transparent and accountable. We have said that we will work with the kind of institutions set out in Haass 7 if they are formally agreed by the parties.