Northern Ireland Budget Bill

Nigel Mills Excerpts

2nd reading: House of Commons & 3rd reading: House of Commons & Report stage: House of Commons
Monday 13th November 2017 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

I hope not to get too close to that time limit.

I also rise to support the Bill, although it is a shame to have to do so on the basis that it is the least worst option available to us, as we would all prefer a Bill that represents an attractive and sensible way forward, but that is where we are. I agree with all the praise that has been given to the Secretary of State for his great patience in waiting until the very last minute in order to try to get the institutions in Northern Ireland back up and running. None of us wants to have to set the budget here.

The options are as follows. The first is to have another election, but we have had two elections this year, after both of which the same two parties were the leading parties. It is hard to imagine that there is sufficient feeling in Northern Ireland that two different parties—or perhaps at least one different party—will be elected so that a different Government are formed. An election at this stage would therefore probably just see a further hardening of opinion, which would make the situation worse, so that option looks extremely unattractive.

The second option would have been to continue without setting the budget, using the gradual running out of money in the public services as a way of twisting the arms of the two main parties to find a deal. I suspect that we have been trying that for a few months now and it has not worked, so there is a real risk of harming ordinary people by trying that for a bit longer. That option was therefore not really on the table.

That leaves only moving quickly to full direct rule, which again has lots of downsides. To try to do so quickly, without any thought of what the local consultation would be, what the institutions would look like and how we could work through the long-term damage that would be caused to the institutions, would have been an aggressive step. I think that takes us back to the point that this is the least bad approach.

Let us be clear about what we are doing: we are setting the budget for Northern Ireland. We are choosing here how money should be spent in Northern Ireland. Perhaps the Assembly’s most important power was to set budgets and control how much money was spent. A Parliament or Assembly that cannot set a budget or choose how to spend its money is not a Parliament or Assembly at all. Let us be clear that we are taking perhaps the most fundamental decision that Parliaments can take by choosing priorities and how much should be spent on them.

I know that we have tried in every possible way to show that this is as close as we can get to what we think the budget would have been, had the Executive been setting it, but this is not the Executive’s budget. There has been no Executive for 10 months. This is us and the civil service choosing how to spend the money, so it is a large step towards direct rule. Choosing how much is spent, and on what, is perhaps the most fundamental step we can take.

As other Members have said, we cannot leave Northern Ireland without any sensible government for very long. There are people who quite fancy the idea of a country being run without politicians, but I sense that when they suggest that, they do not envisage continuing to pay politicians as they try to run the country without them. We can see from what is happening in Northern Ireland that, without real government and without real accountable Ministers, no real decisions are taken. We do not get the progress that we want, and we do not get money spent on the priorities that we want.

A prolonged period without accountable Ministers or accountable decision taking is probably the worst form of government, and it cannot carry on for very long. I am not even sure that we can get past a year. If we get to the anniversary of the Executive falling without having put something in their place, that would be the final end point and we would have to put something in place. We cannot have two years of budgets being set like this and two years of no progress at all. I will happily support the Bill, but we have to find a better way forward as soon as possible.

Northern Ireland: Political Situation

Nigel Mills Excerpts

Monday 3rd July 2017 Commons Chamber

[James Brokenshire]

I agree with the hon. Gentleman that we do want to see that resolution. Interventions have been made by the UK and Irish Governments and others seeking supportive voices to assist in the community and elsewhere to get the parties focused on seeing that bigger picture, looking beyond difference, and being able to get an Executive formed. We will use all interventions appropriately to get that outcome. That is why I make the point about the work the Prime Minister has done, the work that I have done, the work the Irish Government have done and the work the Taoiseach and Irish Foreign Minister have done, but I also agree with the hon. Gentleman that time is progressing and we do not want to see the sort of interventions I have highlighted in this statement. Time is moving on, and if we do not see resolution quickly, there will be a need to take various steps around the budget and other areas. We are still working hard to support the parties, but ultimately it is for the parties to reach that agreement, to see those divides crossed so an Executive are formed. I can assure the hon. Gentleman of the urgency, attention, time and effort that continues to be made in that regard.

[Nigel Mills (Amber Valley) (Con)]

As the only Member on this side of the Chamber who voted for transparency of donations three years ago, I welcome my right hon. Friend’s decision to bring that forward. In relation to resolving the impasse, can he confirm that the £1 billion announced last week will be sufficient, and that there will be no need for more money from Westminster to get this deal over the line?

[James Brokenshire]

The funds that were announced last week should provide a sense of opportunity and potential for issues that are clearly of relevance to Northern Ireland, such as the lack of transport infrastructure compared with other parts of the United Kingdom and the digital and broadband issue, which has lagged behind other parts of the United Kingdom. The funds should give a sense of incentive and opportunity for an Executive to deliver and get on with so many of the things they want to see.

Northern Ireland: Political Developments

Nigel Mills Excerpts

Tuesday 28th March 2017 Commons Chamber

[James Brokenshire]

The hon. Lady is talking about Brexit and the EU. There have been discussions between the Taoiseach and the Prime Minister in relation to those very issues, recognising that Brexit will have an impact across the island of Ireland. We can point to various different areas where we have shared commitments with the Irish Government in that regard. This is about getting the parties back around the table and looking at ways of bridging the gaps. We are determined to support that in every way we can to get a positive response.

[Nigel Mills (Amber Valley) (Con)]

Can the Secretary of State confirm that the solution to this latest impasse is not more money from Westminster?

[James Brokenshire]

I would point to the fact that in the last Budget the Chancellor announced an extra £120 million for Northern Ireland’s priorities, and obviously we will want to see an Executive in place to be able to use that money effectively.

Northern Ireland: Political Developments

Nigel Mills Excerpts

Tuesday 10th January 2017 Commons Chamber

[James Brokenshire]

The hon. Gentleman may have noted that I said in my statement that, obviously, the focus has been on RHI, but other issues have come through from this. Indeed, the letter that Mr McGuinness published yesterday highlighted a number of those themes. That is why I make the point at this time about parties coming together and working together in the best interests of Northern Ireland, given so much opportunity that resides there. There needs to be that focus on the big issues at hand and the best interests of Northern Ireland.

[Nigel Mills (Amber Valley) (Con)]

If there are constructive talks in the next few days, will the Secretary of State be willing to consider extending the seven-day period before an election has to be called?

[James Brokenshire]

As I have indicated, the law is clear about the seven-day period and I must act within a reasonable period following that. Obviously, if the time period elapses, I will need to consider the position carefully, but I am under that statutory duty and I will follow through on it.

Northern Ireland (Stormont Agreement and Implementation Plan) Bill

Nigel Mills Excerpts

Thursday 10th March 2016 Commons Chamber

[Mark Durkan]

I do not think the potential conflict would be the same. Obviously, there is the issue that was considered in the talks that some of the cases that had already been dealt with by the HET are currently the subject of PSNI investigation. Whether they will be referred to the HIU or reopened by the ombudsman is a factor in that. The prospect of any potential tension around the Chief Constable’s role was among the reasons why we said that appointment by the Policing Board would be a sensible way forward.

A different issue arises in relation to the role of the reporting commission. If we take the example of the controversies last year, the panel, which was a proto make-do version of the reporting commission, had to examine issues on which the Chief Constable had rightly spoken. Obviously, there was argument and tension about that.

[Nigel Mills (Amber Valley) (Con)]

I think the hon. Gentleman was arguing that in future the Executive may not consist of all five parties and there will be parties in Opposition. In that situation, would it not make sense for the commission, whose job is to hold the Executive and the two Governments to account, to have its members appointed by the Assembly and the Parliaments, rather than the Executive?

[Mark Durkan]

There is a wider possibility in that, which may take us further away from what was said in the Stormont House agreement. The hon. Gentleman is right. We need to ensure an all-party approach and we will address that problem in future amendments and new clauses, which I will not venture into now.

We believe that the way in which the Government have taken matters forward and the way in which the “Fresh Start” agreement has been framed do not recruit and keep engaged the span of cross-party interest that there should be both in the Assembly and beyond. It mistakenly shorthands too much to the Executive, then translates that as meaning simply First and Deputy First Ministers, with all the limitations and difficulties that that brings.

Furthermore, with the Commission appointed in that way by the Assembly, the process for doing that would become more complicated, and it is complicated enough at the Policing Board level. We think that appointment by the Justice Minister, following consultation—properly to give them their due—with the First and Deputy First Ministers, in agreement with the Executive, would be a way of reflecting some of the wider interests without creating difficulties for the Policing Board, adding to the list of appointments that it makes, and maybe creating tensions with some of its other appointment roles.

It should be recognised that the issues that have been highlighted by both the Ulster Unionist party and ourselves in respect of the appointments are not the only questions that should be asked in respect of the ill-defined role of the reporting commission, and how well that sits with the wider responsibilities that the hon. Member for Amber Valley (Nigel Mills) referred to. If we are serious about the whole community approach alongside the enforcement approach, there needs to be something much more collective and better defined than the Government have provided for in the Bill.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Northern Ireland (Mr Ben Wallace)]

It is a privilege to serve under your chairmanship, Mr Crausby. I thank hon. Members for their contributions and for the suggestions that they have made in the amendments.

As we have discussed, the first five clauses of this short Bill concern the independent reporting commission. This new body is one of a raft of measures set out in November’s “Fresh Start” agreement to tackle the ongoing impact of paramilitary activity. The commission, which is to be established through an international agreement between the United Kingdom Government and the Irish Government, will have an overriding objective to promote progress towards ending paramilitary activity.

Although the IRC has different functions from the Independent Monitoring Commission, it builds on the precedent set by that commission, which was in operation between 2004 and 2011, monitoring activity by paramilitary groups and overseeing implementation of security normalisation measures.

I will now speak about the clauses and related amendments. Clause 1 makes reference to the functions of the new independent reporting commission, as set out in the “Fresh Start” agreement. Those will be: to report annually on progress towards ending paramilitary activity; to report on the implementation of the measures of the Government, the Northern Ireland Executive and the Irish Government to tackle paramilitary activity, including overseeing implementation of the Executive’s strategy to end paramilitarism; and to consult a wide range of stakeholders, including law enforcement agencies, local councils, communities and civic society organisations.

The reports of the commission will inform the Executive’s programme for government through to 2021. The commission will be independent of the sponsoring Governments and will have significant discretion in fulfilling its functions. That independence will help to ensure the credibility of its reports and its success in engaging with the necessary range of stakeholders. The Secretary of State may provide the commission with such resources and funding as she considers appropriate.

Finally, in line with the “Fresh Start” agreement, the commission will be made up of four members—one nominated by the UK Government, one by the Irish Government and two by the Executive. Clause 1(4) confers on the First and Deputy First Ministers the power to jointly nominate the Executive members.

Two amendments have been tabled to that subsection. In amendment 1, the hon. Members for South Antrim (Danny Kinahan) and for Fermanagh and South Tyrone (Tom Elliott) propose that the power to nominate two members be conferred on the Northern Ireland Policing Board instead of the First and Deputy First Ministers. The “Fresh Start” agreement provides that two members of the new commission will be nominated by the Executive. The Northern Ireland Policing Board is not, however, part of the Executive, and the amendment would therefore not be consistent with the terms of that agreement.

In amendment 7, the hon. Members for Foyle (Mark Durkan), for South Down (Ms Ritchie) and for Belfast South (Dr McDonnell) propose that the power to nominate be conferred on the Northern Ireland Minister of Justice, following consultation with the First Ministers, and subject to the approval of the Northern Ireland Executive Committee. While the Government recognise the interest that the Justice Minister, in particular, will have in the nominations, it is our view that the First and Deputy First Ministers, acting jointly, are the most appropriate office holders to nominate members on behalf of the Executive as a whole, in view of the objective and functions of the commission.

We would of course encourage the First and Deputy First Ministers to consult their Executive colleagues—in particular the Justice Minister—before making nominations. It is also open to the First and Deputy First Ministers to refer the nominations to the Executive Committee and, indeed, to consult more widely. For example, amendment 1 proposes a role for the Northern Ireland Policing Board, and that could certainly provide helpful recommendations regarding candidates for nomination. I also noted that the hon. Member for Foyle highlighted the difference between the HIU and the IRC—two different bodies with very different functions. His point is well made when it comes to the reference to the Northern Ireland Policing Board.

[Nigel Mills]

Does the Minister think the appointment by the UK Government should be subject to a pre-appointment hearing by the Northern Ireland Affairs Committee?

[Mr Wallace]

I am all for parliamentary transparency and scrutiny of the Government’s decisions. We will take my hon. Friend’s suggestion on board and reflect on it—that is the best way to proceed. All four stakeholders will hopefully be serious and respected figures to ensure that the public believe that the commission’s reports are credible and that the commission really is a proper step towards reducing paramilitary activity in Northern Ireland.

[Nigel Mills]

I am grateful to the Minister for considering the idea, but as we are appointing somebody who needs to be seen to be impartial and whose role is to hold the Government to account, having that independent oversight of the appointment to show that Parliament has confidence in it would help the credibility of the post.

[Mr Wallace]

The Northern Ireland Affairs Committee is certainly not prohibited from examining the appointment by the UK Government, and it will no doubt be able to make recommendations or to make its views known. As to whether that is formally part of the process, the best thing, as I said, is to reflect on that. If my hon. Friend would like, I will write to him with a response or, hopefully, get back to him before the Bill’s stages are completed.

I turn now to clauses 2 to 5. Clause 2 deals with the exercise of the functions of the new commission. The clause provides that the objective of the commission is to promote progress towards ending paramilitary activity connected with Northern Ireland. The commission will be required to exercise its functions in the way it considers most appropriate for meeting that objective.

The commission will also be under the duties not to: prejudice the national security interests of the United Kingdom or Ireland; put at risk the life or safety of any person; have a prejudicial effect on the prevention, investigation or detection of crime; or have a prejudicial effect on any actual or prospective legal proceedings. With the exception of the duty not to have a prejudicial effect on the prevention, investigation or detection of crime, those were all duties to which the Independent Monitoring Commission was subject. The new duty is now considered necessary given the shift in investigative responsibility for paramilitary activity in Northern Ireland. Its intention is to ensure that the Police Service of Northern Ireland can engage fully and meaningfully with the commission.

--- Later in debate ---

[Mr Wallace]

I will speak to clauses 6, 7 and 8 and the related schedules, which extend the time available for the formation of the Executive after an election and provide for important commitments by Ministers and Members of the Legislative Assembly on tackling paramilitarism. I will also make a few remarks about the amendments in this group and I look forward to hearing the statements of the hon. Members who have proposed them.

Clause 6(1) amends the Northern Ireland Act 1998 to allow 14 rather than seven days for the allocation of ministerial positions in the Executive after the first meeting of the Assembly following an election. The proposed extension will allow the parties more time to agree a programme for government on a cross-party basis prior to the allocation of ministerial positions. That commitment first appeared in the 2014 Stormont House agreement and was reaffirmed in the recent “Fresh Start” agreement.

Schedule 1 makes transitional provision for the upcoming Assembly elections in May. Ordinarily, Assembly Standing Orders would require that ministerial posts are filled within seven days of the creation of a new Department. Schedule 1 makes it clear that where the event coincides with the period following the forthcoming election before the allocation of Ministers to Executive positions, the 14-day time limit for the formation of the Executive takes precedence. That will ensure that the period for the appointment of ministerial offices following the next Assembly election will not be inadvertently shortened as a result of changes flowing from the Assembly’s Departments Bill. I hope that the extension in time for ministerial appointments will provide helpful flexibility to all political parties in Northern Ireland involved in the formation of the Executive on the basis of a shared programme for Government following the upcoming elections and all future elections.

Clause 7, in line with the “Fresh Start” agreement, amends the pledge of office that all Northern Ireland Executive Ministers are required to affirm before taking up ministerial office. The clause inserts seven new commitments into the pledge. These were set out in the “Fresh Start” agreement, and the wording for the pledge faithfully reflects the agreement. The commitments build on existing principles of support for the rule of law and reflect a collective political determination to achieve a society free of paramilitarism. In the “Fresh Start” agreement, the parties agreed not simply to a passive acceptance of the values set out in the amendment to the pledge, but to an active fulfilment of them. The clause enshrines these political commitments in the pledge of office for Northern Ireland Executive Ministers through an amendment to the Northern Ireland Act 1998.

I now turn to amendments 8 and 9. My remarks apply equally to amendments 13 and 14, which seek to make the same changes to clause 8 on the new undertakings for MLAs. I will say more about them shortly. The pledge as drafted faithfully reflects the wording of the “Fresh Start” agreement. I understand there is some concern about a perceived contradiction in the wording of the pledge and the undertaking as drafted. I hope to assure hon. Members that that is not the case. I do not think the wording needs to be changed. I agree that there can be no excuse for supporting paramilitary activity, but a transition away from paramilitarism can be achieved only with effective political engagement in communities. I do not believe there is any contradiction between taking a firm stance against paramilitary activity and supporting groups transitioning away from that activity. To encourage such a move is consistent with the other commitments required from Ministers and MLAs under clauses 6 to 8, such as the commitment to challenge paramilitary attempts to control communities and associated criminality.

Politicians need, as ever, to ensure that their engagements are in line with the responsibilities of their office, and those engagements must be in keeping with the commitments contained in the agreement and in the Bill. Furthermore, the “Fresh Start” agreement represents a collective political agreement by the Northern Ireland Executive and the UK and Irish Governments. The wording that was agreed was carefully constructed, and it demonstrates an important and symbolic political commitment to ending the influence of paramilitarism in Northern Ireland. Changing the structure and substance of the commitments, as proposed in these amendments, would unpick that political agreement.

I understand from the explanatory statement that amendment 10 is intended to refer to paragraph (f), rather than paragraph (e), of the existing pledge of office in schedule 4 to the Northern Ireland Act 1998:

“to support, and act in accordance with, all decisions of the Executive Committee and Assembly”.

I do not agree—nor do the Government—that there is any need to caveat one part of the pledge with another. The pledge will be read as a whole and, taken as a whole, the pledge represents a binding commitment by Executive Ministers to operate within the structures of the Executive Committee and the Assembly, and to accept no outside influence on their political activities. In any event, changing the substance of these commitments, as proposed in the amendment, would unpick the carefully constructed political agreement reached through the “Fresh Start” agreement.

On amendment 11, the arrangements for the First Minister and Deputy First Minister to affirm the terms of the pledge within specified time limits are set out in the Standing Orders of the Northern Ireland Assembly. The Bill, as drafted, makes no change to those arrangements. I agree that the pledge of office is of great importance, particularly for the Ministers who will lead the Executive, but I do not agree that there is any need to require the pledge to be read out orally in full in front of the Assembly. The Belfast agreement commits that the First Minister and Deputy First Minister will affirm the terms of the pledge of office, and that is exactly what the existing provision in the Northern Ireland Act 1998 requires. The changes to the ministerial pledge of office introduced by clause 7 flow directly from the “Fresh Start” agreement, but the proposed amendment would amend the process by which the terms of the pledge are affirmed by the First Minster and Deputy First Minister. In the talks that led to the “Fresh Start” agreement, there was no political consensus on making any additional changes to the existing process for affirming the terms of the pledge.

On amendment 12, the commitments in the pledge reflect the firm resolution of the Northern Ireland parties in the “Fresh Start” agreement to end the influence of paramilitarism in Northern Ireland. I am confident that Northern Ireland Ministers will uphold the terms of the enhanced pledge as they work collectively to achieve a society free of paramilitarism. There are already mechanisms in place that allow the Assembly to deal with breaches of the ministerial pledge by censuring a Minister, reducing their salary or even removing them from office. In addition, Ministers can be held accountable by judicial review in the courts for an alleged breach of the pledge of office. The Bill makes no changes to those existing measures.

The intended effect of amendment 12 was not dealt with under the “Fresh Start” agreement, and these are not therefore matters to be settled under this Bill. Should the Assembly wish to bring matters about alleged breaches of the pledge within the remit of the Northern Ireland Commissioner for Complaints, the Northern Ireland Assembly could do so, but that could clearly be done only on the basis of cross-community consensus on such a measure. Furthermore, it would be very unusual to make a change of the kind proposed in the amendment without cross-community consensus in Northern Ireland, and there is no such consensus at present.

Clause 8 and schedule 2, in line with the “Fresh Start” agreement, make provision for a new undertaking to be given by all Members of the Northern Ireland Assembly. The undertaking for MLAs is based on the same seven commitments on tackling paramilitarism that have been added to the pledge of office for Ministers. For the first time, Members will have to give the undertaking before they can participate in Assembly proceedings or receive any of the rights or privileges enjoyed by Members who have taken their seat. The Northern Ireland Act prohibits the Assembly from requiring its Members to make an oath or declaration as a condition of office. It would not be possible for the Assembly to implement this “Fresh Start” commitment without Westminster legislation to introduce the undertaking. Schedule 2 makes transitional provision for the procedure for giving the undertaking after the Assembly election in May 2016 only. After that, the procedure will be set out in the Assembly’s Standing Orders.

There are two minor Government amendments to schedule 2—amendments 4 and 5. Under existing law, the Speaker of the Northern Ireland Assembly remains in office after its dissolution and may chair the first meeting of the new Assembly, even if they are not a Member of it. The amendments ensure that an outgoing Speaker who has not been re-elected to the Assembly can determine the transitional procedure for the new undertaking for MLAs while chairing the first meeting of the new Assembly.

Amendments 6 and 17 propose changes to the way that the Assembly holds its Members to account for adherence to the new undertaking. Amendment 6 would require the Assembly to introduce a sanctions mechanism, and amendment 17 proposes that oversight should fall to the Northern Ireland Assembly Commissioner for Standards. The Assembly already has the power to introduce sanctions for breach of the undertaking by Members, should it consider that such sanctions are warranted. There are established mechanisms for holding MLAs to account for their adherence to the Assembly code of conduct through the Assembly’s Committee on Standards and Privileges and the independent Commissioner for Standards. There is considerable value in the Assembly, not this House, determining how MLAs should be held to account for any breaches of the new undertaking, in line with the present arrangements for the scrutiny of MLAs. Any changes would of course need to be built on cross-community support in the Assembly. I believe it is right that Assembly Members should be subject to scrutiny for their conduct, and I encourage the Assembly to consider carefully how that might be achieved.

On amendment 15, there was no commitment under the “Fresh Start” agreement for the pledge and the undertaking to bind any persons other than Ministers and MLAs respectively. While there may be merit in encouraging all those holding public office to follow the example set by Northern Ireland’s Assembly Members and abide by the spirit of the undertaking, any move to make a binding requirement on a wider group of public officials would require political and cross-community consensus. There is currently no such consensus.

Members of this House will be interested to note that local councillors in Northern Ireland are already required under law to make a declaration against terrorism before they can validly stand for election locally. They are also required to make a further declaration regarding the standards of conduct they will be guided by in office before they can so act.

On amendment 16, the undertaking as drafted in clause 8 faithfully reflects the wording in the “Fresh Start” agreement in a way that is sufficiently certain for the purposes of this legislation. On Second Reading, hon. Members pointed to the need for MLAs to work with a wide range of people, in addition to other Assembly Members, to achieve the disbandment of paramilitary organisations. I agree that this important task will require MLAs, and indeed political parties as a whole, to work with stakeholders as well as their Assembly colleagues, but the commitment as drafted does not limit the ability of MLAs to do so. The other commitments support an holistic approach to this task—for example, the commitment to support those who are determined to make the transition away from paramilitarism is likely, in practice, to require MLAs to work with other stakeholders. I understand the sentiment behind the amendment, but I do not believe that any amendment is necessary to achieve it. I believe it makes sense for an undertaking by MLAs, made as they are taking their Assembly seats, to refer to working with their Assembly colleagues.

I look forward to hearing hon. Members’ contributions on the issues. For the reasons I have set out, I urge them not to press their amendments.

[Nigel Mills]

May I ask the Minister a slightly complicated drafting question? I cannot see how the pledge and the undertaking in clauses 7 and 8 are restricted only to paramilitarism in relation to Northern Ireland. It may be a bit of an onerous duty to expect people to challenge all paramilitary activity anywhere in the world. If a Member of the Assembly expressed support for the peshmerga or the Free Syrian Army, which are probably paramilitaries under any natural definition, they would face some kind of sanction. Can the Minister point to where it states in the Bill or in the Northern Ireland Act 1998 that the restrictions apply only to activity related to Northern Ireland?

[Mr Wallace]

I think the best solution is for me to write to my hon. Friend on that technical question. I do not think that anyone in the United Kingdom, or in any democracy, would propose supporting paramilitaries, be they here or abroad.

--- Later in debate ---

We want to see the Bill work. We want to see things get better in Northern Ireland, and I think that hon. Members have probably heard enough from me.

[Nigel Mills]

I will make a couple of brief remarks. I think the whole Committee wholeheartedly supports any effort to tackle paramilitarism. I think we would all agree that anyone who engages in or supports paramilitarism has no place in a democratic assembly, making and enforcing laws. I absolutely agree that all the sentiments in the oaths make sense.

Where I get a little concerned is when we start talking about investigating and sanctioning breaches. We must be careful about exactly what some of these words could involve. What we have in these undertakings are not entirely pledges not to do things. They are pledges to do things, so we get phrases such as,

“to challenge all paramilitary activity and associated criminality”.

I could be accused of breaching that undertaking because I have not sufficiently challenged something. What does challenge mean? Does it mean that I should verbally dispute the validity of something? Should I say that paramilitary activity is heinous and I have therefore met that pledge, or should I be out on the streets of Belfast, physically challenging that activity where I see it?

Equally, MLAs will undertake,

“to challenge paramilitary attempts to control communities”

and

“to work collectively with other members of the Assembly”.

I am not sure how we can have a sensible situation where someone is investigated because they have not quite worked collectively enough with other Members on something. Would that happen because they had been working independently, not collectively, and therefore that would not count, or because they had been working a bit collectively but not collectively enough? I am not sure how we go from an oath that sets out undertakings and beliefs to something that we could try to investigate and enforce.

The Oath we take in this place is to be loyal to Her Majesty the Queen and her successors, but I do not think that Members get taken to the standards board because we have not quite been loyal enough to the Queen, or because something we have said has not been entirely consistent with the Oath. There is a separate code of conduct that we have to follow where the investigation of standards applies. We would not try to follow that from an oath. I am just not sure how the Members proposing the amendments could make the investigations and sanctions link to positive activities.

[Sammy Wilson]

First, we accept that if a pledge is made, there must be some way of measuring whether or not it has been lived up to. If it has not, there must be some way, by definition, of sanctioning someone for not doing so. Examples have been provided here today of how it is quite easy to work out whether or not someone has lived up to their pledge. If, for example, they make excuses for paramilitary activity or make excuses for people who have engaged in acts of violence, they are clearly not keeping to the pledge of office.

[Nigel Mills]

I entirely agree. Where someone says or does something that clearly contravenes the undertakings they have given, we should be able to investigate it and sanctions should be available. My slight worry is that the amendments might allow a complaint to be made that somebody had not sufficiently challenged all paramilitary activity—that they had not said enough times how heinous such activity is, or they might not have taken any physical action in the community, for example. I am not sure how it can be proved or enforced when somebody has not done something. That is my point. If we wanted a code of conduct that could be followed, it would have to be clear that people were prohibited from speaking or acting in any way in support of paramilitaries.

[Sammy Wilson]

Does the hon. Gentleman accept that if that were the case, the Assembly Commissioner, or whoever was making the adjudication, would be able to make a judgment about whether a complaint about the pledge of office was valid or not? It could be simply said, “Look, that is not what is meant by the pledge: it is not about the quantity; it is about whether someone should be condemned on the basis of support for paramilitary activity.”

[Nigel Mills]

I am sure that that could be said, but I am not sure whether that is set out in the amendments. We all know that such processes can be abused for partisan reasons, by people making scurrilous complaints that we know will never go anywhere, but which take up time and cause anxiety and spending.

Let me provide a further example. There is another pledge to support those who are determined to make the transition away from paramilitarism. There could be a complaint that somebody had not given sufficient support to those who wanted to move away from paramilitary activity. That would be a nonsense, because there could be many reasons why an individual might not have given that degree of support in that situation. What kind of support are they meant to be providing as an individual MLA? I think we need to be cautious about moving from a set of extremely well-meaning and well-intentioned objectives, such as enforcing acceptable pledges and undertakings, and making them into a code of conduct that I believe we would struggle to enforce sensibly in this form.

[Stephen Pound]

The debate on this group all started so well. The Minister’s initial moves on timetabling were sensible and proportionate, and I believe would have been supported by the whole House. I think the key comments—these should be the leitmotif of this afternoon’s entire discussion—were about the creation of a society “free of paramilitarism”. That is the point we start from. That is where we want to go. It is the route to that desired state that we are discussing this afternoon.

We heard a tour de force from the hon. Member for North Down (Lady Hermon). Sometimes I gain the impression that hers is a multi-Member constituency, because it seems almost impossible that one person could sway the Committee so effectively—and not for the first time, either. I hope that the hon. Lady will allow me, on behalf of my colleagues and, I am sure, all of us, to say what an immensely impressive case she made.

Come what may, the Government have to reflect and consult and reconsider. We have heard too much evidence this afternoon for us simply to allow this matter to slide through. We have heard some immense detail. The hon. Member for North Down talked about the conflicts that arose during her ministerial period. This provides yet another reason why we need to examine the case somewhat further.

The right hon. Member for Lagan Valley (Mr Donaldson) described the amendment tabled by the hon. Member for North Down as sensible and prudent, while also touching on a vital point. The right hon. Gentleman talked about public confidence, which I believe is very much at the heart of the matter. We can argue about the niceties, about interpretation and about angels dancing on the head of a pin. We can go through this catechism and ask whether people adhere to this precisely or not, but ultimately, the issue of public confidence is immensely important. There cannot be an area in the politics and daily life of Northern Ireland where there is a greater need for public confidence than in the transition away from paramilitarism and violence towards the desired state that I referred to earlier.

The right hon. Member for Lagan Valley also talked about identifying an ambivalence in attitude, and that feeds into some of the comments made by the hon. Member for Amber Valley (Nigel Mills). There is a need for further finessing and interpretation. When the hon. Member for Foyle (Mark Durkan) went through the clauses of the Bill in detail, he put his finger on the fact that we are still not entirely clear about what many of them mean. The hon. Member for Fermanagh and South Tyrone (Tom Elliott) also referred to that.

On behalf of my colleagues on the Opposition side of the Chamber, I call on the Government to take cognisance of the strength, the power and the logic of the arguments that they have heard on the Floor of the House today, not just because of the strength of those arguments but because of the impact that the proposals will have on civic life in Northern Ireland. What has been said today cannot be unsaid, and what has been done cannot be undone. We have to recognise the impact of what we have heard this afternoon. The Government have our entire support in this transition towards a good society and, as the SDLP put it when we debated an earlier amendment, a wholesome society.

Northern Ireland Political Agreement

Nigel Mills Excerpts

Thursday 19th November 2015 Commons Chamber

[Mrs Villiers]

On the way forward on the institutions dealing with the past, we will certainly give consideration to the proposals the hon. Gentleman puts forward. I think we all recognised that it was difficult to reach the conclusions we needed to get to within a structure containing just the parties. We need to reflect on whether we can have a wider, more inclusive process. Of course we will give consideration to whether we can publish a further draft of the Bill in the future, but we have not made a conclusive decision on this.

The hon. Gentleman talked about the linkages between the past and welfare reform. To the end, I was arguing to keep legacy in, and I wish we had been able to do so; even if we could not agree on all the issues relating to legacy, I had hoped that we would be able at least to agree on a fair selection of areas where consensus had been achieved. I could not get everyone to sign up to that, but I will continue to strive to find a way to get these legacy bodies set up, as that is crucial for victims and survivors.

Lastly, I pay tribute to the work that his party did in the talks process, particularly on the legacy matters, but also on paramilitaries. The Social Democratic and Labour party’s call for a whole-community approach to ending paramilitarism will resonate in this House and across Northern Ireland.

[Nigel Mills (Amber Valley) (Con)]

In welcoming this deal, may I ask the Secretary of State to say a little more about what sounds like £500 million of new funding for Northern Ireland outlined in her statement? Will she go a bit further by saying that if there are any further disputes between parties in Northern Ireland, they will not be fixed by more money from Westminster?

[Mrs Villiers]

In these extremely difficult days for the public finances, we thought very carefully about what additional support we were able to provide on top of the Stormont House agreement package, but we did feel that a case had been made credibly and strongly to us that Northern Ireland does face unique challenges in the United Kingdom and that therefore there was a case for additional support, on top of the favourable conditions in relation to the block grant. That breaks down roughly as: £160 million of additional security funding for the PSNI to help it counter dissident republican terrorists and paramilitary groups; £25 million for tackling paramilitary activity and strategy; £3 million for a verification body in relation to paramilitary activity; £60 million for programmes to build confidence and see inter-faith barriers coming down; crucially, as a result of the legislative consent motion passed by the Assembly last night, the savings forgone payments—sometimes referred to as welfare penalties—will stop, and that means that a further £40 million will be added to the block grant for the next two years; and we also have £125 million to support a programme to eliminate fraud and error, which we have already discussed. The Executive believe that that will yield substantial savings, half of which they are allowed to retain, and that that is likely to take the total value of the package to well over half a billion pounds.

Stormont

Nigel Mills Excerpts

Monday 12th October 2015 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to contribute to the debate, and to follow the excellent speeches that have been made so far. I will not detain the House by repeating all the good words that have been spoken about how important it is for an enduring settlement to be achieved, although it is clearly very important for Northern Ireland to find a stable political process that can deliver for its people. I think we would quite like to avoid the annual round of crisis talks, and to get this matter sorted out for the long term.

On a more flippant note, I must say that I am surprised that we have got this far in the debate without anyone mentioning rugby or football, given the weekend’s events. May I be the first to congratulate the Northern Ireland football team on qualifying for the European championships? [Interruption.] I know that I should not have mentioned rugby—it is all going to go wrong—but that is an example of Ireland’s working together, and it could be a template for how we can move forward.

Let me now turn to a rather more parochial English activity. The Secretary of State has repeatedly said that the solution to the crisis cannot be yet more money from Westminster and the taxpayers, that the parties in Northern Ireland must find a solution within their existing budgets, and that there is no way of buying them out of the problem. I welcome that, because I think it must be the right solution. Every time we back down over here and offer more money, we create a problem, because in a few years’ time there will be another dispute that the parties cannot resolve between them, and they will think that there is some way in which we can fix it for them.

I urge the Government to be very cautious about taking the power to carry out welfare reform, because I think that that will mean a cop-out by politicians in Northern Ireland. They will not have had to find the money; they will not have had to fix their own budgets; they will not have had to choose their own welfare system. If we do this for them, they will be able to run around saying, “We never agreed to it. All those evil people in Westminster forced this terrible scheme on us. We would never have done anything like this.” They need to make a choice between welfare spending and other budget priorities, and that is what we should be saying to them.

We need the Minister to explain the Government’s time frame. How far can we go with no effective government of Northern Ireland without forcing an Assembly election? Can we really limp on until the end of March and the start of the election period? Is there any real prospect of a deal before the Irish and Northern Irish elections, or will there be another six months of to-ing and fro-ing and hokey-cokey, with Ministers being appointed and then resigning on the following day? Is there, realistically, a solution without the holding of elections in Northern Ireland a great deal sooner than next May?

I said that we should be very cautious about taking over the welfare reforms, but I think that there must come a point at which, if there can never be a deal in Northern Ireland, we cannot just sit back here and watch government fall apart and public spending descend into chaos. At some point we must say, reluctantly, that there really is no other way, although I think that that would be a rather poor outcome. I ask again, however, “What is the timetable?” Is the end of October, which we just heard mentioned, the hard deadline for a deal, or can we allow this to drift on until Christmas and try to deal with it in the new year?

At some stage we must be clear and say, “Here is the time frame: sort this out, or we shall have to do it for you, no matter how bad that is”, but we must also be clear about the fact that it is a last resort, and not the outcome that we want to see.

Northern Ireland

Nigel Mills Excerpts

Tuesday 15th September 2015 Commons Chamber

[Mrs Villiers]

The hon. Gentleman and his party do not share my view on welfare, but I emphasise that the agreement they helped to secure at Stormont castle was a good one for welfare in Northern Ireland. It provides a reformed system that is more effective in rewarding work, but it will also top it up from Northern Ireland’s own resources, giving Northern Ireland the most generous welfare system in the United Kingdom and one of the most generous in the world.

On the proposed legislation, there was a discussion about having a consultation in Northern Ireland, but there was not enough consensus to enable that to happen. We will do everything we can to engage with a range of groups and with the Northern Ireland Affairs Committee in advance of publishing our Bill, which we propose to do shortly.

[Nigel Mills (Amber Valley) (Con)]

The Secretary of State says that the Government will legislate on welfare reform as a last resort. Can she indicate how close we are to that last resort? Can she conceive of a situation where we could get to next year’s Assembly elections with no deal, without us having to take over that responsibility?

[Mrs Villiers]

We have reflected on whether it would be appropriate to set deadlines at this point. I do not think we are at that stage yet, but I reiterate that we cannot let this situation drag out indefinitely. The public finances are at stake. We have a duty to safeguard the interests of the taxpayer and we believe that, if the Northern Ireland parties cannot resolve these questions, ultimately this House will have to do so.

Cross-border Crime

Nigel Mills Excerpts

Wednesday 11th March 2015 Commons Chamber

[Dr McCrea]

Concern for the environment was also mentioned by a Minister of the Irish Republic recently. The House should be taking this matter very seriously, because damage is being done and we cannot turn a blind eye. The concern that many of us have is that the Government could do more. I cannot understand why those involved in this activity have not been brought before the courts. That is totally unacceptable. The last time anyone was brought before the courts was 2002, even though there are those who are known to have committed this crime.

[Nigel Mills (Amber Valley) (Con)]

Does the hon. Gentleman think the problem might be that HMRC has the lead duty to investigate fuel laundering? Perhaps, given that this involves serious organised crimes, the Police Service of Northern Ireland ought to have lead responsibility in Northern Ireland. Perhaps it would be more effective at bringing prosecutions.

[Dr McCrea]

I believe there are many agencies—when I am winding up I shall draw attention to this—that could work together to resolve this situation. I also accept what my right hon. Friend the Member for Lagan Valley (Mr Donaldson) said. We must turn our attention to the cross-border drugs and alcohol problem.

I turn now to another serious organised criminal cross-border activity: the counterfeiting of consumer goods. Although smokers have been warned of the serious health threats posed by illicit tobacco, the current price of duty-paid tobacco makes cheaper tobacco more readily available to the young and the vulnerable. For example, a notorious black market cigarette brand, Jin Ling, which is known to contain asbestos, was recently found on sale in Belfast. Smuggling black market cigarettes is extremely lucrative for organised gangs, which can make huge profits and which cost the UK £2 billion a year in lost taxes.

Last month, almost 1 tonne of raw leaf tobacco and 10,000 suspected illicit cigarettes were seized in raids by customs officers at a farm in south Armagh. HMRC said they were worth an estimated £236,000 in lost duty and taxes. In separate searches on the same day, 10,000 illegal cigarettes were recovered. A number of private and business addresses in County Down were inspected. A vehicle and the cigarettes were removed, worth an estimated £2,800 in lost duty and taxes. It is truly remarkable that no arrests have yet been made in relation to either operation. The question we have to ask is: why?

It is believed by many in the Province that the authorities are turning a blind eye, because this is a way to keep some paramilitary groupings sweet. Those groupings are able to fill the coffers of their organisations and even stand in elections against those who seek to do things in a legal and proper fashion. Although earlier this month five people from County Tyrone and County Down were arrested as part of an investigation into a suspected tobacco fraud worth £110 million, the situation highlights Northern Ireland as an attractive region for international crime gangs owing to the inertia in past months of parties failing to support the National Crime Agency in Northern Ireland. It is through these statistics that we are now clearly seeing the out-workings of not having the NCA in operation over the past year-and-a-half. It is no accident that these quantities of illegal substances are being smuggled across the border into Northern Ireland. These gangs know only too well that at present if the gang leaders are caught, some of their assets cannot be taken from them. For the past 18 months, we have been a soft touch for smugglers and criminal gangs. Although the NCA is now expected to be operational in Northern Ireland by May, it is largely a case of shutting the stable door after the horse has bolted.

Nothing surprises us about the intransigence of Sinn Fein and their hostility to the introduction of the NCA. They have a vested interest in seeking to hinder investigations into the skulduggery of their republican mates. However, others have dithered in their support for the NCA and have denied the Exchequer millions of pounds in lost revenue that could have ultimately benefited the people of Northern Ireland and the Northern Ireland Executive. The difficulties of policing the area along the border are well documented. As recently as last month, a south Armagh man was injured in an explosion while taking down a poster, put up by republican criminal gangs, which claimed that a second individual was a security forces informer or “tout”. However, while it is clear that there are tensions within republicanism, there remains a prevalence of fear in the community about co-operating with the police to bring those behind such threats and attacks to justice.

In conclusion, the motion calls on the Government to ensure greater co-operation between HMRC, the National Crime Agency and the PSNI in combining their investigative prowess to eradicate the scourge of criminal activity from our society.

--- Later in debate ---

[Dr Murrison]

Part of the difficulty, of course, has been that the PSNI has had to deal with a lot of these matters itself. The Chief Constable will say that he is well resourced, but he has been subject to considerable restraints, as have all police forces in the United Kingdom in recent years. That inevitably has an impact on what he can do. The fact that the NCA has not been able to operate at anything like its fullest extent in Northern Ireland has meant that there has been a deficit in policing in Northern Ireland. That is now, mercifully, being remedied so that the people of Northern Ireland can benefit from the full entirety of policing to which they are entitled. That will clearly have resource implications, which I hope will be beneficial, for the PSNI.

On the question of concerns about the lack of custodial sentences, after running a consultation in summer 2013 the Northern Ireland Department of Justice implemented legislative change in December of that year allowing the referral of unduly lenient excise fraud sentences to the Court of Appeal. The consultation and the resulting measure had the Government’s full support, of course. I can report to the House that in the period 2013-14 six individuals were prosecuted for fuel fraud in Northern Ireland. I accept that that is nothing like enough, given the extent of the problem, but it gives the lie to the suggestion that there have been no prosecutions as there clearly have. However, I would share the assertion made by the right hon. Member for Belfast North (Mr Dodds) that there need to be more. I hope that the introduction of the NCA will play a part in that.

On the specific issue of fuel laundering—

[Nigel Mills (Amber Valley) (Con)]

Will my hon. Friend give way?

[Dr Murrison]

I will in a minute.

Hon. Members might be aware that the UK has worked closely with Ireland to identify a new fuel marker. It will come in in May and represents a significant improvement on the current fuel marker. It gives much more protection against fraud.

[Dr Murrison]

I think that we have exhausted this particular point, and I did say that I would come back to the hon. Gentleman. However, I said that I would give way to my hon. Friend the Member for Amber Valley (Nigel Mills).

[Nigel Mills]

While we are talking about the lack of prosecutions, the sentences that are given out are somewhat more lenient than we might hope for an offence of such seriousness. Does my hon. Friend agree that there is a problem in that a lot of people perceive fuel laundering and illegal sales of tobacco to be victimless crimes whereas—this is certainly the case in Northern Ireland—they are serious organised crime offences that fund other serious activity and should be treated with that seriousness by the public, by all the authorities and by those who give out the sentences when people are caught?

[Dr Murrison]

I agree it is not a victimless crime, as is clear from the figures I have trotted out—there is the cost to the Treasury alone. All of us who rely on the largesse of the public services we enjoy are victims of this crime, so I would certainly agree with my hon. Friend. On the leniency of sentences, I will be interested to see what the Court of Appeal decides.

Corporation Tax (Northern Ireland) Bill

Nigel Mills Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mrs Villiers]

The principle of the Bill is that that becomes a matter for the Northern Ireland Assembly and the Executive. It is for them to make the choice and decide whether to go ahead with implementation of a reduced rate. Obviously, there is a great deal of support for bringing down the rate of corporation tax in Northern Ireland to the same level as in the Republic of Ireland. I know that the hon. Gentleman’s party colleague, Minister Foster, would like to see it reduced still further. Those matters are not provided for in the Bill because the Bill vests that choice with the Northern Ireland Executive once commencement has taken place.

As I was saying in response to the intervention, Northern Ireland has a unique position within our United Kingdom. The land border that it shares with a very low corporation tax environment in the Republic of Ireland puts it at a significant competitive disadvantage when competing for inward investment into the island of Ireland. Northern Ireland is also more dependent on the public sector than most other parts of the UK. Estimates vary as to the extent of this dependence, but it is generally accepted that around 30% work in the public sector, compared with about 20% in the rest of the UK. Some surveys put the dependence on the public sector at even higher levels.

Economic prosperity as measured by gross value added per capita is still some 20% below the UK average and has been so for a number of decades. Of course, Northern Ireland faces a range of difficult issues flowing from the legacy of the troubles. All these challenges need to be overcome if Northern Ireland is to compete successfully on the national and global stage for jobs and for investment. None of this is to say that Northern Ireland does not have some amazing entrepreneurs and some hugely successful businesses that are truly world-beating. Under this Government unemployment in Northern Ireland has fallen in every month for the past two years and the record of foreign direct investment is strong, not least because of the efforts of the Northern Ireland Executive.

But for all the great businesses we have in Northern Ireland, the blunt truth is that there are just not enough of them, so the Government are convinced that to boost the private sector and enable Northern Ireland to perform even more strongly in attracting inward investment, we need to go further. We need to provide stronger incentives for Northern Ireland firms to invest in growth. The Bill before the House today will give the Assembly a powerful tool to help them do this, enabling Northern Ireland to take a decisive step forward towards rebalancing its economy.

The Bill provides a further demonstration of this Government’s general commitment to devolution, which we have shown in many ways, including with the Scotland Act 2012. We are making progress on implementing the Smith commission proposals for further powers for Scotland over tax and welfare to be transferred to the Scottish Parliament. Draft legislative clauses were published on 22 January.

[Nigel Mills (Amber Valley) (Con)]

Is my right hon. Friend aware of the data which suggest that almost twice as much will be raised from companies moving from Great Britain to Northern Ireland than from those moving into Northern Ireland from overseas? If that is the case, does she think it fair that Members from Northern Ireland may vote on the UK-wide corporation tax rate as well as their own, when they are effectively competing with our constituents?

[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.

--- Later in debate ---

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to follow the hon. Member for Belfast East (Naomi Long). I should like to begin by saying that this measure is entirely the right thing for Northern Ireland. Those of us who serve on the Select Committee have all seen how hard it is to compete when a neighbour a short distance away can offer a much lower rate of corporation tax. I wholeheartedly support the notion that we should allow Northern Ireland to choose its own corporation tax rate, especially on trading profits. In fact, I would even support the principle that lower business taxes drive growth. Over the past five years in the UK, we have reduced our corporation tax rate from 28% to—in a couple of months’ time—20%, which is important in helping to drive growth in the whole country.

That leads me to my first concern. Part of the argument for making that reduction is that we recover money that we lose in corporation tax by attracting more investment: more companies make more money and pay more corporation tax as there are more profits. Even though corporation tax is set at a lower rate we begin to recoup some of the costs. With more employment, we would expect increases in income tax and PAYE. Greater economic activity will result in more VAT, and more property transactions will give rise to more stamp duty. Those are the key ways of recovering what is lost through lower corporation tax.

It is not entirely clear how much of those increased tax takes will go to Northern Ireland and how much will be kept by the UK as a whole. When the final deal is done and a calculation is made of by how much budgets are reduced, that net cost needs to be worked out to ensure that it is fair to Northern Ireland and fair to the rest of the UK. There will need to be a breakdown of the overall impact of behavioural change as a result of a lower tax rate in Northern Ireland, if that is what results. I assume we expect to see a rate of 12.5%, or perhaps a little lower to make it competitive.

We seem to be devolving taxes haphazardly, creating a mishmash. We ought to look forward a few years and ask, for all our taxes, “What should our tax system look like? What taxes will we devolve and to where? How can we best achieve a sustainable, sensible tax system as a result of that?” One way of doing that would be to set a federal income tax rate and a federal corporation tax rate that apply throughout the UK. Once those were set, each area could choose its own rate as well, so there could be a federal corporation tax rate of, say, 10% and Northern Ireland could choose 0% as its local rate, and England could choose a rate as well.

What we have in this Bill is a complex way of doing that for one area of the country. I accept the reason for doing that just for Northern Ireland initially, but if there is pressure from Scotland and Wales, this mishmash of a system will be hard to act on and it will be very unfair on England. How will we work out the rate that we want? With the devolution of corporation tax, I suspect that the easiest competition will be between Northern Ireland and the rest of the UK, because we have the same currency, much the same legal system, the same VAT system and the same income tax system. In fact, for almost any sensible business, the east midlands is a far more attractive place to do business than Northern Ireland. I would say that, because my constituency is there, but we have the right skills, the right location and all manner of advantages.

[Ian Swales]

Does the hon. Gentleman agree that the sort of business decisions we are talking about are long-term decisions, and if the tax system appears to be moving around wildly among countries year by year, companies will not use it because they will not be able to rely on a long-term future?

[Nigel Mills]

The hon. Gentleman is right. That is why we should look ahead and see what our tax system should look like. Nobody in the UK wants a business man with a business based in Amber Valley or Redcar to think, “I could save half my corporation tax by moving to Northern Ireland.” That may help Northern Ireland, but it will not help the mainland. It will not help UK plc to attract more inward investment. We want fair competition. I accept that competition is good and that if we get investment somewhere in the UK, that is better overall, but we want investment coming in from outside, not moving around within the UK.

As a matter of fairness, if parts of the UK are to compete on corporation tax, those parts should not vote on the rate elsewhere in the UK. If Northern Ireland wants to set its own corporation tax, let us let England, Wales and Scotland set ours. If we devolve it further, the same fairness should apply. People in my constituency should be able to say, “Yes, we are competing, but we can choose whether to compete or not.” I hope that before April 2017 some sort of mechanism is in place to ensure fairness. Devolving taxes without first settling that is dangerous in constitutional terms. I am not sure it would be tolerable for Scottish MPs, for example, to set their own income tax and then to set ours as well. I accept that that is probably more of a problem than corporation tax, but it is an example of the unfair tax system that we could end up with.

An excellent Library paper that runs through the research shows on page 13 that, looking at the behavioural response to a lower rate of corporation tax in Northern Ireland, even by year 4 we would see that profit shifting from the rest of the world into Northern Ireland would have an impact of £30 million a year, but that profit shifting from Great Britain to Northern Ireland would have an impact of £60 million a year. That is twice the impact of new foreign direct investment. Tax-motivated incorporation would have a potential impact of £45 million —even more than foreign direct investment into Northern Ireland. I hope that the measures in the Bill will reduce the likelihood of the latter possibility. The easiest way of competing will be to move around within a regime rather than try to attract investment into the UK that would not have come here in the first place.

That leads me to look at how cluttered some of these proposals will make the corporation tax system. This is not a simple set of things to understand. A company that has its tax base in Great Britain and Northern Ireland will have to work its way through some fairly complex situations. There were simpler options. We could have just had an allocation key that worked out one profit and then how much of it would be taxed in Northern Ireland and how much in the rest of the UK, based on employees and sales. It could have ended up a bit like the awful EU tax base that was thought up. However, within the UK, that might have worked, being easier to understand and removing some of the distortions of attempts at tax avoidance. Taxation based on sales is much harder to fix.

There are still some gaps in these proposals. It is absolutely right that we have stopped allowing finance companies to get the lower tax rate. Otherwise every large corporate would have had a finance company based in Belfast doing its finance for the rest of the UK and moving profit over there artificially. That would have been unacceptable.

How do we stop other things happening that we might not like? What about intellectual property planning? If I move all my brand names over to Northern Ireland, can I charge large royalties in the rest of the UK and artificially move profit in that way? That is not caught by the restrictions in the Bill. It is not moving jobs or creating real value; it is just moving assets around a regime and trying to get a tax advantage.

On the flipside, there are some wrinkles in how we have tackled the finance company exemption. Under the definitions in clause 17, I am not sure what happens in the case of a company trading in Northern Ireland that makes a lot of profit, ends up with some cash at the end of the year, and thinks, “Okay, I’ve got another important investment project in 18 months’ time, so perhaps I’ll lend this cash around to somewhere else in my group of companies and make a bit of interest income.” It is then engaging in a lending activity. Has that blown it out of the whole lower rate because it now has an excluded activity, or is only the interest taxed at the higher rate, and because it is a very small part of its activity, that is okay? I am not quite clear about how we tackle real, practical situations such as that.

I am not convinced that the situation for small and medium-sized companies is entirely fair. The hon. Member for East Antrim (Sammy Wilson), who is no longer here, said that some construction companies in Northern Ireland end up with lots of building work on the mainland because that is where the work has been. If, during the year, such a company gets a big contract on the mainland, it then has to track whether the profit from that becomes more than a quarter of its total activity. If it is 26% by the year end, it pays 20% corporation tax on the whole of its profits, whereas if it is 24% at the year end, it pays 10% on the whole of its profits.

I accept that for the vast majority of SMEs that do not trade on the mainland and operate just in Northern Ireland, that will be a very simple situation, and one small contract will not hurt. However, I suspect that SMEs trading in both areas will be in a worse position than a large company, because a large company that had 26% of its activity on the mainland would still get the lower rate for most of its profits, but a small company will lose it for most of its profits. Perhaps there could be a way of allowing an SME to elect to be in the large company regime if that better reflects its needs. Another option would be to have two separate companies and split their activities, but that does not strike me as a very easy situation. There are some issues that may lead to unintended complexities.

We need to think through exactly which activities we do not want to qualify for the lower rate. We have a new diverted profits tax coming, whereby if someone moves an activity that ought to be somewhere else, we will try to tax it at a higher rate than our UK standard rate. Under one of the provisions, someone who is being taxed at a rate of less than 80% of the UK rate will be caught. Clearly, Northern Ireland is likely to have a tax rate of less than 80% of the main UK rate. If a Northern Ireland company has an internet trading business or a mail order business in Belfast and takes careful steps to avoid having an establishment on the UK mainland, could that company be caught by the diverted profits tax, triggering a higher rate than if it was in the UK? How can we stop people artificially putting trading activity using very few employees into Belfast, rather than doing it on the mainland, to get the lower rate? I accept that no one wants the rate to apply to activity involving no employees, but I sense that certain activities that do not require much labour might be moved, which is not what we intend.

I welcome the principle of the Bill. I have some concerns about rushing it through now without thinking about how it affects the UK as a whole—we need to do that if we are to get a tax system that is sustainable in the long term—about how cluttered we are making our corporation tax system and about whether things in the Bill’s details might make the system work in a way that we do not want, but I suggest that we think through such issues in Committee.