Oral Answers to Questions

Owen Paterson Excerpts

Wednesday 9th February 2011 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

1. What assessment he has made of the effect on economic growth in Northern Ireland of the increase in the basic rate of value added tax.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

Before answering, may I pay tribute to Ranger David Dalzell of the 1st Battalion the Royal Irish Regiment? He came from Bangor, but he was also stationed with his regiment in my constituency at Tern Hill. I am sure the whole House will join me in offering our condolences to his family and friends, and thanking this brave young man for his service to his country after he was killed in Helmand this week.

The reckless years of debt and spending made the VAT rise a necessary step for national economic recovery. Forecasts from the Office for Budget Responsibility show that the Government’s plans will deliver sustainable growth for each of the next five years, with employment rising by 1.1 million by 2015, and the deficit falling.

[Bridget Phillipson]

When will the Secretary of State set out his paper on rebalancing the Northern Ireland economy? That is particularly crucial at a time when the VAT rise is damaging local retailers.

[Mr Paterson]

The hon. Lady is correct. We need to bring the paper forward as a team effort, working with local Ministers. I will come to that in response to later questions. We had a very satisfactory meeting with the Exchequer Secretary earlier this week, and we hope to publish the paper as soon as possible.

[Mr Laurence Robertson (Tewkesbury) (Con)]

Further to that answer, how long will the consultation period on the document be when it is released?

[Mr Paterson]

I am grateful to the Chairman of the Select Committee on Northern Ireland Affairs for his question. That has to be finally decided, but I would estimate that we should have a public consultation period of two to three months.

[Jim Shannon (Strangford) (DUP)]

I associate myself with the comments of the Secretary of State on Ranger Dalzell. Across the House we are all well aware of the bravery and courage that all those young men show. We sympathise with his family at this time.

On VAT, shoppers from the Republic of Ireland coming across to Northern Ireland contribute greatly to the economy of Northern Ireland. The VAT increase has impacted directly on Northern Ireland, leading to a 10% reduction in sales and a 28% reduction in exports. What will the Secretary of State do to address that?

[Mr Paterson]

I am grateful to the hon. Gentleman for his comments on Ranger Dalzell.

Cross-border taxation is an issue that we will consider as part of the paper. We are acutely aware of the ability of consumers to move their spending rapidly either way, depending on taxation.

[Mr Peter Bone (Wellingborough) (Con)]

Can the Secretary of State put into context the changes in taxation? Basic rate taxpayers in Northern Ireland have had their personal allowance increase, which has taken many of them out of the tax net.

[Mr Paterson]

We regard Northern Ireland as an integral part of the United Kingdom. Northern Ireland taxpayers pay their tax and receive public spending in return.

[Mr Shaun Woodward (St Helens South and Whiston) (Lab)]

I join the Secretary of State in his tribute to Ranger Dalzell and his family.

The Secretary of State has made it clear that he wants to be Northern Ireland’s man in the Cabinet. As he knows, following the rise in VAT instituted by his Government, a litre of fuel in Northern Ireland is the most expensive in any part of the UK. Can he tell the House why it is more expensive in Belfast than in North Shropshire, and what a litre of fuel costs in Belfast this morning?

[Mr Paterson]

Prices vary from 120p to 133p for petrol or diesel, but the right hon. Gentleman should remember that it was his Government who increased the rate of duty on fuel. He was in the bunker with the great incompetent for Kirkcaldy and Cowdenbeath (Mr Brown), who got the country into this mess in the first place.

[Mr Woodward]

I am glad that the Secretary of State managed to find an answer in his folder. The First Minister and Deputy First Minister are asking him urgently for help in Northern Ireland now. He has been in the job for nearly a year, but so far there has been no real help on the economy, just a promised paper on the economy that is still stuck in the printing press. Meanwhile, VAT is up, fuel prices are up and private sector business activity is reporting the biggest fall in 26 months. Hundreds are losing their jobs at Belfast Metropolitan college, 4,000 more are due to lose their jobs in health and social services and tens of thousands more jobs will go in the public sector. In Dublin, demand evaporates. Now we learn that he is losing his battle with the Chancellor for a future grab on end-of-year funding from the Executive. We can all see that it is hurting. When are people in Northern Ireland going to see it is working?

[Mr Paterson]

I do not know how the right hon. Gentleman has the nerve. When he was sitting in the bunker in Downing street shoring up his former boss, who overruled the right hon. Member for Edinburgh South West (Mr Darling) when he wanted to raise VAT, the Belfast News Letter found out that I was in Northern Ireland more than he was. We were in the danger zone in May, but thanks to the measures that we have taken, everyone in the UK, including in Northern Ireland and Lancashire, are in a better place as we establish stability in the public finances. We cannot go on spending £120 million a day on debt interest.

[Grahame M. Morris (Easington) (Lab)]

2. What his policy is on the use of stop-and-search powers by security forces in Northern Ireland.

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[Mr Wayne David (Caerphilly) (Lab)]

3. What arrangements he has made to ensure that the Police Service of Northern Ireland has the resources to meet threats from dissident activity.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

Funding for the PSNI is primarily a matter for the Northern Ireland Executive. However, this Government are committed to ensuring that the Chief Constable has the necessary resources to counter the threat posed by terrorist groups. The Northern Ireland Justice Minister has made a strong case to the Treasury for access to additional resources, but discussions are continuing at the highest level, and I am confident that we will have a satisfactory outcome soon.

[Mr David]

The Chief Constable of the PSNI has requested an extra £200 million to deal with the perceived dissident threat in Northern Ireland. Yesterday the Chancellor of the Exchequer said that he was “interrogating the request”. Surely we should have had a proper response by now.

[Mr Paterson]

The hon. Gentleman is quite right: the Chief Constable and the Justice Minister have made that request, and we are taking it extremely seriously. The bid is, of course, for money over four years, which is probably unprecedented for the reserve, and it is not an easy matter, given the national economic circumstances that we face. I remind the hon. Gentleman, however, of the Chancellor’s words yesterday. He said:

“We will treat the request with due diligence, but I am clear that security comes first. That will be my priority.” —[Official Report, 8 February 2011; Vol. 523, c. 148.]

[Patrick Mercer (Newark) (Con)]

The Secretary of State will no doubt be as delighted as I am by the proposed visit of the Queen down to Dublin, but he will have seen the news on republican websites that there is likely to be dissident activity. What assistance will be given to the PSNI during that difficult period?

[Mr Paterson]

My hon. Friend will know that no visit has formally been confirmed, although everyone in the House would welcome one. I should like to confirm that we have the closest possible collaboration with the Garda Siochana out in Dublin. A couple of weeks ago I met the new commissioner, Martin Callinan, and I am delighted to say that he is absolutely as robust and as determined to face down those terrorists as his predecessor, Fachtna Murphy.

[Ms Margaret Ritchie (South Down) (SDLP)]

Given the continuing perceived threat from dissident activity, the disruption to normal human and economic activity two weeks ago in Belfast, and the calculating callousness of leaving a booby-trap device on a child’s bicycle, will the Secretary of State now take action to ensure that intelligence is transferred from MI5 to the Police Service of Northern Ireland, which has all the accountability mechanisms in place?

[Mr Paterson]

I agree with the hon. Lady about the disgusting nature of those terrorists: booby-trapping a child’s bicycle is absolutely revolting. I know that her strong belief is that the regime should be changed, but at this moment it would be crazy to move the furniture around. Let me make it very clear that Lord Carlile, who conducted an independent review of the matter, said that MI5 and the Police Service of Northern Ireland are working very closely together, and that we could not do more work, or do it more energetically, to deal with what is a very difficult threat. I am afraid that we just have to disagree on this matter, but I do agree that we have to do everything that we can to bear down—

[Mr Speaker]

Order. I am immensely grateful to the Secretary of State, but we must move on.

[Mel Stride (Central Devon) (Con)]

Although PSNI funding is rightly the responsibility of the devolved Administration, will my right hon. Friend reassure the House that, in the event that dissident activity becomes much stronger, resources may be made available from the UK Government?

[Mr Paterson]

I thank my hon. Friend for that question. We made it clear that a bid has been made by the Justice Minister, whom I met on Monday and talked to this morning on the phone. We are raising this at the highest level of government and we are determined to stand by Northern Ireland and do the right thing.

[Stephen Pound (Ealing North) (Lab)]

It would be churlish of me to let this occasion pass without congratulating the right hon. Gentleman, the Minister of State, on his elevation to the Privy Council, and I do so with pleasure.

It would be negligent of me—

[Stephen Pound]

It would be negligent of me, Mr Speaker, not to remind the Secretary of State that the request for additional funding has been with the Treasury since last year—for months. The signal that we send to dissident terrorists is the most important thing here. Will the Secretary of State fight for Ulster, fight against the dissidents and fight with the Treasury to get this money, which the PSNI needs now?

[Mr Paterson]

I thank the hon. Gentleman for his congratulations to my right hon. Friend. He is not quite right about the request—[Interruption.] No, he is not right to say “months”. The Minister of Justice has negotiated within the Executive and got a significant increase from his fellow Ministers, which we welcome. Having resolved where he stood with the Executive, he then wrote to me with a request calling on the reserve. That letter came to me in January.

[Graham Evans (Weaver Vale) (Con)]

4. What recent assessment he has made of the level of threat to security in Northern Ireland posed by residual terrorist groups; and if he will make a statement.

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[Greg Hands (Chelsea and Fulham) (Con)]

5. What recent discussions he has had with Ministers in the Northern Ireland Executive on economic development in Northern Ireland.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

The Minister of State and I met last week with the Exchequer Secretary and Northern Ireland’s First Minister, Deputy First Minister, Minister of Finance and Personnel, and Minister of Enterprise, Trade and Finance to discuss the Government paper on rebalancing the Northern Ireland economy and promoting investment and growth.

[Greg Hands]

Given the coming corporation tax cut, the national insurance contributions holiday for small businesses and the avoidance of Labour’s national insurance tax increase next month, does the Secretary of State agree that this Government are restoring Northern Ireland’s reputation as a destination for inward investment, which was badly damaged by the previous Government?

[Mr Paterson]

I endorse my hon. Friend’s comments. We had an excellent meeting at Hillsborough only last week with a number of major businesses, at which we saw significant investment coming in from Denmark. I am pleased to say that our plans were endorsed by a coalition of significant business organisations last week.

[David Simpson (Upper Bann) (DUP)]

Will the Secretary of State outline his assessment of the potential impact on the Northern Ireland economy of the reduction in corporation tax, and of its cost?

[Mr Paterson]

The coalition of businesses that I mentioned gave an estimate last week of 94,000 jobs, and the Northern Ireland Economic Reform Group published a report yesterday with an estimate of 90,000 jobs. On the costs, the hon. Gentleman should consider the case of Canada, where corporation tax has been reduced over recent years and revenue has increased. He will have to be patient and wait for the publication of our paper, which I hope will happen soon.

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

Does the Secretary of State agree that Northern Ireland urgently needs meaningful action on creating economic opportunity? Has there been any discussion about how we might create the authority for the Northern Ireland Executive to create bonds, thereby creating private funding to boost our construction industry and build the necessary schools and infrastructure that are missing?

[Mr Speaker]

Order. There is far too much noise in the Chamber. [Hon. Members: “Hear! Hear!”] Agreement is one thing; abiding by it is another. Ministers cannot even hear what is being asked. A bit of order please.

[Mr Paterson]

I am grateful to the hon. Gentleman for his question. We will have a consultation period once the paper is published. He made an interesting suggestion, which the Chancellor will have heard. I hope that he will put it through formally in the consultation process.

[Chris Evans (Islwyn) (Lab/Co-op)]

7. When the Government expect to publish their proposals for rebalancing the Northern Ireland economy.

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

The Exchequer Secretary, the Minister of State and I continue to work intensively with Northern Ireland Ministers on the Government’s consultation paper to set out measures aimed at rebalancing and growing the Northern Ireland economy. We hope to complete our work and publish the paper soon.

[Chris Evans]

Does the Secretary of State accept that the Northern Ireland economy needs to stimulate the private sector? How do the Government propose to do that?

[Mr Paterson]

The hon. Gentleman is right. According to one report, Northern Ireland’s economy depends on public spending for 77.6% of its gross domestic product. That is wholly and totally unsustainable. I have been visiting Northern Ireland for three and a half years now and visiting businesses, and we are considering a whole range of measures for rebalancing the economy and helping to promote the private sector, which will be published in our report. There are excellent private businesses in Northern Ireland, just not enough.

[Ian Paisley (North Antrim) (DUP)]

The Secretary of State will be aware that to travel from Aldergrove airport in Northern Ireland on a transatlantic flight, a passenger has to spend an additional £150 in tax. If he travelled from the south of Ireland, 90 miles away, as of 1 March he would pay €3 in tax. What is the Secretary of State going to do about that to encourage people to travel on transatlantic flights from Northern Ireland?

[Mr Paterson]

The hon. Gentleman raises an important issue. I discussed it with Declan Kelly, the US envoy, 10 days ago, and it was also discussed at our meeting with local Ministers and the Exchequer Secretary earlier this week. My right hon. Friend the Minister of State is working on it with colleagues in the Treasury.

The Prime Minister was asked—