Northern Ireland Economy and Innovation: Government Support

Sammy Wilson Excerpts

Tuesday 29th October 2019 Westminster Hall

[Emma Little Pengelly]

I absolutely agree. Later in my speech, I will come to the various aspects of our economy in Northern Ireland, and the particular issues, challenges and opportunities they face.

Northern Ireland is the smallest region of the United Kingdom, making up just 3% of the UK, but we still make a mighty contribution, and have a mighty story to tell. All of us here from Northern Ireland want it to play an even greater part in what is often referred to here as global Britain, but we would like to see a truly global United Kingdom agenda, in which every part of this United Kingdom is fully integrated and promoted and each region pulls its weight.

[Sammy Wilson (East Antrim) (DUP)]

Does my hon. Friend accept that one of the downsides of the current withdrawal agreement is that although we are a major exporting region of the UK, we might find ourselves prevented from taking part in trade deals that the Government might strike with other parts of the world because of the way in which we are tied into the EU?

[Emma Little Pengelly]

As a member of the International Trade Committee, I am very aware of the opportunities, challenges and barriers that full participation in international trade entails. It will come as no surprise to hon. Members to learn that I will mention the ‘B’ word—Brexit—later in my speech, and specifically the dreadful proposal for the Northern Ireland economy. My right hon. Friend’s points are valid; that constitutes a real and present risk to our economy.

Northern Ireland, just 3% of the United Kingdom, relies hugely on trade with the rest of the United Kingdom. Great Britain is the biggest market by far for Northern Ireland—bigger than the Republic of Ireland, the European Union and the rest of the world combined. Over the past 10 to 20 years, and certainly since the restoration of the Assembly in 2007, huge effort has been put into increasing our exports, and the market for our exports in other countries in the European Union and across the world, but Great Britain remains our biggest market, which we rely on hugely. Any barriers to trade with it would have significant impacts. I will touch on that later.

A factor that is discussed less often in this debate is consumer choice. Consumers in Northern Ireland rely hugely on the Great British market for goods, from the supermarket goods that we see in common high-street shops, to bespoke and craft products in smaller, family-owned shops. Many of those goods come from Great Britain, and there are real concerns about how people will access them. Many people today access goods through online marketplaces, such as Amazon, eBay and Etsy; that, too, gives rise to concerns about consumer choice and access. Many of the companies in those marketplaces are based in Great Britain, and many are very small producers; barriers might prevent them from posting their products to shops and consumers in Northern Ireland.

As a small region of the United Kingdom, we rely heavily on its economy, but Northern Ireland has a really strong case to make. As we have gone round the world trying to attract new businesses and, particularly, foreign direct investment to Northern Ireland, we have been able to showcase the fact that we have the highest skills in the United Kingdom. We have three excellent universities: Ulster University, Queen’s University in the heart of my Belfast South constituency, and the Open University, which does a huge amount of work. We also have high skills and a good education system. That is not to say that we do not have challenges—I have spoken about the challenges of trying to support every child to succeed in getting skills—but we are one of the highest-skilled regions in the United Kingdom.

We have relatively low staff turnover, which is very attractive to businesses moving to Northern Ireland, because they know that if they take those staff on, train them and invest in them, they will show loyalty. Indeed, I think we have the lowest staff turnover in the United Kingdom, which is comparatively unique. A company looking to come to the United Kingdom will also find relatively low set-up costs in Northern Ireland, as well as people who can support it through the process, and comparatively low recurring running costs.

We have a strong case to make, but of course there have been challenges. Over the past 15 years, the Republic of Ireland has cut its corporation tax time and again to make it even more competitive, knowing that our corporation tax rate is tied to that of the rest of the United Kingdom, and is therefore significantly higher. The Republic of Ireland has created tax incentive packages that I would describe as innovative, particularly to attract big US companies such as Facebook and Apple. We want to be able to attract those companies, too. Since 2007, working closely with Invest NI, Northern Ireland has had a very strong record; in fact, for some years, it attracted more FDI than any region of the United Kingdom outside London and south-east England. For a small region with the challenges that we had, that is a really strong story to tell. It is a story that we should be proud of—but we want more. We want to do better, and we need to do better, because we still have challenges and we still do not have the types of jobs that we want for our young people: high-value, stable jobs that young people with the right skills can move into, creating happy, healthy lives for themselves and their families with the prosperity that we want to bring.

[Sammy Wilson]

My hon. Friend is right that it is not just jobs that we want, but good-quality jobs. Does she agree that when the Assembly was working properly, one of its successes was in attracting such jobs? Indeed, about 50% of the jobs attracted through FDI paid wages above the average wage in Northern Ireland.

[Emma Little Pengelly]

I absolutely agree. Statistics released in recent days indicate that although we have had growth in the average wage, it has now slowed down, and there has been a slowdown at the high-value end of jobs. In Northern Ireland we have comparatively low unemployment, but those statistics do not necessarily show the whole story. My constituency of Belfast South has one of the lowest unemployment rates not just in Northern Ireland, but across the United Kingdom—but too many of those jobs are at the lower end. We need high-value jobs that pay people better, because there is significant in-work poverty. The best way to get out of poverty is with a well-paid job. People need jobs with stability to help them to support themselves and their family.

We also have persistently high levels of economic inactivity. Although people point to that inactivity, the reality is that right now we cannot just match it with jobs growth. We need good programmes to support people, regardless of why they are economically inactive. In Northern Ireland, we have a higher than average percentage of students, who are currently defined as economically inactive, but those are not necessarily the people we are worried about; we are worried about those who have been economically inactive for some considerable time. Even more worrying are people in families who suffer from transgenerational unemployment. They need the right support and skills programmes, at the right level.

This is not just about getting people entry-level jobs; we want them to skill up and make progress. I have heard House of Commons statistics about how many people go into an entry-level job and stay at that level for their entire career. Social mobility and support for people throughout their career, so that they can increase their wages and their family income, are essential to the shared prosperity to which we are committed.

Let me touch on a few particular aspects. I have already mentioned foreign direct investment. Northern Ireland’s economy is still very much one of small to medium-sized, largely family-owned businesses, as my hon. Friend the Member for Upper Bann (David Simpson) said. The Democratic Unionist party absolutely wants to support those businesses, but many of them are understandably reluctant to take risks in order to grow—people are content with the strong business that they have built not just for themselves, but for their children and family. We want to encourage those businesses because we need them to grow, but they should be able to take those risks in an environment in which they feel confident and positive. I will say a little more about family and small businesses in a moment.

I know that the Minister will have had meetings with Invest NI and received briefings. I pay tribute to the incredible work of Alastair Hamilton, who I worked with many years ago. He has done a fantastic job in very difficult circumstances, particularly in the past few years, to keep increasing foreign direct investment and high-value jobs. Since the collapse of the Northern Ireland Assembly more than 1,000 days ago, one of the small glimmers of light has been the fact that Invest NI has been able to continue to make jobs announcements, including in my constituency, and to create the opportunities that we really need. Under the framework set by the Northern Ireland Assembly, Alastair Hamilton and his Invest NI colleagues were able to continue going into the global marketplace, winning contracts and attracting companies to Northern Ireland. We want to build on his incredible work; as he moves on from the job, we are all thankful for the amazingly competent work that he has put in.

We are keen to continue to play a full role in attracting foreign direct investment. We can do so much through our regional organisations, such as Invest NI, but as the Democratic Unionist party has pointed out to the Government on a number of occasions, our sell in Northern Ireland must be fully integrated into what the United Kingdom does on a global scale. We want to be fully included in what is being offered, including trade fairs, engagement with countries, and trade missions. Some progress has been made, but we want more. I am sure that Members of Parliament from Scotland, Wales, the north of England and other regions also feel that, historically, their region has not been fully included and integrated in the sell of the UK Government. I have raised that issue on many occasions with the Secretary of State for International Trade, and with the Department for Business, Energy and Industrial Strategy. Progress has been made, but we want to build on it, and we want more of our companies to take part.

We know that innovation is the way forward. Northern Ireland will never be a low-cost manufacturer, but we have been, can be and will be high-quality, innovative and creative in our manufacture, industry and services, and in the skills that we bring to them. Investment in innovation is therefore very welcome. Some investment in research and development has been affected by constraints around state aid and other aspects of the European Union. As we move forward from that, we want a continuation of the investment in innovation, research and skills that we have had before.

The Government have spoken on this issue on a number of occasions, and I certainly welcome the very warm words that they have used. However, we would like concrete proposals on how Northern Ireland will get its fair share from any central programme to support innovation, research and development, and on how Northern Ireland can be more successful in bidding for central funds, to try to get the help and support that our businesses need to grow.

I have mentioned a number of universities, but as the Member of Parliament for Belfast South, I will of course mention once again Queen’s University, which does fantastic work in innovation; in fact, it is leading the way in a number of areas.

I am very conscious that we need to identify the potential growth areas. In what areas can Northern Ireland show unique creativity and innovation? In terms of the UK as a whole, what can we do to be particularly attractive to foreign direct investment and growing businesses? We have done huge amounts in areas such as cyber-security and finance.