Economic Growth

Stephen Farry Excerpts

Tuesday 14th November 2023 Commons Chamber

[Stephen Farry (North Down) (Alliance)]

I want to concentrate on the Northern Ireland economy, as this is primarily a debate on the economy. First, however, I want to touch upon the situation in the middle east, and in particular the need for a ceasefire. I utterly condemn the actions of Hamas as terrorism. However, we must recognise that Israel’s response has been disproportionate, represents collective punishment and sees ongoing breaches of international humanitarian law. We have all been deeply touched by the images we have seen on our televisions, and we know that there is a massive humanitarian crisis ongoing in Gaza.

Hopefully, we all recognise that there is no military solution to the situation. The only way forward lies in both Israel and Palestine having freedom and security, and the reaching of a political accommodation, notably with a two-state solution. Continued death and destruction achieves nothing—arguably, it makes the situation even harder, because it will only compound people’s sense of bitterness and feed extremism. It also risks wider regional escalation. A ceasefire, which must include the release of hostages and humanitarian access, requires a collective international effort, as does the renewed peace process that should follow any initial ceasefire. I hope I can speak with some degree of authority on peace processes, given my experience in Northern Ireland.

Moving on to the situation in Northern Ireland, our economy continues to function and businesses are continuing to invest, but our economy is being held back massively by the absence of a devolved Executive. We need an Executive for political stability and investment in skills, infrastructure and research and development. As a former Minister for Employment and Learning in Northern Ireland, I appreciate the importance of skills. Rather than further investment in those areas in Northern Ireland, we are seeing budget cuts. The impact on further and higher education is mirrored more widely in health, education and other public services.

I want to see a restored Executive working closely with the UK Government to address Northern Ireland’s current financial crisis through two key interventions. The first is the introduction of what is called a fiscal floor. Northern Ireland is structurally underfunded by around £400 million a year. A fiscal floor would need to be set at the correct level, taking into account policing and justice needs based on the most relevant period, 2010 to 2015, adjusted for inflation, as that was based on actual need as assessed by the Government at that particular point. We have the precedent of what happened in Wales, fed by the Holtham commission. That model could be replicated with adjustments for Northern Ireland relatively quickly.

We also need a transformation fund. We cannot fix public services in Northern Ireland from a burning platform of cuts and further cuts. We need an invest-to-save programme for both public services and our economy, as part of a renewed financial package. Of course, we have to learn lessons from previous financial packages in Northern Ireland. I say to the Government that I fully accept that there will be a need for a certain degree of conditionality around any intervention, but unless we have that financial package, we are never going to turn the situation around in Northern Ireland.

We have a very particular opportunity in Northern Ireland through the presence of the Windsor framework. I welcome the Government’s efforts to secure it earlier this year. I am disappointed that others are failing to see the importance of that breakthrough and to return to the Executive as a consequence. Without a functioning Executive and those key interventions in our economy, we will not be able to take full advantage of the opportunities provided by the framework, particularly in terms of dual market access.

Finally, I will touch briefly on climate change. It is by far the deepest, most far-reaching challenge facing the world, including us in the UK. While the Government’s targets may remain, there is a clear sense that the brakes are being slammed. It is a false narrative to pitch economic wellbeing against climate change. Through a green new deal, we can address not just economic change but social justice, alongside climate change. I strongly suggest that the narrative needs to change around a green new deal, both UK-wide and in Northern Ireland.