NORTHERN IRELAND ASSEMBLY
Tuesday 12 June 2007
Private Members’ Business
The Assembly met at 10.30 am (Mr Speaker in the Chair).
Members observed two minutes’ silence.
Welfare Reform Bill Second Stage
The Minister for Social Development (Ms Ritchie): I beg to move
That the Second Stage of the Welfare Reform Bill [NIA 1/07] be agreed.
The Welfare Reform Bill makes provision corresponding to the Welfare Reform Act 2007 and is therefore a parity measure. Following the Bill’s First Stage, I outlined the policy of parity and social security and the arguments for maintaining this long-standing policy, not least of which is financial reality. I trust that all Members accept the benefits of parity.
As a society, we cannot afford to be denied the skills and talents of many people who want to work but who, in the past, found themselves excluded from the workplace due to disability or incapacity. More importantly, we cannot deny such people the right to work if we can help them to do so. We are all too well aware of the corrosive effect of economic inactivity, not just for individuals but for entire communities.
The Bill aims to break, once and for all, the idea that people should be consigned to a life on benefit simply because of a health condition or a disability. Although the aim is to help everyone play an active role in society, there is no question of moving away from the firm foundation of a sound medical assessment of each person’s individual capabilities and limitations. The Bill has, as its guiding principle, the development of a welfare system that tackles poverty and social exclusion and that matches rights and responsibilities.
Part I of the Bill provides for the employment and support allowance, which will replace incapacity benefit and income support on grounds of incapacity. The replacement benefit will incorporate the contributory allowance and an income-related allowance. It is estimated that eight out of 10 people who apply for incapacity benefit want, and expect, to get back to work. However, the stark reality is that if they are on incapacity benefit for more than two years, they are more likely to retire or die than to get another job.
Little is expected of claimants and, outside the Pathways to Work pilot schemes, almost no support is offered to them. The Bill seeks to change that. The new benefit is founded on the concept of measuring and building the capability of individuals rather than writing them off as incapable. It offers a radical extension of the support available, which will be underpinned by the roll-out of Pathways to Work by April 2008.
The new personal capability assessment will identify those who are capable of undertaking work-related activity, and the support and interventions that will be necessary to help them prepare to get back to work. As is the case with the current personal capability assessment, the scores from the physical assessment and the mental-health assessment will be combined. Following the assessment phase, the majority of claimants would become entitled to additional benefit in the form of the work-related activity component.
The personal capability assessment will identify separately people who are so limited by their illness or disability that it would be unreasonable to require them to undertake any form of work-related activity. Those people will be entitled to additional benefit in the form of a support component. They will, however, be able to volunteer to participate in work-related activity and access all the appropriate support available.
For the vast majority — those who are not in the support group — the new benefit will have a clear framework of rights and responsibilities. In return for the additional support provided by the roll-out of the Pathways to Work programme, claimants will be required to attend regular interviews and to complete action plans. There are no plans at present to introduce mandatory work-related activity. However, the Bill contains a provision that would allow the work-related activity component of the employment and support allowance to be reduced if a claimant fails, without good cause, to undertake such assessments, interviews or activity if required to do so.
All claimants will be treated sensitively. However, people with mental-health problems will be treated with particular sensitivity and sympathy. Additionally, there will be safeguards geared to people with mental-health problems. The current gateway to benefit, the personal capability assessment, is known to deal less well with mental-health conditions, not least because, in the years since the assessment was created, there have been many changes to the types of conditions being presented and the available treatment options.
The personal capability assessment is being transformed into a more positive assessment that focuses on what a person remains capable of doing and identifies the help that they need to overcome their problems and return to work. Specifically, the mental-health component of the assessment is being reviewed to ensure that it is up to date, evidence-based and deals effectively with the problems and needs of those with mental-health problems.
The revised assessment will ensure that people with mental-health conditions are better identified and that their problems, needs and the support that they require are correctly assessed. We do not want to write people off; we want to ensure that they get all the help that they need to fulfil their potential. The personal adviser is at the centre of the team, which also draws on the expertise in mental health and other disabilities in the Department for Employment and Learning’s disablement advisory service and the healthcare professionals who deliver the condition-management programme.
Local experience of the Pathways to Work programme suggests that people with mental-health conditions welcome the support and opportunities offered to them and are usually very willing to commit wholeheartedly to the process.
Since 2006, some 260 people have volunteered for the support available, including those with mental ill-health and people with learning disabilities who heard about the Pathways to Work programme from organisations such as Action Mental Health and Mencap.
We believe that engagement with the community and some form of work-related activity will benefit most people. We do not expect that the power to reduce benefits for people who refuse to engage with the help and support on offer will need to be widely used. Experience of the current Pathways to Work areas in which extra conditions have been imposed shows that less than 0·5% of claimants have been sanctioned. Our aim is to encourage and to assist, but it is vital for the fallback position of this sanction to be available where it is absolutely necessary.
The Bill amends existing social security law to ensure that the rights of appeal to an independent appeals tribunal apply to the employment and support allowance. Over time, existing claimants will migrate to the new employment and support allowance. However, the current benefits of existing claimants will be fully protected.
I stress again that the Bill is not about forcing people off benefit and into work. It is about offering people help and support to get ready to return to work, and, in return, expecting claimants to engage with that help and support.
Part 2 of the Bill concerns housing benefit. In particular, it makes provision to simplify the existing housing benefit system; to improve work incentives and encourage personal responsibility for housing choices; and for the introduction of a local housing allowance across the private-rented sector.
The local housing allowance is designed to ensure that the same amount of benefit is paid to tenants in similar circumstances residing in the same area. The intention is to provide a better, quicker service based on simpler rules, while ensuring that people on low incomes can afford a decent home that meets their needs.
The Bill provides a regulation-making power to allow payment to be made directly to the tenant. As I made clear to the Social Development Committee, and during the debate last week to grant the Bill accelerated passage, I will not seek to exercise that power until I have considered the matter further and fully discussed the issues with the Committee.
The Bill also provides for a reduction in housing benefit where someone has been evicted from their home on grounds of antisocial behaviour and who then refuses to co-operate with the support that is offered by the Housing Executive to help them improve their behaviour. Members are all aware of the problems caused by antisocial behaviour. No one wants people to move from one property to another and continuing their antisocial behaviour. Equally, we need to ensure that our efforts to tackle antisocial behaviour get things right.
For that reason, I will only consider bringing that provision of the Bill into force once pilots in 10 local authority areas in England and Wales have been evaluated. The evaluation will cover all relevant areas, including effectiveness, the effect on antisocial behaviour and the impact on housing and homelessness. Furthermore, the provision will cease to have effect on 30 December 2010 unless a further Bill, which provides for it to continue after that date, is introduced.
Part 3 of the Bill contains several measures to improve the administration of social security, including powers to allow greater sharing of information to improve the take-up and delivery of benefits — something I particularly want to happen. For example, where pensioners are entitled to both pension credit and housing benefit, common information on personal and financial circumstances will need to be given only once.
Part 3 also provides more power to tackle benefit fraud by strengthening the rules in relation to the loss of benefit for commission of benefit offences by extending from three to five years the length of time over which previous benefit fraud offences can be taken into account. It will also provide the Housing Executive with clear powers to investigate and prosecute offences relating to other social security benefits where it already has powers to prosecute fraud against housing benefit.
Finally, Part 4 of the Bill contains a number of smaller, but important, measures to correct anomalies in the current benefits system. Those measures include ensuring that recipients of disability living allowance who are around 16 years old do not lose up to three months’ benefit entitlement; and continuing the simplification of the budgeting loans scheme, which enables the social fund to play a crucial role in providing interest-free loans or grants to assist the most vulnerable people — those with no recourse to mainstream credit. Part 4 also contains technical measures on the payment of benefit for bereaved persons, and clarifies the law on payment of disability living allowance and attendance allowance to care-home residents.
The Bill also eases the relevant employer condition, making it simpler for a person who suffers from certain dust-related diseases, including mesothelioma and other asbestos-related conditions, to claim compensation.
The legislation will allow us to harness the power of modern advances in health and employment support, and to foster a society in which there are genuine equal rights and opportunities for all. The Bill is a parity measure, and an important step in the ongoing process of welfare reform. It encourages people into work, while supporting those who cannot work.
The Chairperson of the Committee for Social Development (Mr Campbell): I understand that it is the intention of the Welfare Reform Bill to break the link between welfare and dependency. That is to be welcomed. The Bill provides practical measures to support that aspiration as part of the ongoing process of welfare reform and modernisation of the benefits system.
The Minister and her officials have appeared before the Committee. They briefed us on the Bill’s principles and details, for which the Committee is grateful. As the Minister has outlined, the Bill will introduce a new employment and support allowance to replace the current incapacity benefit. That new allowance will help to support individuals who wish to remain in, or return to, work. The Committee welcomes any efforts to help such individuals and encourages the Minister to consult with the Minister for Employment and Learning on the resources that may be required in order to provide that allowance.
The legislation will also introduce a local housing allowance across the private-rented sector. The Committee welcomes that local element and hopes that it will go some way to alleviating the current difficulties that those who must top up their housing benefit experience.
An associated change, however, will allow local housing allowance to be paid directly to tenants. The Committee is glad that the Minister agreed with its strong reservations on that issue. At our specific request, she gave an unequivocal undertaking to consider the matter further and consult with the Committee before taking any action.
The Committee will pay close attention to how the Housing Executive uses its wider powers to investigate and prosecute benefit fraud. We hope that the introduction of those powers will increase the scope for effective joint working between the Housing Executive and the Department.
The Committee supports measures that will make it simpler for people who suffer from certain dust-related diseases to claim compensation, and indeed, it supports the other provisions in the Bill that clarify existing legislation, thus making it simpler and easier to understand.
Although the Committee will not be able to conduct a detailed examination of the Bill due to its receiving accelerated passage, it will consider the practical implications of welfare reform in the course of its scrutiny of the Department’s work.
Mr Speaker: Before we continue, I remind Members that we are debating the Bill’s principles, not its substance.
Mr F McCann: Go raibh maith agat, a Cheann Comhairle. I welcome the opportunity to participate in this debate. Although the Committee for Social Development agreed to its being given accelerated passage, the Bill by no means had the Committee’s full support. In fact, accelerated passage was only ensured when Committee members were informed that people’s benefits would cease should passage of the Bill be delayed, and after we received a commitment from the Minister that certain clauses would be brought back to the Committee for discussion.
It is my understanding that on 23 January 2007 the Minister voted against the Bill, in that she voted against the wording of a motion that was moved by my colleague from Upper Bann, John O’Dowd, and voted in support of an amendment that was proposed by her colleague from Upper Bann, Mrs Dolores Kelly. The wording of the motion, as amended, read:
“That this Assembly expresses deep concern about the implications of the Welfare Reform Bill, particularly the introduction of a new coercive regime into benefit administration, and its impact on a number of vulnerable groups, especially those people with mental ill health.” — [Official Report, Vol 21, No 14, p421, col 2].
We now have the strange situation where the Minister is putting her reputation on the line by supporting that same legislation, which has reached its Second Stage today.
Perhaps the Minister could explain to the House what has changed in the Bill to warrant her road to Damascus conversion. Although I welcome her commitment to come back to the Committee for Social Development to deal with the issue of housing benefit, I ask her if the clauses relating to housing benefit in the Bill have changed? If the Bill were to be passed in its present form it could lead to many people falling into debt and finding themselves on the street for deciding to feed their families rather than pay their rent.
Has the Minister reviewed the clause on sanctions, which could have a detrimental impact on people’s health and mental well-being if threats to reduce or take away benefits are followed through? Can she guarantee that personal advisers have been given the training needed to assess, and have the experience to evaluate, those suffering with mental-health problems? Will she stand over the opinions of a personal adviser or a GP in relation to a mental-health assessment? Have staff been trained to understand the needs and capabilities of disabled people?
Can the Minister guarantee that clients who attend work-focused interviews, if classed as fit for work, will move into employment, and into jobs that fit their requirements and capabilities? Has she seen recent statistics, which state that fewer than 40% of employers would employ a person with a mental illness? In addition, 75% of employers stated that employing someone with schizophrenia would be very difficult or impossible. Can the Minister say if there would be any way that she could guarantee that those who most need our protection from discrimination and prejudice would be better off were some clauses in the Bill to be passed? Alternatively, is the House setting people up for a fall?
The information that the Minister is relying on in relation to housing benefit was collated through surveys carried out in 18 or 19 towns and cities in England that are completely different from those here. People here are on lower pay, and the cost of living here is greater. Some years ago, it was the norm, in this state, that housing benefit was paid directly to people. The situation was changed to one in which direct payments were made to landlords because people were getting into debt. They found it difficult to control their finances, especially people who were paid at the poverty level, such as those on income support or low earners who struggled to pay their bills.
Rushing to pass all clauses in the Bill would be a mistake. The Department’s insistence that people will lose benefits if the Assembly does not complete the passage of the Bill quickly is an attempt to get it through without any real debate. Members have the power to ensure that people’s benefits are not delayed. However, we also have a responsibility to ensure that, in the rush to get the Bill through, we do not trample over the rights of people who expect us to do right by them — those with disabilities, those who suffer from mental illness and those who live in poverty.
Will the Minister say whether there will be jobs available for all those who attend work-focused interviews? Many people believe that the Bill has little to do with benefits and more to do with forcing thousands of individuals off benefits completely. Let us not be hasty. Let us make sure that we get the Bill right. Too much depends on this, especially as regards the vulnerable groups who rely on Members to make things right for them. Go raibh maith agat.
Mr B McCrea: This is a very sensitive issue. Welfare reform is something that one can get badly wrong; therefore, it is important to strike a balance in matters such as this.
I understand why the Bill is being taken forward under the accelerated passage provisions. However, that rings a few alarm bells with me. I start from the position that there seem to be many more economically inactive people in Northern Ireland than in the rest of the United Kingdom — roughly 30% as compared with 20%.
We must ask ourselves why the difference exists. A very informative report by the Joseph Rowntree Foundation concluded that there are two significant issues.
The first factor is that elected representatives in Northern Ireland are much more aware of the situation and are therefore able to provide the necessary support to people who deserve to receive disability living allowance (DLA). Indeed, many people in other parts of the UK who deserve DLA do not claim it. The issue is therefore not simply one of people in Northern Ireland claiming more than they are due.
The second, and more interesting, point comes from the report’s examination of the various subsections that make up DLA. The report concluded that in every single quota bar one, Northern Ireland is identical to the rest of the United Kingdom as regards perception. The one area where Northern Ireland is different is that of mental illness. The report explored why that was the case. As might be expected, 30 to 40 years of civil war has had an effect. The report found that it is not unreasonable that our society as a whole should suffer considerable mental stress and that a way must be found to deal with that.
I was interested in the Minister’s point about encouraging those with mental illness into the workplace. Prejudice is undoubtedly a problem. Many employers must be encouraged to take on people with a mental illness. Members should note that in New Zealand, for example, 25 times more per capita is paid to tackle such prejudice. However, we must also be careful that people are not pressurised into work for which they are not capable. The reality is that people with a mental illness or a mental disadvantage have different issues than those of us who are more fortunate.
I am pleased to report that the Pathways to Work initiative has been piloted in 14 out of the 35 jobs and benefit offices across Northern Ireland. The Department for Employment and Learning has an interest in that scheme. The initial response in Northern Ireland has been relatively positive. However, there is always a danger of getting excited. In reviewing the work of the Department for Work and Pensions, Rethink, a major mental-illness charity in the UK, recognised that, as yet, no statistical evidence exists to show that the Pathways to Work initiative supports those with a mental illness in returning to work. The situation must be tackled and kept under review. How we treat those with mental illness is a very important part of a civilised society.
There are a number of issues to consider. I shall say what everyone is thinking: many people think that DLA and housing benefit are abused. That perception is not helpful to society, and I welcome the Bill’s moves to address such issues, whether they concern antisocial behaviour or people with recurrent problems who live in Housing Executive homes. Evicting someone from a Housing Executive home can take years. That is absolutely unsatisfactory. It is not that we want to penalise anyone, but a way must be found to reduce the amount of overheads required to manage the systems, because all money must be focused on the front line.
The Ulster Unionist Party is very supportive of the Minister’s proposed reforms in the Bill. We promise to keep the matter under review. In the years to come, we will, no doubt, return to this important issue.The ethos of providing a more positive and individual approach to claimants is also to be welcomed.
People want to work, and the reforms have the potential to help many individuals, while also losing the stigma of being perceived as not wanting to work. The proviso is that people who are genuinely not able to work should not be forced into it. I also welcome any help for people currently moving from benefits into the job market, as there is inadequate support at present to help people move into employment.
However, Government needs to be cautious that the reform is not just a means to move people off benefits into work. It should be borne in mind that Northern Ireland has higher levels of poverty, health problems and unemployment than the rest of the UK.
Incapacity benefit is claimed by 15% of Northern Ireland’s population. People who are on incapacity benefit are generally the most vulnerable in our society in terms of ill health, educational levels, housing status and employability. Quite often they are the people who are least able to come off benefits to get into employment. Government needs to provide meaningful support to them to make the transition into employment a real incentive in economic and self-development terms. The aim should not be to merely remove them from our benefit statistics. To do this there is a need for joined-up services to be put in place right across the benefit, employment and health sectors.
The independent advice sector should be resourced and trained to give effective advice and information to enable recipients to make informed choices about moving from benefits to work. Measures should be put in place to protect people and encourage them to come off benefits rather than to penalise them. An adequate infrastructure needs to be established before a new system comes on stream to support people to move into employment. That infrastructure should include affordable childcare and meaningful job opportunities rather than mere token job placements.
It is fine to say that we need to get people off benefits in order to move them into work, but we must have a safety net to ensure that people have sufficient income to live on in order not to fall into poverty. It is essential that the new system and forms be simplified. Sometimes even elected representatives struggle to help constituents, due to the complexities of the process.
For claimants whose first language is not English, Members can imagine the difficulties in completing such forms. In addition to benefit simplification, the Social Security Agency (SSA) needs to address the issue of bureaucracy to ensure that the transition from benefits to employment runs smoothly, without causing hardship.
Mr Hilditch: I support the Bill at its Second Stage. The Bill has received accelerated passage, and I thank the Minister for Social Development, Ms Ritchie, for coming before the Committee for Social Development to seek support for that process, and to answer questions on the concerns raised by the Committee.
The majority of the Bill is concerned with maintaining parity with the rest of the United Kingdom, which I welcome. There are several broad areas of principle that deserve a mention. The employment and support allowance will replace incapacity benefit and income support on the grounds of incapacity benefit for work on disability. The underlying principle across the entire benefits system should be to target those who are in most need, and to ensure that those who should not be in receipt of benefits are removed from the system. Every Member finds that to be a sore point in their constituency.
The proposed 13-week assessment phase means that claimants will be required to provide medical evidence of their inability to work. Although that may concern some people, the majority of claimants have nothing to fear from any measures that are designed to reduce fraud. Those who cannot provide the required medical evidence within the 13 weeks will have benefit back-paid on receipt of that evidence. I welcome that provision in principle.
Once those who cannot work have proven that incapability, the focus can move on to those who can be helped back to the world of work. That is what the benefit system should be designed to do: it must ensure that people do not become stuck in the benefit trap by showing how they can move back towards employment.
I am glad that the Minister has recognised the Committee’s concerns about housing benefit payment; indeed, several times she mentioned that she shared those concerns. I welcome her assurance that no moves will be made on housing benefit without full discussions taking place and evidence being produced to support any decision. I look forward to the Minister returning to the Committee to discuss the matter.
The proposed amendment to the regulations on certain dust-related diseases will benefit many people. The proposed provision will widen the group of dependants who may make a claim. I am particularly pleased with that proposal; some of my colleagues may remember that part of the campaign for sufferers of such diseases and their families began in my constituency several years ago. Many people suffer from diseases that were contracted as a result of their employment. As well as ensuring that not only can relatives make a claim, making it easier to make a claim against an employer or an insurance company will be a great relief to those who suffer as a result of those terrible conditions.
Although accelerated passage means that the Bill will not be subject to the scrutiny that Committee Stage affords, Members have highlighted several issues. I hope that there will be support across the House to ensure that, as well as parity being maintained, those aspects of the Bill that benefit the community across Northern Ireland will be implemented. I support the Bill.
Mr Brady: Go raibh maith agat, a Cheann Comhairle. Although the Welfare Reform Bill is an important piece of legislation, it is merely a rehash of what has been tried previously. It proposes to change housing benefit with the introduction of a local housing allowance rate. That is calculated according to the number and range of occupiers as well as the locality of the claimant.
Some Members — and the Committee for Social Development — were concerned about the proposal to introduce regulations to allow direct payment of housing benefit to claimants instead of to landlords. That raises an obvious problem in that more money may go into a weekly budget but may not necessarily be used to pay rent. However, the Minister has given an undertaking that until that has been discussed further with the Committee for Social Development, she will not introduce any regulations that will change the current method of payment of housing benefit.
Mr McCarthy: Is the Member aware that the Housing Executive, as I understand, has already notified landlords and, possibly, tenants about a possible change in the payment method? Will the Member accept that if that is the case, the Minister’s undertaking may not be realistic?
Mr Brady: That may be the case, although it is our understanding that the Committee for Social Development will consider that matter further. If the Minister decides not to implement that change, the Housing Executive will presumably be informed.
Tenants will have their housing benefit removed if a possession order has been made against them on the grounds of antisocial or criminal behaviour. Other sanctions can be applied. The Minister has said that those sanctions will not be imposed until pilot schemes have been studied and their results are in the public domain.
Benefit fraud was also mentioned, and it is a recurring theme in social security legislation. Out of £150 million that was lost by the Social Security Agency last year, less than £30 million was lost in fraud. Presumably, the other £120 million was lost through error.
It has been mentioned that the Bill proposes changes to the age conditions regarding entitlement to the care and mobility components of disability living allowance. The proposal is to alter the age conditions from those who are 16 years old to people who are around the age of 16. The Bill also makes welcome proposals to amend the Pneumoconiosis etc., (Workers’ Compensation) (Northern Ireland) Order 1979, to ease the “relevant employer” condition and widen the group of dependants who could make a claim to include, in particular, civil partners.
The main principle behind the Bill is to support and encourage more people in receipt of incapacity benefit to move into employment when they are able to do so. Although some of the reforms are welcome, other provisions in the Bill may create particular problems for people with mental-health issues, who make up approximately 40% of all incapacity benefit claimants. One in six people here will suffer from a medically identified mental-health illness at some time in their life, and recent research has found that almost a tenth of our working population claim benefits for mental health. Those figures are worrying and raise major questions about how the area of mental health should be dealt with.
A large amount of responsibility is to be placed on personal advisers. The Bill obliges a claimant who fails to attend a work-related interview to provide a good reason for that failure within five days. That timescale is too short and must allow for the unpredictable nature of some mental-health problems. Presumably, the Minister will reconsider the timescale.
When the personal capability assessment was introduced in the 1990s, 50% of people were supposed to be taken off benefits — that simply did not happen. A more holistic approach to that assessment is required. Examining doctors must be fully trained and have a thorough understanding of mental-health issues to ensure that the test is applied fairly and effectively. It is essential that proper resources be allocated for that purpose.
Although the move to encourage and support more people to return to work is welcome, many on incapacity benefit will face practical issues. People with mental-health problems still face prejudice and discrimination in the workplace. Recent statistics confirm that less than 40% of employers would employ someone with a mental illness and 75% would not employ someone with schizophrenia. Urgent action must be taken to reduce the stigma and discrimination faced by people with mental-health problems.
Finally, a Cheann Comhairle, parts of the Bill are welcome, but many aspects must be properly resourced and dealt with in a humane and sensitive way. Go raibh maith agat.
Miss McIlveen: I welcome the passing of this important piece of legislation: it is imperative that there is parity between Northern Ireland and the rest of the United Kingdom in such areas. As a member of the Committee for Social Development, I found it of great assistance that the Minister attended the Committee to brief us on the Bill.
Particular aspects of the Bill should be highlighted to the Assembly. The Housing Executive will be given clear powers beyond its current perceived remit to investigate and prosecute benefit fraud. That will provide an effective tool with which to tackle fraud and free up funds that can be distributed to their rightful recipients — the Province’s needy. Fraudsters are a blight on society; they steal from the poorest and embezzle the taxpayer. Therefore, I welcome the provision in clause 45, which extends the period during which time someone convicted of benefit fraud will lose the right to benefit for five years as opposed to three years.
Furthermore, I note the provisions contained in the Bill at clause 31 and, although it is not intended that the measure will be introduced until the pilot scheme in England has been evaluated, it must be introduced without delay if such sanctions are shown to be successful. The public purse should not be used to facilitate thuggery, bullying and antisocial behaviour.
Recipients of housing benefit should be mindful that being part of a society that has at its heart the support and protection of the vulnerable by the payments of benefits means that those receiving the benefits have been assessed as vulnerable. People who have been shown to be thugs and bullies are not vulnerable.
Along with the members of the Committee for Social Development, I happily note the provisions contained in clause 52, which makes important changes to the Pneumoconiosis, etc., (Workers’ Compensation) (Northern Ireland) Order 1979. Any means of supporting those who are suffering from such horrific industrial diseases is to be wholeheartedly endorsed. The introduction of measures to simplify the means by which sufferers can be compensated is laudable.
I have my reservations regarding the payment of a local housing allowance directly to the tenant rather than to private landlords, as outlined in the Bill. Like the Chairperson of the Committee, I welcome the Minister’s undertaking to the Committee on this matter. The introduction of such a measure may have the opposite effect of its intention: instead of encouraging budget management and the paying of bills, it could place pressures on an individual who has fallen into debt and is tempted to pay off that debt rather than pay for his accommodation. The landlord will suffer, and there is the possibility that private landlords will be disinclined to offer accommodation to those eligible for local housing allowance.
The Bill is only the skeleton to which the flesh of ministerial regulations will be attached, and, as a member of the Committee, I look forward to scrutinising the practical effect of the legislation. However, I remind the Minister that some of the main concerns regarding the legislation in Great Britain have been about the impact on those suffering with mental-health problems and the willingness of employers to absorb them into their workforce. I welcome the Minister’s earlier remarks on that.
We must be mindful that regulations will have to be sensitively drafted, so that the most vulnerable in society are not cast adrift from the benefits system. I am happy to support the general principles of the Bill.
Mr Burns: I support the Welfare Reform Bill. As Members of the Assembly, we have a responsibility to do our best for our constituents and for Northern Ireland. There is also a strong need to maintain parity. In relation to the employment and support allowance that will replace incapacity benefit, it is positive that there are work-related conditions that build on the Pathways to Work programme. Will the Minister outline how Pathways to Work has worked so far in Northern Ireland, and will she confirm that her Department is working with the Department for Employment and Learning on that programme?
The Minister has expressed concern about the proposal to pay the local housing allowance directly to tenants, and I share the Minister’s concerns. Increasing the sense of responsibility of tenants might be a good idea, but we must ensure that any possible increase in debt or evictions does not happen.
My primary interest in the Bill is in the provision for dust-related diseases such as asbestosis. The Bill provides for an easement of the “relevant employer” condition, making it easier for people suffering from asbestosis and mesothelioma to claim compensation. We must ensure that people suffering from those diseases do not have any further delays in making their compensation claims. It is encouraging that the group of people eligible to claim compensation will be widened. Those who have found it difficult to identify their former employers will now find it easier to make claims.
There are many reasons to maintain parity. Social security is an area with a long-standing policy of parity, as provided for in the Northern Ireland Act 1998. I support the Bill.
Mrs McGill: Go raibh maith agat, a Cheann Comhairle. The Social Development Committee agreed to this Bill’s receiving accelerated passage because it was told by officials, and by Minister Ritchie, that claimants would suffer if the Bill were delayed, and that there needed to be parity with England, where the counterpart Bill was passed in May. However, there was very strong resistance to the Bill in England.
The irony of that is that there was so much resistance precisely because of the suffering that the Westminster Welfare Reform Bill would cause if passed.
The Coalition Against the Welfare Reform Bill (CAWRB) protested against that Bill at the Labour Party conference in September. It demanded that the British Government rethink their welfare reform policies and recognise that the poor, the vulnerable, the disabled and the genuinely unemployed would be seriously disadvantaged and punished if the Bill were passed. The Bill was variously described as unjust, draconian and unworkable.
I know that we are debating the general principles of the Assembly’s Welfare Reform Bill, but clause 31 deals with the loss of housing benefit following eviction for antisocial behaviour. We all accept that antisocial behaviour is a scourge; therefore, Governments must tackle its root causes. However, instead of doing so, they rely on reactive punitive measures; indeed, Basil McCrea referred to penalties. I agree: every single case does not warrant penalty.
Clause 31 proposes that the Housing Executive be given the power to reduce housing benefit by 10% for the first four weeks, 20% for a further four weeks, and eventually by 100% for a period of up to five years from the repossession of the accommodation. Will that encourage someone who has been evicted to behave positively? I do not think that it will. Where will the evicted person live?
Clause 31 proposes that the sanction be withdrawn or reduced depending on the Housing Executive’s assessment of whether the evicted person has co-operated with rehabilitation, and I accept that that has been addressed. A lower rate of benefit reduction will apply if families are deemed to be in hardship. However, does that make the sanction all right? A household may experience hardship if, for example, someone is seriously ill, pregnant, has caring responsibilities or there are children. Despite the lower rate, however, a reduction would still apply.
The Housing Executive can act with flexibility: sanctions can be stopped or restarted. That must be a bureaucratic nightmare. I note that the removal of housing benefit for antisocial behaviour will not be introduced until the piloting of the sanction in England has been evaluated. Indeed, the Minister referred to that pilot.
I thank the Minister for giving the DSD Committee the commitment that there will be no changes to housing benefit or the method through which it is delivered. However, given Kieran McCarthy’s contribution, I wonder whether that commitment still stands. I am sure that we will hear from the Minister about that at a later stage.
Accelerated passage has denied the Committee the opportunity to discuss fully the implications of the proposed changes. That is not good for democracy, and in this case, it would have helped if the Committee had been able to discuss the Bill.
We need a Minister who is not only a Minister for Social Development but who has a social conscience. The Minister gives the impression that she has a social conscience; however, parts of the Bill do not reflect a social conscience. Go raibh maith agat.
Mr Craig: I welcome the Welfare Reform Bill. I note with great interest that there is more enthusiasm from some quarters of the House today than there was when the original Bill was debated in the Transitional Assembly. Perhaps some of those parties have managed to make a leap between grandstanding in opposition under direct rule and the realities of life under devolution.
I welcomed the Minister’s attendance at the Committee for Social Development to provide more details on the issues that are contained in the Bill. Parity between Northern Ireland and the rest of the United Kingdom is crucial. I welcome the fact that other Members seem to be thinking along the same lines. I support the fact that the Bill ensures that Northern Ireland is kept in line with Great Britain.
The issue that received most attention in the Committee was the possible introduction of a local housing allowance. Although the Minister gave a welcome assurance that it would not be introduced without further consultation with the Committee, it is worth a mention in the debate. There is great concern about a change in the direct payment of housing benefit away from the landlord to the tenant. Tenants can experience great pressure when deciding how best to spend their benefits, particularly when at their most vulnerable. The direct payment of housing benefit to tenants would put those people under further pressure. Recipients of housing benefit are among those with the lowest incomes, and there are many competing pressures on their limited budgets. Although there is the argument that people should be able to budget for and pay their rent when in work, the direct payment of housing benefit to tenants will only put increased pressure on those recipients, who may have to choose whether to use that money to pay their rent or to heat their homes in order to keep their children warm. At times, that may put them in an almost impossible position.
My hon Friend, the Chairman of the Committee for Social Development, stressed the importance of that issue to the Minister and ensured that the Committee was given her commitment that further consideration would be given to it. I hope that she will stand by that commitment.
Measures to reduce benefit fraud will be welcomed by the many honest benefit claimants in Northern Ireland. The Bill will encourage those who are in receipt of benefits to go back to work, which can only be good for the economy. Northern Ireland receives taxable income contributions of £2·3 billion. As a Committee member, I was shocked to learn that £2·25 billion of that money is spent on benefits. The long-term effects of that must be examined. Northern Ireland’s economy cannot sustain itself under the present circumstances. To enable the economy to grow, the Assembly must assist people to get back to work while ensuring that those who cannot go back to work are looked after.
I caution the Minister against the introduction of direct payment of housing benefit to tenants without detailed examination of its effects. However, I support the broad thrust of the Bill, and I urge the rest of the House to do likewise.
Mr A Maginness: Northern Ireland is in the most curious situation of having one of the highest levels of people who are economically inactive throughout these islands: its level is certainly higher than that of any region of the UK and possibly of the Republic as well.
At the same time Northern Ireland has a serious skills shortage. The problem of economic dislocation in the workforce and the high numbers who are economically inactive must be addressed thoroughly and seriously. Part of the Bill is intended to do that.
People have become economically inactive, are in a benefit trap, dependent on benefits and unlikely to get out of that situation. We cannot sit back and allow that to continue indefinitely. It is not good for those people, for society in general or for the local economy. All of us in the Assembly want to see the economy reshaped and reformed, so that it responds to the needs of the community at large.
The Welfare Reform Bill is part and parcel of an attempt to address that situation. Others have pointed out that it is a parity measure, and it is important that the Assembly supports it.
Most of us in the Chamber would prefer to legislate for social welfare ourselves, and we might make a better job of it, going by the interesting ideas that have been introduced this morning. However, that is not possible because the need for parity has been accepted, and that will continue indefinitely.
The SDLP accepts the financial realities. A figure of £2·5 billion was quoted as being spent on benefits in Northern Ireland. That is a huge amount of money; however, as we must maintain parity, we have little option but to accept the legislation.
As with most legislation, there are good things and bad; however, the main thrust is good. If we are going to make economically active those who are inactive — and not all of them are benefit recipients, though they are a goodly number — then we have to employ new means of encouraging people to work. The main vehicle for that is similar to the Pathways to Work approach, which is a good thing.
My colleague Fra McCann, who spoke this morning, and I sit on the Employment Services Board (ESB) in Belfast. That is a community-based organisation, financed partly by the Department for Social Development — and I am grateful to the Minister for continuing that finance. I am sure that Mr McCann agrees with me. Essentially, what the ESB does is precisely what Pathways to Work does, but on a community level. People who are disconnected from the statutory agencies are brought into to a community context where, by talking to them, advising them and interviewing them, they are encouraged back to work. In fact, I used the wrong phrase — some of those people have never been in work in the first place. The ESB aims to encourage them to think differently, about working instead of being on welfare benefits, and about getting out of that culture of dependency. Mr McCann would agree with me that that approach is working in West Belfast.
Mr F McCann: I agree with Mr Maginness, with whom I sit on the West Belfast Employment Services Board (ESB), which is trying to make a difference. However, the difference between the ESB and Pathways to Work is that the board’s work has been done in a stronger community setting and in a more community-friendly manner. For many people, the barriers that have been mentioned exist in the benefits offices, which seem intimidatory. That dissuades people from going to benefits offices and leaves them on the back foot.
Mr A Maginness: Those arguments will continue after the passage of the Bill. Many will say that they want a more innovative and friendly way of dealing with people who are out of work. I am sure that the Department for Social Development will take those points on board, deal with that matter and become much more friendly in dealing with people in that situation.
The differences among Members are not about the substance of what is intended by the Bill, but the methods by which some of the delivery will take place. We must be constructive in debating the ways and means of proceeding. Unfortunately, we cannot have an Employment Services Board in every part of Northern Ireland. We all would love that to be the case, which would lead to a much friendlier, more community-based approach. However, the realities of life are such that that measure cannot be translated to a wider scale.
Mr McCann and others have said that the Department must be sensitive to people’s needs, including those who have real — particularly mental — disabilities. I accept the Minister’s assurance that a sensitive approach will be taken when dealing with people with those difficulties. It is important that DSD works out ways and means to engage with people, over and above the normal, more bureaucratic methods. I would welcome that, and I hope that the Minister could offer assurance on that.
We have had the experience of the Pathways to Work programme, which was offered by 14 benefits offices. The outcome of those experiments and that experience will be important in informing this debate, and I look forward to that.
I do not wish to get into the detail of clause 31, but I understand why people say that they object to punitive measures and do not wish to see people, effectively, left without any support in the community. However, antisocial behaviour is an appalling problem in many housing estates and neighbourhoods throughout Northern Ireland. It may be only one family that is causing the problem, but that has a ripple effect. It is not just the immediate neighbours who suffer; it is the whole neighbourhood. If we do not hold some type of sanction on people, over and beyond what exists at the moment, how are we going to control effectively such situations?
Such measures as sanctions are possible with the Bill; however, the Minister has assured us that she will examine the pilot schemes that have taken place in Britain. That should inform our debate and it would be useful to see exactly what happens in Britain. If there is no threat of sanction, will people listen? Will behaviour improve? We are all human beings and there must be some sanctions at the stage when behaviour is completely out of hand.
That provision is not intended to deal with people who are simply negligent; rather, it is to cope with a hard core of completely antisocial people who defy the normal rules of society.
I hope that the Department will seriously consider the provisions relating to the mentally ill, and that the Minister will assure the House that that issue will be dealt with in a sensitive manner.
I welcome the provisions relating to those suffering from asbestosis and other diseases. I know, from professional experience, that that will assist people to bring claims for compensation by helping to overcome the evidential difficulties in establishing claims related to events of 20, 30 or, in some cases, 40 years ago.
Mr McGlone: Go raibh maith agat, a Cheann Comhairle. I have two brief points. I ask the Minister to clarify her position on the increasing tendency for the Department, in establishing the personal capability assessment (PCA) and eligibility for disability living allowance, to require proof of professional psychiatric intervention in order to establish that a person suffers mental ill health. That appears to be a growing issue; and I am concerned at that trend. I am anxious that provision of that proof should not become a prerequisite. In many cases, a social worker or a general practitioner is the person who is best apprised of the mental-health difficulties that an individual suffers.
It is a misnomer to call the programme a pathway to work, since, for many, it does not lead to work. People want to know whether it will be financially disadvantageous for them to return to work, even under the present inadequate benefit system. We must grapple with that issue, which impinges on education, job skills acquisition, further education and benefit entitlements. We must take a longer-term view on that matter. For many, the economic calculation does not stack up. In the longer term, a cross-departmental approach must be taken to develop a better means of bringing people back to work, rather than tackling social security aspects in isolation. Members have no wish to rubber-stamp policies that will, in practice, exacerbate poverty, rather than tackle its root causes.
Ms Ritchie: I have listened carefully to all the points made by Members during the debate. I will address their concerns. At the outset, however, I stress that the Bill, and its accelerated passage, was supported by all members of the Executive.
I must also address the issue of parity with the rest of United Kingdom. I acknowledge that that principle is, to some extent, frustrating to an Assembly that is keen to pass its own laws and form its own policies. Both as a Minister and as a Member of the Assembly, I would like to be able to do that.
However, I caution Members that Northern Ireland’s social security system is not self-financing. The cost of paying benefits in Northern Ireland is heavily subsidised by Great Britain. During the debate on accelerated passage for the Welfare Reform Bill on Monday 4 June, I said:
“For example, in 2005-06, to meet its benefit obligations, the Northern Ireland National Insurance fund needed a transfer of £185 million from the Great Britain National Insurance fund. In the same period, expenditure on non-contributory benefits, which are demand led and financed from taxation revenue, was more than £2·26 billion. The funding depends on parity. Therefore, when Members ask what reason we have for maintaining parity, the answer is that there is approximately £2·4 billion worth of reasons.” — [Official Report, Vol 22, No 8, pp261-2].
Those points must be made. Some Members have used their misconceptions about the Welfare Reform Bill for party political coat-trailing purposes.
I have a social conscience, and I firmly believe in the principles of social justice. I come from a family that worked extensively with people who suffered from mental illness, so I have always been aware of the principle that people come first.
Some Members: Hear, hear.
Ms Ritchie: I now move on to the concerns that Members expressed. I am grateful to the members of the Committee for Social Development and its Chairperson, Mr Campbell, for their support of the Welfare Reform Bill, and I look forward to working with them over the coming months.
Fra McCann mentioned my “Damascene conversion”, but it appears that the road to Damascus is very crowded now. [Laughter.] However, having explored the issues thoroughly with my officials, I am reassured about the implementation of the Bill’s provisions. My Department’s aim is to support and encourage people with mental-health conditions, and to treat them sensitively, not to impose sanctions on them.
Full account of the fluctuating nature of certain mental-health conditions will be taken, because we must respect the fact that people may be well at certain times and less well at others. We must be particularly sensitive to that. I fully empathise and sympathise with people in that situation. For example, more than 20% of interviews with people suffering from a mental-health difficulty are deferred due to the fluctuating nature of their illnesses. Personal advisers will be fully trained to assist and support people with mental-health problems.
I have already assured the members of the Committee for Social Development that I will discuss the issues associated with direct payment with them before we move ahead. I thought that I had made my position clear, but some people may have chosen — again for party political reasons — not to listen.
The Executive Committee, including Fra McCann’s colleagues, endorsed the Bill. I did not hear any dissent on that day. Likewise, the members of the Committee for Social Development, including Fra McCann, unanimously supported accelerated passage for the Bill. Furthermore, since the introduction of the Pathways to Work programme —
Mr F McCann: May I make a point of information in order to clarify the position?
Ms Ritchie: I wish to continue.
Mr F McCann: The Committee for Social Development was told —
Mr Deputy Speaker: Order. Please address your remarks through the Chair.
Mr F McCann: I apologise, Mr Deputy Speaker. The Committee for Social Development was told — [Laughter.]
Mr Deputy Speaker: Order.
Mr F McCann: The Committee for Social Development was told that accelerated passage was required; otherwise the payment of benefits would be affected. That was why I, and my colleagues on the Committee, went along with it.
Ms Ritchie: I thank Mr McCann for his intervention. However, I had already explained the principle of parity and the financial reasons for driving the Bill through by way of accelerated passage. As the Minister for Social Development, I want to ensure that nobody will be worse off financially as a result of the Bill. That was the point that the members of the Committee for Social Development wanted me to take on board.
Mr Campbell: Will the Minister confirm that, when she spoke to the Committee for Social Development, the circumstances and rationale for seeking accelerated passage for the Welfare Reform Bill were exactly the same as the circumstances and rationale in the Assembly today?
Ms Ritchie: I thank the Member for making that point. I agree fully with him. The conditions remain the same. Therefore granting accelerated passage was vital, as is the Bill’s content. That is why, because of the principle of parity, we must move forward.
Since the introduction of the Pathways to Work programme in October 2005, more than 790 employers have recruited those in receipt of incapacity benefit.
Dr McCrea referred to mental health. I am well aware of the mental-health issues. Indeed, they happen to be one of the legacies of the Troubles. There is no intention to force people, particularly those with mental-health problems, into work if they are not ready to do so. I agree fully that we must focus our energies on front-line services.
Anna Lo referred to language difficulties. My Department is aware of such difficulties and will take them into account as we implement the employment-support allowance and the work-related activity requirements. I can also assure Ms Lo and the Assembly that the Bill is not about benefit statistics but about genuinely wanting to help people to realise their potential.
Mr Brady referred to mental-health problems and the role of personal advisers. I emphasise once more that, since the Pathways to Work programme was launched, more than 790 employers have provided work to those on incapacity benefit. Departmental disablement-employment advisers and Health Service professionals support my personal advisers in assessing needs. GP advice is sought if necessary. Personal advisers are trained in how to recognise the impact of mental-health conditions. I assure the Assembly that they receive a high level of training.
I thank David Hilditch and Michelle McIlveen for their broad support of the Bill’s principles. Once again, I have noted the concerns expressed about the proposal to pay housing benefit directly to tenants, and I hope that my reassurances during this Second Stage debate will go some way towards allaying those concerns. I have made it clear that, until I have discussed the issue with the Committee, I will not invoke regulations or introduce commencement Orders. To do so, I must be absolutely satisfied, and, at present, I have grave reservations and concerns.
Mr McCarthy: This point returns to my earlier intervention. Over the weekend, I had in my hand a letter from the Housing Executive that advised landlords that, come 1 April 2008, housing benefit would be paid directly to tenants. Will the Minister confirm or deny what is going on?
Ms Ritchie: I will make the position clear again. I sought advice from the Housing Executive on direct payments. In its advice to me, the Housing Executive said that it wanted housing benefit to be paid directly to landlords.
Mr McCarthy: Hear, hear.
Ms Ritchie: In light of Mr McCarthy’s intervention and other related comments, I will raise those issues with the Housing Executive. As Minister, I will not invoke the regulations for direct payments or introduce commencement Orders until I have gone back to the Committee. Like members of the Committee, I must be satisfied that such a system would be a success. At present, I have no reason to believe that it would be a success.
Thomas Burns referred to the Pathways to Work programme. I hope that I have reassured him of its success.
Claire McGill referred to anti-social behaviour orders (ASBOs). Her concerns about tenants’ being evicted for antisocial behaviour encapsulate my reasons for wanting to study the outcome of the pilots being run in England. Those have to take place first. Nor will the sanctions be introduced until a further Bill is brought before the Assembly. I thought that I had made that clear this morning.
I am grateful for the support of Mr Craig, and I hope that my reassurances on housing benefit have allayed his concerns.
Alban Maginness gave some statistics and supporting arguments. I can also provide some statistics: in Northern Ireland, 10·7% of the working-age population is economically inactive due to ill health and disability, compared with the UK average of 7%. Everyone must move forward to help people reach their potential. We cannot consign so many people to a life of benefit dependency. The Department is asking people to engage in some work-related activity, but it is not forcing them into work, because I am mindful of people with severe disabilities and mental ill health, and of the periodic impact that that poor mental health can have on their lives and situations.
I guarantee Patsy McGlone that no one who moves from incapacity benefit to employment support allowance will be worse off. There will be provision for any individual who tries to go out to work but is prevented from so doing due to disability or illness — which can happen, as Members know — to return to the higher benefit rate, rather than having to start again. All evidence will be taken into account, but the personal capability assessment is an objective assessment that is carried out by specially trained healthcare professionals. Mr McGlone asked about disability living allowance; I will have that investigated and respond to him in writing.
I am sure that there are also concerns about people leaving care and the need for a joined-up response across different sectors to facilitate their successful reintegration into society. I will draw to the attention of the Health Minister the comments that were made today. Gregory Campbell, the Chairman of the Committee for Social Development, and other Members mentioned the need for discussions with the Minister for Employment and Learning about the requirement for resources to be invested in employment and training. I am fully aware of that, and I will be having discussions with the Minister. I have informed him of my concerns on that matter, and we have talked about them and hope to make progress.
I hope that I have addressed all the points raised today. I will read Hansard carefully, and if any Member has raised a matter that I have failed to address or that needs to be dealt with in more detail, I will respond to him or her in writing. I commend the Bill to the Assembly.
Question put and agreed to.
That the Second Stage of the Welfare Reform Bill [NIA 1/07] be agreed.
Mr Speaker: I remind Members, though reluctantly, that there is no time limit on speeches.
The Minister of Finance and Personnel (Mr P Robinson): I beg to move
That the Second Stage of the Budget Bill [NIA 3/07] be agreed.
This debate follows the Bill’s First Stage, which took place yesterday, and the Supply resolution for the 2007-08 Main Estimates, which was also considered and approved yesterday.
The Bill can be given accelerated passage because the Committee for Finance and Personnel has confirmed that, in line with Standing Order 40(2), it is satisfied that there has been appropriate consultation on the public expenditure proposals contained in the Bill. That condition has been met and confirmation was given in a letter, dated 23 May 2007, from the Chairman of the Committee for Finance and Personnel to the Speaker. I welcome the Committee’s assistance in this matter.
The purpose of the Bill is to give legislative effect to the resource Estimates approved through the Supply resolution passed yesterday. Copies of the Main Estimates volume, the Budget Bill and the explanatory and financial memorandum have been made available to Members. However, for the benefit of Members, I wish to summarise briefly the main features of the Bill in accordance with the nature of the Second Stage debate envisaged under Standing Order 30. The principle of the Bill is to authorise the use of resources totalling £7,922,535,000 by Departments and certain other bodies and the issue of £7,079,776,000 from the Northern Ireland Consolidated Fund in respect of the Main Estimates for 2007-08. Those amounts are additional to the Vote on Account passed at Westminster in February 2007.
I emphasise again that the Executive have adopted the financial allocations for 2007-08, as originally set by the Secretary of State for Northern Ireland prior to the restoration of devolution. As I said yesterday, although this is not ideal, and the Executive will wish to review the plans in the longer term in the context of their own priorities, it represents the most pragmatic and sensible way of ensuring the continued and uninterrupted provision of public services.
The Executive will also have an opportunity to review spending plans, particularly in the context of any emerging flexibility, through the normal in-year monitoring process. Any and all reallocations of funding will be made in accordance with the Executive’s own priorities, rather than those used by the previous direct rule ministerial team.
The Assembly has important responsibilities in this area, and I was most interested to hear the views of Members during yesterday’s useful debate. The nature of those debates means that they are wide-ranging — that is important because financial provision is fundamental to each of our public services. I welcome the interest that was demonstrated by Members on those issues yesterday. I recognise that, as Members had a full opportunity to speak on those matters yesterday, there is unlikely to be a long debate today. However, I will be happy to deal with any of the points of principle that may arise.
The Chairperson of the Committee for Finance and Personnel (Mr McLaughlin): Go raibh maith agat, a LeasCheann Comhairle. In writing to the Speaker on 23 May 2007 to confirm the Committee for Finance and Personnel’s decision to support accelerated passage, I also addressed the context in which the Committee made this decision. At its meetings on 16 May 2007 and 23 May 2007, the Committee was briefed by senior officials from the Department of Finance and Personnel on the Budget Bill and on the related Main Estimates, which contain the Department’s detailed spending plans for the financial year 2007-08.
The Committee was informed that, because of the timing of restoration, the Assembly and the Executive are, in effect, inheriting a direct rule Budget, which requires Assembly approval. This approval provides the legal authority for the balance of resources and associated cash requirements, as detailed in the Main Estimates, which were debated and voted on yesterday.
The Bill would normally mark the end of a process, lasting approximately 18 months, during which the Assembly — and especially its Statutory Committees — would be extensively consulted by Departments and the Executive on the preparation of the annual spending plans.
Although the opportunities for the levels of consultation that would normally have occurred in the annual Budget cycle did not exist under direct rule, the Committee received clarification on a range of issues in respect of the 2007-08 Budget and on the arrangements for consultation with the Assembly Committees to be included in the annual Budget process in the future.
The Committee is aware of the consequences for departmental spending and the potential effect on front-line services should the Bill not reach its Final Stage by 3 July 2007. It was in that context that the Committee declared that it was satisfied that there had been appropriate consultation on the public expenditure proposals in the Bill, in accordance with Standing Order 40(2). At its meeting on 23 May, the Committee agreed that the Bill should proceed with accelerated passage. I support the motion. Go raibh míle maith agat.
Mr McNarry: I look to my left at the crew of the DUP’s starship Enterprise — and a fine-looking bunch they are too. Surely even the DUP’s most travelled voyagers will admit that going where no unionist has gone before takes a lot of fuel. Indeed, the DUP leader was quoted in the ‘Belfast Telegraph’ on 14 March this year as saying:
“There is no use putting a beautiful engine on the road and saying, ‘Here is devolution, here is a wonderful form of Government’ if there is not the money to pay for the fuel, the fuel to run that engine.”
That was only a few months ago, and the cost of fuel has fluctuated, as have the DUP’s promises and pledges.
Here we are, debating the Second Stage of the Budget Bill. To put that in context, let us return to 2004 when Ensign Storey and Chief Engineer McCrea were just getting used to party statements that moved along at warp 3. How they will greet the Budget Bill remains to be seen. No doubt, we will hear.
However, in September 2004, the now Minister of Enterprise, Trade and Investment, Mr Doods, told the ‘News Letter’ — and this is good stuff:
“To underpin stability we are proposing an economic package, a peace dividend, to give Northern Ireland a good start to any return of devolution.”
Mr Dodds was soon followed in the ‘Belfast Telegraph’ in December 2004 by the now Minister of Finance and Personnel, who was speaking after a party delegation had met the then Secretary of State, Paul Murphy. Mr Robinson said:
“The whole idea of a financial package for Northern Ireland in the event of a comprehensive settlement was initiated by the Democratic Unionist Party and first publicly mooted by myself in a speech to the Small Business Association in Dublin back in September.”
What he said in Dublin, he failed to say when presenting his Budget Bill to this House in Belfast.
Way back, the DUP’s party policy compass was set in the direction of going where unionists had never gone before and taking the crew of the DUP starship Enterprise on a journey that it might never get over, let alone recover from. By 2006, the great negotiators — the strong men whom members of the party could trust with their money — had moved from warp three and were hurtling along at a roller-coaster speed of warp six.
“We are star trekking across the Province,” was the DUP cry. “There are Klingons in the east wing now, Ian. Yes, they are Klingons, Ian, but not as we know them. They are republican Klingons, and they are everywhere. Commander Worf McGuinness is on the bridge with his hands on the controls, Ian. Our own Mr Spock has taken over the ship’s arts and culture activities, and Lieutenant Uhura, God bless her, is in charge of the environment. The fellow we need to build new roads is a right trekker. He is not sure whether he is here or there, and the rest of us are not sure either, Ian.”
Let us hold fast at warp six — let us not get ahead of ourselves. Let us stop for a while in 2006, when the DUP declared that it would take the finance portfolio. The DUP declared that it would prepare for a Budget Bill in June 2007 and that it had over a year to show London who the bosses were in Ulster. Who would have thought, after what the DUP said about financial and fiscal imperatives throughout 2006 — indeed, right up to only a few weeks ago — that we would be witnessing a DUP Minister of Finance and Personnel delivering the Second Stage of a direct rule Budget Bill today?
Direct rule is still laying down the terms and conditions. That is no inheritance. That is how Gordon rolled over Peter — not once, not twice, but three times.
Who encouraged the bravado behind crowd-pleasing spending? Who delivered such rashly arrogant assurances that only served to raise the expectations of the people; and who disappointed them and retreated from stargazing election promises? The DUP junior Minister — one of the “I am no pushover” financial negotiators — in September 2006, when he was speaking at a meeting of the Subgroup on the Economic Challenges facing Northern Ireland, said:
“Before the rubber hits the road, we need to get a signed-up deal on finance with the Government. What would be on the blank page of that deal? We must identify the critical issues so that, when we do put our foot on the pedal, the car goes in the direction that we want it to go”. — [Official Report, Bound Volume 20, pSG125, col 1].
If one attempts to factor that statement into the Budget Bill, it simply will not go.
On 30 October 2006, Mr P Robinson, when speaking to the Preparation for Government Committee about the financial package, said:
“If the package is zero, there will not be a deal. The package is an essential ingredient as far as we are concerned. We are not going to the Chancellor to give us something to keep us happy. If we do not have a decent package, we are not going forward.” — [Official Report, Bound Volume 20, pCPG494, col 1].
Where are we going with this Budget Bill?
On 1 November, speaking before the political parties met with the Chancellor at Downing Street, Mr Robinson said very publicly that the financial package was:
“a necessary precondition for any restoration of devolution. Unless the financial package is satisfactory, then there is little benefit in any return of devolution.”
Where is the benefit in this Budget Bill?
On 15 February 2007, while we were still at warp six, the ‘News Letter’ told its readers that DUP sources said that the financial package was a “deal-breaker”, and that if the money for devolution was not enough, there would be no Government. They also said that there was no point in setting up a Government to fail because the Government need the tools and resources to succeed. Which deal did it break — are we not in a devolution situation now?
What is this Budget wizardry about? How did the DUP go into Government when it is clear that its members have even broken promises that they made to themselves? How can they present this Bill today when they said in their manifesto:
“If a satisfactory financial package is not secured now, it is unlikely to be obtained after devolution returns when the pressure is off the Government?
When did you take the foot off the pedal, Ian Junior? When did the pressure stop?
The DUP stated:
“If a satisfactory package is not secured now”.
My oh my — are we to believe that a satisfactory package has been secured? Does the DUP believe it, or is it unable to admit that it has been knocked over, and that there is no package, satisfactory or otherwise, to be delivered?
The DUP’s own words in its own manifesto — in its commitment to the electorate — stated that without a package before devolution:
“it is unlikely to be obtained after devolution”.
Does the DUP stand by that statement, and would its Members tell the House that that is their view?
Devolution has returned, and yet there is no sign of a satisfactory financial package in this Budget. Indeed, judging by this Bill there is little prospect of it, and as far as Gordon Brown is concerned, he will move into 10 Downing Street in two weeks time, giving these great negotiators nothing.
Do not get me wrong, the UUP knows all about roller coasters. Whereas Klingon ships have cloaking devices, I am afraid to say that the Klingons that we met did not know when to remove their cloaks of deceit and sleight-of-hand tactics. As for broken or shattered promises, we have experiences of Government that say little for those whom we encountered. It is not enough of an explanation for Dr Paisley to say, as he was reported to have done, on 6 May, that:
“he was disappointed with the negotiations and that Mr Brown should not take the local parties for granted.”
The script was added to on 7 May — as Members might recall — when the ‘News Letter’ quoted Dr Paisley taunting democrats by saying:
“All we have to say is, ‘all right have your little pantomime on Tuesday but we’ll not be there’.”
Well, he was there. The very next day, on that Tuesday, the pantomime curtain was rolled up and the pantomime performed, with both Mr Paisley and his deputy playing leading roles in that “Come into the parlour” scene, in which Tony, Bertie and Martin were treated to tea and cakes.
This House is no pantomime set, nor should we ever allow the impression to be given that we do not mean business; so let us be businesslike. Let us be open and transparent by admitting — more than people have been prepared to admit — that, in 2007-08, all Departments will struggle to live up to expectations; cuts will be made; water charges will not be resolved; many improvements will not be made; and expectations will be lowered. That is what the Budget will deliver.
Much has been made of some people’s superior negotiating skills — the point was rammed down our throats — but they have been found out. Those who claimed that a financial package was an imperative and a deal-breaking condition for going into or staying out of Government have singularly failed to deliver. That has been exposed today. However, we need to tell the people not about the failures, but how we intend to make headway despite those failures. That is what we expect to hear today about the foundations that we hope will be laid in the Budget Bill. The next time that a devolved Minister of Finance presents Budget proposals to the House, he or she should also come with their position on the line.
Last October, like all my colleagues on the economic challenges subgroup, I agreed with Mitchel McLaughlin when he stated:
“A clear demand is emerging for the Government to put their money where their mouth is and create a level playing field for us, the upcoming Assembly, and a future Executive. They should give us a chance to deliver a Programme for Government and not destroy us before we start.” — [Official Report, Bound Volume 20, pSG 172, col 1].
That was the challenge that was laid down for any Minister introducing a Budget Bill.
In October, Edwin Poots — who is now Minister of Culture, Arts and Leisure — made sense when he rebuked a member of the Preparation for Government Committee by saying that the Member in question
“seems to have a defeatist attitude before we go to the Chancellor. I am quite hopeful that we will get a package. If we get zero, all the parties should withdraw, including those who were sent forward to negotiate in the appropriate manner.” — [Official Report, Bound Volume 20, pCPG 494, col 1].
However, we got zero, and some parties were withdrawn. That was another way of excluding people to make way for Peter Robinson alone, or for Ian Paisley and Martin McGuinness together, to conclude the negotiations. The truth is that not once or twice but three times they failed to negotiate successfully a financial package, without which this Budget Bill has little relevance to our people.
Having begun with a comment from Nigel Dodds from September 2004, let me finish with another of his comments — taken from the DUP website — from no later than 23 May this year, when reality was perhaps finally dawning. He said:
“It is absolutely essential that the right economic and financial package, which was promised to the people of NI, is put in place so as stability can be achieved in Northern Ireland.”
I agree. That is Mr Dodds’s most realistic statement for a long time. That statement means that his colleagues surely need no longer be in denial and can move on from the blame game that they want to continue playing. This situation is not Gordon’s fault; this is the devolved Minister of Finance and Personnel’s first Budget Bill. A financial package was indeed promised, but it was not promised by the “giver”. The package was promised by the “askers”, who became the “demanders”, then the “negotiators”. Ultimately, however, they have become the losers, and we have all lost as a result.
Mr O’Loan: Members will be glad to hear that the duration of my speech will not emulate that of Mr McNarry. Its content may also differ somewhat. As the Minister of Finance and Personnel said, most of the issues were thrashed out yesterday.
I want to take this opportunity to wish Ministers well. I know that they will all approach the task of discharging important public functions seriously. Everyone will benefit from that.
The Department for Social Development’s budget will be over £1·8 billion, and the Department of Health, Social Services and Public Safety’s budget will be £1·9 billion. Those are large sums of money.
I do not want to pre-empt this afternoon’s debate on industrial rating, but I wish to comment briefly on the issue. This year has seen a lower income from industrial rating than had been planned, and I have no doubt that provisions have been made to allow for that. All parties will have to consider the effects of the future controlling of industrial rates.
The budget for the Northern Ireland Authority for Utility Regulation is £272,000. I was struck by that figure. That office is crucial, and we could all learn a lesson from its relatively small budget. Consumers and citizens are seriously under-represented in the public process. That situation ought to be redressed, and the Minister and Members should think hard about the development of that issue. Recently, the Consumer Council has made huge achievements, which, in the context of the Budget, were done at a very small cost.
The important health, education and social security sectors need more, rather than less, consumer and citizen representation. An independent person to deal with complaints should also be factored in; elected representatives should not see that as an arrogation of their democratic prerogative — quite the opposite, in fact. Such a position would benefit citizens and assist Members as we make policy, legislate and allocate resources.
During yesterday’s debate on the Main Estimates, my party leader referred to a revenue regulator. The Minister responded, if not lightly then briefly, that he exercises the role of a revenue regulator. However, there is more to it than that. Independent bodies, as well as elected representatives, play a significant role in representing the consumer.
They are not a threat to our position, but rather an assistance. Considering the myriad measures that have financial implications for the public, it would benefit us for an independent body to consider the issue. That small cost would be of benefit to us. I urge Members and parties not to dismiss that idea but to consider it further.
Dr Farry: Yesterday, the Alliance Party supported the Supply resolution, albeit with a heavy heart; we will do so again today with the Second Stage of the Budget Bill. There is a need to ensure the continuation of services in Northern Ireland, but my party accepts that it is an inherited Budget from direct rule Ministers. That said, however, it is also a flawed Budget. No Member in this Chamber should be under any illusions about that.
In line with the general principles of the Bill and the amount that is being drawn down from the Consolidated Fund, we must be conscious of the interaction between the size of our Budget and the Northern Ireland economy. The subvention from the UK Exchequer is almost £7 billion. That is almost half the Budget, which highlights the relatively small size of the tax base and the very large public sector share of GDP.
I was pleased that the Minister acknowledged yesterday that that issue must be addressed, and that the answer is to grow the private sector as rapidly as possible to ensure that local resources are in place to deal with the demands for public services that the people of Northern Ireland are rightly putting before us.
Although, in many respects, our economy may be converging with that of the Republic of Ireland, and there is much more scope for North/South co-operation, in fiscal terms we are not converging with the Republic of Ireland. Judging by the long-term aspirations of some Members, that issue will have to be considered. Although it is relatively easy for a population of 60 million people across the United Kingdom to maintain that level of subsidy for Northern Ireland, sustaining such a subsidy would be a much bigger challenge for the Republic of Ireland’s population of four million. That factor must be taken into account.
The Alliance Party and I are here to raise issues in a constructive manner. As the opposition in the Assembly, we are here to hold the Executive to account, to scrutinise, to challenge and to put issues on the agenda. However, we are not here to engage in “yah-boo” politics about who did what or who promised what and has not delivered it. The people of Northern Ireland expect a proper discussion on the serious issues that they face.
Although Mr McNarry is not in the Chamber at the moment, it is worth pointing out that if the Assembly had addressed the issue of a financial package in 1999, or even as part of the Good Friday Agreement, perhaps so many opportunities would not have been wasted over the past number of years. The issue is on the agenda at the moment, and the Alliance Party wishes the Executive well in trying to reach a positive result.
That said, we on these Benches take a different perspective on what a financial package for Northern Ireland should be. We should not simply try to get more money out of the Chancellor solely in order to distribute those funds to public services in the existing way. Frankly, that would be a huge missed opportunity. Short-term relief would be gained from taking tough decisions for two or three years, but, two or three years after that, the same problems would remain.
Any financial package must be linked to a serious package of reforms. The Alliance Party has stressed time after time that any financial package must be linked to the concept of investment to save. We should ask the Chancellor for additional funds because we need to spend money in the short term in order to change the way in which we conduct business in Northern Ireland. In the long run, we will be able to generate more local taxes in order to sustain our own economy rather than having to depend on the British people to the extent that we have done over the past 35 years.
That message would find much more favour with the UK Treasury. As part of that, we need to be realistic about setting targets for how the Assembly will seek to address the financial and economic challenges facing Northern Ireland.
We should be held to account for our ability to achieve those targets, or not, as the case may be.
One of the key demands from the local business sector is for the differential rate of corporation tax to be part of any financial package. The Alliance Party is very keen on that, as are many other Members. Under the Azores ruling, we must be conscious that we need to address the issue of lost revenue as a result of those financial arrangements. That cost may run into several hundreds of millions of pounds. That should not be a reason not to pursue that measure, but we need to be aware of the fiscal implications. According to the economic model, it might be 2013 before the revenues raised from a larger economy through lower corporation tax would allow us to break even, and that is a major challenge.
The Budget is flawed because it contains many inefficiencies and distortions, and it does not address certain challenges. The Alliance Party has focused on the cost of segregation. Approximately £1 billion is wasted every year in Northern Ireland by trying to manage a divided society. That is a huge missed-opportunity cost. By investing in division we forgo the opportunity to reinvest in quality shared public services for the entire community. It was welcome that yesterday the First Minister and the Minister of Finance recognised that at least it was a genuine issue. The Institute of Directors, and others, such as Mitchell Reiss the former US special envoy to Northern Ireland, have also recognised the issue and reflected on it. Division presents the Assembly with a serious challenge, which it must recognise and try to address. The Alliance Party is under no illusion that it can be addressed in one, two, three or five years; it requires a long-term programme of radical reform of the way that we do business. It is important that the Assembly starts now, during the comprehensive spending review. Even in the short term, we should be able to realise some funds for reinvestment elsewhere in the system.
I also want to focus on education. One of the major challenges we face is the segregated system we are currently running. Yesterday, my party leader referred to the fact that more is spent on education per capita in Northern Ireland than in any other part of the United Kingdom, but, bizarrely, we spend less per pupil. A lot of money is wasted and diverted elsewhere in the system. No one should run away from the challenge of 50,000 empty school places. There must be rationalisation, and we must be straight with people that the education system will have to change. The Bain Report provides a structure for change, and I look forward to the Assembly debating it soon.
The Alliance Party will advocate integrated education as being the most viable model not only academically and socially but economically and financially. We are concerned that the Department of Education sees integrated educated as a further break-up of an already fragmented system rather than a solution. If schools come together or transform, they can create a more sustainable model for preserving education in local communities.
Education will need to change and schools must be considered as part of the overall framework. Tough decisions will have to be taken. We are not essentially talking about moving to an integrated model for all of Northern Ireland’s schools, but it is important that we look for opportunities to promote integrated education whenever and wherever they arise. Other systems will, inevitably, survive alongside that, but all sectors are aware of the need for sharing and collaboration. I welcome that as another approach to addressing the issue.
As regards transport, the Assembly must be aware that not enough is spent on public transport relative to our competitors elsewhere in these islands. About 65% of the local transport budget is spent on roads, and only 35% on public transport. That is almost the mirror image of the spending pattern in Great Britain, where there are also large rural areas. There is scope for changing the balance of the transport budget over time. That does not necessarily mean that it requires additional funds; it means that we must prioritise our resources as best as possible.
The Budget Bill is essentially a precursor to the big discussion that must follow on the comprehensive spending review for the next three financial years. That is the opportunity for the Executive and the Assembly to re-examine everything in the detail of our expenditure plans in order to see where we can make additional investments to meet the demands of the people of Northern Ireland for, for example, free personal care. However, we also need to revise budgets, and that will mean cutting budgets in some areas in order to reinvest elsewhere. Our Budget process must be a constant process of change. Sometimes budgets will go up; sometimes they will go down. Circumstances change. Circumstances are never fixed, so budgets can never be fixed either. In the meantime, my party supports the Bill.
Mr Hamilton: Before I come to the thrust of what I want to say, I cannot allow the spaced-out contribution of the sole Ulster Unionist representative from Strangford to pass without comment. I notice that he is not in his place; perhaps he has been beamed back up to his mother ship along with Elvis and the former Ulster Unionist representatives who have vanished without trace in recent times. Elvis is more likely to be spotted than some of those characters.
It ill behoves any Ulster Unionist to belittle the attempts to obtain a financial package for Northern Ireland — attempts in which the Ulster Unionist Party has been intimately involved. Mr McNarry himself attended several key meetings, both here and across the water, on the issue. His rather infantile contribution in the Chamber today exhibited his complete lack of knowledge of what is happening. He said that “zero” has been achieved. Anyone who looks at what actually has been achieved will see that it is far from zero.
We have had reform of the reinvestment and reform initiative, undoing the damage that was done by the Ulster Unionist Party, whereby we could only borrow in so far as we closed the gap on expenditure-raising with the mainland — something that led to huge rises in the regional rate, and for which the Ulster Unionist Party was responsible. To date, we have had an additional £2 billion of capital expenditure; at least £100 million in guarantees for the CSR period; a review of tax policy in this part of the kingdom; and guarantees on end-year flexibility and on where the proceeds from asset sales will go. Compared to UUP standards, that is certainly a sizeable package for Northern Ireland.
Mr McNarry’s contribution also raises the question of what the Ulster Unionist Party did in 1998. The answer to that is “zero”. His party did absolutely nothing and allowed the issue to go without mention.
Mr Weir: Does the Member not agree that that is a little bit unfair on the Ulster Unionists? After all, although they did not achieve a single penny for the Northern Ireland exchequer, they did manage to negotiate a couple of knighthoods.[Laughter.]
Mr Hamilton: I welcome that contribution, which shows where the UUP’s priorities lay at that time. The party was feathering its own nest rather than assisting Northern Ireland to develop a better economy.
What would the UUP have done in 2007? Having read its election manifesto, everyone knows that it would again have done nothing. The Ulster Unionists would have entered Government on 26 March irrespective of the addressing of any issue. That analysis was roundly rejected by the electorate. Were he here, I would remind the Member for Strangford of the result in his own constituency, where he is now the only representative of the Ulster Unionist Party, compared with four from my own party.
He talked frequently about Klingons — [Interruption.]
I am sorry; I will acknowledge the Member from the Alliance Party who was also elected in Strangford.
Lord Morrow: How could you forget him?
Mr Hamilton: Indeed, how could I forget him? In many boxes that we saw being emptied, he was beating the Ulster Unionist Party.
Mr McCarthy: Absolutely.
Mr Hamilton: I am sure that he is glad to hear that.
There were plenty of references to Klingons. The Ulster Unionist Party has been clinging on to my party’s coat-tails. There was talk of pantomimes taking place in this Building. If any pantomime is taking place, the Ulster Unionist Party is certainly participating in it, and that must mean that the Minister of Health and the Minister for Employment and Learning are the ugly sisters.
Mr Storey: Does the Member agree that it is ironic that we have sustained a tirade of criticism from the Ulster Unionists this morning? Having had the opportunity to stay outside the tent, the Ulster Unionists decided to take their places in the Executive. Therefore it ill becomes them to attack the Minister of Finance and the proposals before the House today.
Mr Hamilton: The Member makes a valid point. I am not sure what the Ulster Unionist Party’s position is on that matter. I hear one thing from some Members and something else from others — surely not a divided Ulster Unionist Party?
Mr Beggs: Will the Member give way?
Mr Hamilton: Unlike the Member for Strangford David McNarry, I will give way.
Mr Beggs: I am fascinated by the Member’s comments about the Ulster Unionist Party’s deciding to take its places on the Executive. Is that not exactly what the Member’s party did in the previous Executive? Why is he criticising the UUP for doing the same?
Mr Hamilton: The Member knows well that DUP Ministers did not take their seats around the Executive table. His party leader and others lambasted the DUP and said that Members of my party were outside the Executive. The Member cannot have it all ways.
Now that I have got that off my chest, I wish to turn to the issues that I want to raise. With the exception perhaps of Mr McNarry, Members are aware that this Budget has been inherited by the Minister of Finance and Personnel. It is not to every Member’s satisfaction, but, sadly, we do not start with a blank piece of paper. However, this debate provides a good opportunity to look forward to future Budgets.
Members have and will use today’s debate to make a special case for increased expenditure in particular Departments or on pet projects in which they are interested. I wish to make the case for a greater concentration in future Budgets on the economy. That is an area of public policy that has been sidelined and ignored for far too long in Northern Ireland. Many public services have been so underfunded in the decades of direct rule that it is understandable that the issues of hospitals, schools and housing dominate political debate. I fully sympathise with and support those views. However, I believe that the new Executive’s principal focus should be on economic development, and I sincerely hope that, when published, the new Programme for Government will centre upon that matter.
In recent times, Members have grown accustomed to good news stories about the local economy — high employment, high manufacturing output relative to other UK regions and a growing tourism sector. Unfortunately, Members are also well aware of the many structural weaknesses that the economy suffers from: the highest proportion of economically inactive people in the UK; an over-dependence on the public sector for growth and jobs; a small private sector; the decline of the manufacturing base, which, I am sure, will be touched upon in the debate later today; an over-representation of the service sector; low levels of research and development; and the difficulties inherent in evolving from some 30 years of civil strife, during which time the economy was often a target and bore the brunt of terrorist violence.
The challenges that must be overcome were summed up in a report in ‘The Economist’ from June 2006. It found that, in Northern Ireland, the public sector accounts for 61% of GDP, only 65 private sector firms employ more than 500 people and 10 firms account for half of all exports.
I do not ask that the Executive prioritise local economic growth simply to put more pounds into people’s pockets — although that would be nice. All Members wish citizens to be prosperous and working in well-paid jobs and for Northern Ireland to be the best that it can be. The main focus of the Assembly, its Executive and its expenditure ought to be the enhancement of the economy because a transformed economy, through sustainable wealth creation, can be the key to unlocking better public services.
Earlier, Members took part in the debate on the Welfare Reform Bill, and we all want to see as many people as possible ceasing to be economically inactive, coming off welfare and getting into work. The transformation of the economy can assist in the achievement of that noble aim.
I do not argue simply for increased budgetary allocations for the Department of Enterprise, Trade and Investment (DETI), although I am sure that my hon Friend the Minister would not mind if I did. What I am suggesting is a genuinely cross-departmental approach to economic development. Members have heard that all policy should be rural proofed, or equality and human rights tested. It is time, however, for the Executive to insist that economic development is the primary emphasis of Departments, legislation and spending.
There is an assumption that economic development is the domain of DETI. That assumption is wrong. DETI has a co-ordinating role, and I welcome the Minister’s comments on how he intends to perform that role.
Hardly any Government Department is without an important part to play in rebuilding our economy, whether it is the Department for Regional Development in improving our infrastructure; the Department for Education and Learning in retooling our workforce; the Department of the Environment in reform of our planning process; the Department of Agriculture and Rural Development in overseeing our number one industry; or even the Department of Education in laying the foundations for an educationally-equipped workforce. Every aspect of the work of Government is paramount in rebuilding our economy.
The Department of Finance and Personnel has an important overseeing role in respect of our economy. I welcome the comments of the Minister who, on his first day in office, stated that helping to create a competitive economy for Northern Ireland was a priority of his tenure. Furthermore, I welcome the work that the Minister has already engaged in with the European Commission, which will help the Executive and the local business community to identify opportunities in Brussels to develop our economy and create jobs. That is a much better use of the EU than we have made in the past. We have watched other European regions use the benefits of Brussels to develop their economies, while we have wasted millions on abstract and woolly notions.
It is a gross understatement to say that the economy and its development have been a secondary matter during the decades of direct rule. To pick up on a theme, discussed by Dr Farry yesterday, government policy has made us, at times, and in many respects, nothing better than a Soviet-style satellite state, dependent on central handouts to survive. We must end that dependency culture at every level and begin to stand on our own two feet. The best way to do this is to grow our own economy.
We have a proud economic history in this part of the world. Reclaiming it for a new generation, and those that will follow, should be at the top of the Assembly’s agenda.
Mr O’Dowd: Go raibh maith agat, a Cheann Comhairle. I support the Bill — which may surprise Members, coming from my party’s position. However, we are where we are. The Finance Minister and the Executive have inherited the Budget from direct rule Ministers and the British Government. It is a British Labour Party Budget. In the Transitional Assembly, I brought my single transferable speech to every debate and stated that we needed to be in power and to make decisions. Thankfully, we have reached the stage where we are in power, and we continue to work through a process in which we make the decisions.
Undoubtedly, if I speak in a Budget debate this time next year, I may have to — and if I need to, I will — attack the Department of Finance and Personnel on its Budget. At this stage, that would not be a worthwhile use of energy or time in this place.
It will come as no surprise that, as republicans, we want to develop an all-Ireland economy. We want an all-Ireland economic development plan, and we want the amalgamation of Invest Northern Ireland and the Industrial Development Agency, Ireland (IDA), with a remit to support indigenous industries. However, we do not want that out of some ideological stance because we are who we are. Rather, we believe that it is a practical way forward in developing the economy in all parts of the island of Ireland.
Mr Storey: Given the fact that the Member advocates an all-Ireland economic plan, how much of a disappointment and a setback was the Republic of Ireland’s rejection of that economic plan? Effectively, the people of the Republic of Ireland have said that the reason that Sinn Féin was not fit for Government there was because its economic policies were not fit for purpose.
Mr O’Dowd: I thank the Member for his intervention, and his interest in all-Ireland politics: that is welcome. Before the elections we were told that we were economically illiterate, and Fianna Fáil told the electorate that the economy was doing well. However, the day after the election results were announced the Taoiseach, Bertie Ahern, told the electorate that the economy was going to slow down and that they may be in for a difficult ride. So, who is economically illiterate — Sinn Féin or Bertie Ahern? Perhaps he was not as truthful as Sinn Féin was about the economic situation. I do not wish to digress too much. Sinn Féin had a bad day at the elections, but it was not rejected and it will return. The party will dust itself down and it will be back again — something of which I am sure Members are well aware.
The all-Ireland economy — something that was discussed in the Programme for Government Committee during the Transitional Assembly — is a benefit to all of society. Unionism says that it will get involved in any all-Ireland activity only if it is practical, and not if it is political. Members will get no arguments from Sinn Féin on that matter.
Mr Beggs: The Member indicates that he wants only things that are practical. Does he accept that the rest of the United Kingdom is, by far, the biggest region to which Northern Ireland exports? The last figures that I saw showed 45%, whereas only approximately 15% of our exports go to the Republic of Ireland. It is surely not practical to be linked to an economy to which most of our exports do not go.
Northern Ireland, being within the United Kingdom, is part of the sterling currency regime. It would not be practical to move into the euro zone as that would add huge costs to our exporters and lead to a whole host of other complications. Does the Member accept that his proposal is not practical?
Mr O’Dowd: No one in Sinn Féin seeks an isolationist policy, where an all-Ireland economy is formed and we sit out in the Atlantic on our own. The party wants to work with all its neighbours, and it would be crazy not to develop stronger economic links with Britain as a whole. Sinn Féin is not about isolationism; rather it is about creating a vibrant new beginning — part of that involves an all-Ireland economy, but we can also work towards it in a transitional period, too.
I certainly do not wish to turn this debate into a question-and-answer session on Sinn Féin party policy. I am more than happy to hold one-to-one sessions or to participate in party sessions on the matter.
There are a number of issues, some of which have already been raised today. The Department of Finance and Personnel and the Executive must deal with the Budget and the financial package before them. I commend all the political parties for strongly lobbying Gordon Brown and Tony Blair to increase the financial package to the North. In very difficult circumstances, they did what they could do. Those negotiations must continue. There is no need for the Ulster Unionist Party’s short-termism, or for it to attack any political party in this Chamber or to break away from that work at this point. We must remain united and focused on continuing the negotiations.
The Barnett formula is also part of the problem; it is not beneficial to the people of the North. We must continue negotiations with the Exchequer on that issue. Sinn Féin wants the Executive to have a borrowing facility, as opposed to the reinvestment and reform initiative, and for the Assembly to have tax-varying powers. If the DUP gave the UUP a bit of stick about its involvement in that initiative, I may give the SDLP a bit of stick about its involvement too. We must secure a financial contribution towards the peace dividend from not only the British Government but the Irish Government as well.
Any Budget from this Administration must have at its core a commitment to tackling disadvantage and discrimination and creating a new beginning for people. In the previous debate, on the Welfare Reform Bill, several Members pointed out that many people are economically inactive. We must ask why that is the case, and why there are pockets of high unemployment and deprivation across the North. There are clearly historical reasons for that, and the Executive have a duty to tackle those issues in this Budget and particularly in the next Budget, which will be their own.
We must create investment incentives in areas of high unemployment. This week, the Committee for Public Accounts will consider the Springvale project in north and west Belfast — an imaginative Government intervention in an area of high unemployment and deprivation. We must, of course, examine why that project went wrong. However, the Executive must also be imaginative and must consider how they can implement such schemes in other areas of high unemployment and deprivation.
We must press on with the decentralisation of Government Departments. There is no need for the Government to be centred within a one-mile radius of this Building. Areas such as west of the Bann could benefit from the decentralisation of public-sector jobs.
There has understandably been much talk of the large number of people employed by the public sector and the role of the public sector in our economy. I will focus on the health sector. The power of procurement in that sector alone is massive. Ensuring that that procurement is used to tackle unemployment and deprivation would be a productive use of public moneys. Many hospitals and health units are situated in areas of high deprivation. Therefore, why not use that budget to ensure that the services that are provided to hospitals are situated in the localities of those hospitals?
Fermanagh and South Tyrone, for example, comprises rural areas. Why should the new rural hospital in Fermanagh not be used as an economic as well as a health unit in order that its spending power can be used locally? That would be an imaginative use of resources and would help to eliminate poverty.
We have a responsibility to ring-fence a meaningful proportion of the Budget in order to tackle poverty and to ensure that resources are targeted on the basis of objective need. We also need to tackle ongoing employment discrimination and enhance the rights of workers, because, after all, they create wealth. Not only are all our successful enterprises a credit to the business sector, they are a credit to the people who work in them. We need to do more for the rights of migrant workers, without whom our economy could not survive. If our economy is to grow, we will need more migrant workers. If we are to encourage migrant workers to come here, we must ensure that their rights are protected.
I shall touch on several issues that the Minister of Finance and Personnel discussed yesterday. I noted with interest his comments on social housing and his challenge to the Minister for Social Development to make him shout “Give me the money” at her. Although I agree that that is a good catchphrase that will no doubt get headlines for a while, the Department for Social Development has a large land bank that should and could be used to tackle the difficulties with social housing.
The Minister of Agriculture and Rural Development made a statement yesterday on rural regeneration. That is the responsibility of several Departments; therefore, the Executive need to think in a more joined-up way about how public moneys should be used in rural areas.
Challenges ahead of us include the comprehensive spending review, and we must ensure that that is not a mechanism to cut front-line community services. Education and health will always be high priorities. I noted the Minister of Finance and Personnel’s comments on what the Chairperson of the Committee for Health, Social Services and Public Safety said about the need for investment in the Health Service. I hope that the Minister got his tea last night and that there will be investment in the Health Service. I was previously Sinn Féin’s health spokesperson, so I support any such investment.
The Minister of Finance and Personnel said that we need to examine our own structures and that we have too many Departments and too many MLAs. I hoped that at that stage he would have touched on the fact that we also have too many local councils.
Mr Kennedy: He meant eight too many.
Mr O’Dowd: Perhaps that is what he meant. I hope that he realises that the present 26-council structure cannot continue and that increasing the number of councils from the proposed seven to 11 or 15 is not a financial option.
The Committee of the Centre, which may soon have its new name, the Committee for the Office of the First Minister and Deputy First Minster, agreed by the Assembly, was told that 11 or 15 councils — instead of seven — would cost an extra £35 million. Are the Members on the opposite Benches, who support having 11 to 15 councils, prepared to stand over that figure when other services in the comprehensive spending review will face difficulties?
My party agrees that the number of MLAs and Departments needs to be reviewed. In particular, we believe that it is not financially viable to continue with councils’ current format. Go raibh maith agat.
Mr Speaker: Order. Members will know that the Business Committee has arranged to meet immediately upon lunchtime suspension. I propose, therefore, by leave of the Assembly to suspend the sitting until 2.00 pm.
The sitting was suspended at 12.59 pm.
On resuming (Mr Deputy Speaker [Mr McClarty] in the Chair) —
Mr Ross: I welcome the opportunity to speak in the debate. I will endeavour to avoid the pitfall of presenting a wish list for my constituents in East Antrim, although I will highlight some important issues that I hope will be kept in mind for future spending decisions. I am quite glad — and proud — that I do not follow ‘Star Trek’. I will therefore avoid any anecdotes about that programme in my speech, which will be based in reality rather than the fantasy world of some Members who spoke earlier.
As we have heard, the Budget is not perhaps to the liking of all Members. However, we should realise that we cannot get everything that we want. It may be a catchy sound bite to call on the Minister to throw millions of pounds at a particular project, but Members must recognise that we cannot start spending huge sums of money that we simply do not have. Our task is to spend the Budget wisely to ensure that Northern Ireland can grow economically and that the people living in this part of the United Kingdom can enjoy a better standard of life.
With that in mind, I hope that the next part of my speech does not subject me to the wrath of the Minister, as I recall his comments yesterday about individual Members presenting a number of pet projects. I do not have a metaphorical begging bowl; rather, I wish to highlight a few areas in East Antrim where investment in the future would see a return for the Northern Ireland economy as a whole.
The first issue that I wish to raise is more of a pet hate than a pet project, particularly among my constituents in East Antrim. It would be remiss of me not to mention it while I have the opportunity. East Antrim is plagued by a second-rate train service and, from my experience of working in Larne over the last number of years, I know of the frustration and anger with the train services that exists among my constituents. I will meet the Larne Line Passenger Group tomorrow evening, and I hope that the new trains that they are lobbying for can be procured for the Larne line to replace the dilapidated trains that are currently used to enable the people of East Antrim to be finally able to enjoy more comfortable and frequent journeys to Belfast.
As the Member for North Down Mr Farry mentioned, improved public transport throughout Northern Ireland would encourage more people to leave their cars behind and use what some refer to as environmentally friendly forms of travel. I am sure that that would please other Members. It would also reduce the number of cars on the road. On a recent visit to Carrickfergus train station, I witnessed first hand the success of the park-and ride-scheme that operates there. Such schemes should be extended and given every encouragement. That can only happen when people are confident in the level of service that they will receive from bus and rail services.
The promotion of tourism is another issue. Tourism is the fourth largest private-sector employer in Northern Ireland. Although most of the focus will inevitably be on Belfast, East Antrim, as a constituency that borders Belfast, is well placed to avail itself of the tourism opportunities that exist. Sound investment in tourism can see huge returns in the number of visitors who come to Northern Ireland and the number of jobs created in the tourism sector, all of which can boost the Northern Ireland economy.
The area that I represent has been coined as the gateway to the glens. As such, it is ideally placed to catch many of the tourists as they make their way to the north coast. The entire region of the Antrim coast and glens attracts many walkers, cyclists and those who enjoy the splendid natural beauty of the area or the impressive built environment — none of which is more impressive than Carrickfergus Castle. It is paramount that funding be made available to assist the tourism sector in Northern Ireland, specifically in East Antrim. It is also important that smaller tourist ventures such as bed and breakfast establishments are given every chance to promote their business.
Some 865,000 visitors came to Northern Ireland via the port of Larne in 2006, a considerable number of whom are tourists or work in the freight industry. I therefore draw attention to the importance of the port of Larne and to the A8 road, which runs through my constituency. Small-scale improvements on the A8 have already shortened journey times significantly and improved road safety. However, investment per mile is still dramatically lower than the investment per mile on the stretch of road towards the Irish border. I hope that that disparity can be addressed in the future.
There is a 10-mile stretch of single carriageway on the A8 that carries a significant amount of rural machinery, which can in turn result in long tailbacks. There are two negative effects from that. First, drivers frustrated at hold-ups in traffic often attempt dangerous overtaking manoeuvres. Secondly, the queues can act as a disincentive for roll-on roll-off ferry commuters to use the Larne port who feel that it is too slow.
We must recognise that it is not only the economy of East Antrim and Larne that will suffer unless we recognise the importance of upgrading the A8, but also the economy of Northern Ireland. A sound transport network is essential, given that Larne is the favoured route of much freight from Scotland. We must ensure that that cultural, historical and business route between Northern Ireland and Scotland is strengthened. My East Antrim colleague Sammy Wilson has previously spoken to the former Scottish First Minister Jack McConnell about the issue. That is perhaps an issue that our Executive and the Scottish Executive could examine further.
I am conscious that time is limited and I do not want to restrict the opportunities for other Members to speak. I could go on to highlight the need for social housing in Newtownabbey and put forward the case for keeping Inver House in Larne open but those issues have been addressed in the past and will be returned to in the House.
As the Finance Minister said, many of the issues raised during the debates of the past two days require imaginative thinking. It is not simply a case of throwing money at a problem; it is more a case of using the available money wisely.
I congratulate the Minister for the realistic and responsible attitude that he has adopted to spending in Northern Ireland during his first weeks in office. I support the Second Stage of the Budget Bill.
Mr Beggs: As I indicated during the consolidation debate, I accept that a new Administration, which takes office mid-year, has little choice but to accept the Budget plans of the previous Administration. However, when examining the detailed Budget proposals and Estimates, I could not identify any new money allocated by the Chancellor. When I questioned departmental officials at the Finance and Personnel Committee, they advised that the Chancellor’s package had not been included in the Budget proposals.
Where are the additional financial announcements to reveal how that money will be spent? The DFP officials also advised that subsequent changes would be incorporated into additional announcements to allocate the £100 million. It is interesting that the figure of £100 million was used and not £1 billion. It appears that £100 million has been allocated by the Chancellor.
In the current financial year, £75 million of that £100 million has been allocated to the deferment of water charges. That leaves approximately £25 million to be allocated. Interestingly, that concurs with the views expressed by Nigel Smith in the First Trust Bank’s ‘Economic Outlook and Business Review’, when he stated:
“Closer scrutiny of the UK Government’s ‘peace dividend’ package of £1bn shows that it contains £400mn pledged by the Republic of Ireland (RoI) Government, £200mn of accelerated public asset disposals, £200mn of end-year flexibility (NI gets to roll over its own spending from one fiscal year to the next!), some monies to defer the introduction of water charges (which will be clawed back under the CSR). This leaves just £20mn of additional resources — hardly an ample dowry for the new administration.”
Therefore, according to people who should know, £100 million will be used for the deferment of water charges and the review process and £20-25 million will be left over.
I have closely examined references to the review of public administration (RPA) in the Bill. RPA expenditure is listed under several headings: Department of Culture, Arts and Leisure; Department of the Environment; Department for Regional Development; and Department for Social Development. There are concerns that costs associated with reorganisation are often underestimated, meaning that there could be a black hole in the expenditure plans. It remains to be seen when that difficulty will be faced. When I questioned the departmental officials, they indicated that unforeseen RPA costs would be dealt with in end-year monitoring.
RPA is an opportunity to reduce administrative costs and to give a greater level of accountability in many areas. It is disappointing that no significant new money is available to kick-start and front-load the RPA to get over the initial cost burdens. That would have been a useful area had significant moneys been available in the Chancellor’s package. It appears that RPA reorganisation is largely being financed from the block grant allocations.
As the Finance Minister has indicated, the Budget will be tight this year. Given that unforeseen RPA costs will be funded by end-year monitoring, we should expect reduced opportunities at the Supplementary Estimate stage to allocate moneys that may not have been allocated to other useful purposes during the year. No pot of gold has been acquired by the incoming Executive, or by the Minister of Finance and Personnel, who was leading the charge.
It has been mentioned that the borrowing arrangements have changed. I understand that borrowing is still maintained at the Bank of England base rate, and, as such, it does not matter what amount is borrowed, because a similar amount of interest will have to be paid. I am interested to know what is the great benefit of changing the borrowing arrangements.
The previous levels of the regional rate were mentioned. It is important that everyone acknowledge that the highest regional rate in memory — certainly in my memory — occurred in Northern Ireland while the Democratic Unionist Party was the lead unionist party. The DUP cannot blame the Ulster Unionist Party for high regional rates that happened under DUP leadership of the unionist community, and it must be held to account for that.
Mention was made that the Budget represented a better package. It has been omitted that, under the previous Administration, several valuable properties were transferred to the devolved Administration, including the Maze site, which is much in vogue at present. The military base at Ebrington in County Londonderry had substantial land assets transferred to the responsibility of the Northern Ireland Executive. I am interested to know the valuation of those sites. It is also interesting to note that the Mahon Road base in Portadown has been sold to the private sector. How much of that sale has passed into the hands of the Northern Ireland Executive? It is important that a balanced view is reached on those matters.
I shall comment on a few issues relating to my own constituency. Transport has been a theme that I have revisited on a number of occasions since joining the Northern Ireland Assembly. As other Members have said, East Antrim alone retains a third-rate rail service. New trains have been allocated to other areas of Northern Ireland, but the east Antrim line retains the old class-450 vehicles and carriages. They have been upgraded and are better than they were, but they are still a poor second to what is available in other parts of Northern Ireland. It is important that the rail users of East Antrim have equality.
There is a dense urban area along the Larne line, and there is a huge potential to significantly increase the number of rail users in that area. There are a large number of stations along that line, and people could take the opportunity of switching to rail travel, and, therefore, minimise traffic congestion.
Road bottlenecks, particularly on the A2, should be removed. That has been highlighted as a priority in the Belfast metropolitan area plan, and should be considered. I appreciate that that project is still in the planning stage, but I hope that it will soon be on the starting block for receipt of significant moneys to enable that blockage to be removed.
There is a four-lane route on the Jordanstown side of Greenisland, and a four-lane route on the Carrickfergus side of Greenisland, with a two-mile stretch of a two-lane road in between, and anyone with common sense can imagine what happens.
In addition, the A8 from Belfast to Larne, with its connecting road at Ballynure to the north-west of the Province, is a key transport link. Plans for the development of that road have not received the priority that they should have. I responded to consultation on that issue, and I hope that that key transport link to Scotland, which carries most of Northern Ireland’s exports, will be prioritised. The congestion that is caused in Larne when ferries offload a large number of vehicles at one time would be alleviated if an appropriate road to accommodate them existed. Such a road would enable the safe and efficient distribution of imports throughout Northern Ireland and the transport of exports that are bound for the United Kingdom and Europe.
Indeed, that road is also an important route for tourism. I hope that the recent Scottish exhibition at the Smithsonian Institution will result in a significant increase in the number of tourists to Northern Ireland and to the East Antrim constituency area in particular. Visitors to Northern Ireland frequently comment on Antrim’s coast road. If a range of facilities were provided, visitors would be encouraged to come not just for a one-day visit to the Giant’s Causeway but for a visit of several days or a week. They could then enjoy our wonderful environment and scenery and the hospitality for which we are renowned.
I hope that the Minister will take those comments into account when he considers the current Budget and future expenditure.
Mr Gallagher: Members, myself included, will approve the Minister’s plans. Several Members have commented that the Budget is inherited, which, indeed, it is. However, the public expects Departments and the Executive to be able to respond to future events, some of which are unforeseen. My remarks, therefore, will be largely about the Assembly’s capacity to use this Budget to respond to certain events.
Private finance initiatives (PFI) for acute hospital services are under way throughout Northern Ireland in Enniskillen, Omagh, Antrim, Belfast and Dundonald. As those projects progress, the public is becoming concerned about peculiar aspects of them. For example, frozen food will be flown in to be served to patients in a hospital in Enniskillen. That aspect of that project is complete nonsense. It is bad for nutrition and health, and it certainly does not make economic sense. Is the Department aware of any other peculiar aspects of PFI contracts for acute hospitals? The Assembly needs to know about those immediately.
Another concern is the so-called affordability gap, meaning that the figures that have been agreed in a PFI contract to deliver the full range of hospital services fall short of current costs. In the Enniskillen and Omagh hospitals projects, it is envisaged that there will be an affordability gap of £20 million.
Members know that the trusts are strapped for cash and that the Department of Health, Social Services and Public Safety does not have sufficient resources; so where will the money come from? Can money be drawn down from the Department of Finance and Personnel? If that is not the case then the Health Service is going to become a complete shambles under its PFI projects.
A couple of points have come up in the course of the debate. First, there is the reorganisation of councils under the review of public administration. Decisions taken at Executive level mean that the initial model envisaged, or at least that which was agreed by Sinn Féin when the British Government proposed that Northern Ireland should have seven councils, is unlikely to happen.
Soon, we will have to carry out further consultation on what the best model should be — and it will certainly not be the 26-council model. That work is going to cost more money. We have already had the Boundary Commission, and its work may well be set aside. Has the Department of Finance and Personnel made allowances in the Budget for further work to be done on selecting the model of local government that will be adopted?
The Department of the Environment is currently in possession of a report, which will be put into the public domain next week, on whether Northern Ireland will have an environment protection agency. If we are to have such an agency, it will not be enough for it to be independent — it will need to be resourced in a much better way than the Environment and Heritage Service, the body currently accountable for the care and protection of the environment.
Finally, if Northern Ireland ends up with an independent environment protection agency, which the vast majority of people would like to see happen, will we be able to resource it properly?
Mr McQuillan: I support the Bill. Finance is a key building block of the Assembly, and although the accelerated-passage provision is not the best way to deal with business, the DUP fully recognises the reasons for using it. I welcome the assurance given by the Minister yesterday that consultation will be materially enhanced in the future. The Programme for Government will be a vitally important document. It is hoped that the document will have a priority-driven agenda and not a political wish list that would have more to do with enhancing the egos of the political parties than delivering real and effective service for Northern Ireland.
Will the Minister also assure the House that lessons from PFI deals that have been highlighted in PAC reports will be learned and will be reflected in the Workplace 2010 contracts soon to be awarded?
Mr Weir: I support the Bill.
I was glad to hear the Member for Strangford Mr McNarry who spoke earlier but who is not in the Chamber. I congratulate him because when he spoke on a previous occasion — on the issue of fisheries — his speech borrowed heavily from the Member of Parliament for Strangford. Today, one assumes that Mr McNarry’s speech was his own work, for I am sure that no one else would own up and take responsibility for it.
Mr McNarry seemed to get very enthused with ‘Star Trek’ analogies. In case there is any doubt on the subject, I should point out that ‘Star Trek’, like the content of Mr McNarry’s speech, is a work of fiction. Mr McNarry accused those of us on these Benches as being like the crew in ‘Star Trek’, but I suspect that those on the Benches alongside him would be more appropriately likened to the crew of the Titanic, sinking below the waves, or perhaps to the Mary Celeste, the ghost ship that was deserted and left lurching from side to side.
Mr McNarry today presented Members with a great deal of rhetoric. He was critical of the Budget Bill, and of the efforts of the DUP in negotiations with the Government. All parties, including the UUP and Mr McNarry’s party colleagues in the Executive, supported yesterday’s appropriation motion. Therefore, I am keen to see whether the Member for Strangford will put his money where his mouth is. If he has such strongly held objections to the Budget Bill, will he vote against it? We will take that as the acid test.
As to the complaints of Mr McNarry and Mr Beggs — a Member for East Antrim — that no new money is allocated in the Budget, it was made clear yesterday that it reflects what was available after direct rule. My hon colleague, the Minister of Finance and Personnel, will refer to changes that have arisen out of the recent negotiations with the Chancellor of the Exchequer. It would have been impractical to include those in the Bill. Mr McNarry and others are keen for those adjustments to be made to the Bill; perhaps they will tell us what front-line services they will starve of funds during the consequent delay. The Department of Finance and Personnel would require additional time to incorporate those changes into the Bill.
Mr Beggs: I asked when we might expect the announcement of additional money. I am content that this was the Budget as determined by the previous direct rule Administration. I simply ask how the additional money will be spent.
Mr Weir: I commend the Member for remaining in the House after his speech, unlike his colleague the Member for Strangford. If the Member is sufficiently patient to wait until the end of the debate, he will hear the detail of some of the changes.
We must move away from instant fix solutions. Some of the changes to be announced will help the economy and assist in controlling public spending in the long run. [Interruption.]
Those details will be referred to in the Minister’s speech; you will not have to wait long. However, I appreciate that waiting for that may be beyond the patience of some Members.
I am glad that most of the Members’ contributions yesterday and today have been responsible and constructive. The Committee for Finance and Personnel, of which I am a member, accepted accelerated passage for the Budget Bill; and it is important that those resources are delivered to the front line as soon as possible.
We require increased appreciation of financial realities. Irrespective of how generous or tight a Budget is, there will never be enough money to satisfy every potential desire. Sooner or later, whatever the financial circumstances —
Mr B McCrea: Does the Member accept that the general public expects a substantial peace dividend, and that it is as yet unclear to what extent that has been achieved?
Mr Weir: The UUP berated my party, saying that it had not produced a pot of gold. Since that party did not even produce a pot, I take no lectures from it. Also, the UUP ran on the manifesto commitment that, no matter what happened in negotiations with the Chancellor of the Exchequer, it would be in there from day one: so neither do I accept its lessons in negotiating strategy.
Sooner or later, and this will be uncomfortable for many Members, we will face the challenge of deciding between spending priorities. Any Member who believes otherwise is fooling himself. As indicated yesterday and today, the key challenge in rebalancing the economy is to create circumstances in which we can boost the private sector. I welcome a debate on whether that is more important than reducing the size of the public sector. As a society we are keen to obtain our rights, but we must also accept that there are certain financial responsibilities and realities.
The Budget Bill poses challenges to the Departments and opportunities that must be examined. The Department of Education must look closely at the unfair treatment that was meted out to centres of education in the South Eastern Education and Library Board (SEELB) area due to the financial constraints that were placed upon the board. The high level of special needs statementing of young people in the South Eastern Board area, which was clinically driven, required levels of expenditure that outstripped those of the other board areas, but the South Eastern Board was not recompensed to the same level.
As a result, draconian cuts were forced on the South Eastern Board by the direct rule Minister with responsibility for education. I am glad to say that all parties were united in opposition to those cuts. However, that situation ultimately led to the imposition of commissioners. Situations such as that must be addressed, and we must examine the disparity of funding between the South Eastern Board area and its Belfast counterpart. Falling demographics mean that pupils who live in the South Eastern Board area, but attend schools in Belfast, create a net loss in the South Eastern Board area, which has to pick up the tab for transport. Meanwhile, the Belfast Board receives funding for the places taken up by pupils travelling to schools from the South Eastern Board area. The Department of Education must examine that situation and also the extent to which primary schools in Northern Ireland suffer a disparity in funding compared to other sectors.
Although that scenario is particularly true of the Department of Education, it applies equally to other Government Departments. We must ensure that capital funding is spent swiftly and appropriately. At times, that has been sadly lacking and has perhaps been a token of the disregard shown by direct rule Ministers. At times, in large capital projects, particularly in the education sector, the expectation of swift action is built up, only for schools to be left hanging for years, waiting for action to be taken.
I note, for example, the effect on schools in my constituency: the proposed move of Priory Integrated College seems to have been held back on numerous occasions, and that has had a knock-on effect on the proposed merger of Holywood Primary School and Redburn Primary School. It is important, therefore, that when capital expenditure commitments are made by the Department of Education —at times it has been the worst example — the money is actually spent.
When the time comes to re-examine the Budget we must give greater priority to waste management, which is of great concern to my hon Friend the Minister of the Environment, Mrs Foster. Waste management has been underfunded for years, which does not help the Northern Ireland economy in the long run. Unless swift action on waste management is taken in the next few years, it will not simply be a question of the opportunity missed: if we do not get this right, the Province will face potentially large fines from Europe.
Several Members made points about transport infrastructure and funding for the road networks and the railways. If the Department for Regional Development is providing that funding — and commitments were made to deliver it — we must ensure that those moneys are well spent. The Public Accounts Committee highlighted the problems associated with the investment in the Belfast to Bangor railway line, which led to the squandering of a great deal of money.
Those are some of the challenges that we face.
I welcome the Budget because, given the available timescales, it is the appropriate way forward. In the months and years ahead, the great challenge for the Executive and the Assembly will be to ensure that we use the budgetary process to add value to this society. I look forward to the Minister’s response and to further action’s being taken. I support the motion.
Mr Cree: During yesterday’s lengthy debate on resource allocation, I outlined my views on the economy and on the way forward.
Many Members have said, and it is a matter of record, that this Budget was prepared by the direct rule Administration and is already in operation. Therefore it would be pointless, at this stage, to discuss wish lists or pet subjects. However, many Members have indulged in speeches of that nature. Wish lists and pet subjects are really matters for discussion in the autumn when we will prepare the Budget for 2008-09. That Budget will fall within the comprehensive spending review and will be the real test for the Executive and the Assembly.
Yesterday, I ended my contribution by emphasising the importance of having adequate resources to meet the challenges in Northern Ireland. That remains the main issue that is yet to be resolved between the Assembly and HM Treasury.
I am happy and satisfied that we approve the Budget Bill.
Mr P Robinson: The debate has been useful, and, for the most part, Members have taken it seriously and have made valuable contributions. There have, however, been exceptions, with which I will deal in some detail. First, however, I should deal with the more informed and intelligent comments, and —
Mr Campbell: It will be a short speech, in that case. [Laughter.]
Mr P Robinson: I agree entirely with the Chairperson of the Committee for Finance and Personnel that the legal necessity to pass the Bill is one of the encouraging factors for us to accept it as the route forward. Unless we pass the Bill, we will run out of money in early July. Clearly, that would have devastating consequences. However, some people who lectured us about taking on the direct rule Budget do not seem to understand those consequences.
Mr O’Loan referred to the importance of representation for citizens and consumers. In particular, he mentioned the Utility Regulator and the General Consumer Council. I am happy to join with Mr O’Loan in his warm appreciation of their contributions. They provide a valuable service and perform a positive role in our society.
However, I must point out that, contrary to Mr O’Loan’s comments, and given that we are the representatives of citizens and consumers in Northern Ireland, it can hardly be said that they are under-represented. In fact, compared to those in any other part of the United Kingdom, perhaps citizens and consumers here are over-represented, particularly in this Chamber. However, where there is a requirement for a regulator, a voice, or a commissioner for a particular sector, we must consider each case on its own merits. My colleagues and I supported the case for a children’s commissioner; we have argued for a commissioner for older people; and we argued — and got — a commissioner for victims. Therefore I accept very much Mr O’Loan’s argument. It is important that someone who can focus on particular issues and help our consumers and citizens be appointed.
Dr Farry raised several issues. He said that the Budget is flawed. As this is not my Budget, I am, perhaps, in the strange position where, in moving it, I can, to some extent, agree with him. However, I must fulfil the requirement to proceed with the Budget of the direct rule Ministers.
Dr Farry mentioned the significant subvention that Northern Ireland receives, but, as I said yesterday, we are an integral part of the United Kingdom and we are entitled to enjoy its prosperity. We have an expenditure of more than £17 billion, comprising a resource departmental expenditure limit of approximately £8·5 billion, an annually managed expenditure of slightly more than £7 billion, and a capital departmental expenditure limit of almost £1·5 billion. That is a significant budget for the Province, and, as I said yesterday, there are several ways of building on that — if that is what we want to do.
I have already mentioned my meetings with the European Commissioner, the ongoing process with the Chancellor, the discussions with Sir David Varney, and the need to look at the regional rate. However, I agree with Dr Farry that if one is requesting more money from the Treasury, that request is more convincing if one can show that one is dealing with issues of reform in the public service and looking to new thinking. That will show that one is serious, and it will make a favourable response more likely. We must demonstrate that type of seriousness in facing the challenges ahead.
Dr Farry also mentioned corporation tax. I will not go into that in too much detail at this stage, but suffice it to say that in our meeting with President Barroso, he argued that it would be up to the European Commission to decide what to do, but that a case for special circumstances for Northern Ireland had not been presented to it by the United Kingdom Government. There are associated legal complications, but in our discussions with those who show some expertise in those matters, the complications are not insurmountable, if the political will exists. We will wait for the outcome of the Varney review before addressing corporation tax in any detail, but it is an important issue with which the Executive must deal.
The Member for North Down Dr Farry also mentioned roads funding. The Roads Service has been allocated almost £200 million to deliver on its regional transportation strategy, but I will return to the transportation strategy later. The Roads Service has been given a considerable amount of money, and a proper planning process is required to ensure that that is spent wisely. One must remember that we can pick out any figure for capital spend from the air, but it must be integrated with the ability of the construction industry to construct within the same period. Therefore, there is a need for consultation.
The Member for Strangford Mr Simon Hamilton mentioned the European package. I met President Barroso, along with the First Minister, the Deputy First Minister and the Minister of Enterprise, Trade and Investment. I was impressed by President Barroso’s enthusiasm to assist Northern Ireland. He said that he wanted to set up a task force to look at the issues relating to Northern Ireland. He wants to look at such things as how best Northern Ireland will compete for European funds since it has lost its Objective 1 status, and he wishes to explore how expertise might be brought in from elsewhere in Europe to help us achieve funding. He also expressed willingness for a study on the Northern Ireland economy to be undertaken. He has asked his colleague, Commissioner Danuta Hübner, to take forward that project, and we are discussing with him how best to conduct a study that will not simply duplicate the many studies that have gone before on the Northern Ireland economy. We want the new study to have some added value, and the Commissioner agrees that that is the best way forward.
Therefore, there is benefit in further engagement with the European Union. The First Minister and the Deputy First Minister intend to visit Europe in the near future, and hopefully there will be further discussions between officials from the Department of Finance and Personnel and those involved in the task force that is to be set up by President Barroso.
The Member for Upper Bann Mr O’Dowd raised a number of points; it is unfortunate that he is not present to hear my response. He indicated that, although he was supporting the Budget this year, he would not be reluctant to attack next year’s Budget. The Member should be aware — so that he gets that notion out of his head — that next year’s Budget will not be the Department of Finance and Personnel’s Budget; it will not be Peter Robinson’s Budget; it will, however, be an Executive Budget, as it will have to be agreed by the Executive. I am sure that he will want to give faithful support to his colleagues on the Executive, rather than attacking their Budget and the Budget of the other Ministers in the Executive.
I was concerned to hear Mr O’Dowd refer to the opening up of the Barnett formula. That issue has been dangled in front of Finance Ministers and discussed in Finance Committees and in a wide variety of forums. There are considerable dangers involved, and I am nervous about that prospect. If it were the responsibility of the Assembly to evaluate the formula, then by all means, we could consider it.
Unfortunately, there will be competing interests when the time comes to reconsider the Barnett formula. I fear that the political interests of a new Prime Minister, with his mind on an election, might skew the Barnett formula in a way that would not be favourable to Northern Ireland. Therefore, on some issues, we might from time to time look for Barnett-plus. We will certainly be requiring Barnett consequentials when a Chancellor gives a particular emphasis to an area of expenditure. It is important to consider long and hard before we encourage the Chancellor or the Treasury to open up the Barnett formula.
Mr O’Dowd also mentioned the subject of the dispersal of public sector jobs. However, as that matter will be debated this afternoon, I am prepared to hold fire on that issue until then.
He referred to the review of public administration and asked if I had deliberately left it out of the list of savings that I mentioned yesterday as a means of reducing bureaucracy. Had I thought of the issue yesterday; I would not have been reluctant to mention it. It is necessary to reduce from 26 the number of councils in Northern Ireland. There are political issues that will determine what number is settled on, as there is a balance to be gained between the economies involved and having a local Government. The larger the areas are, the less local they become, so there is a need to balance that equation. However, Mr O’Dowd rightly stated that the more councils that exist, the less savings will be made — that is obvious.
On the other side of the equation, there are areas of activity, which are presently based on a unitary system, that are considered suitable for transfer to the councils. If those areas were transferred to even seven councils, they would cost more, yet I did not hear the Member suggest that we should not give responsibility to local government for roads, planning and so forth. Perhaps a balance can be struck on the number of additional councils that should exist in Northern Ireland.
Perhaps the councils should not be given responsibility for roads. I am sure that by now, the Member will have heard from his colleague the Minister for Regional Development that there are considerable advantages in having the Roads Service continue in its present form — a unitary roads authority. At various places around the world, I have been commended by people on the set-up in Northern Ireland and told how they envied it. Now we have proposals, albeit from direct rule Ministers, that indicate that we should ruin a system that is the envy of the rest of the world.
If there are seven, 11 or 15, that will add very considerably to the cost of road functions and will lead to a considerable rise in the rates, particularly west of the Bann. Members need to draw that to the attention of their constituents.
Mr O’Dowd also made some comments about procurement. I agree that the primary focus must remain on efficient, effective purchasing. I am Chairman of the Procurement Board, where all of the elements of the Civil Service, including the permanent secretaries, meet. It shows that real, considerable savings are being made by our procurement policies. We have not yet reached Utopia, but considerable progress has been made.
My colleague Mr Alastair Ross from East Antrim — not unexpectedly — raised the matter of trains and, in particular, the Larne line. I have reasonably clean hands, given that I signed the cheque for 28 new trains when I was Minister for Regional Development. He cannot blame me if they were dispersed in a way that did not suit. However, the one lesson that I did learn in the Department for Regional Development (DRD) is that if we want to take people off the roads and onto public transport — and, given the massive congestion on our roads and its expected increase, that should be our aim — we must have a public-transport system that is attractive to consumers. It was for that reason that the Regional Transportation Plan set out a programme that included an upgrading of both railway lines and buses. It is essential that we have a public-transport system that can be relied upon, one that is dependable, comfortable and that comes at an acceptable cost.
The Member for East Antrim also told us of the tourist delights in his constituency and of Larne port’s great advantage as the gateway to Northern Ireland. This is very important to both business and tourism. The port of Larne has an important role to play in DRD. I approved some schemes to improve the A8. I believe that there are other proposals, but I will draw those matters to the attention of the present Minister for Regional Development, who will, in time, bring forward his own proposals.
Mr Tommy Gallagher referred to PFI. I do not find myself ideologically wedded to PFI. I am, however, wedded to value for money, and any scheme must be tested for affordability and value for money, as well as by how it delivers. The Executive and the scrutiny Committees will want to examine those matters. However, just as I do not take an ideological position in favour of it, neither do I do take one against it. We need to look at whatever instruments are available, and see how best they can be used to the advantage of the community that we all represent.
Tommy Gallagher also referred to the RPA, and made some comments on its funding. That is interesting, and I should like to remind people of something that seems to have been forgotten: the genesis of the RPA was an Ulster Unionist Party conference, where the then Minister Mr Sam Foster argued that it would bring us savings. Yet it is very clear that, in several areas, it will not bring us savings and that, in the areas where savings can be made, those will not be made in the short term.
Clearly the Executive will also have to look at the rolling out of the RPA programme in relation to budgetary issues.
As far as the environmental protection agency is concerned, Mr Gallagher is aware that the decision to remove it from the Budget was made by the direct rule ministers. The Minister of the Environment is looking into this, and if she is to bring forward a proposal recommending an environmental protection agency or any derivation of that she will also bring forward proposals for the accompanying funding.
Mr Peter Weir, a Member for North Down, referred to capital funding issues and particularly the gap that occurs between an announcement being made and construction actually taking place. The European tendency is to announce things repeatedly, but that builds an expectation, and years pass without anything happening. We need to look at the lead-in times for a number of capital projects.
As a former Minister for Regional Development, we recognised that there was a very long lead-in time, and the Member for East Londonderry, who was also a Minister for Regional Development, will know that it often takes much longer than two years from the decision to proceed with a road to the point at which it can begin. We built up a roads pool and started to prioritise issues so that as soon as the money was available, most of the statutory work had been completed, and we could continue to the tendering process and complete the job without having to wait for the legalities to be finalised. Other Departments should follow this example and start looking at the lead-in times to ensure that we can deliver.
I will return to the Chancellor’s package in more detail in a moment. The Chancellor repeatedly questioned us on our ability to spend the money. He was not convinced, presumably on the basis of the direct rule Ministers who had preceded us, that we were capable of spending the over £1 billion to £2 billion in a year. We did our utmost to convince him of our ability to spend money wisely, but we will look at that in more detail shortly.
The Member for North Down also referred to the regional transportation plan. I suggest that the Minister for Regional Development lodge a progress report on the regional transportation plan so that he is not blamed for the dragging of feet in the period up until devolution commenced again. The plan was laid out and approved unanimously by the Assembly; it had a programme linked to spend, a programme that would have considerably improved our roads and public transportation system. The plan is still sound, although from time to time I am sure that the Regional Development Minister and the Regional Development Committee will wish to examine aspects of it. A progress report would be useful to see how much off course we have gone over the period of direct rule.
(Mr Deputy Speaker [Mr Dallat] in the Chair)
The Member for Strangford Mr David McNarry demonstrated in this afternoon’s contribution why it would be better if we did not allow him to speak on financial matters. He demonstrated at great length a painfully shallow appreciation of the budgetary issues we face and revealed his own ignorance for all to see.
Before he spoke, many of us suspected how little of the subject he understood; after he sat down, we knew how little he did. Perhaps it is not surprising given his own background and experience in business, and with a track record like his, I doubt that anyone would wish to entrust him with a credit card, let alone the public finances.
Mind you, Mr McNarry’s political record is no better than his economic one — he has helped to transform Strangford, previously one of the Ulster Unionist Party’s strongest constituencies, into one that is reduced to a solitary seat.
Mr McNarry: Is that your best defence?
Mr Peter Robinson: He was elected on the tenth count. [Interruption.]
I hear a sedentary intervention from “tenth-count” McNarry. [Laughter.] He might be better to find out why the electorate continues to reject the Ulster Unionist Party. If he would wait until I have finished dealing with the issues, instead of interrupting, he would find out exactly what the answers are to the issues that he raised.
Mr McNarry: Go to the people of East Belfast and see what their response is.
Mr P Robinson: I have been to the electorate of East Belfast 22 times, and on each occasion I have been elected. I am also delighted to say that, in the same period when support for the Ulster Unionist Party in Strangford has fallen, the Democratic Unionist Party has become the largest party and has returned four Assembly Members and the Member of Parliament for that constituency. Before making unsubstantiated comments, Mr McNarry would do well to compare the record of the Ulster Unionist Party with that of the DUP.
Mr McNarry: The DUP’s record is on trial, not ours.
Mr Deputy Speaker: Order. It would be in the interest of all Assembly Members if we could confine the debate to the subject under discussion, and leave the party politics for elsewhere.
Mr P Robinson: I am absolutely sure that you are right, Mr Deputy Speaker; it is unfortunate that you were not in the Chair during Mr McNarry’s speech. I think that, in winding up the debate, I am entitled to respond to the issues that Mr McNarry raised during it.
The record of the Ulster Unionist Party is that it allowed Sinn Féin into an Executive without decommissioning and while that organisation continued with paramilitary and criminal activity, gave no support to the police, did not recognise our courts and would not accept the rule of law. That is the record of the Ulster Unionist Party. On all those issues, the Democratic Unionist Party was able to reverse the bad record of the Ulster Unionist Party and do a good deal for unionism. More than that, we transformed this Assembly from being one in which there was no accountability —
Mr Deputy Speaker: Even the Minister must address his remarks through the Chair.
Mr P Robinson: The Assembly previously had no accountability, either for the decisions of Ministers or on North/South issues. The decisions taken by the Democratic Unionist Party negotiators have ensured that there is accountability and collectivity in the Executive. That is distinctly to the advantage not just of the people of Northern Ireland but of democracy itself.
Ulster Unionist Party Members have some cheek to talk to anyone about their ability to negotiate. Mr McNarry made some retorts about the financial package, so let us consider the financial package issues —
Mr Kennedy: It was a deal-breaker.
Mrs Foster: Is there a Speaker in the House?
Mr Deputy Speaker: Mrs Foster has asked a good question, which I now put to the people who are causing the disturbance and ignoring the Speaker.
Mr P Robinson: The one thing that the Member did do accurately was to quote our position that, if there were a zero financial package, there would be no deal. His lack of knowledge about the financial package — and, indeed, of finances in general — is what leads him to the view that there is a zero package. Nobody believes that it is a zero package, except the dull heads in the Ulster Unionist Party.
Mr Kennedy: Tell us about the deal.
Mr P Robinson: I will tell the Assembly about the financial package. First, the Chancellor of the Exchequer has agreed to increase our capital spend allocation by £2 billion. We have an extra £100 million in our annual resource budget for this year, with further increases in the following three years guaranteed. Revenue from asset sales can now be retained for spending in Northern Ireland, rather than being reclaimed by the Treasury, as was the case for certain large projects in the past. We have guarantees on the use of end-of-year flexibility on both the resource and the capital side. A review of tax policy in Northern Ireland is being carried out by Sir David Varney. Instead of attempting to undermine that review, it would be better if the Ulster Unionist Party — an Executive party — would attempt to convince Sir David to make some helpful recommendations. We have also been guaranteed an investment conference for Northern Ireland, which has received support from, and will be led by, the Chancellor, who will be the new Prime Minister.
We have also managed to retrieve something from the disastrous consequences of the 2002 reinvestment and reform initiative (RRI) negotiations, for which the Ulster Unionist Party was responsible. The Member for East Antrim Mr Beggs had the audacity to suggest that the 19% rise in rates was somehow the fault of the Democratic Unionist Party because it was the largest unionist party at the time. The only reason why the rates rose by 19% was that, under the poor deal negotiated by the Ulster Unionist Party, there was a requirement that there be a reduction in the difference between the amount of tax raised locally in Northern Ireland and that raised in Great Britain.
In order to have access to the reinvestment and reform initiative, it was necessary to reduce the gap between Northern Ireland taxation and that on the mainland. The Democratic Unionist Party successfully renegotiated the bad Ulster Unionist Party deal, and that link has been broken. In the past — [Interruption.]
Mr Deputy Speaker: Order. Mrs Foster, you complained recently.
Mrs Foster: Yes I did.
Mr Deputy Speaker: You are now one of the problems. Please address your remarks through the Chair.
Mr P Robinson: As my colleague Mr Peter Weir indicated, in the past, the Democratic Unionist Party has been critical of Mr McNarry, who was involved in plagiarism. All Members will be aware of the fact that —
Mr McNarry: You get your lawyers ready for this one, Peter. Your remarks will be in Hansard. You just keep going.
Mr P Robinson: I will continue, and I will do so in the clearest possible terms. Indeed, can I challenge the Member to take any legal action that he wants? If he does not take legal action — sit down there — [Interruption.]
Mr Deputy Speaker: Order, order.
We cannot have two Members speaking at the same time.
Mr Campbell: Especially one with high blood pressure.
Mr Deputy Speaker: We now have three people speaking at the same time. Please allow the Minister to continue.
Mr P Robinson: The charge of plagiarism is easy to prove: the Member copied the Member of Parliament for Strangford’s speech, which was made at Westminster, and read it in the Assembly, almost word for word. He copied the speech to such an extent that although he delivered it after new statistics had been published, he used the statistics that the Member of Parliament for Strangford had used at Westminster, which were out of date by the time of the Assembly speech. That is how bad a plagiarist he is.
Mr McNarry: When has the Member of Parliament for Strangford ever written a speech, never mind given me one to copy?
Mr P Robinson: I cannot hear what the Member is shouting at me.
Mr Deputy Speaker: I remind Members that it is raining outside. I am sure that they do not want to go there. Please allow the Minister to continue.
Mr P Robinson: The claim has been made clearly, and it is on the record. The challenge has been issued, and we will all await the legal case that the Member does not bring. He will, of course, skulk off and hope that Members will forget all about it. I shall place the two speeches in the Library so that everybody can read them and be the judges of the Member for Strangford’s plagiarism.
Mr McNarry: On a point of order, Mr Deputy Speaker. What has this got to do with the Budget Bill?
Some Members: Hear, hear.
Mr Kennedy: Answer!
Mr P Robinson: I will answer the Member for Strangford.
Mr McNarry: You are rabble. Sit down!
Mr P Robinson: The Member asked for an answer, and then he asked me to sit down. Clearly, he does not want the answer. I made the remarks; the Deputy Speaker did not make the remarks.
Mr McNarry: You speak through the Speaker in here.
Mr Deputy Speaker: Order, order.
I invite the Minister to return to the subject under debate. I am sure that the public would want to hear about the Budget Bill.
Mr P Robinson: My comment is relevant. Although the DUP has been critical of the Member for Strangford’s plagiarism, it would have been much better if he had plagiarised DUP speeches, rather than coming out with the tripe that he spoke during the debate earlier today. Rather than my criticising him, he would be better off copying the speeches of his colleague the Member of Parliament for Strangford.
The Member for Strangford also had the audacity to criticise me for introducing a direct rule Budget. His colleagues in the Executive supported the process in which we are now engaged. His colleagues — the leader of his party and the Minister of Health, Social Services and Public Safety — supported this Budget as the way forward. His Assembly colleagues voted for it yesterday. Indeed, he voted for it yesterday — he did not say a word in opposition. Therefore, what he criticises today, he voted for yesterday — such is the consistency of the Member for Strangford. If Mr McNarry had even the slightest understanding of the Budget process, he would know why it was not possible to make significant adjustments during the year. This is the month of June, Mr McNarry; the financial year begins in April.
Mr Deputy Speaker: I have an important announcement to make. There has been severe flooding on the roof of the Building due to the heavy rainfall. There is some leakage onto the fourth and third floors — obviously a storm of a different type. This may have an impact on the fire alarms. There are two-minute delays built into the fire alarm system. If a fire alarm is triggered, I will not ask Members to leave. I am sorry for that interruption; I thought that the House should hear about that.
Mr Kennedy: On a point of order, Mr Deputy Speaker. Is it your advice that we stay, in order to get less wet than if we go outside, where we will get really wet?
Mr Deputy Speaker: Go ahead, Minister.
Mr P Robinson: It is abundantly clear that the course that has been adopted and recommended to this House by all the members of the Executive, including the Ulster Unionist members, is a pragmatic and sensible way forward. I thank the Members who genuinely wanted to be constructive in this debate for their contributions. In spite of the efforts of the Ulster Unionist Party, it has been a good debate, and we have discussed many issues of real importance to the people of Northern Ireland.
The restoration of the Assembly has presented us with an opportunity to deliver a better future for the people of Northern Ireland and to improve public services for the benefit of everyone. This approach brings challenges, and the Executive will have many difficult decisions to make. However, the programme that we adopt will enable us in future years to take forward a strategy to strengthen the local economy; encourage investment by making Government more responsible and agile; improve and enhance our infrastructure; tackle poverty and deprivation; and upgrade the core front-line services.
Devolution is only of value if we use it to improve the lives of our people, especially those in greatest need. Devolution will be seen to have worked when we grow our economy and bring greater prosperity to Northern Ireland and its people. This Government intends to make a difference and deliver improvements.
In commending this Bill to the Assembly, I rejoice that it is Northern Ireland’s elected representatives who are making these decisions in a devolved Assembly. Let us take, and make the most of, this opportunity.
Some Members: Hear, hear.
Mr Deputy Speaker: Before we proceed to the Question, I remind Members that this is a Budget Bill and that, therefore, the motion requires cross-community support.
Question put and agreed to.
Resolved (with cross-community support):
That the Second Stage of the Budget Bill [NIA 3/07] be agreed.
Committee for the Office of the First Minister and Deputy First Minister
That this Assembly approves the change of name of the Statutory Committee called the Committee of the Centre to the Committee for the Office of the First Minister and Deputy First Minister. — [The Chairperson of the Committee of the Centre (Mr Kennedy).]
Mr Deputy Speaker: The Business Committee has agreed to allow up to one hour and 30 minutes for this debate. The proposer of the motion will have 10 minutes to propose and 10 minutes to wind up; all other Members who wish to speak will have five minutes. Two amendments have been received and are published on the Marshalled List. The Member who proposed the motion has also tabled one of those amendments.
Mr Cree: I beg to move
That this Assembly calls on the Minister of Finance and Personnel to honour the resolution made by the ‘Hain’ Assembly, on 6 June 2006, to cap industrial rates at 25 per cent.
I beg to move amendment No 2: At end insert
‘; and for the Minister of Finance and Personnel to make a statement to the Assembly, following publication of the ERINI report.”
Last summer, the House debated industrial rating. The Member for East Londonderry, who is now in the Chair, proposed the motion that industrial rates should be capped at 25%, which was agreed by all Members. We need to move on and deliver that which we agreed.
The Northern Ireland Manufacturing Focus Group (NIMFG) has made, and continues to make, cogent arguments for this assistance to what is left of the manufacturing base. Today’s economic climate is very different to that of even five or six years ago. Manufacturing jobs have been reduced to a fraction of what they once were. Industry is competing in a global environment against very low labour and material costs. Our near neighbour, the Republic of Ireland, has a much more beneficial tax regime. This is the only part of the United Kingdom that has a land border with a country that operates a different fiscal regime and is within the euro zone.
The decision to phase out industrial derating is seriously flawed. Instead, we must develop a wealth-creating economy that retains as much of its manufacturing base as possible. Indeed, we need to add to that manufacturing base.
In the past, we were often reminded that the economy relied too heavily on the public sector. The increasing application of industrial rates will do nothing to change that balance; it will have the opposite effect. Increasing rates will threaten the profitability and viability of businesses. Several thousand jobs will be put at risk, and we must not allow that to happen.
When Mr Pearson was in office, he promised to assist the industry by reducing the higher electricity costs. Those higher electricity costs remain. Although some £30 million was set aside to deal with them, the plan was turned down by our European friends. The financial aid has not been made available to the industry.
When DTZ Pieda Consulting presented its report to the Government at that time, it forecasted that the impact from full industrial rates would be only 2·7% of profits. Invest Northern Ireland (INI) and others have produced revised figures that are considerably higher.
Rates may represent only a small proportion of business turnover, but they represent a higher proportion of profits. Companies that experience low profits can have their viability altered dramatically by a change in overhead costs, which can lead to closure. It makes sense to assist such businesses to stay in business and create employment.
Manufacturing represents a small percentage of the economy for gross domestic product (GDP) and employment — it may be as low as 15% — but it generates the vast majority of our exports. We are told that 90,000 people are employed in manufacturing and we could lose one third of those jobs. We cannot take that risk. Jobs will also be put at risk in service industries.
We could rehearse many more arguments, but I trust that the House will again unite in opposing the implementation of industrial rates beyond the 25% level. I agree fully with the First Minister, who, in the debate on 6 June 2006, said that we must:
“ensure that industrial rate liability is kept at 25%.” — [Official Report, Bound Volume 19, p62, col 2].
We ought to keep our promises.
Mr Storey: I beg to move amendment No 1: Leave out all after “calls” and insert
“upon the Executive to consider the resolution made by the ‘Hain’ Assembly on 6 June 2006, concerning industrial rates, in light of the impact of rating on manufacturing in Northern Ireland and in the context of other priorities in the Comprehensive Spending Review, having considered the independent assessment presently being carried out into the matter by the Economic Research Institute of Northern Ireland (ERINI).”
Despite the attempts by the Member for Strangford Mr McNarry to have the Assembly in orbit, considering what is beyond the stars, it is more important that Members keep their feet on the ground and face certain realities.
I hoped that the fact that the Assembly has got down to what could be described as “real business” would ensure that Members have learned the lessons from the previous Private Members Business in the House. Hopefully, Members will have realised the need to consider the issues in a mature manner and to work within the reality of fiscal constraints that simply cannot be wished away. I welcome the comments made by the Minister for Social Development this morning about financial realities.
Industrial derating has been debated several times in the House. The views of Members and parties have been voiced on many occasions, both inside and outside the Chamber.
My amendment refers to the debate that took place on 6 June 2006 — the proposer of the motion has also referred to it. The case was well put on that occasion. The economy of Northern Ireland is a key issue for us all, and the drive to improve our private sector is an aim that everyone shares. Businesspeople in Northern Ireland realise that a return to zero rating is unlikely; they recognise and support the principle of ensuring that they make their contribution.
It is important that we look at the impact of rating on manufacturing businesses across Northern Ireland so that we can decide on the most suitable and sustainable level. The service sector is increasing in size, so it is important for us to ensure that our manufacturing sector is maintained and enhanced. Manufacturing accounts for the vast majority of our exports. Although manufacturing has endured some difficult times, it is important — indeed, vital — to ensure that manufacturing businesses in this part of the United Kingdom have a future.
Therefore it is important that industrial rating should receive the full benefit of the independent assessment being carried out by the Economic Research Institute of Northern Ireland (ERINI). When that assessment has been made, it will be prudent for the Assembly and the Executive to make full use of all the available information, so that an informed, correct decision can be made.
It is also important that the issue be looked at alongside the full range of priorities that the Executive have identified. It has been said in the House recently that, if every issue were made the number one priority, nothing would receive attention. That would do an injustice to the many other issues that we consider. It is essential that we choose the correct economic policies in order to ensure economic stability and progress.
It is incumbent on us as a party to ensure that the economy is and will be a priority for us. Despite the assertions of the Member for Strangford Mr McNarry earlier, we have given that commitment. I have no doubt that the Minister, as he has already adequately shown, is more than capable of producing the circumstances, principles and policies that will deliver that economic stability.
I hope that Members will support my amendment. To do so would show our support for manufacturing businesses in Northern Ireland, and it would also send to the Executive the desired message: that they should consider the views that have been put forward in the House today and in the past, and ensure that the most comprehensive information is available to them so that not only the most informed, but the most appropriate and suitable, decisions can be made. I hope that Members will share the aim of the amendment and join us in supporting it.
Mr P Maskey: Go raibh maith agat, a LeasCheann Comhairle. I thank Mr Beggs and Mr Cree for tabling a motion on an important matter that must be addressed. I am aware that my party colleagues Mitchel McLaughlin and Alex Maskey met the Northern Ireland Manufacturing Focus Group (NIMFG) on a number of occasions in order to discuss the issue and bring it to the fore. I congratulate the NIMFG on keeping the issue of industrial rating high on the agenda.
The sentiment of the motion is good, but, in my view, it has been brought before the Assembly too soon. ERINI’s review of industrial derating is ongoing; it has not yet reported, and we need to wait for the completion of the report to see what it advises. There is a need to recognise that business rating is only one aspect of a much wider problem that requires general reforms, including democratic control of fiscal policy and the development of an all-Ireland taxation and rating system.
Following the review of public administration, it is important that the new functions for councils should include a system of local-government accountability for the spending of commercial rates as there currently is in the Twenty-six Counties.
The capacity of local councils to deliver business development, secure and develop new jobs through enterprise units is weak. Therefore, it is vital that business rates are ring-fenced for economic development, allowing new and existing businesses to move forward and grow stronger with an even greater support mechanism to assist their development and enable them to be the industrial leaders of the future.
The sentiment of the motion is good, but Members must explore all of the options, both now and in the future. I represent West Belfast. Government Departments have deliberately neglected my constituency and other socially deprived areas. When attempting to secure industries for the North of Ireland, the Government are obliged to encourage their location in TSN areas. In my opinion, they have done the opposite.
Recently, as part of a delegation from the West Belfast and Greater Shankill Enterprise Council on a trade mission to Lawrence, near Boston in the United States, I met with people from both areas for the first time. Delegates met with businesspeople and US state officials who had been on trips organised by Invest NI to the North of Ireland, including many parts of Belfast, yet they were never shown west Belfast or the Shankill. Is Invest NI ashamed of us? That is indicative of how British direct rule Government Ministers treated the area that I represent. Members must not allow devolved Ministers to treat communities in the same way.
There should be specific rate relief measures for businesses that locate in TSN areas, to draw in new investors and assist existing businesses that have already shown great courage and leadership in helping communities to overcome their difficulties. It must be a priority to give TSN areas assistance to allow them to catch up with the rest of the island.
A review is ongoing, and Members should wait for the recommendations. A blanket approach may not be the best way forward, and Members must reserve judgement until all the evidence is before us. A report from the Committee for Enterprise, Trade and Investment is 2002 stated:
“A blanket approach currently in practice meant that benefits to the manufacturing industry were spread too thinly and did not allow the Executive to focus resources where they were most needed. Other sectors of the economy did not benefit from this concession meaning that the policy of Industrial De-Rating was not fair in its application.”
That is an important statement from a Committee of the previous Assembly. However, the new Committee for Enterprise, Trade and Investment may have a different view.
To vote for the motion would be to neglect our responsibility, as elected representatives, to hear the evidence from the review of industrial derating by the Economic Research Institute of Northern Ireland (ERINI). Therefore, I will be opposing the motion but supporting amendment No 1. However, I welcome the fact that Members have debated the issue, and I hope that the manufacturing community will take some reassurance from the Assembly. Go raibh míle maith agat.
Mr O’Loan: I wish to speak in favour of the motion. At the outset, I can do no better than quote from Hansard on an almost identical motion on 6 June 2006. The leader of the Democratic Unionist Party Dr Paisley said:
“I am delighted to speak in support of this motion … The Government’s proposals will have a terrible impact on industry. To say, as certain Ministers from elsewhere have told us, that people are crying “Wolf, wolf!” where there is no wolf — well, there are hounds and wolves in abundance, and they are all sniping at the industries of Northern Ireland. We should be here to protect those industries and do everything in our power to see that they are safeguarded.” — [Official Report, Bound Volume 19, p61, col 2].
I could also quote from the Democratic Unionist Party manifesto, which supported a cap on industrial rates. The fact is that the manufacturing base in Northern Ireland has been in steady decline, and the number of jobs is now down to something like 90,000 or 100,000. Manufacturing must still be at the core of business activity.
In debate yesterday, Members spoke of the need to grow the business sector. This morning, when debating the Welfare Reform Bill, contributors spoke of the need to get more people economically active. We live in an intensely competitive, global environment. Low-wage economies, including the new Indian and Chinese tiger economies, put intense pressure on the industrial sector to compete. The SDLP is gravely concerned that an increase in industrial rates of over 25% will threaten the narrow manufacturing base in the North.
Concerns about job losses are not fanciful. The Government have reported that the best-case scenario for job losses, after full industrial rates are imposed, would be 10,000. The worst-case scenario would be 45,000 job losses, with 20,000 accepted as being a realistic figure. However, the NIMFG has projected a job-loss figure of 30,000.
Government have recognised the problem and have stalled the planned phasing-in of industrial rating, which was set to reach 100% rate liability by 2011. That is convincing evidence that the issue of industrial rating is increasingly being accepted as a real problem. Manufacturers will be forced to relocate, downsize, or even close. All companies are vulnerable to closure if additional pressure is exerted to extract more money from an already narrow profit margin of little more than 5%. The costs involved are huge. The total income at 100% rating has been estimated at £75 million — approximately £750 for each worker. For small businesses, or even large ones, that is a large sum to withdraw from the business.
Our industrial policy rightly stresses innovation, to which research and development is critical. For many companies, money extracted through industrial rates is the same money that they could use for R&D. Northern Ireland industry exists in a difficult economic climate. High energy costs are one major factor in that. One major manufacturer, to whom I have spoken, has said that that was the single biggest problem for him, and one that he wanted the Assembly to address.
High insurance costs are also a feature of business life here. Business can flow very easily from North to South. In the South, there is a relatively favourable climate for manufacturing, including lower fuel duties. We need to protect our industry. Through the Varney review of tax policy in Northern Ireland, we are arguing strongly for the equalisation of corporation-tax rates with the South. How could we be taken seriously if, at the same time, we got rid of lower industrial rates, which is one of the few competitive advantages that we have?
In 2005, the SDLP called on the Government to delay the initiative and develop instead a menu of reliefs and exemptions to support business development as follows: first, measures to support vulnerable sectors and encourage developing ones; secondly, assistance for businesses — services or industrial — in areas of high unemployment and/or social deprivation; thirdly, tailoring the rating system to take account of the differing levels of energy consumption, spatial requirements, and so on, that are necessary for various manufacturing processes; and fourthly, change must be phased in on an affordable and sustainable basis. A flexible rate relief and exemption scheme could contribute greatly to addressing coherently the needs of our economy.
There has been much talk recently that all property taxes are a crude weapon that does not relate to ability to pay. The Minister of Finance and Personnel is responding to concerns on domestic rating by initiating a further review that will include the issue of rates relief. Exactly the same applies to industrial rating. Spatial requirements and profitability have no correlation. At present, different sectors of industry are being shown no consideration.
As I said at the outset, I strongly support the original motion and would neither welcome nor support amendment No 1.
Mr Deputy Speaker: I remind Members yet again that mobiles phones are not to be switched on or used in any way in the Chamber.
Mr Neeson: I welcome the opportunity to debate this very important issue again. I applaud the efforts of the NIMFG. Its work over the past year in keeping such an important issue at the top of the agenda must be highly commended. I am delighted to say that the NIMFG has been invited to address the Committee for Enterprise, Trade and Investment next week. I look forward to hearing them.
Hundreds of people attended last year’s event, at the Waterfront Hall, in support of the focus group’s efforts. The important fact that emerged from that event and the subsequent debate in the Chamber was that they both had cross-party support. The commitment that was given then still stands, and that is important.
I am also aware of the ongoing work of the Economic Research Institute of Northern Ireland (ERINI). However, I remind Members that the original reason for introducing industrial derating in Northern Ireland was to allow industry here to compete with the low corporation tax rate that had already been introduced in the Republic of Ireland. That problem still exists today.
I recognise that Northern Ireland has a narrow manufacturing base. One of the positive aspects of industrial derating was that it could attract new inward investment to Northern Ireland. Although the Department of Finance and Personnel will take the decision on industrial rates, there is an economic aspect to the issue. For that reason, I wrote recently to the Minister of Enterprise, Trade and Investment, Mr Nigel Dodds, and I was delighted to receive a response today. He states that:
“The Department of Finance and Personnel has engaged the Economic Research Institute (ERINI) to assess the effects of removing industrial derating from manufacturing businesses. This work is expected to be completed in September 2007.
My Department, through Invest NI, continues to help Northern Ireland manufacturing companies to improve their competitiveness through a broad portfolio of programmes aimed at improving productivity, encouraging more innovation and R&D and encouraging businesses to seek out opportunities in export markets.”
At least we now know that ERINI is expected to report in September.
Last year, the economic subgroup dealt with the industrial rates issue. The important point to emerge was the recognition of a need for an overall package to assist industry in Northern Ireland. In many ways, the extended guidelines of the Varney review team reflect that as well. We must bear in mind that not just one issue needs to be addressed, but a package of issues.
It is also important to remember that the main beneficiaries of industrial derating are the large companies in Northern Ireland. We must recognise that if we are to have political stability in Northern Ireland, we also have to have a strong economy. The Assembly will be judged on how it deals with economic issues.
It is vital that we encourage growth in all sectors of the economy, particularly indigenous small and medium-sized enterprises (SMEs) in Northern Ireland. Although I understand the sensitivities that some Members have about the DUP’s amendment, the Alliance Party will support it.
Mr McQuillan: I welcome the opportunity to contribute to this debate. Over the next few years, the economy should be the Assembly’s number one priority. We must create the kind of environment that will allow business to prosper and generate a greater opportunity for all in our society.
Although the nature of our economy will change, I have no doubt that the manufacturing sector will have an important role to play in the years ahead. We must, therefore, find the best way to encourage manufacturers to come to Northern Ireland, and to stay here.
There are factors that businesses will take into account when deciding where to set up and where to stay, and taxation is one such factor. As we all know, corporation tax is an important consideration, but so too is the question of rates. It is essential that we have the clearest possible picture of the impact of rating on manufacturing in Northern Ireland, and I welcome the research that ERINI is currently carrying out. That work will be essential in making long-term decisions on industrial rates policy.
As someone who believes that a strong economy is fundamental to a stable political environment, I am committed to ensuring that future resources are targeted to where they are most needed. It is unfortunate that, because of EU state aid law, we are limited in what we can do. I hope that the Executive will reflect on today’s debate when they make their decisions in the autumn. I am sure that whatever decision is taken will be in the best interests of Northern Ireland manufacturers.
Mr Shannon: As tha oul Proaverb saes, frae mickle sterts cum muckle things.
We er stertin fae tha beginnin – aa’ fresh slaet efter tha years o’ neglect fae oor direct rool Givermunt en yeers o’ heertacke an bluidshed fae wi-in.
It micht seem aa’ moanumentil erdeael – tae tak Northern Ireland tae tha place whor it shid be, tae study it baith socially an economically, tae paint aa’ new warl pictur o’ Nth Ireland. Moving it fae aa’ war-torn state, tae tha real pictur o’ aa’ bonnie kintry, rich wi cultur, fu’ o’ warem foulk an ready tae step oot untae tha warl stage – aa’ moanumentil er dael indeed – but this sterts wi’ mickle things aa’ beleev that yin major-er muckle step tae be takkin is that o’ studing oor economy by encouraging growth fae wi in.
As the old proverb says, from small beginnings come great things. Northern Ireland is starting from the beginning, with a fresh slate after years of neglect from our direct rule Government and years of heartache and bloodshed from within. It may seem a monumental task to take Northern Ireland from a war-torn state to where it should be: to stabilise it socially and economically and to paint a new, realistic world image of Northern Ireland as a beautiful country, rich with culture, filled with warm people and ready to step out onto the world stage. It is a monumental task indeed, but it begins with the small things. One major step is to stabilise our economy by encouraging growth from within. I support the DUP amendment.
A short walk from the Chamber across the Great Hall to the Senate Chamber is an elegant portrayal of the three realms that Northern Ireland used to rely on to keep it afloat — linen, ships and agriculture. Once known as a giant in the manufacturing world, renowned for quality, Northern Ireland is now floundering and losing out to Third World nations that had the foresight to encourage big business to invest. Those nations then reaped the benefits through increased labour and higher task dividends as businesses eventually produce more. We must learn a hard lesson from those who once looked to us for inspiration.
However, it does not have to be like that. In Northern Ireland, we still have the ability and desire to work for ourselves, to thrive economically and to support our small nation. It is up to the Assembly to facilitate that. It can be achieved by taking the necessary steps to foster growth, not hamper it with the lure of quick or easy money. Manufacturing accounts for around 90,000 jobs in the Province, in addition to a further 45,000 supplementary jobs. That level must not only be sustained but it must be increased. That can be achieved by a cap on industrial rates. That would help to sustain the 6,000 small businesses in Northern Ireland that currently do not enjoy the rates relief that is experienced by their counterparts on the mainland. It is our job to promote the growth and to cap the rates.
For too long we have been reading newspaper articles about closures in, or downsizing of, our industries. As our nation wakes up in a time of accountability and prosperity, it is time that we read articles about more jobs, such as the 100,000 jobs needed over the next 10 years to sustain us, or about international firms using our businesses and products due to their competitive prices and superior quality. The Republic of Ireland has consistently offered taxation, insurance and rates at a much lower level than in Northern Ireland. That country has been rewarded with a burgeoning business world and the benefits that that invariably brings.
If a company is seeking a base where is it likely to go? What side of the border will offer greater value for money? We must consider those questions. There could be a loss of some 18,000 jobs if businesses will have to pay industrial rates. That would be a blow that Northern Ireland could not take.
In Northern Ireland, we have become hardened to terrorism by the gun. That has held us back and hampered prosperity. However, we cannot allow ourselves to be laden by terrorism through taxation, a tactic of which the Labour Party is so fond. In the UK, just under 15% of jobs are in the manufacturing sector, as opposed to other EU countries that have double that proportion. Why is that? The Government have taxed local businesses out of existence yet they have not replaced it with anything substantial.
That trend cannot be allowed to continue in Northern Ireland. We must support the Federation of Small Businesses and the Northern Ireland Manufacturing Group. Those bodies have stated that the Northern Ireland economy and their own businesses must be able to afford the rate. From small beginnings come great things. If businesses get a shot at a good beginning, everyone would reap the benefits of lower unemployment levels, more funds being available through regular income taxes, less money being paid out in benefits and greater cash flow and prosperity throughout the Province.
Ms J McCann: Go raibh maith agat, a LeasCheann Comhairle. The current policy of industrial derating was introduced mainly as a response to growing competition in markets for manufactured goods from foreign countries. In 2001, the Executive commissioned a study into the economic impact of industrial derating, and the public consultation that followed revealed broad support for the removal of the industrial derating policy.
Along with other parties, the Committee for Finance and Personnel and the Committee for Enterprise, Trade and Investment, Sinn Féin supported the ending of industrial derating because measures were required that would best support local businesses and their vital role in the economy. The Irish Congress of Trade Unions (ICTU) expressed a view that the revenues raised by the abolition of industrial derating could help to fund Government borrowing to deal with the capital funding deficit of £6 billion. The ICTU pointed out that the current industrial derating policy was inconsistent with the Programme for Government’s aim to promote a knowledge-based economy, given that the businesses benefiting from derating were largely manual-labour-oriented.
Businesses must contribute to the cost of local government services and the infrastructure in general, because they are often the primary beneficiaries of such spending. Therefore, businesses should pay local taxes such as rates. However, the system must be applied fairly to ensure that other industries that make a significant contribution to the economy are treated equally.
There is a huge responsibility on enterprise units at local government level to ensure competitiveness, business development, the securing of existing jobs and the development of new ones. New council functions after the review of public administration should include a system of local government accountability for the spending of commercial rates, as is currently the case in the South of Ireland. Business rates should be ring-fenced for economic development.
A crucial aspect of strengthening enterprise is the nurturing of new businesses, and part of that should involve lightening the financial burden of those businesses during their start-up period. The financial benefits to businesses on their own will not contribute significantly to development unless the benefits gained are used strategically by the businesses concerned. Therefore, a system of rates relief should replace the current industrial derating system. Rates relief for new businesses, and businesses located in new TSN areas, should be based on compulsory, agreed and accountable action plans for those businesses.
The issue of industrial rates cannot be isolated from the significant infrastructure deficit in the North of Ireland, the higher costs for businesses here and the progressive squeezing of resources by the British Treasury. Industrial rating is only one aspect of a much wider problem that requires general reforms, including democratic control of fiscal policy and the development of an all-Ireland taxation system. The independent review currently being carried out by the Economic Research Institute of Northern Ireland is the best way forward. Therefore, I support amendment No 1, which considers all the options.
Mr Beggs: Before I was elected as an MLA, I worked in various small businesses in Northern Ireland as a production manager in the manufacturing sector, and I assure the House that that is a difficult environment in which to work. There are huge pressures for survival, and small businesses struggle against international competition from former eastern bloc or Far Eastern countries. In an enlarged European Community, an additional low-cost economy can compete directly with Northern Ireland. There are huge pressures in the small business sector, particularly in the manufacturing sector, which is open to global competition.
Geographically, Northern Ireland has several disadvantages, or challenges, to overcome. It is situated on the periphery of Europe and has a relatively small domestic market, which means that additional transport costs are incurred and goods must be exported. Most of our exports go to the rest of the United Kingdom, and that means paying for goods to travel across the Irish Sea. We must ensure that we do not over-burden local manufacturers to such an extent that they cannot survive, and we must appreciate that there are huge challenges, both locally and internationally.
The Northern Ireland Office has justified its proposal to end industrial derating by reference to the infamous DTZ Pieda report, which estimated that industrial rates would be only around 2·7% of profits — and that is clearly unrealistic. Other Members have said that professionals in that area have said that that figure is unrealistic. I welcome the fact that a detailed review is under way. It is hoped that it will come up with more realistic figures and demonstrate how they could ultimately adversely affect local manufacturers.
Manufacturing in Northern Ireland is not just about the industrial heartland of East Belfast. Recent figures for manufacturing jobs in each constituency covering the period to September 2005 showed that Upper Bann had the highest quotient, with 9,514 jobs, followed by Fermanagh in the west of the Province with 7,658 and then North Antrim. East Belfast came in fourth. We are not talking about some Belfast-based, old-fashioned heavy industry that has been around for some time: we are talking about a very wide geographical spread, with the bulk of the jobs being located outside Belfast.
Mrs D Kelly: I thank the Member for giving way. Does he acknowledge that as Upper Bann has a high number of manufacturing jobs compared to other areas across the North and is also close to the border, it is one of those constituencies most at risk of losing those jobs? If we do not resolve this matter, many businesses, particularly in the Banbridge area, will transfer across to the Republic of Ireland.
Mr Beggs: The Member makes a valid point. If I were in that constituency I would be particularly concerned.
Northern Ireland has a higher prevalence of small businesses than does the rest of the United Kingdom, and that in turn creates difficulties. It is widely recognised that in smaller enterprises a higher proportion of the turnover is spent on rates, and, ultimately, a higher proportion of the profit is spent on rates. Those businesses are not running two or three shifts in a confined area with the equipment and buildings being used continually. They are probably only operating on an eight-hour daily shift. Northern Ireland has difficulties associated with the nature of the employment and the size of the companies.
It is also widely recognised that Northern Ireland’s public sector is too large and its private sector too small. Action must be taken to encourage the private sector. It should not be burdened by taxes that put money into the public sector, but that is exactly what happens when rates are raised in the industrial manufacturing sector.
Sir David Varney is conducting a major review of corporation tax, but the outcome of that is not yet available. Those Members who have met Sir David will appreciate that we have an up-hill task, as he is taking the view of the central Exchequer. However, we must try to win.
We must use what mechanisms are under our control until something better comes along. Industrial rating is under the control of the devolved Assembly. We must keep those rates as low as possible; they would be increased at our peril. We must reflect the needs of local manufacturers, and ensure that we do not create additional burdens for them. I support the motion.
Mr D Bradley: Go raibh maith agat, a LeasCheann Comhairle. Tá an-áthas orm deis a bheith agam labhairt ar an rún tábhachtach seo. I am glad to have the opportunity to speak in support of the motion and of the second amendment. I thank Mr Beggs and Mr Cree for bringing it to the Floor of the House.
Manufacturing in Northern Ireland needs all the incentives that it can get to enable it to engage in an increasingly competitive market, in which emerging economies exert more and more pressure and in which margins are squeezed, leaving manufacturers with less and less money for wages and investment.
The best-case scenario under higher industrial rates is job losses of 10,000. The worst-case scenario is job losses of 45,000, although it has been accepted that 20,000 is a realistic figure. However, the potential ramifications of a higher rate are further job losses in the service industries. Taking that into account, a more realistic projection of job losses is about 30,000. Manufacturers would be forced to relocate, downsize or even close. All companies are vulnerable to closure under additional pressure to extract more money from an already narrow profit margin of little more than 5%. Under those circumstances, companies have little incentive to plan for the future through investment, research and development. That greatly hinders wider economic growth and competition.
Support for manufacturing has fallen from £150 million each year in the late 1990s to just £50 million: £100 million has been taken away from industry. That support used to be shared by over 1,000 companies; however, it is now focused on a handful of large companies, and the majority of manufacturers now receive no support. At present, manufacturers pay £20 million each year in rates. Five years ago, when the policy was planned, a typical manufacturing firm received money from the Government; now it must pay them. The situation has changed drastically, and policy changes to reflect that make sense.
Global competition is intense. It may, therefore, be cheaper in the long term for companies that are faced with higher rates to relocate to other areas, particularly eastern Europe. Moreover, they have the option to consolidate and streamline. For example, food and drink manufacturers have already set up plants in the South of Ireland, where, in addition to the other incentives available there, corporation tax is only 12·5%.
Communities that have worked to help themselves by establishing co-operatives and developing enterprise agencies will see their efforts wasted if tenants are forced out of business by higher rates. Those businesses will either fold or move to low-tax areas, leaving behind empty factories that will be of little benefit to owners, workers or the Government. Instead of driving manufacturing out of Northern Ireland, the Assembly must do everything possible to ensure that it stays and must give it every possible encouragement to develop in the future.
Rather than create increased revenue for Government, the danger is that increased industrial rates will lead to diminishing returns through factory closures and unemployment. Make no mistake about it — increasing industrial rates will cost jobs. That is certain. Unemployment increases the demand for other Government services, including health, benefits and housing. If more must be spent on those areas than is raised through rates, where is the gain?
Northern Ireland’s peripheral location in Europe means that manufacturers here must have extra storage facilities to help mitigate the impact of transport costs and possible delivery delays. They should not be penalised with higher rates bills for their efforts to overcome the effects of peripherality. On the contrary, they must be given every support to overcome those difficulties and others, such as high energy and insurance costs.
I support the motion and the second amendment.
Mr Armstrong: I support the campaign to cap industrial rates in Northern Ireland. Last June the Assembly voted to freeze rates at 25%, but a lot has changed for many parties since then. Indeed, although some parties are almost unrecognisable from this time last year, surely they are prepared to speak up for our manufacturing sector.
No less a person than Dr Ian Paisley himself said in last June’s debate that we must ensure that industrial rates are kept at 25%. Mind you, he said a month later that no unionist who is a unionist would go into Government with Sinn Féin. He also said that Sinn Féin was not fit to be in Government in Northern Ireland and that it would get there over the dead bodies of unionists. Therefore he has a track record of changing his mind.
The Assembly should be aware of the tremendous difficulties with which Northern Ireland manufacturers have had to deal in the past number of decades. Political stability and lasting peace mean that we now have an opportunity to build Northern Ireland and create new jobs and prosperity for all our people.
Those in the manufacturing industry are telling us that they need the Assembly’s help to ensure that industrial rates are kept at a level that they can bear. The Northern Ireland Manufacturing Focus Group is telling us that the introduction of a full industrial rate would cost thousands of jobs and devastate our economy. In many cases, those people have kept businesses going throughout the most difficult circumstances in our darkest days. Now is certainly not the time to place obstacles in their way. They need our support and help, and they are entitled to expect it. They have asked that the strong positive signal be sent that the manufacturing sector has the support of the new Government. Today presents us with an opportunity to send that signal.
The House supported the measure a year ago. At that time that support was easy to give because we did not have the responsibility to deliver on our promises. That has all changed, and today we must prove that we deserve to be here by seizing the opportunity to make a real difference to the lives and well-being of our people by taking action to help Northern Ireland businesses to thrive.
Some Members: Hear, hear.
Dr Farry: The Alliance Party leans towards supporting the DUP amendment because it captures the issue in a slightly more balanced and realistic way.
Industrial derating needs to be seen as a means to an end rather than as an end in itself. That end is about putting in place a robust and effective package to support our local economy and to encourage economic growth. I understand why the manufacturing sector wants to retain industrial derating, and in the absence of any other mechanism, that retention is particularly important. In the absence of any wider package, it is important that the Assembly lobbies for some form of industrial derating to address the problems that the manufacturing sector is encountering.
However, it is important to appreciate that there are limitations to industrial derating as an industrial policy. It is in effect a blunt instrument in two main respects. First, it helps those businesses that have larger premises, but it is of more marginal benefit to small- and medium-sized enterprises than those working in the service sector, particularly those companies that focus on information technology — biotech and nanotech and all the different knowledge enterprises for which Northern Ireland is trying to create a greater foothold. Those enterprises are the core industries of the new global economy and the future.
Secondly, industrial derating does not focus assistance on those areas of the economy in which there is the greatest potential for growth and increased profit. It spreads the benefits evenly and does not make any distinction between the different sectors.
Industrial derating is also a defensive industrial policy that tries to protect Northern Ireland’s assets. That is understandable given the decline of manufacturing over recent years and the increased competition from emerging economies, especially those in the Far East.
We need to go on the offensive to achieve the economy that we want to see in Northern Ireland. We have seen how the Celtic tiger approach has transformed the economy of the Republic of Ireland over the past 20 years. We are not in a position to repeat what has been achieved there, because it was the product of a unique set of circumstances and a particular time. However, the Assembly should aspire to achieve similarly rapid economic growth and societal transformation. We should consider how we might reach that.
The Assembly should focus on putting in place a package of economic reforms to assist industry and the manufacturing base. We must attract new inward investment, encourage entrepreneurship and appeal to the new growth sectors, especially in information technology. The Assembly should consider tax-varying powers and whether we should have fiscal autonomy. Corporation tax is a major concern for all parties. The Assembly should consider R&D credits; levels of investment in research and development in Northern Ireland are well below those of our competitors, and that should be addressed.
The complaint that I hear most often from the business sector is the need to address the skills deficit. Young people emerging from schools and colleges are not meeting the demands of the industrial sector. That gap needs to be addressed quickly. We also need to invest in our infrastructure.
The motion proposes something that is not covered in the existing Budget. Funds will have to be found; I note that the proposers of the motion have not addressed where they intend to find those resources. That said, the proposal is worthy of consideration, but it needs to be addressed within the comprehensive spending review as part of an overall package. We need to be quite blunt: choices may have to be made between one type of industrial support and other options that might arise, either as part of a financial package or as a result of the Varney review. We may not have the resources or the ability to fund all of these, and we need to ensure that what we choose is the most effective means of addressing economic growth in the shortest possible time.
We must have open minds on this. It is important that we not let the issue of industrial derating fall off the table. It is currently the only relief available to manufacturers. However, there are other means that might be more effective in addressing their needs and those of other sectors of the economy.
I support the amendment.
The Minister of Finance and Personnel (Mr P Robinson): I understand that it is pretty wet in a number of places. The Connswater shopping centre in east Belfast has had to be closed. There are problems in the Dundonald leisure park, and also in this Building. I suspect that we will have to get our wellies on tonight.
I congratulate the Members from East Antrim and North Down for securing this debate. For the third time in the month that this Assembly has been up and running, I am on my feet addressing Members on the issue of rates. Members’ interest in the issue demonstrates the importance of local taxes to both businesses and householders.
Although we would all prefer to see local taxes at a low level, I hope that, after yesterday’s debate and today’s discussions, Members recognise that there are no easy answers and that there are consequences to all decisions. It is my role, as Minister of Finance and Personnel, to spell out what those are, so that, when they decide on the motion and the amendment, Members are armed with information.
Either we reduce the amount of money that is raised to fund public services, or we shift the rate burden onto other businesses or householders. Every penny raised from rates stays here in Northern Ireland and is invested in public services. Decisions cannot be taken lightly. There are consequences to all reliefs and exemptions. Either money — and therefore programmes — are forgone, or ratepayers pay more.
It is important that this issue be seen in the proper context. Let me set out the financial implications of the decisions that the Assembly and Executive will have to take when addressing the issue in the autumn. The cumulative cost of keeping this form of relief at its current rate of 30% liability — compared to the phasing schedule set out in the legislation — is estimated to be £144 million between now and 2011-12. Thereafter, it will be around £50 million a year.
If we estimate the cost of restoring rate liability to 25% and keeping it at that percentage, the cumulative figure is just under £160 million: £19·1 million in 2008-09; £39·1 million in 2009-10; £40·1 million in 2010-11; and £61·5 million in 2011-12.
We face a dilemma, because the future of manufacturing in Northern Ireland is, or should be, important to us all. We have a proud industrial heritage, which is based on a world-class manufacturing sector that has been the main wealth creator for generations. However, we are also moving with the times by encouraging all business sectors to grow and create an economy fit for the twenty-first century.
Yesterday, I outlined statistically how our manufacturing base had declined over the years. We must assess what further impact the direct rule Minister’s proposals might have on that sector. The motion asks that the resolution made by the Hain Assembly on 6 June 2006, calling on the Secretary of State for Northern Ireland — pending the restoration of devolution — to cap industrial rates at 25%, be honoured. Even though the circumstances have changed and rate liability has increased to 30%, we must deal with the figure stated in the motion, because many of us made manifesto pledges on the issue, albeit perhaps not in the precise terms laid down in today’s motion.
The direct rule Ministers undertook a preliminary review. Following approaches from the Northern Ireland Manufacturing Focus Group and Amicus, officials in my Department worked with those bodies on the preliminary review. That exercise proved to be inconclusive, but it resulted in a reduction in the planned rate of increase for 2007-08. Instead of 35%, the Government conceded 30%, pending a full review of the policy this year. Jeff Rooker agreed to that review after intense lobbying from local manufacturers, and I know that my parliamentary colleague David Simpson was closely involved in securing that commitment.
We are now in control of the destiny of this policy, and I am glad to tell Members that the review has already begun. The Department of Finance and Personnel has engaged the Economic Research Institute of Northern Ireland (ERINI) to undertake a rigorous study of the effectiveness and impact of the policy, and it has already begun to talk to business organisations. The review in itself will not fully answer the question, but it will allow us to take more informed decisions.
To put it starkly, the issue is about whether rates bills are likely to be the last straw that will force our good firms across the border, or, worse still, out of business. At a time when we are seeking to attract business to the Province, it is critical that we provide the best environment possible for industry.
ERINI will also undertake a full and impartial economic assessment, looking at the broader issue of whether the money needs to be left in the pockets of the private sector to enable it to compete, or whether there is a better way in which to ensure Northern Ireland’s future economic success by using that money for investment in public services. It is important that we make our judgements on the basis of the evidence.
I am hopeful that the study’s findings will help us make the right decision about the appropriate level of rates for manufacturing businesses. The Assembly would look foolish if it took a decision without considering such an evidence-based report. ERINI will conclude the exercise in the autumn, and I will report its findings, and my Department’s assessment, to the Assembly, taking into account all the relevant available evidence.
Although it is timely to have a debate on industrial rating, it would not be timely to make a final decision in advance of the outcome of the independent analysis. Moreover, there is a growing understanding that the only sensible way in which these matters can ultimately be judged is to set each issue alongside competing priorities as part of the Executive’s Programme for Government, and alongside the decisions that the Executive will take on the comprehensive spending review for the next three years. Therefore I hope that Members will support the reasoned amendment that sets out that course of action.
As I listened to the debate, I found myself agreeing with many of the points that were made. I will not assess all the points about the impact of the reintroduction of rating to the manufacturing sector, because, pending the outcome of the analysis, I am not satisfied that we have all the answers yet.
We all want what is fair and reasonable to ensure that our vital manufacturing industry remains competitive and vibrant. I want to see increased foreign investment and, with Executive colleagues, I am urgently looking at areas where we might be able to make an impact. Indeed, Members will be aware of the work that Sir David Varney has undertaken in this area.
Every Member is aware of the major financing issues facing the Assembly and the hard decisions that we will have to take shortly on health provision, care for the elderly, the education of our children, public transport and a host of other priorities. Therefore a careful balance must be struck. Furthermore, even if we were to continue with the phasing out of derating — and no decision has yet been taken on that matter — we may need to consider other ways of supporting our manufacturing base outside the rating system. Until a more detailed analysis of the impact on manufacturing is available, I cannot reach any conclusion on that matter. However, there are other positions between industrial derating and charging the full rate.
Ensuring economic growth must be the number one priority of the Executive and the Assembly, and our policies must be shaped to deliver that outcome. The Assembly must address how best to achieve that goal. I am grateful for Members’ contributions today, and I will come back to the Assembly when the review has been completed.
Mr Hamilton: Every Member is sympathetic to the plight of those in the manufacturing sector, and that has been the tone of the debate. The DUP’s amendment — more so than the substantive motion — represents a sound footing for the Assembly and the Executive on which to proceed with regard to industrial rates, especially in relation to the pending ERINI report on this important subject. I do not wish to pre-empt the report, but the amendment puts the matter into a proper legislative and governmental context.
I look forward to seeing the proposer of the motion, Mr Cree, in the Lobby supporting amendment No 1. He will certainly be there if he wants to remain true to what he said yesterday during the debate on the Supply resolution:
“At the end of the summer, we will begin the Budget preparations for 2008-09. That Budget should emerge from the Programme for Government. It will have a limited number of overarching priorities that will guide departmental spending plans. Members must ensure, through the various Committees, that the process that is adopted allows for accountability. The establishment of priorities is crucial, given that financial resources are limited.” — [Official Report, Vol 22, No 10, p396, col 2].
If the proposer is true to his word, I look forward to seeing him support the DUP amendment.
The Minister and Mr Shannon spoke about our proud manufacturing tradition, and when one thinks of industry in Northern Ireland, images of massive manufacturing enterprises such as Harland and Wolf, and Shorts are instantly conjured up. Members on all sides lamented the decline in the manufacturing sector. The decline in traditional manufacturing jobs in the Strangford constituency has been startling in its speed. Gone are the once huge and significant employers such as Saintfield Yarns Ltd and the linen mills in Comber and Killyleagh. The most recent figures show a decline in employment in the manufacturing sector from 4,624 in 2001 to 4,200 in 2003. Those figures are historic, so I am sure that they are much worse today.
That situation is replicated across the country, and for that reason there is sometimes a false belief that the manufacturing sector is lost forever. That is certainly not true.
Mr Cree: I thank the Member for quoting so well from the speech that I made yesterday, but does he agree that industrial derating is a priority?
Mr Hamilton: If the debates that have taken place in the Chamber over the past few weeks are anything to go by, Members have many priorities. Today’s Budget Bill debate and the Finance Minister’s response show that the economy is one of the Assembly’s highest priorities, and I support that.
The number of employees in the manufacturing sector is well down, but it is still about 80,000 people. That is not an insignificant number, especially when one factors in how many family members and dependents rely on those jobs. The manufacturing sector represents approximately one quarter of Northern Ireland’s private sector employment.
Although there is rightly much focus on generating new, high-value-added jobs in the technology, information and communication technology or financial services and banking sectors, we cannot afford to lose our manufacturing base. Mr O’Loan spoke of how we must retain a manufacturing sector. He is right. Not just because of some sort of snobbery that says that a job that results in an end product — that produces a widget — is better than a service-sector job, but because if any more jobs in that sector are lost, they might prove near impossible to replace. There is much evidence that some of those service-sector jobs depend on jobs in the manufacturing sector.
Mr Neeson spoke of the circumstances that brought about the retention of industrial derating. That poses the question: have those circumstances been completely resolved? The main reasons for industrial derating’s being introduced in Northern Ireland were the deteriorating competitive positioning of manufacturing in the 1980s, the erosion of our manufacturing base, and difficulties in attracting foreign direct investment. Those are very much the same problems that the Northern Ireland economy faces today. Many unique, or certainly peculiar, problems also exist that are overemphasised in Northern Ireland. These include high costs for energy, transportation, insurance, waste, property and tax.
The need to enhance our competitive position has been a common theme during the debate. Northern Ireland suffers from several key disadvantages compared to economic competitors such as the Republic of Ireland. Corporation tax was mentioned, as was the skills deficit. Infrastructural problems should also be considered. A question that must be answered is: can we afford to do away with the one advantage that we enjoy?
Considerable success has been achieved since the motion was passed in the House, and many congratulations are owed to those industrialists who fought hard to cap the level of industrial rating at 30%. I suspect that the prospect of having full industrial rates is extremely unlikely now. Mr Beggs, Mr Cree, Mr O’Loan and others spoke of job losses and other impacts.
Mr Deputy Speaker: Draw your remarks to a close please.
Mr Hamilton: I certainly will.
It is important that we wait for the conclusions of the report from ERINI, from which we should learn the full impact of industrial rates. Members can then decide the best way forward, and not before.
Mr B McCrea: Before commencing my speech, I declare an interest as a former employee of the Northern Ireland Manufacturing Focus Group. That fact has been entered in the Register of Members’ Interests.
Many Members will know of my involvement with this issue in the past. In fact, many of those present will have attended the Waterfront Hall, where they witnessed the strength of feeling on the issue. Others will have participated in the debate during the so-called Hain Assembly. I have talked to quite a few people during council meetings, and, more recently, during the hustings in the run up to the election, many Members will have met with representatives of the industrial sector.
I recall the First Minister, along with several other colleagues, visiting a factory in my constituency, where he gave some warm words of encouragement to the workers. As has already been mentioned, the First Minister’s emphatic commitment to ensure that industrial rating is kept at 25% is appreciated.
The issues are broadly known, and I do not intend to regurgitate the arguments. As the Minister of Finance and Personnel has mentioned, he is aware of many of the arguments. I do want to discuss the reasons for the motion’s having been tabled today, and, to a certain extent, the issue of financial responsibility, which has been mentioned.
Although many companies in Northern Ireland are struggling with the burden of industrial rates, manufacturing is not on its knees. This country has some great companies that are competing daily in a global economy. Every day, the prices of fuel and electricity increase, workers need more pay and more machinery is required. Due to that, companies have to invest continually to continue competing. The problem that companies face in this global economy is that they cannot increase their prices. Therefore, there is a squeeze on their return. This impacts on training and research and development, and all the measures that we have implored our people to undertake.
The problem is that investment decisions are being made daily, and the impact of that is not felt immediately. Just because a decision is taken that a factory will be built in Hungary, or across the border, it does not automatically follow that the home-based factory will immediately close.
Businesses are disappearing on a daily basis. There cannot be a constituency in Northern Ireland that has not had a major employer close down, and the sad thing is that that does not have to be the case. Members representing border constituencies will know about the number of businesses that are growing on the other side of the border. Mid Ulster has been identified as an area most at risk, spreading to Dungannon and Upper Bann. Each month of delay means that another factory closes and people lose their jobs, and they end up working part time in retail and tourism rather than in the highly paid jobs that they previously held. Stacking shelves may be better than nothing, but it is not the way to give people the skills they want to learn.
Time is of the essence, and Mr Storey, one of the proposers of the motion, said in the past that he felt that there had been great reluctance and dragging of feet on the issue. That should not be the case. Urgency is needed. Let us put our money where our mouth is.
There is the issue of financial responsibility, and the proposers of the amendment want to introduce a degree of financial responsibility, which is to be commended. My experience during the campaign was that no one adopted anything less than a responsible attitude. When the Northern Ireland Manufacturing Focus Group came to the Committee to argue for a level of 25%, it did not argue for 0%, although it appreciated the comments of Mr Paisley Jnr, who thought that it should. In addition, the group did not refuse to participate in skilling and reskilling the workforce. It is a responsible group.
I wish to clarify that industrial rating is different from other issues being discussed, such as personal care. Increasing the level of industrial rating will decrease revenue, because businesses will take steps to ensure that that is the case. Companies with three or more factories will merge them; others will relocate, downsize, or automate.
It must also be appreciated that much of Northern Ireland’s manufacturing sector resides in rural constituencies, and there would be a huge knock-on effect for the whole of the rural economy if such factories were to be lost — something that the Assembly would want to deal with.
Then there is the ultimate sanction. In my constituency there is a company called Sanmina-SCI. In two weeks time it will close down its operation, and there will be a loss of 300 jobs to the economy — £500,000 in wages alone. The company is closing down here because the ten acres it occupies are worth £27 million, and it can make its products elsewhere. That is why Members need to deal with this matter. The manufacturing industry is not dead — it makes a huge contribution to our economy — but it wants to see a positive message coming from the Assembly.
Earlier, Mr Cree made a point about the land border. It is true — Northern Ireland is the only part of the United Kingdom to have a land border. Mr Paul Maskey said that he sympathised with the situation but was unsure about what we were going to do about it. Mr O’Loan put forward an eloquent proposition explaining things, and Mr Neeson, who is no longer here, spoke well and was complimentary about the Waterfront Hall — it seems that the party of opposition appears not to be in opposition on this particular issue.
Mr McQuillan mentioned research and the state-aid rule. One of the great advantages of industrial rating is that it does not fall foul of state aid rules. Mr Shannon spoke of monumental encouragement and getting off our knees. Members also talked about productivity.
Mr Shannon also said, in a debate last year, that he and his party had been to the Secretary of State on this issue eight or nine months earlier — yet, here we are, one year on, still talking about the same matter.
I should also mention that Stephen Moutray — although he did not speak in today’s debate — has acknowledged the dire consequences that might arise.
To resolve those issues, we must consider what is best for our manufacturing sector. I was a little disappointed that Stephen Farry described the policy as a blunt instrument. It is not a blunt instrument, but something that works. Without the big factories that employ lots of people, the subcontractors go and the whole thing falls down. If we take away the subcontractors, we take away the retailers. A £30 million fund was made available for electricity, but we have dipped into it to the tune of only £6 million this year, so there is money in the budget.
We also need to find a way to increase Northern Ireland’s productivity. We are at full employment, but the Minister of Finance and Personnel confirmed yesterday that we have been losing our productivity stance since 1998. That is because we are surrendering well-paid manufacturing jobs with an average gross value added of £50,000 and replacing them with part-time employment in retailing and leisure with a GVA of £8,000 to £12,000. We must invest in manufacturing, which is the one area in which we can increase our productivity.
Despite Simon Hamilton’s quotes from Hansard — he also seemed quite keen on quoting people when I saw him on television earlier — I can tell him that there is a wide range of support for our point of view. Mervyn Storey talked about reluctance and foot dragging. Ian Paisley Jnr said that the issue has been picked over so we should simply ensure that the rates are capped at a low level as early as possible, and get on with it. David Simpson talked about his personal experience of the rates going from nought to 25%. I remind Members that, if we return to the accelerator, the rates will rise from 30% to 50%. That is a huge hike.
We do not expect a particular answer now, but we want to send a message. Therefore, we ask Members to support the motion. We will not support amendment No 1, not because we have not heard what people say, but because we want to send a message. However, we ask Members to support amendment No 2 because we think that there should be cross-party support on this very important issue.
Mr Deputy Speaker: I remind Members that if amendment No 1 is made, I will still put the Question on amendment No 2.
Question put, That amendment No 1 be made.
The Assembly divided: Ayes 53; Noes 27.
Ms Anderson, Mr Bresland, Mr Brolly, Lord Browne, Mr Buchanan, Mr T Clarke, Mr W Clarke, Mr Craig, Dr Deeny, Mr Dodds, Mr Easton, Dr Farry, Mr Ford, Mrs Foster, Mr Hamilton, Mr Hilditch, Mr Irwin, Ms Lo, Mrs Long, Mr A Maskey, Mr P Maskey, Ms J McCann, Mr McCausland, Mr I McCrea, Dr W McCrea, Mr McElduff, Mrs McGill, Mr M McGuinness, Mr McHugh, Miss McIlveen, Mr McKay, Mr McLaughlin, Mr McQuillan, Lord Morrow, Mr Moutray, Mr Murphy, Mr Neeson, Mr Newton, Mr O’Dowd, Mr Paisley Jnr, Rev Dr Ian Paisley, Mr Poots, Mr G Robinson, Mrs I Robinson, Mr P Robinson, Mr Ross, Mr Shannon, Mr Simpson, Mr Spratt, Mr Storey, Mr Weir, Mr Wells, Mr B Wilson.
Tellers for the Ayes: Mr McQuillan and Mr Shannon.
Mr Armstrong, Mr Attwood, Mr Beggs, Mr D Bradley, Mrs M Bradley, Mr P J Bradley, Mr Burns, Mr Cobain, Mr Cree, Mr Durkan, Mr Elliott, Mr Gallagher, Mr Gardiner, Mrs Hanna, Mrs D Kelly, Mr Kennedy, Mr A Maginness, Mr McCallister, Mr B McCrea, Dr McDonnell, Mr McFarland, Mr McGlone, Mr McNarry, Mr O’Loan, Mr P Ramsey, Mr K Robinson, Mr Savage.
Tellers for the Noes: Mr Armstrong and Mr McCallister.
Question accordingly agreed to.
Question, That amendment No 2 be made, put and agreed to.
Main Question, as amended, put and agreed to.
That this Assembly calls upon the Executive to consider the resolution made by the ‘Hain’ Assembly on 6 June 2006, concerning industrial rates, in light of the impact of rating on manufacturing in Northern Ireland and in the context of other priorities in the Comprehensive Spending Review, having considered the independent assessment presently being carried out into the matter by the Economic Research Institute of Northern Ireland (ERINI); and for the Minister of Finance and Personnel to make a statement to the Assembly, following publication of the ERINI report.
That the Assembly do now adjourn. — [Mr Deputy Speaker.]
The Case for the Location of Public Sector Jobs in West Tyrone
Mr K Robinson: On a point of order, Mr Deputy Speaker. As Mr McElduff rises to propose his motion, I see that he is properly dressed. On a serious matter, yesterday I noticed that a female Member appeared to be carrying not only a handbag, which one can accept as an accessory, but another piece of luggage as well. I was under the impression that Members, and I do not stress gender, are not to carry items into the Chamber. Will you give a ruling on that matter, Mr Deputy Speaker?
Mr Deputy Speaker: Mr Robinson is correct. Members should not carry large bags into the Chamber. The matter will be referred to the Speaker.
Mr K Robinson: On a further point of order, Mr Deputy Speaker. That was my concern about the departure from the dress rules in the Chamber. If Members deviate from what has been accepted, such as dress in the Chamber, we must be careful not to open the door to other practices that might creep in and embarrass the safety of Members.
Mr Deputy Speaker: The matter will be referred to the Speaker. The Member’s party Whip will probably inform him that this matter was discussed today in the Business Committee, and no doubt there will be further discussion.
Mr McElduff: Go raibh maith agat, a LeasCheann Comhairle. Cuirim fáilte roimh an díospóireacht seo inniu. I welcome the selection of this topic for the Adjournment debate.
I am calling for a proactive approach by the Department of Finance and Personnel in particular, as well as the wider Executive and other Belfast-based Government Departments, towards decentralisation and the relocation of public-sector jobs to West Tyrone and its principal towns, Omagh and Strabane. I could easily broaden the scope of the debate to include any areas beyond greater Belfast — for example, west of the Bann is another recognisable geographical area where there is a deficit in this matter. I recently tabled a question for written answer to the Minister of Finance and Personnel, which was answered on 21 May 2007. The question was:
“to ask the Minister of Finance and Personnel if he will make a statement detailing a proactive approach regarding decentralisation and the location of public sector jobs, and to make a specific commitment that areas west of the River Bann will receive equality in this matter.”
The Minister of Finance and Personnel, Mr Peter Robinson, replied:
“The consultation on ‘The Guiding Principles for the Location of Public Sector Jobs in Northern Ireland’ which closed on 30 April 2007 is the first step in developing a framework which would facilitate future decision-making on the location of public sector jobs. Responses to the consultation are currently being analysed. Once this work is complete I would wish to discuss the matter further with the Executive Committee.”
The “first step” has been mentioned; what are the next steps?
What prompted my question in the first instance? Obviously, there are benefits to the economy of an area if public-sector jobs are located there. It increases spending power and provides employment. In the Twenty-six Counties, and in Scotland, it has been found that the relocation of Government offices served to regenerate the areas concerned; brought secure employment with attractive salaries; encouraged people originally from the areas to return to live and work there; and boosted the commercial life of the towns.
A lot is said in the regional development strategy, Shaping Our Future, about the importance of sustainable communities. Opportunities are presented by the review of public administration. It has been said that the increase in population — the result of relocating public-sector jobs to various places — strengthened by the security of employment, ensures critical mass for the maintenance and expansion of local schools and local businesses. That is the business of sustainable communities.
In the regional development strategy there is a quote that I want to draw to the attention of the House:
“In the context of achieving the optimal balance between Belfast and the rest of the Region, the Strategy promotes the decentralisation of public sector employment to Londonderry and the main towns thereby augmenting their range of service functions. Even on a modest scale this could bring significant local economic benefits, support town centre revitalisation, underpin and encourage private sector investment.”
Another reason for asking this question and raising this issue today is that my constituents in West Tyrone are fed up travelling to work that is considerably far away when they should have options a lot closer to home. In 2002, I asked the then Minister of Finance and Personnel, Seán Farren, to detail the number and location of public-sector employees, by Department, who live, for example, in the Omagh district but travel to work outside it. There were significant numbers of people employed by the Civil Service, or in public-sector jobs, and who lived in the Omagh and Strabane districts, travelling to Belfast, Derry, or elsewhere to their jobs in the Civil Service.
Many of those people are on waiting lists, seeking transfer to a post closer to home. There are real human stories about, for example, women who are pregnant and who are on a waiting list, and who are scored in a welfare-type system for suitability for transfer to a post nearer home. The M1 and M2 motorways are full of cars in the mornings. People feel as if they know each other because they see one another in the early hours of the morning, every day of the week.
I also raise this question because of the recent, incomplete consultation exercise on ‘Guiding Principles for the Location of Public Sector Jobs’. Armagh and Templepatrick were the two venues for public consultations. Limavady was also chosen, but that event was cancelled in unsatisfactory circumstances regarding its scheduling, advertisement and promotion — or lack of promotion. I made a strong case at the time for Omagh to be the location for a consultation exercise of that nature where people could come along and make their case for the location of public-sector jobs in West Tyrone.
I appreciate that other Members will feel equally strongly. The generality of the issue is relevant. I was pleased that, in a subsequent letter to the chief executive of the Western Education and Library Board, the corporate services director of the Department of Finance and Personnel acknowledged that, in light of feedback, he recognised that holding one of the workshops in a central location in the west, such as Omagh, would have been helpful.
I was pleased to get that acknowledgement in that letter, which was dated 23 April.
Mr Kennedy: Will the Member give way?
Mr McElduff: I cannot. I have only 10 minutes, and I have a significant statement to make.
Omagh is a suitable place for the relocation of public-sector jobs, as is Strabane. In the immediate future, Omagh should have the benefit of a consultation exercise. I would like the Minister and his senior colleagues to understand the strength of feeling on this matter.
A public-sector ethos already exists in Omagh. Organisations such as the Western Education and Library Board, the Department for Regional Development, a Roads Service division and DOE Planning Service have offices there, as did the former health trust for the area. The associated expertise helps to provide a critical mass of public-sector employees who can supply essential support in the event of any planned relocation initiative. There is also a range of available office space and potential development sites; a large pool of potential employees with complementary competencies; and a first-class education and training infrastructure.
Omagh and Strabane, therefore, both offer value-for-money options. Furthermore, they are both designated new TSN areas. I refer the Minister to submissions from the former president of the Chamber of Commerce in Omagh, Kevin Martin. I also refer him to a report by academic Cormac Duffy about Belfast centrism in the location of public-sector jobs.
I can equally make the case for Strabane, and I certainly intend to keep in touch with the Department on that issue. I believe that the recent establishment by the two Governments of the North-West Gateway initiative should help to shine a spotlight on the needs of Strabane. Strabane is ever mindful of the experience in the Twenty-six Counties whereby selected counties have benefited from the relocation of public-sector jobs. I commend the Strabane Employment Task Force on the good work that it has carried out, in association with Strabane District Council, to bring this matter to public attention.
In conclusion, I call on the Government, the Executive and the Department of Finance and Personnel to adopt a more serious and proactive approach to the relocation of public-sector jobs to areas west of the Bann, not least the West Tyrone constituency. I would welcome any initiative in the short term — indeed, in the immediate term, I hope — that is aimed at listening to the views of local government, civic representatives, and business and community representatives in Omagh and Strabane. I invite the Minister and his senior officials to take the opportunity to listen to those views, and I would be very happy to host an event to facilitate that.
Mr Armstrong: The debate focuses on the constituency of West Tyrone, but it is has relevance for east Tyrone and further afield, too.
All too often in Northern Ireland, there is a perception of a Belfast bias. There is a mistaken belief that life begins and ends on arrival at Lisburn or Glengormley. That is clearly not correct, but as a resident of Stewartstown in County Tyrone and a representative for Mid Ulster, I would say that, would I not? Given the large population of the greater Belfast area, it is obvious that many jobs will be located there. However, the Government have a role to play to ensure that, where possible, other areas of Northern Ireland, particularly west of the Bann, receive their fair share of public-sector jobs.
The rural economy has suffered greatly in recent years. The agriculture industry has faced falling revenues and has had to deal with the impact of BSE and the outbreak of foot-and-mouth disease. We have also witnessed a staggering growth in house prices, placing homes beyond the reach of first-time buyers, and the threat of closure hanging over many schools due to falling rolls.
It is therefore more vital than ever that people are encouraged to stay in the west of the Province, and the availability of public-sector jobs is a major factor in achieving that.
Mr K Robinson: Does the Member agree that the emphasis on the west of the Bann masks the impact of the under-representation of Civil Service jobs in the eastern areas of the Province? For example, recent figures from an academic suggest that there is an under-representation of 3,000 public-sector jobs in East Antrim. Furthermore, there is not one mile of motorway in my constituency. There is nothing in the north-east comparable to the north-west tourism initiative. Does the Member agree that an unfair distribution of jobs exists and that it has an impact on the east of the Province?
Mr Armstrong: Yes, in my opening remarks I said that the issue affects areas other than the west of the Bann. There is too much emphasis on the Belfast area. It is as if everything starts and stops in Belfast.
It makes more sense for Government to ensure that public-sector jobs are spread throughout Northern Ireland. That is not only to ensure a fair distribution — which is a worthy end in itself — but to support the rural economy and remove some of the pressure from the infrastructure in Belfast. There is life beyond the city limits of Belfast, and it must be sustained and supported. The existence of a vibrant economy in the west of the Province — and the east — will benefit not only those of us who are fortunate enough to live there.
Mr O’Loan: Barry McElduff will not have been surprised that Members have mentioned other areas to his entirely proper defence of the interests of west Tyrone. Indeed, he broadened the issue in his remarks. It is important to be aware at the outset that no policy exists on the dispersal of Government jobs. There is a policy on how to assess a proposal if one arises, but there is an absence of a policy on the central issue. That gap must be filled. I, and my party, want decentralisation to happen.
Two current initiatives bear on this issue. However, as I have said, they are inadequate. The first is Workplace 2010, and the second is the Department of Finance and Personnel’s consultation on ‘Guiding Principles for the Location of Public Sector Jobs in Northern Ireland’, which closed in April 2007.
Workplace 2010 is a major part of the Civil Service reform programme. Its objective is to modernise the Government estate; its method is to sell off around three quarters of the estate and lease it back, with a contract to upgrade and service the buildings. A term in the contract provides a cost for office dispersal, if that is required. However, the term contains no imperative to decentralise. Most importantly, Workplace 2010 points to a rationalisation of the estate towards a smaller number of larger buildings and the disposal of surplus buildings.
The consultation document, ‘Guiding Principles for the Location of Public Sector Jobs in Northern Ireland’, gives me some cause for concern. The document is set in the context of the review of public administration. Although it states that its principles may be adopted more widely, the document does not address the central issue of the location of the entire Civil Service establishment. Usefully, the document mentions the regional development strategy and spells out the benefits of decentralisation: local economic benefits; supporting town-centre revitalisation; underpinning private-sector investment; and a fairer sharing of resources.
The consultation document also mentions the Department of Agriculture and Rural Development’s guide to rural proofing — a guide that the current policy fragrantly ignores. I have no doubt that the many principles for a framework for public-sector jobs location that are proposed in the document form a useful basis for consideration, and I recognise that they include supporting development in areas of deprivation.
This is not an easy debate. It is wise to recognise that there are real arguments for centralisation. Service delivery must be local when it cannot be done electronically or by mail. However, bringing centres of administration — rather than service-delivery points — close to each other, brings economies of scale and a degree of connectedness that may be very important. Capital cities develop for good reasons. For example, how many political parties in the Assembly have their Northern Ireland headquarters outside Belfast?
Members cannot ignore the importance of connectedness between the Administration and the political system at the Assembly. In arguing for decentralisation, I am arguing against powerful forces, but I argue nonetheless. Essential areas of discussion will include an appraisal of the relative costs of different solutions. That includes the cost of change, which will not be negligible.
The efficiency of any proposed solution must be tested against others, including any loss in connectedness and any potential time wasted by certain officers in travelling. The gain in local economic development must be considered, as well as the reduction in miles travelled and congestion. How does the trend towards fewer large buildings fit in with decentralisation? The approach down South seems to have been quite different, where small units have been decentralised. How will proper opportunities be offered for career progression? How will the critical issue of staff be dealt with in relocation proposals? Are some departmental sections easier to hive off from the centre? The transfer of the teachers’ pension branch to Derry seems like a model example. Equality issues must be addressed.
I have one practical suggestion, but it is not offered with any certainty. Although Derry cannot be ignored in this discussion, it cannot be all about Derry. The guidelines refer to hubs with over 20,000 people and give the examples of Ballymena to the north, Newry to the south and Omagh to the west. Places such as those might be a good way to move forward. That is not a definitive position on my part or on the part of the SDLP. Barry McElduff and I may or may not agree on that list. Those places have an advantage in that if people employed there wanted to seek promotion in Belfast, it would be possible for them to commute.
It will not be easy to find a perfect solution to this problem. However, it is time to progress the issue of decentralisation. I ask the Minister to do that.
Mr Deputy Speaker: I remind Members that the debate is about West Tyrone.
Dr Deeny: I am an MLA for West Tyrone, and I am grateful for the opportunity to speak on this important issue on my area, my community and my patients. I was born and reared on the east coast — although some people say that I have never been reared — and am now living in the west, so perhaps I can consider the issue from both angles. I thank my colleague Barry McElduff for raising the issue. I read an article that he wrote in a local paper some years ago, in which he said that almost 300 cars leave the Omagh and district area every day to come to the greater Belfast area. I was not political at all then, and it was the first time that I realised that there was something wrong with that.
I am aware that the decentralisation of public sector jobs has brought political support, but there may be a reduction in Civil Service jobs and balancing may be seen in that context. I am also aware that unions and senior officials oppose any decentralisation and would consider legal action against it.
I will not go through the litany of jobs that have been lost in the Omagh area, but 229 jobs were lost at Desmond and Sons’ shirt factory in 2003. In April 2005, there were 85 job losses at Rixell Ltd. It is estimated that 5% of Omagh’s economically active people are currently unemployed; that compares badly to the Northern Ireland average of 2·5%.
Over the past couple of years, I have taken an interest in Sion Mills because it lost its health centre. In 2004, that exemplary community lost 270 jobs from Herdman’s linen mill; it also lost its police station. Those closures happened because it was thought that people should work in larger towns and cities and move away from rural areas. I have lived in a rural area for 21 years, and I think that that is wrong. In Strabane, 565 jobs were lost between 2003 and 2005, and as recently as January 2007, estimates of unemployment in the Strabane area show that 1,116 people claim unemployment-related benefits.
In January 2007, 26,900 people throughout the whole of Northern Ireland claimed unemployment-related benefits, and 4% of those, or one in 25, can be found in Strabane.
I accept that we cannot neglect and look away from the central areas when we focus on rural areas. Over the years, I have become a major opponent to complete centralisation, and I have said so publicly. Some months ago, one of our daily newspapers officially declared County Tyrone as the most disadvantaged of the Six Counties, with people there suffering the greatest amount of deprivation. However, there are different reasons why complete centralisation is wrong, and why we must have some degree of decentralisation.
One reason is the family. Many people in my area drive to Belfast, and some of my constituents work here in Stormont. They do not see their families and homes at all in the winter, as it is dark when they leave and dark when they return.
Moreover, there are health concerns, with the additional stress of a journey of up to two-and-a-half hours — depending on the traffic — resulting in a five-hour round trip each day. Those people have young families and they have to work. It does not just apply to men; women too travel distances to work. They want to be with their children and bring them up, but they cannot do so because of the amount of time spent travelling.
There are environmental reasons. If I drive down the motorway at the wrong time, it is packed full of cars. We are becoming more and more environmentally green and aware, and we must consider the volume of traffic that packs our motorways.
Then there is the social aspect. People do not work near their homes, and, therefore, they cannot get on with their business in the evening. They cannot attend meetings or do the things that they would otherwise do.
On a human and personal level, there are many reasons to consider decentralisation. I have become aware of the problem, not only through my political involvement, but because of my job as a GP. GPs are asked to write letters for all sorts of reasons. Doctors have to confirm everything in writing nowadays. I have written letters on many occasions to try to bring people nearer home where they can do exactly the same job. In this technologically modern era, in which people are more aware of computers, jobs can be done equally well close to home, and that should happen. People should not have to travel down the motorway to Belfast.
No one says that work should be removed from our cities and urban areas. However, in the 21 years that I have lived out west, it has been loss, loss, and further loss. More and more people are disadvantaged and unhappy, and their health suffers because they spend most of their working day travelling.
I thank my colleague in West Tyrone for tabling the motion, which I support. I am delighted to see that the Minister is still in the Chamber, and I am interested to hear his comments.
Mr Deputy Speaker: I call the Minister for Regional Development, Mr Peter Robinson.
The Minister of Finance and Personnel (Mr P Robinson): Mr Deputy Speaker, you and I have had a long day today. This must be the ninth or tenth speech that I have made in the Assembly in the last two days.
I congratulate Mr McElduff on securing the Adjournment debate. I admire his generosity in seeking to have public-sector jobs fairly and equitably allocated across Northern Ireland. I refer to his generosity because, if one looks at the figures that officials have gathered on the location of public-sector jobs, the Omagh travel-to-work area is ahead of the pack. In fact, by travel-to-work area, Omagh has the highest ratio of public-sector posts for each 100 economically active people, which is more than any other travel-to-work area in the Province.
It might be useful if I outline some of those figures, although I may be seen as trying to wind up the Member for West Tyrone. Another part of his constituency, the Strabane travel-to-work area, is the worst in Northern Ireland.
The Ballymena travel to work area, which is presumably where the Member wants to share some of the jobs to have a more equitable dispersion with the Omagh travel-to-work area, has 19·5 posts per 100 economically active people, Belfast has 32·5, Coleraine 22·7, Craigavon 27, Londonderry 31·1, Dungannon 23·1, Enniskillen 22·2, mid-Ulster 18·7, Newry 24·3, Omagh 38·1; but Strabane has 17. The Member might want to join Omagh and Strabane together.
Mr McElduff: What about Belfast?
Mr P Robinson: The figure for Belfast is 32·5; it comes second just after the Omagh travel-to-work area.
The combined figures for Omagh and Strabane come fairly close to the Northern Ireland average of 24·4, which shows that, statistically, the issue can be looked at in many different ways. It is not simply a matter of spreading jobs evenly across Northern Ireland, and in his contribution Dr Deeny rightly drew attention to some of the difficulties in doing that, as did Mr Declan O’Loan.
The fact is that, on a location basis, the picture is fairly complex. I have asked staff in my Department to provide me with more data, which I will be happy to share — at least with the Committee for Finance and Personnel — when it has been compiled. One moment the talk is about public-sector jobs, and the next about Civil Service ones: Civil Service jobs are public-sector jobs, but there are public-sector jobs that are not Civil Service jobs.
The decisions on the future location of public sector jobs could have important implications for communities throughout Northern Ireland. Ultimately, decisions will have to be taken about the location of any new bodies that might be created as a result of the review of public administration, and that was mentioned in an earlier contribution. The Department of Finance and Personnel also needs to think longer term and beyond the RPA.
Therefore I regard the work being lead by my Department in developing a framework to support future decision-making as vital. The draft guiding principles that would underpin those decisions were the subject of a public consultation that closed at the end of April. The consultation attracted strong interest, with 39 written responses in total, including one from Mr McElduff — who is not a johnny-come-lately to this subject — which he followed up with an Assembly question, which he has already referred to. Mr McElduff commented on the choice of venues for the consultation; however, I do not have to defend that decision as it was taken before my time in the Department.
However, I believe that the Department of Finance and Personnel was keen to reach as wide an audience as possible and to give people the opportunity to discuss the matter face to face. As part of the consultation it held two open workshops in Armagh and Templepatrick, which attracted more than 70 delegates, including several from Omagh. Unfortunately, DFP officials had to cancel the workshop scheduled for Limavady on 12 April due to a low take-up.
The locations of the workshop were selected with the aim of offering a range of options to delegates from across Northern Ireland. Obviously, it was not possible to hold a workshop in every key town; as you know, Mr Deputy Speaker, when you attempt to call a party meeting somewhere in the Province, 17 constituencies are unhappy with the choice of location you make.
Officials are currently analysing responses, and I expect the work of consultation to be completed shortly. However, as one might expect, one of the key themes that has emerged so far is that of dispersal. Not surprisingly, a significant number of respondents, mostly from west of the Bann, argued that a proactive policy of dispersing public-sector jobs from Belfast should be adopted by the Executive. Equally unsurprising is the fact that other respondents, mostly from the greater Belfast area, acknowledge that while a well-managed relocation policy could bring a more even spread of benefits of public-sector employment opportunities across Northern Ireland, they also emphasise the critical relationship between the long-term success of Belfast and that of Northern Ireland plc., and they point specifically to areas of continued deprivation in Belfast.
The full analysis and summary of the consultation responses will be completed shortly. Thereafter, I intend to take a paper to the Executive to be considered in July. Since the findings of the consultation process on the guiding principles for the location of public-sector jobs in Northern Ireland are not yet finalised, I am restricted in what I can say at this moment and in this Place. However, there are advantages in providing work in areas outside Belfast, rather than requiring staff who live in those areas to travel to Belfast to work. I recognise the strong point that Dr Deeny made in drawing attention to the environmental and road congestion issues. I have been looking at such data as has been compiled in order to study trends and identify the areas from which public-sector workers travel.
Let me be clear: I am not unsympathetic to having more public-sector jobs located outside the greater Belfast area, but we should not ignore the capital city as a key location. I thank Mr McElduff for initiating the debate, and I await the outcome of the Executive’s discussions with interest.
Mr Deputy Speaker: I thank the Minister, and I hope he will continue to be Minister for Personnel and Finance for a long time to come. No doubt Hansard will correct my earlier mistake.
Adjourned at 5.23 pm.