Corporation Tax (Northern Ireland) Bill — House of Commons, 2015-01-27
Topic: Macroeconomics
Laurence Anthony Robertson (Conservative, Centre-right): It is a pleasure to follow the hon. Member for East Antrim (Sammy Wilson), who drew on his experience in the Northern Ireland Assembly to make a very useful speech. I also congratulate the Secretary of State on introducing the Bill, which has taken a good deal of skilful negotiation, and on doing so before the election. It would have been easy to push it back. I think the whole House is grateful to her I also pay tribute to my right hon. Friend the Member for North Shropshire (Mr Paterson). I had the pleasure of working with him in opposition when he thought outside the box and came up with this idea. Yes, it had been discussed to some extent, but it had not been fully discussed in this place. At the time, there was opposition, as there always is when somebody comes up with a radical new idea, but he had the foresight, determination and courage to press ahead, and when he became Secretary of State, he made it clear that it was one of the most useful things we could do for Northern Ireland. We are now seeing the benefit of his work A few years ago, this proposal was the first thing the Select Committee looked at when we wanted to find something that moved us away from the orange and green issues and the security situation—serious though it was—to look at different ways of helping the people of Northern Ireland. We thought that the economy was one way we could do that. We took evidence from a great many witnesses—businesses, trade unions and very many other people—and eventually came up with a report that recommended the devolution of corporation tax to the Assembly. I should point out that it was not a unanimous decision. Several Committee members had concerns or reservations, a number of which have been addressed by the hon. Member for East Antrim. However, we felt that the benefits would be overwhelming and that we could address the problems that the decision might throw up As has been said, Northern Ireland is the only part of the United Kingdom that shares a land border with another country, and that country happens to have corporation tax at a much lower rate. As has been pointed out, southern Ireland—the Republic of Ireland—stuck to that policy through thick and thin. I remember going to see the EU Commissioner when the Select Committee was looking at the issue. He was rather dubious about the Republic of Ireland’s low level of corporation tax and expected that it would have to roll over, give way and increase the rate. However, as I said to him, that might have been okay in the short term, but what would it have done for the Republic of Ireland’s longer term prospects? I am glad that that country won the day I recognise—I say this as a Unionist—that there was some concern about setting the rate of corporation tax in Northern Ireland to match that in the Republic, as though that was somehow giving up or compromising on Britishness. It is nothing of the sort. We have a single electricity market across Ireland. Ireland is promoted as one for tourism—I think we could do more on that—and there are experiments with common visa arrangements. All that is sensible. To me, that is not about green or orange; it is not about Britain or a united Ireland. These are sensible measures. Giving the Assembly the ability to cut the rate of corporation tax in Northern Ireland to compete with the south would be a simple and sensible arrangement, and there is a need to do it As we have seen from the economic statistics, which have been discussed in the House and repeated many times, Northern Ireland lags behind on many measures when compared with the rest of the United Kingdom. It is doing okay—it is improving and getting there—but it really needs a boost to move it along rather more rapidly. That is why, interestingly, as well as most members of the Committee and most witnesses agreeing with the proposal to devolve responsibility for corporation tax to the Assembly—along with every political party in Northern Ireland, which is rather unusual—the Irish Government agree with it too. I have heard the Taoiseach on more than one occasion say that he thinks it would be a good idea for Northern Ireland to be able to have the same level of corporation tax. He does not see it particularly as a threat; he sees it as a sensible move The Committee also found that corporation tax in itself is not necessarily the silver bullet. It is not going to transform the whole economy—other measures are needed, such as improvements in the planning regime and many other areas—but it is a good headline grabber. It will grab the attention of the business world, and that can only be a good thing. For example, just a few weeks ago the Committee travelled to Belfast and had a meeting with Senator Gary Hart, who was over to help with the discussions. We put the point to him, and he said the change would remove one of the reasons for not investing in Northern Ireland, because when people look from afar and see the island of Ireland, where are they going to go? Of course, other factors come into play too, but if corporation tax is 12.5% in the Republic and 20% in Northern Ireland, surely that is a draw towards the Republic of Ireland. He said he would be willing to try to set up a trade delegation from the United States to come to Northern Ireland with a view to exploring the investment opportunities. That has to be a very positive move indeed Again looking from afar, it is not just that Northern Ireland shares a land border with the Republic of Ireland that is a compelling reason for making this move. Northern Ireland is also part of an island off an island. If it is exactly the same as the rest of the United Kingdom, what is the benefit of investing in Northern Ireland? We have to ask ourselves that question. What will draw companies to Northern Ireland rather than investing on the mainland? If everything is the same, perhaps they will not do that, but if things are more attractive in Northern Ireland, surely companies and investors will consider their options in the Province. To an extent, it is the same with the United Kingdom, which is one of the very many reasons why I am not for making ourselves exactly the same as the European Union. If we are exactly the same as mainland European countries such as Germany or France, what is the attraction of coming to the United Kingdom and investing here? There has to be a reason for people to come here, and it is up to us to give them that reason I want to touch on another point, which is slightly off the issue, but which is important when we consider the extent of the benefit that reducing corporation tax might bring. When we were in the United States on a Select Committee visit about 18 months ago, we discussed this issue—very positively—and a number of others, but one thing that came up time and again was the violent scenes that we see on our television screens and which are flashed across the world. No matter what this place or the Assembly does on tax or any other incentives, it is destroyed in a single night, with a single vision of any violent scenes or paramilitary activity that is flashed across the world. Nothing could drive people away from Northern Ireland in a worse way or more quickly than that. Anybody in a republican organisation or a so-called loyalist organisation who engages in such activity is betraying the people they purport to represent. They really ought to bear that in mind There are a number of issues that perhaps need to be looked at in greater detail. I am not making a criticism, but I would ask the Secretary of State whether she has given any thought to how the Bill might be considered during its Committee stage. As I understand it, it will be considered in Committee upstairs. However, there are a number of issues that still need discussion, so it might be an idea to consider holding the Committee stage on the Floor of the House. As we move towards the election, sometimes the Chamber is not as heavily used as it might be at other times. Maybe we could consider discussing these issues in a way that allowed all Members to take part, rather than just a few Members upstairs I understand why this change cannot be introduced absolutely straight away, but I am a little concerned that it is being pushed back two years. A lot can happen in two years. However, while we have the full agreement of people in all the political parties in Northern Ireland—on this issue at least, if not on any other—let us take advantage of that. Let us drive this forward as quickly as we can.