Budget Resolutions and Economic Situation — House of Commons, 2015-07-13
Topic: Macroeconomics
Ian Richard Kyle Paisley (Democratic Unionist Party, Right): I commend the speech of the hon. Member for Somerton and Frome (David Warburton). I have spent a career doing what a lot of people told me I could not do, and I shall certainly continue to do so. I wish him well as he fills the big shoes of his predecessor. I hope things go well for him in this House I welcome the aspirations set out in the Budget statement. I believe that this Government are committed to balanced growth, to increased productivity and living standards and to making work pay. I welcome, too, the 2% commitment to defence spending. That is most welcome as something for which we campaigned strongly during the election campaign The Budget missed many points that the Government could have delivered, but I welcome the ongoing commitment to reduce corporation tax. That is a welcome stance, as I believe in a low-tax economy, which I believe drives jobs and employment. This also sends a powerful message to the Northern Ireland Executive—that as the Government here on the mainland continue to reduce corporation tax, Northern Ireland is missing the opportunity, every day that passes, to reduce its corporation tax. We have the right and the opportunity to control it completely—to reduce it to a very low level indeed or to remove it entirely. I think that the Northern Ireland Executive has been sent the message that they should get their skates on and reduce corporation tax as a matter of urgency. In my view, it should be lower than the 12.5% that is the current rate in the Republic of Ireland, our southern competitor, but we should certainly get our skates on, given what the national rate will be by 2020 if the Chancellor continues to have his way. The cost of reducing our corporation tax will be considerably less as a result of the Budget: Northern Ireland will be saved tens of millions of pounds a year, and that in itself is welcome I am, however, concerned about the high rate of personal income tax throughout the United Kingdom. According to statistics from Christian Action Research and Education, one-earner families pay a third more tax than families in all the other richest countries in the world, and the tax bill of United Kingdom households with full-time mums is the highest in the world Other taxation issues also need to be addressed. The Budget statement made no mention of the impact of high energy prices, which could potentially drive jobs out of Northern Ireland. They are being fuelled by an environmental tax which is set to increase from £5.6 billion to £16.1 billion. That will be very bad for Northern Ireland. My constituency contains one of the largest employers in the country, Michelin Tyres, which is a high energy user. Following the Budget, I received a letter from the company saying that energy pricing tariffs in Northern Ireland were the second most expensive in Europe, and that the cost was having a serious impact on Northern Ireland businesses. While the national Government here are holding off in regard to certain payments, I agree with the company that Northern Ireland’s renewables obligation certificate system for onshore wind could be seriously detrimental to our businesses The Government did not take the opportunity to reduce VAT on tourism, which is one of our key employers, and drives between £400 million and £500 million into the local economy. We currently pay 20%, while our neighbour pays only 9% As for the welfare reform changes, I welcome the reduced cap, but I am concerned about the different cap levels in different parts of the United Kingdom. The cap is being regionalised in favour of London, and I think that that is wrong. I believe that there should be a universal reduction The welfare changes must now be implemented at Stormont. We are currently experiencing considerable delays. As we discuss the impact of the Budget on a devolved part of the United Kingdom, we should recognise that the crisis that Northern Ireland is facing could cause that devolved institution to crumble. The Government should convey that message, and prepare themselves for the worst-case scenario of a collapse of devolution in Northern Ireland as a result of the inability of certain politicians to do their job, to count, and to secure a settlement on welfare reform.