Oral Answers to Questions

Lord Dodds of Duncairn Excerpts

Tuesday 5th November 2013 Commons Chamber

[Mr Osborne]

Of course the OBR provides an assessment of the impact of Government policies on the economy, and I will consider my hon. Friend’s specific suggestion that we look into the impact of climate change policies on energy prices. We are currently examining the charges and levies that the last Government, among others, added to energy bills, and seeing what we can do to roll them back in order to provide relief for customers.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the action taken by the Government to freeze fuel duties, but UK taxes on petrol and other fuels remain among the highest in any country in the European Union. What will the Chancellor do to remedy that much unwanted achievement?

[Mr Osborne]

I looked at the plans that this Government inherited, and then cut petrol duty in March 2011. We have frozen the duty ever since, and I intend to continue the freeze for the rest of the current Parliament, provided that we can find the savings to pay for it. That is the crucial point: if we do not sort out the economy, if we are not fixing the public finances, if we do not have an economic plan, we cannot have a living standards plan.

Air Passenger Duty

Lord Dodds of Duncairn Excerpts

Wednesday 23rd October 2013 Commons Chamber

[Dr McCrea]

I thank the hon. Gentleman for that helpful intervention.

I thank the hon. Member for Brigg and Goole (Andrew Percy) for acknowledging the problems faced by regional airports—many hon. Members acknowledged that point in the debate. The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) is right that statistics are worth repetition because they might get through to the Government, who must then answer to them.

The hon. Member for South Down (Ms Ritchie) drew attention to the impact of the Irish Government on Northern Ireland. She was exactly right. It has been said that the UK Government cannot do what the Irish Government have done because of the deficit. However, I draw the House’s attention to the fact that the Irish Government have a greater deficit problem than the UK Government. The Irish Government nevertheless believe that removing APD was of greater value economically. The Minister should bear that in mind when he expounds why we should not abolish APD—he should not say that it is because we are dealing with the deficit. As I have told him, the Irish Government have a greater problem, yet they have announced the measure in their budget.

I am happy that the hon. Member for Mid Norfolk (George Freeman) spared us the details of his trip to Amsterdam. Nevertheless, I hope he has learned something from the debate and will change his mind on any decision he makes later.

I share the experience of my hon. Friend the Member for Strangford (Jim Shannon): a lot of ordinary people come to my constituency office because they have no Sinn Fein representation in the House and we must represent them. That is a disgraceful situation, but it is a fact, and we must accept the reality. The hon. Member for North Antrim (Ian Paisley) gave the House an interesting report of the statement by Mr Hastings. That, too, is worthy of our consideration.

It is clear from the debate that the civil aviation sector is one of the main pillars of economic growth in the UK, driving job creation and growth both at home and overseas, as well as providing air transport for goods and passengers. More than a third of world trade is delivered by air, and about half of international tourism is facilitated by air links. However, as hon. Members commented, UK passengers are taxed more for air travel than passengers anywhere in the world, with APD rates expected to rise again in line with inflation from 1 April 2014.

In March 2013, the UK was ranked by the World Economic Forum as the world’s least-competitive country in terms of taxes and charges levied on air passengers. The TaxPayers Alliance has described APD as

“an unwelcome burden on family holidays, a cost to business and redundant with the EU Emissions Trading System now being applied to aviation”,

and has called for APD to be phased out entirely.

Our vision for a strong and prosperous Britain can be achieved only with healthy and vibrant transport and economic development sectors. Air connectivity is the key to efficient trading and, as the UK economy continues to transform in the face of domestic and global change, it is essential that the aviation industry is given the certainty and incentive necessary to allow it to plan and invest for the long term. Time and again we are presented with the argument that APD has deterred airlines from opening new routes, especially in Northern Ireland, where robust air links are fundamental to underpinning our regional economy, and has compromised the ability of local businesses to attract new foreign direct investment.

The situation is similar in Scotland. Amanda McMillan, managing director of Glasgow airport, has stated:

“Due to the size of the market in Scotland, we will always find it difficult to attain and sustain new routes and this situation is compounded even further by APD which simply serves to artificially depress demand and dissuade airlines from basing aircraft here…Unless APD is reformed, people travelling to and from Scotland…will continue to face some of the highest levels of taxation in Europe which is clearly a disincentive to travel.”

In an evidence session to the Northern Ireland Assembly Finance and Personnel Committee on 18 September, the director of the City of Derry airport, Damien Tierney, described APD as one of the “big factors” influencing airline decision making. Low-cost carriers such as easyJet and Ryanair, which account for most of the Province’s air travel, are particularly influenced by APD.

[Mr Nigel Dodds (Belfast North) (DUP)]

Does my hon. Friend agree that APD has long since ceased to be an environmental tax, if it ever was, and is now simply a means of revenue generation for the Government?

[Dr McCrea]

I thank my right hon. Friend for his intervention. Throughout the debate, Government Members have acknowledged that APD is a way to deal with the deficit, so my right hon. Friend is spot on in identifying that this is another form of taxation on the people of the United Kingdom.

Belfast International airport has noted in similar terms that APD has been held up as a barrier to airlines that might otherwise have shown interest in operating services in Northern Ireland, thereby limiting market opportunity and creating competitive disadvantage for operators. A 2011 report by PricewaterhouseCoopers, entitled “Helping Economic Take Off”, looked at Northern Ireland’s geographical location, which makes us unique in both a UK and EU context. We are the most westerly part of the European Union and the only region of the UK separated by water, yet we share a land frontier with another member state. We have to travel and we have to trade, and air connectivity is the essential springboard from which future economic growth will be launched. The report, however, found that the continued imposition of APD would serve as a significant deterrent to further investment by existing or new carriers in existing or new air routes.

Much has already been said in today’s debate about the Netherlands experience. The Dutch Government introduced an aviation tax in 2008 for passengers departing from Dutch airports. The Dutch air passenger duty proved controversial from the outset and decreasing passenger numbers, combined with the global economic crisis, led the Dutch Government to subsequently abolish it on 1 January 2010. Belgian plans for a ticket tax were not implemented for similar reasons and a Danish tax was withdrawn due to adverse economic impact. In January 2013, the German Government announced that they would freeze their air passenger tax, while the German Transport Minister has publicly stated that he would like the tax to be abolished completely. Will our Government not listen to what is happening across the rest of Europe? Surely those decisions are being made in the light of economic circumstances.

The decision announced in last week’s budget by the Irish Government—that air travel tax is to be removed from 1 April 2014—has once again thrown APD into sharp focus, particularly its potential impact on the aviation sector in Northern Ireland. Concern has already been expressed by the Consumer Council of Northern Ireland that demand for air services in Northern Ireland could face decline, as people head south of the border to avoid tariffs. As Belfast International airport, in my constituency, has commented:

“Any tax or regulation prevailing in Northern Ireland which makes our gateway less attractive than those across the border is entirely retrograde with regard to economic development”.

As recognised by the Northern Ireland Affairs Committee in its two previous reports, Northern Ireland suffers greatly from its shared land mass with the Irish Republic, where the abolition of air travel tax, along with low corporation tax, start-up incentives and marketing funds, will now make it even harder for Northern Ireland to compete for cheaper fares and new route development. Belfast International airport, which lies on the shores of Lough Neagh in my constituency, is the main international port of entry for the province and has proved itself to be an essential component of the local economy and regional growth, as well as being a strategic asset nationally.

In conclusion, I realise that time has run out and I want the Minister to have the opportunity to respond to the debate. I thank every right hon. and hon. Member for participating. I trust that the Government have listened to what has been said and will take away the motion and the thoughts of the House, rather than seek to divide it.

amendment of the law

Lord Dodds of Duncairn Excerpts

Monday 25th March 2013 Commons Chamber

[Naomi Long (Belfast East) (Alliance)]

All of us who sat in the Chamber throughout last week’s Budget statement will be acutely aware of the context in which this debate is taking place. Global economic conditions remain extremely challenging and the impact on the UK economy has led to the downgrading of many of last year’s Budget predictions.

The people we represent, who listened to the statement outside this place, were realistic about the Budget, but they also hoped for measures that would encourage inward investment and growth; give businesses confidence and access to finance to create new jobs and help grow their export markets; ease the pressure on family budgets and small businesses alike; tackle inequality in society; and stimulate desperately needed growth.

Although talk of an aspiration nation is great rhetoric and a worthy aim, it is the job of Government not only to ensure that people are encouraged to have aspirations, but, if there is to be real improvement, to create the context in which they have the opportunities and support to fulfil them.

In the brief time available I want to focus on a few aspects of the Budget, welcoming some of the positive measures and highlighting a number of areas where more could be done.

I commend the Government for upholding their commitment to spending 0.7% of gross national income on international development. Given the current economic climate, it is understandable, though regrettable, that, despite the fact that this allocation represents a small fraction of overall Government expenditure, it comes under continuing pressure. However, by standing by the commitment, the UK is showing leadership in the international community. Aid well spent is a powerful tool to tackle severe global poverty, to assist some of the poorest nations in becoming more self-sustaining and to support global justice, human rights and security. Moreover, although it is spent abroad, it also contributes to protecting our own national interest.

In that vein, I also welcome the fact that at the same time as the Treasury is seeking to tackle tax avoidance in the UK—which we all welcome—it has also committed to prioritising dealing with international tax avoidance by UK companies, which is depriving many nations from the transition from aid to trade. I hope that it will be robust in its actions.

I also welcome the increase in the personal tax allowance, which will lift many of those in the lowest paid employment out of tax altogether. If it were part of a package of measures to tackle poverty more comprehensively, it would be even more welcome. However, as I noted last year, as an anti-poverty measure it is neither the most effective nor the most targeted approach. Although the poorest working families will benefit, raising the personal allowance will also benefit many others.

In the time remaining, I want to comment briefly on measures that will impact on Northern Ireland in particular. I welcome the reduction in corporation tax, which is a particularly sensitive issue given our land border with the Republic of Ireland, where corporation tax is significantly lower at 12.5%. Although it would not be a silver bullet, the devolution of corporation tax has been identified by industry, the Northern Ireland Affairs Committee and the Northern Ireland Executive as an important tool in stimulating the economy and attracting inward investment. The UK-wide reduction, though modest, is a step in the right direction and will also lower the potential cost to the Northern Ireland Assembly should this tax power be devolved, as many of us wish. It is disappointing that that devolution was not announced in the Budget. I trust that the Prime Minister will have more positive news for the First and Deputy First Ministers when he meets them to discuss the matter tomorrow.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Lady can be assured that virtually all the Northern Ireland Assembly parties support what she has just said. Does she agree that it is important that their meeting with the Prime Minister tomorrow has the endorsement of all major business groups, major community groups and people who are concerned about jobs and employment in Northern Ireland?

Cyprus

Lord Dodds of Duncairn Excerpts

Monday 18th March 2013 Commons Chamber

[Greg Clark]

Clearly, it is a matter of regret, and lessons should be learned from the situation that Cyprus finds itself in. One of the clear lessons is that it should not have been allowed to descend into this state of indebtedness, and the banks should not have been allowed to get into their present position of vulnerability. It is in our interests, as well as in the interests of other members of the eurozone, that we have a much more soundly based banking system right across Europe.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the action that has been taken to protect the deposits of members of our armed forces in Cyprus, but to follow on from what has just been said, is not the lesson of this whole episode to spell out very clearly to anyone who advocates in future any greater European integration or any joining of the euro, “Hands off our money”?

[Greg Clark]

I am sure that our constituents in this country will be relieved and reassured that we are not part of these arrangements and not exposed to the consequences of the failure that is sought to be averted in Cyprus.

Air Passenger Duty

Lord Dodds of Duncairn Excerpts

Thursday 1st November 2012 Commons Chamber

[Mr Nigel Dodds (Belfast North) (DUP)]

I will be relatively brief, because many of the general arguments about air passenger duty have already been advanced. The UK has the highest air passenger duty in the world, twice the level of the next most expensive, which is that levied by Germany. Only five or six other countries in Europe levy APD and, as we have heard, the Irish Republic, which currently levies a €3 rate, is planning to abolish it altogether very soon as it believes that will help its economic growth.

When the tax was introduced it was relatively affordable, but there have been swingeingly massive increases in recent years. I suppose that highlights the danger of new taxes in general, because they are always introduced at a level that is seen as relatively modest and we are given all sorts of commitments about them, but very soon they start to ratchet up. That happens especially when they are perceived as not hitting people directly. We know that income tax, national insurance and so on are sensitive matters, but insurance premium tax, APD and so on start by being seen as easy hits. Now, we have got to the stage at which APD is clearly hitting businesses, families, ordinary people and the aviation industry, and that is causing real damage. As the hon. Member for Edinburgh West (Mike Crockart) and others have pointed out, it is clearly not an environmental tax but purely a revenue raiser.

Lord Heseltine’s growth report was published yesterday. When one considers the effect of APD on the aviation industry’s economic prospects, it is clear that it is a tax on exports, businesses, tourism and families. Like other right hon. and hon. Members, I have received many representations about it. Many of them have come by e-mail—we have all received the e-mails—but more than a fair share have been made to me personally. I have been stopped at airports by business men, travellers and students, and people have come to my advice centre to raise the issue with me. It is a matter of concern to many people.

I will not go over the effect of APD on families and tourism, because the hon. Member for Edinburgh West has done his research on that and shown the price differences, but the aggressive nature of the tax is a real problem for families. What is most concerning is that it puts us at a severe disadvantage as a country, particularly in the part of the world where I come from, Northern Ireland. It helps our competitors and makes us more uncompetitive. It affects London, of course—as has been pointed out, it is often relatively cheap for people to go to Europe and then fly on long-haul from there—but the implications are particularly severe in Northern Ireland.

I acknowledge, of course, that the Government have granted a concession to Northern Ireland on long-haul flights, but there are other important considerations in Belfast. The right hon. Member for Gordon (Sir Malcolm Bruce) said earlier that it took seven hours to get from Aberdeen to London by rail or car, and of course it takes considerably longer to get from Northern Ireland to London or the south-east of England by rail or car and ferry. For businesses, there is no alternative to the air link between Belfast and London and the south-east, so that is a unique consideration. It is also now easy to get to Dublin using the new motorway links that have been created. It is therefore attractive and tempting to businesses, tourists and others to travel to Dublin to avoid the APD that is levied on flights out of Belfast.

The Belfast to London route is particularly important. To go off slightly at a tangent, but not too much, we all need to keep an eye on events following the recent merger of BMI and British Airways, which has raised real concerns in Northern Ireland now that Aer Lingus has moved its operation from Belfast International to Belfast City. There are concerns about future links between Belfast and London Heathrow in particular, which need to be monitored carefully.

I received an e-mail the other day from one of my constituents. He said that he flies often, and that his wife is director of a small company in my constituency that regularly sends its employees all over the world. He continued:

“We have both found it to be significantly less expensive to fly out of Dublin, and as I am sure you are aware, this is money lost to both the Exchequer and to our local economy.”

That is the problem in a nutshell. By holding tax on short-haul flights at its current level, we are losing revenue in Northern Ireland and across the country. The tax acts as a disincentive, and something needs to be done. I therefore welcome the opportunity to contribute to this debate, and I join others in paying tribute to those responsible for securing it. I look forward to hearing contributions from other hon. Members.

Multiannual Financial Framework

Lord Dodds of Duncairn Excerpts

Wednesday 31st October 2012 Commons Chamber

[Mr Nigel Dodds (Belfast North) (DUP)]

It is a pleasure to follow the hon. Member for Wellingborough (Mr Bone). I agree with him entirely that the Prime Minister has a wonderful opportunity, if he wishes to grasp it, to use the united stance of the Commons on EU budget cuts to increase his bargaining power in Brussels, but I fear that the Prime Minister’s negotiating position is more about damage limitation than about getting the EU budget reduced. A unique opportunity exists for EU budgetary reform and all due diligence should be directed towards advocating an overall reduction in the EU budget.

The House of Commons Library has set out clearly what the reductions are for each of the Departments over the current comprehensive spending review period. There are reductions of 23% for the Home Office, 27% for the Ministry of Justice, 19% for the Ministry of Defence and 19% for the Department for Work and Pensions. Across the board there is an 11% real reduction in Government spending. In the Northern Ireland Office the reduction is 12%, in the Wales Office 12% and in the Scotland Office 11%. These are real cuts. There is nothing in these figures which allows for a freeze still less an increase to cover inflation.

It is difficult for people in the community, as has been said by previous speakers, to understand why the Prime Minister tells people that in order to get the economy on the right footing, drastic real-terms cuts in the budgets of Government Departments are necessary, affecting front-line services. That message has been sent out by national Governments in the EU, right across the board, yet when it comes to EU expenditure, we are told that the most that we can aspire to is some kind of inflation increase. To the people in the street, to whom the hon. Member for Wellingborough referred, this is not only bizarre, but incomprehensible. They expect the Members whom they send to the House of Commons to stand up for the United Kingdom and for them, and to say that the same rules should apply to spending on the EU as to everybody else.

[Mr Cash]

Does the right hon. Gentleman know that the European Parliament describes the Commission’s proposal as representing a freeze of the multiannual financial framework between 2014 and 2020, and says that it would not be sufficient to finance the existing policies which come out of the treaty of Lisbon? Is there not something ironic in that, in relation to the Government’s motion?

--- Later in debate ---

[Mr Dodds]

Absolutely. When it comes to the European Parliament, nothing surprises me. I must speak up in defence of Members of the European Parliament, including the Member from my party, who consistently vote against these federalist ideas and against increases to the budget, and stand up for the people who contact us daily, saying enough is enough.

With reference to what the EU is doing, let us look at some of the areas of expenditure to which this year alone the UK will contribute £15.8 billion and by 2014-15 £19.2 billion, and that is before the increases going forward. A Member referred earlier to the European Parliament and the fact that it does not have a single seat. Ending that wanton inefficiency would equate to £1.26 billion over the seven years of the 2014-20 period, but there seems to be no appetite in the EU to change that.

With respect to quangos and agencies, there are 56 EU quangos, twice the number in operation in 2004. The cost to European taxpayers has increased by 33% in the past two years alone, with an estimated expenditure of €2.48 billion in 2012 alone. We were told that when it came into being, the External Action Service would not cost the British Exchequer any more money, whereas it has done precisely that. If we got rid of that unnecessary body, we would save EU taxpayers more than €480 million every year.

I think the Minister referred to the House of European History, of all things, which, I am told, is aimed at promoting an awareness of European identity since 1946. It will cost £136.5 million by 2015, with British taxpayers contributing £18.6 million. Those are simply a few examples of the absolutely scandalous waste of money towards which our taxpayers are having to contribute year on year through our contributions to the EU budget.

[Bob Stewart (Beckenham) (Con)]

Is this not simply about fairness? It is fair for the European Union to make the same sorts of cuts that we are having to make at home. That is fair and that is what we should pass tonight.

[Mr Dodds]

The hon. Gentleman is absolutely right that this is about fairness. It is also about being seen to connect with the electorate, the people who send us here, as the hon. Member for Vauxhall (Kate Hoey) said. One of the problems with Parliament and politicians generally is that people do not feel that we have any connection with them or relate to their day-to-day problems. The choice before the House tonight is clear: either we vote to send a clear message that enough is enough, we expect what applies to UK Government expenditure and the national budgets of other member states to apply to the European Union, and our choice is to be on the side of the taxpayer and our people, who are out there suffering daily as a result of the cuts—

[Mr Jim Cunningham (Coventry South) (Lab)]

rose—

[Mr Dodds]

I am sorry, but I have no more time to give way and other Members wish to speak.

The choice is whether or not to vote in favour of the Government’s motion, which has been couched in tough terms by the Minister, and I welcome the progression in Government thinking, because when I listened to the Opposition spokesman I was reminded that it was not long ago that we heard representatives of the same party arguing a very different case when it came to European expenditure. I accept that entirely, but the fact of the matter is that there is no reason why this House should not send out a united message saying that what is good enough for Britain and our constituents, for the people we represent, should also be good enough for the European Union and that there should be no special exemption or special rule for it. We must be on the side of taxpayers tonight and vote for the amendment tabled by the hon. Member for Rochester and Strood (Mark Reckless).

Professional Standards in the Banking Industry

Lord Dodds of Duncairn Excerpts

Thursday 5th July 2012 Commons Chamber

[Mr Osborne]

I will give way in a moment, but let me make this point.

We all agree that, in the words of the FSA, Barclays

“failed to conduct its business with due skill, care and diligence”,

failed to

“take reasonable care to organise and control its affairs responsibly and effectively”

and failed to

“observe proper standards of market conduct”.

We all agree that the misconduct of Barclays created the risk that

“confidence in or the stability of the UK financial system would be threatened.”

We can also agree—this is material to the point about whether there should be a judge-led inquiry or a parliamentary inquiry—that the FSA and the Department of Justice in the United States have done a very effective job in identifying what went wrong after the event. Sadly our regulators failed to see it coming, but the job afterwards has been effective. Now, I think we can all agree that we want the prosecuting authorities to see whether there are legal routes that they can take to bring proceedings against those involved. That is of course a matter for them. In this very partisan debate, that at least is a matter of consensus.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Chancellor referred to the public anger, which is palpable. Is not the choice of which type of inquiry should take place a matter of public confidence? The public want to see a judge-led independent inquiry.

[Mr Osborne]

We heard from the Attorney-General that a judge-led inquiry may, in his words, not even get off the ground. The idea that we cannot have a parliamentary inquiry is obvious nonsense, because yesterday the Treasury Committee questioned Bob Diamond on the LIBOR scandal. Of course it is entirely possible for a parliamentary inquiry to take place. Our motion will enable us to get an inquiry under way and assuage the anger of the people of Northern Ireland and the rest of the country.

Public Appointees (Tax Arrangements)

Lord Dodds of Duncairn Excerpts

Wednesday 23rd May 2012 Commons Chamber

[Danny Alexander]

I am grateful for the hon. Gentleman’s remarks about the BBC, which is useful information for the House to have before it. I say to him in all seriousness that the rules relating to this sort of case—the IR35 rules—were put in place by the previous Government, and we are seeking to strengthen them through the consultation we have today. The coalition Government have done more than many previous Governments to take action on dealing with tax avoidance and evasion across the board, because it is vital in a time of austerity that everyone pays their fair share, and that is what we are doing. Frankly, it is what the Government of whom he was a part did not do.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the Chief Secretary’s statement, but should we not apply the rules to all individuals receiving money from the public purse, rather than allowing the BBC, local authorities and others off the hook? I fear that, unless they are forced to take this action on transparency, all sorts of obstacles will be put up. I know from correspondence with the BBC in Northern Ireland that it has not been as transparent there as it has been elsewhere. In fact, it has stonewalled and refused completely to give information to me as a Member of Parliament, so I urge him to go further and force organisations such as the BBC into transparency.

[Danny Alexander]

The new Treasury rules that I have announced today apply only to organisations under central Government control. That is how the rules work, but I encourage the right hon. Gentleman and other hon. Members who have made the point about local authorities to continue their campaigning in order to ensure that those organisations do reveal such information. He did not refer to the Northern Ireland Assembly Government, but he may very well want to take steps to ensure that that organisation also brings forward the appropriate degree of transparency about its arrangements, too.

Section 5 of the European Communities (Amendment) Act 1993

Lord Dodds of Duncairn Excerpts

Tuesday 24th April 2012 Commons Chamber

[Mr Hoban]

My hon. Friend would, I think, be the first to criticise other member states seeking to lecture us on our economic policy, so we need to be careful not to lecture them either. As I said, there is the political will in the eurozone to keep the euro, and its actions are consistent with that. Whether through closer fiscal integration or increased firepower for the European stability mechanism, those signs are there. The fiscal compact is a significant step towards closer fiscal integration.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Minister talks about the political will in Europe to continue with the euro, but one wonders about the popular will among the peoples of Europe. He knows that the Irish Republic will shortly hold a referendum on these measures. Does he welcome that and would he encourage other countries to go to their people and seek their views, as opposed to the consensus among the political elites?

[Mr Hoban]

Different member states have different constitutional requirements and different histories on the use of referendums, so it is not necessarily appropriate for a politician here in Westminster to lecture others on how to ratify treaty changes.

Before I took the intervention from the hon. Member for Blackley and Broughton (Graham Stringer), who has now disappeared, I was talking about how the UK fits into the economic governance measures. We will present the convergence programme to the Commission after the Budget has been presented to Parliament—the process we are going through at the moment. The EU, alongside other international institutions such as the OECD and the International Monetary Fund, can comment on the Budget, but, crucially, we are under no obligation to take action. It is up to the Government, not Brussels, to decide what action to take in the UK.

Of course, as the euro area moves towards closer fiscal integration, we must remain vigilant to protect the UK’s interests. Where matters are rightly for discussion or agreement by all 27 member states—for example, on the single market or financial services—they must be agreed by all 27 member states. In case there is any doubt, I can reassure Members that the UK remains at the heart of the EU’s economic debate. It is because of the Prime Minister’s recent letter with 11 other Heads of State or Government ahead of the March European Council that the Council conclusions were agreed with a commitment to ambitious structural reforms at the EU level. That included concrete Council conclusions on strengthening the single market and its governance; completing the digital single market by 2015; making further progress in reducing administrative burdens; and boosting trade by removing trade barriers and ensuring better market access and investment conditions.

The Government will push for even more ambition, however, because a return to sustainable growth is the only way for EU member states to pay down their debts and exit the current crisis. It is essential that the Commission uses EU-level policy levers fully to support growth, but member states must continue to take tough decisions to prioritise the most growth-enhancing reforms, matching the kind of ambition that the Government have demonstrated since coming to office, including in our most recent Budget. The Budget information we are providing to the Commission in the convergence programme is part of the European semester process, now in its second year, and will be something that the Commission will look at.

Amendment of the Law

Lord Dodds of Duncairn Excerpts

Wednesday 21st March 2012 Commons Chamber

[Sammy Wilson]

That is so, and I wish to discuss another measure in this Budget that will affect hundreds of thousands of people.

[Mr Nigel Dodds (Belfast North) (DUP)]

The people of Northern Ireland are grateful to my hon. Friend for the work he does as Finance Minister in Northern Ireland to move its economy forward. Does he agree that people up and down the country are terribly disappointed that the Budget contains no additional measures to reduce the amount of fuel duty and VAT on petrol and diesel, which, in Northern Ireland, is the highest in the entire European Union?

[Sammy Wilson]

The continuation of the measures that the Government have in the Budget already will take a further £800 million out of motorists’ pockets over the next year.

The final point I wish to discuss is regional pay. Some people may regard what I am about to say as special pleading for Northern Ireland, but may I remind hon. Members that this will have an impact on those who represent constituencies outside London and the south-east of England? This measure will have an impact on all the rest of the United Kingdom. Some have the idea that, because there is currently a difference between private sector and public sector wages—it is important to make the point that the difference is current—wages should be frozen for people in the public sector, so as to stimulate the private sector. I do not quite understand the economics behind that, because freezing wages in the public sector will have a deflationary impact, especially outside the south-east of England, given the prominence of the public sector not only in Northern Ireland, but elsewhere. The areas of the United Kingdom that are currently falling behind, even given the slow rate of economic growth for the country as a whole, will be the parts that will be most punished. This is one of the most divisive measures that I have ever heard about and it does not even address a problem, because there is no evidence for it. We have 3 million people unemployed and we are not recruiting in the public sector, so how on earth are higher wages in the public sector going to prevent private sector employers from being able to find workers? This argument does not work. The impact of the measure will be very detrimental. I hope that we will have an opportunity to re-examine that in much more detail in this House, because I believe it is one of the most pernicious measures floated in this Budget.

There are things that the Government could have done but have not done. There is an unfairness in this Budget; it is an unfairness in respect of not only different income groups, but different regions of the United Kingdom. I am a Unionist and I believe in the value of the Union. I believe that it is important that, as part of the Union, we bear the burden when there is a problem. As my right hon. Friend the Member for Belfast North (Mr Dodds) mentioned, that is one of the reasons why, despite the unpopularity that this has probably led to in Northern Ireland, I have made the case that if there is an economic crisis facing the United Kingdom, we cannot ask to be exempt from the burden to be borne. However, it makes it far, far more difficult to say to public sector workers that their wages are going to be frozen, to say to the ordinary citizen that they should tighten their belt and to say to people who live in Northern Ireland that they have to go through these hard times when the Government are saying to those who can most afford it, “We are asking you to loosen your belts. We are going to fill your pockets.” That is exactly where the unfairness in this Budget lies.

For that reason, although I want the Government to succeed, I believe that they have not taken the opportunity to inject money into the economy. If they have credibility, they should use it in the financial markets and borrow to invest in infrastructure, rather than paying people to sit on the dole. If the Government want people to face up to the hard economic facts, they should do things fairly and not in a unjust and uneven way. If they want to be the Government for the United Kingdom, let us make sure that some parts of the United Kingdom do not have to bear a bigger burden than others.