Northern Ireland Economy

David Simpson Excerpts

Wednesday 11th May 2016 Westminster Hall

[David Simpson (Upper Bann) (DUP)]

I beg to move,

That this House has considered the Northern Ireland economy.

It is good to serve under your chairmanship today, Mr McCabe. This is a timely debate, with Northern Ireland having just had elections to the Assembly, and it would be remiss of me not to mention—or, as my hon. Friend the Member for East Antrim (Sammy Wilson) said, to gloat about—the success our party has had. May I pass on my congratulations to Mrs Arlene Foster, our party leader? I hope by tomorrow she will be the new First Minister for the next five years in Northern Ireland. That is the last bit of party politics I will bring into the debate, in case you chastise me, Mr McCabe, or I get some dirty looks from the Social Democratic and Labour party.

This will be a pleasant, humorous and serious debate and none of us will mention Brexit and all such things. Arlene Foster has gained huge respect across the whole of Northern Ireland, with more than 200,000 people having voted for her leadership and for our party. We look forward to the next five years. Two weeks have been allowed for us to get a programme for government in place, but hopefully it will not take that long and we will get up for business and deliver for the people of Northern Ireland. I pay tribute to my many colleagues who did not stand for re-election but contributed to the Assembly for many years and worked for the people of Northern Ireland.

[Lady Hermon (North Down) (Ind)]

The hon. Gentleman is very kind to allow me to intervene so early. As he has mentioned the programme for government and his party leader, may I urge all of those who will be designated as Ministers that they must give top priority to funding for our schools right across Northern Ireland? A number of constituents have raised with me what is something of a funding crisis in schools, so I would like him to assure us that that will be given priority.

[David Simpson]

I will give the hon. Lady the best assurances that I can. I am not a Member of the Assembly, but that message has been made clear and she has put that on the record, so it will be taken back. She is right that education is an important aspect for the future generations in Northern Ireland.

We are all well aware of the difficult times that Northern Ireland has faced. We are the smallest of the four regions and, as I have already alluded to, we are still suffering from the results of the troubles, which have been a debilitating factor in the economy’s growth. That has made inward investment slightly more difficult and for the local business sector—small, medium and large businesses—sustainability has continued to be an uphill struggle. My speech contains good news for Northern Ireland, but it will also be realistic about lessons we have to learn, what we can do better and how the Assembly can move forward in the future.

At the outset, I want to praise all the companies who provide employment in Northern Ireland. I recognise the determination and energy they put in every day, along with their workforces. Their resolve has sent unemployment rates in Northern Ireland to an all-time low. When the economic crisis hit the whole of the United Kingdom, in my constituency we were at 8.5% unemployment, but as of last week that figure has come down to 4.1%. Even at the best of times the figures never fell below that, so we are encouraged by that. I have no doubt that the selfless work and processes established by companies right across Northern Ireland will continue for many years to come.

[Sammy Wilson (East Antrim) (DUP)]

Does my hon. Friend agree that one of the main sources of employment in his constituency is manufacturing industry? Despite all the nonsense that has been spoken about the uncertainty for manufacturers because of the EU referendum, and the prospect of the people of the United Kingdom voting to leave the EU and break its shackles of dominance on our economy, manufacturing industry has actually forged ahead.

[David Simpson]

I wondered how long it would be before someone brought up Brexit.

[Mark Durkan (Foyle) (SDLP)]

A source close to you.

[David Simpson]

A source very close to me, yes. My hon. Friend the Member for East Antrim is right: despite all the nonsense that has been talked, the manufacturing sector certainly will continue if we leave the European Union.

According to reports this week, Northern Ireland’s growth is dependent on the retail and service sectors, as they

“continue to report the fastest rates of job creation.”

I have certainly witnessed that in each of the three towns in my constituency. Growth is slow, but small retail businesses—I am not referring to charity shops—are starting to move back on to the high street, which is a good thing.

We may be the smallest region in the UK, but we are powerful on the world stage. Some 30% of the famous London red buses are manufactured in Ballymena by a local firm, Wrightbus. That is of course a big contract in London.

[Jim Shannon (Strangford) (DUP)]

It supports Brexit as well.

[David Simpson]

We will move on from Brexit a wee bit; we will come to it later.

Some 25% of all computer read-write heads are made by Seagate Technology in Londonderry, at the UK’s largest nanotechnology site, and 40% of the world’s mobile crushing equipment is made in Northern Ireland. We have some of the largest pharmaceutical companies, which employ thousands of people across the Province.

It is evident that the people of Northern Ireland remain committed to helping to grow its economy. However, despite all the good news, we cannot ignore the significant job losses that have been reported by companies—two of the most high profile are Michelin and JTI, and some others face making redundancies—because of problems in the global market and sometimes because of energy costs.

[Sammy Wilson]

I am glad that my hon. Friend has mentioned energy costs. Does he agree that the cost of energy is one of the biggest threats to manufacturing in Northern Ireland, as it has been in England, Scotland and Wales, and that that is in part due to the insane policy of trying to move towards renewable energy when we have cheap forms of energy in coal, gas and oil?

[David Simpson]

Absolutely. I thought my hon. Friend was going to mention the EU again; he disappointed me greatly in not getting it slipped in. He is right: we need to look at other ways we can help. Some companies across Northern Ireland, certainly in my constituency, have availed themselves of gas lines, which have made a big difference to electricity costs, especially for bakeries. As the Executive move forward, I believe we have a big part to play in reshaping energy policy.

I meet companies regularly, as I am sure all right hon. and hon. Members here do. One of the major issues they raise continually is business rates—if it is not energy costs, it is business rates. In Northern Ireland, we have capped rates for manufacturing at 30%. I have to say that that is a success for my own party—other parties agreed to it, but it was brought forward by the Democratic Unionist party and we have achieved great things with it. Companies today are surviving because of it, and without it, those companies would not still be here.

My constituency of Upper Bann is the second largest manufacturing base in Northern Ireland outside Belfast. For every manufacturing job in the Province, 1.5 jobs are supported elsewhere in the economy, contributing £2 billion in wages to staff and a further £2.2 billion though jobs supported outside the sector. I fear future losses if we do not address the issue of energy costs, which I keep coming back to, because it is crippling a lot of our companies.

[The Parliamentary Under-Secretary of State for Northern Ireland (Mr Ben Wallace)]

Will the hon. Gentleman join me in pressing the new Executive to ensure that one of the first things they do is resolve the issue of providing a proper and appropriate superconductor between the Republic of Ireland and the north? It is widely believed, and stated to me by the energy companies, that Northern Ireland’s manufacturers and residents have higher energy costs than their neighbours in the Republic because of the lack of a modern, 21st-century superconductor process to allow electricity to move around the whole country and island.

[David Simpson]

I am grateful to the Minister for intervening. He is absolutely correct, but that project has been held back by environmentalists—I do not want to get on the hobby-horse of my hon. Friend the Member for East Antrim—and, I have to say, by Sinn Féin, as far as planning permission is concerned. We need to address that. The Minister is quite right that that will make a big difference to energy costs. I think Northern Ireland has the second most expensive electricity after Japan, and addressing that would help the economy to grow even more.

Despite the difficult times we have had, 40,000 new jobs were created in the past five years. A lot of that, of course, was done through the Department of Enterprise, Trade and Investment. Mrs Arlene Foster was the Minister in the Department at that stage, so she has a good track record, along with her colleagues in the Executive. We also welcomed £2.9 billion of investment in that time, which is almost three times the £1 billion target. We are well on the way.

We look forward to the reduction of corporation tax. Our party is focused on that and has promised its delivery. Is it a silver bullet? No, but it is certainly part of a large armoury that will be available to the Executive. It is estimated that 30,000 jobs could be created through the reduction in corporation tax, which would mean 10% growth in our economy. Our party and the First Minister will certainly be pushing for that. The Northern Ireland Assembly today is in a good position to maximise the potential of all those things, but we need the Government’s support behind us.

Tom Hall, the vice-president of international technology and operations at Allstate, has said:

“Our experience in Northern Ireland far exceeded our expectations. We came here originally for the cost savings. We find ourselves staying for the people and the talent that is available.”

That leads me on to a key factor relating to Northern Ireland’s economy—one that I am proud we are delivering. Northern Ireland is the top region in the UK for educational attainment. The hon. Member for North Down (Lady Hermon) raised the issue of education, which we need to make more progress on. We cannot rest on our laurels. However, the official figures show that in 2015, 83% of Northern Ireland students achieved the three top grades in A-level exams, compared with 77.3% across the rest of the UK. Students and young people play a pivotal role in the Northern Ireland economy. Their input is not given enough focus, and the skills and expertise they are achieving needs to be given the accreditation it deserves.

Northern Ireland is the only region of the UK that has increased salaries for new jobs in the past year. However, new salaries in Northern Ireland remain lower than the UK average of £33,815, so there is still some work to be done. We need to stop haemorrhaging our trained professionals to other countries, which can offer better rates of pays. It is a vicious circle that we are in: while better pay is available in other countries, it encourages our young people to go to them and perhaps not return—if they are going for educational purposes or to learn skills or whatever and returning, that would be a different story. We need to improve our rates. The only way we can do that is to encourage the private sector to invest in Northern Ireland and to reduce the public sector. That is something that we are trying to achieve, and it has been achieved to an extent, but again there is still some way to go.

As I said earlier, our manufacturing sector was certainly one of the worst hit, but the 30% cap on manufacturing rates has made a big difference. The latest figures show that companies may now be prepared to pay for new recruits and to invest in new staff. That may go some way to encouraging young people to embark upon apprenticeships, especially plumbers, electricians, bricklayers and other such areas in the construction sector. There remains a concerning lack of skilled tradesmen throughout Northern Ireland. Last year it was reported that the construction industry was paying grossly over the odds, as they had to bring recruits in from other countries to ensure that they met their completion dates.

[Sammy Wilson]

Does my hon. Friend agree that that is one of the reasons why it is important that Northern Ireland, like other regions of the United Kingdom, gets its fair share of the money raised through the apprenticeship levy? That is an issue that needs to be addressed by the Treasury and also the Northern Ireland Executive.

[David Simpson]

My hon. Friend is correct. We need to get our fair share of that in order to push this forward. I recently visited my local training centre in the Craigavon area. I have visited it many times, and in recent times it hosted a regional skills competition. I spoke to one of the instructors there, who told me of one young man who came to him—I think it was three years ago—as a trainee plumber. The instructor knew when he saw the young man working that he had something special. That young fellow lives in a village called Katesbridge outside Banbridge.

[Ms Margaret Ritchie (South Down) (SDLP)]

That is in my constituency.

[David Simpson]

He is in his early 20s, and is a constituent of the hon. Lady, and he is the world champion plumber. He went through all the heats, he went to Brazil, he won the heats in Brazil, and he is now the world champion plumber. That is some achievement for a young lad from Katesbridge in—I emphasise this again—the hon. Lady’s constituency. For a young man like that who has come in and developed a skill, the world is his oyster. He can do whatever he likes and demand his price. That is what we want to see: more young people getting into those skills, including the basic skills. It has to be realised that, while parents want all their children to be Einsteins, brain surgeons, dentists, GPs and so on, that is not going to happen, but there is still a lot of money to be earned with those skills, which we lost during the economic crisis.

Lastly, I want to focus on the agri-food sector. I have come from the Select Committee on Environment, Food and Rural Affairs just now, and we had a very interesting debate. This sector plays a significant role in the Northern Ireland economy. It contributes £1 billion of added value per annum and has demonstrated a strong track record of export growth, employing over 100,000 people, but the outlook for our farming community remains grim. Dairy farmers have witnessed their incomes fall by over a third in the past year. The realisation is that they are producing milk well below the cost of production. Something more needs to be done to help them. They cannot continue on this ongoing basis of haemorrhaging money and cash flow.

My party wants the industry to bring forward supply contracts that minimise price fluctuations and seize a greater share of their profits along the entire food chain. Six years ago in Northern Ireland, we were doing approximately £60 million of food exports. This year, the figure will be £95.5 million. That is a clear testimony to the quality of our food and drink, which is an essential part of our tourism industry. Our industry target is £1 billion by 2020 and we are already well on our way to achieving that.

[Lady Hermon]

Can the hon. Gentleman confirm that the executive of the Ulster Farmers Union is in favour of remaining in the EU?

--- Later in debate ---

[David Simpson]

It is my understanding that that is the opinion of the Ulster Farmers Union, but everybody has their problems. I think that the National Farmers Union may have come out in support, but I am not sure; it could still be sitting on the fence. We do not know which way it will go. However, the Ulster Farmers Union has come out with that silly statement.

The year 2016 is the Northern Ireland year of food, and fantastic work is underway through Food NI. The hon. Member for South Down (Ms Ritchie) and I hosted an event on St Patrick’s day in this House. It was the second time that an event had been held in this House to promote Northern Ireland food, and it was a fantastic success. This week, the fancy London outlet Fortnum & Mason is promoting Northern Ireland produce to help local retailers. Today, a lot of VIPs and other invited guests have been there to sample some of that food.

[Ms Ritchie]

I congratulate the hon. Gentleman on securing the debate. Does he agree that a large proportion of Northern Ireland’s agri-food industry is dependent on exports? In that respect, it is important that we achieve a direct export capacity to China, Taiwan and north America.

[David Simpson]

I absolutely agree—I think the hon. Lady raised the point in the Environment, Food and Rural Affairs Committee previous to this debate—and that needs to be achieved quickly.

It is humbling to hear all the success stories—sometimes, there are stories of not so much success—especially coming from a wee country that was deep in conflict for many years. To me, that shows a strong work ethic from the Northern Ireland community and the business community to keep trying. Our economy is settling into a reasonable state of stability, but we must acknowledge the unease of local businesses, farmers and investors as the referendum looms.

I am appalled by some of the scare tactics that have been put forward by those in the remain campaign. Membership of the EU costs £350 million a week. Combined with red tape, bureaucracy and many EU laws taking precedence over UK law, we have reached a point at which the costs have outgrown the falling benefits.

Nine years ago, devolution was restored to Northern Ireland. In that time, we all faced many local, national and international challenges. We faced up to them and overcame them. However, we cannot take our foot off the gas. The incoming First Minister’s five-point plan prioritised spending on the health service, creating more jobs and increased incomes, protecting family budgets, raising education standards for everyone and investing in infrastructure. That is what we are about and what we need to do to deliver for all the people of Northern Ireland.

[Several hon. Members rose—]