Northern Ireland (Executive Formation and Exercise of Functions) Bill

Debate between Gavin Robinson and Lord Dodds of Duncairn

2nd reading: House of Commons
Wednesday 24th October 2018 Commons Chamber

[Gavin Robinson]

Absolutely right. Mr Deputy Speaker, we gave time to my hon. Friend, but we have saved time on what I was about to say. This is an important point and such civil servants should take cognisance of their ability to make these decisions, and they should make these decisions.

Very helpfully and importantly, paragraph 10(c) of the guidance outlines that NICS departmental officials are encouraged to

“continue to advance preparatory work”

up to the point at which a ministerial decision would be required. That goes some way to addressing the point made by my right hon. Friend the Member for East Antrim (Sammy Wilson). No longer can a departmental official say, “I’m sorry, we can’t advance that project or strategy, consider an alternative or engage with interested groups because we don’t have a Minister”; they can, and I think that is crucial.

As a constituency representative for Belfast East, I look to the regional stadium development fund as a prime example. The Executive agreed that they would spend £36 million on stadium development. Strand 1 of that scheme said there would be £10 million for a football club in my constituency—Glentoran football club. Officials say they cannot advance it because they do not have a ministerial decision. Well, of course they can, because it is an Executive priority, it is agreed, the consultation has been issued, the consultation responses are back, the consultation responses have been appraised by officials and they know exactly the direction of travel. Preparatory work still needs to be concluded, particularly with the Irish Football Association on the funding matrix for such a development, and that work should continue.

Transparency needs to be at the heart of this Bill. I was therefore pleased to see in paragraph 15 of the guidance a requirement on departmental officials in Northern Ireland to report to the Secretary of State monthly on any decision that has been taken under the Bill. That is really important, and it goes to the heart of transparency of government. The notion that senior civil servants could take decisions and not tell the people or that they could fail to take decisions that we know remain outstanding is one that is well worth consideration. I am pleased to see that that is included in the guidance.

There is a whole other issue that should have featured as part of this Bill. I look to the Minister to see whether he can give any comfort on this issue at all. We have no legislative forum in Northern Ireland. This is the only legislative forum in this country that can legislate on behalf of Northern Ireland, and every week, Bills go through this place that could and should be extended to cover Northern Ireland: issues that are not controversial; issues that do not cause difficulty between political parties; and issues that are normal and run of the mill. It is important that they are progressed and that we in Northern Ireland do not lose the opportunity for legislative change. We do not have any certainty that the ad hoc procedures and ad hoc approach to the inclusion of Northern Ireland in England and Wales legislation and the extension of that legislation to Northern Ireland will take place. That leaves us in a ridiculous situation. We are asked to come here and vote on issues that affect the people of England and Wales and yet not get any progress for the constituents that send us here. It is not right.

The Under-Secretary of State for Health and Social Care, the hon. Member for Winchester (Steve Brine), had the courage to include Northern Ireland in non-branded medicines cost regulations back in March. He said that he sought a legislative consent motion, but there was no Northern Ireland Assembly. None the less, it was the right thing to do, and it was in the public interest to include Northern Ireland. Yesterday, the Civil Liability Bill should have included Northern Ireland. Animal welfare changes that have been brought forward by the Department for Environment, Food and Rural Affairs should include Northern Ireland. In Westminster Hall, in debate after debate, we ask Ministers whether the Government will extend the same provisions in the absence of an Assembly to cover Northern Ireland, and they say that they cannot because it is devolved. I invite the Minister, if he can provide comfort for us now or later in his summation, to outline the steps that we can achieve to make sure that there is certainty that, when a legislative vehicle gives the opportunity to extend something sensible to Northern Ireland, we seize that opportunity.

[Nigel Dodds]

My hon. Friend makes a very, very important point. The Bill really covers only the issue of Executive functions and decisions taken at administrative levels, so the whole area of legislation is left to one side—obviously. There is the issue not only of extending legislation for England and Wales to Northern Ireland, but of legislation that is sitting with Government Departments in Northern Ireland ready to go, which cannot be progressed. Earlier, somebody mentioned the unexplained wealth orders, for instance, to tackle paramilitary crime and criminal organised crime in Northern Ireland—a sensible measure that is supported by everybody and that should be progressed. The police want to see it happen; everybody in Northern Ireland wants to see it happen. Why can that not be progressed?

Air Passenger Duty

Debate between Gavin Robinson and Lord Dodds of Duncairn

Tuesday 10th July 2018 Westminster Hall

[Gavin Robinson]

My hon. Friend is right. I will come on to those Northern Ireland-specific issues, but first I will touch on the 2013 PricewaterhouseCoopers report. PwC uses—this will mean something to the Minister, and probably a lot to the officials sitting behind him, although it does not mean much to a layman like me—a computable general equilibrium model: exactly the same model that the Treasury uses when considering economic impacts. PwC updated its report in 2015, but the 2013 report was clear: scrap air passenger duty, and the Treasury will gain—not lose and claw back, but gain.

As a country we have gone from getting £343 million per year from air passenger duty in 1999, to £3.9 billion last year, with £4 billion estimated by 2021. When PwC updated its model in 2015, it said that there would be a direct boost to this country’s GDP of 0.5% in the first year, not a loss. How many times do we see newspaper headlines with every political decision that is having a detrimental impact on our GDP? Yet here is a simple and clear way that the Treasury could make a positive and progressive move that would lead to an increase in GDP in the very first year.

PwC said in 2015 that if we had done it that year, by 2020 we would have had 1.7% economic growth. That would have meant 61,000 additional jobs in this country, stimulation of our tourism and hospitality sectors, growth in business, 61,000 more families benefiting from a good income, 61,000 more families not otherwise relying on the state, and more revenue raised in tax than would be lost in abolition. If we can push one message, whether through the consultation, the call for evidence or the plethora of modelling and economic data that has been provided to the Treasury, it must be this: more tax revenue will be raised with the abolition of APD than its retention—an extra £570 million per year, had the decision been taken in 2015. That is not the £4 billion we are hoping to get, but £2 billion on top of that by 2020. That is a 50% increase, and were I a Treasury Minister I would jump at the chance.

Northern Ireland is, of course, close to our hearts. We have to look at the competitive disadvantage in Northern Ireland compared with our near neighbours in the Republic. Travelling from Belfast to Dublin airport is no different from travelling from Manchester to Birmingham. It is only 100 miles, so when someone is considering where to fly from and how much it will cost, the economic attractiveness of flying from Dublin is incredibly strong.

I do not put those figures forward to suggest that the UK tourism industry is in a bad place; it is not—we rank fifth out of 136 nations in travel competitiveness overall. However, on ticket price competitiveness, the Treasury report says we are 135th out of 136 countries. When someone is faced with the attractive economic proposition of travelling 100 miles down the road to Dublin, that is a barrier to growth in Northern Ireland, to additional connectivity, and to greater opportunity for leisure travel. It is frustrating and constraining the economic stimulus that we in Northern Ireland desperately need, and that our businesses crave.

In Northern Ireland we have had an 11% increase in travel, with 17% more air passengers going through our airports over the last five years. That sounds good, as the UK average is 22%, but what are Dublin’s figures? In 2014, the Republic of Ireland scrapped air passenger duty. From 2014 to 2018, the number of air passengers going through Dublin’s airports rose by 47%. That is an additional 9 million travellers, 1.2 million of whom come from Northern Ireland. That starkly illustrates what we are attempting to highlight. On average, 25% of the cost of a one-way short-haul ticket in this country is air passenger duty. It is not small beer; it is a considerable consideration for anyone seeking to travel.

The Northern Ireland Affairs Committee, which I served on during the time of the inquiry, has considered both the reduction and the abolition of air passenger duty, as well as a reduction in VAT. The debate does not focus on VAT but on air passenger duty. However, in our view the two are intertwined, and the Northern Ireland Affairs Committee agreed. The Republic of Ireland cut its VAT rate for tourism and hospitality, bringing it down to 9%. That means, again, that that industry has a competitive advantage. If somebody goes to visit the island of Ireland they will see our hospitality figures, hotel rates and so on with a significant uplift.

When the Republic of Ireland cut its hospitality and tourism VAT, there was a significant benefit to the economy again. For every percentage point dropped—and the rate went down to 9%—there was an increase of 1.7% in employment. That directly led to 4,800 new jobs in the Irish Republic, because it had the courage to cut the VAT associated with hospitality and tourism. The Northern Ireland Hotels Federation and Hospitality Ulster are clear that the economic benefit and growth created in the Northern Ireland economy through that simple reduction could result in 1,100 jobs.

I understand that we have two tax rates for VAT in this country—20% and 5%. We are constrained to those two at the moment, and even if we were not, we might not choose to have three, four or five because of the increase in burden. However, the Northern Ireland Affairs Committee was quite clear that the disparity makes a distinct difference when Tourism Ireland, which is charged with promoting tourism on the island of Ireland under the Good Friday agreement, is promoting Northern Ireland, as opposed to the Republic of Ireland.

I hope that the Minister will not only outline a timetable for considering the Treasury’s call for evidence, but show an earnest desire to take, once thoughtful consideration has been given to the mounting evidence that has been compiled over years, reasonable, beneficial, appropriate steps to stimulate the aviation sector across the United Kingdom, tourism and economic growth in Northern Ireland. I hope that we look at not only the specific calls of the Northern Ireland Affairs Committee on the abolition of APD and the reduction of tourism VAT, but other models as well.

One such model could be a route development fund. We could charge no APD for a three-year window. That would be a good way to test whether or not it is an economic barrier or detriment. There would be no loss to the Treasury on any new route, because it would just not charge for such a route. A route development fund would encourage growth and stimulate the sector to get business destinations, which we crave in Northern Ireland, such as Frankfurt in Germany, France or even transatlantic flights to the United States. We could give a route development fund three years to see whether it makes sense, and whether air passenger duty has been a significant barrier. Allow a route to develop without the threat of air passenger duty, allow it to stabilise and grow, and we believe that fruit would be borne through that sensible policy.

[Nigel Dodds (Belfast North) (DUP)]

I am grateful to my hon. Friend for securing this important debate. It is a timely opportunity to remind everyone of the important work that is under way in relation to the consultation on APD and VAT in Northern Ireland, which he referred to. He talked about the general issues, but there are two crucial issues that will result in a change for Northern Ireland: first, we are in competition with Dublin airport; and, secondly, Northern Ireland is cut off from the rest of the United Kingdom by the Irish sea, and therefore we are much more dependent on air links. When the Treasury looks at APD, it must conclude that, to make Northern Ireland competitive and to sustain our economy, it must take action to deal with those two issues.

[Gavin Robinson]

My right hon. Friend is absolutely right about the competition and the constraints put upon us as a region. I could not have put it better. We are set aside by the Irish sea, and we rely on air connectivity. We do not have the choice to search around for off-peak train travel, or to easily jump on a boat, only to find that the bus is not at Stranraer waiting for us. When we look at stimulating our economic growth, we have to recognise that we are at a distinct disadvantage because of the Irish border and the tax duty regime in the Republic of Ireland.

I know that other hon. Members will mention the other devolved regions, which have committed to remove air passenger duty. Whenever a devolved Administration gets into such a discussion with the Treasury, it will ask for the cost to be covered by the block grant. It has had such conversations with Northern Ireland and with the Scottish Government. If there is further devolution, it may have such conversations with the north of England.

The whole thrust of that approach is predicated on loss and on the Treasury not having something it otherwise would have had. If it is successful, Scotland, Northern Ireland or the north-east of England are not allowed to reap the rewards; they go back to the Treasury. We need confidence and optimism in this process. Evidence from across the United Kingdom shows that there are benefits. The Government must recognise our unique challenges and those of other parts of the United Kingdom.

I look forward to hearing what the Minister has to say. I have a Valentine’s poem for him. It was written by Pubs of Ulster—the predecessor to Hospitality Ulster—to one George Osborne in February 2015. I hope it adds a bit of levity to a debate that can be turgid when we get down into the figures. I think pragmatists can see what the answer is.

“Labour is red

Tories are blue

Here’s something important

That you need to do

Our VAT rate is crippling

Our ability to grow

It’s putting off tourists

To other countries they go

Please cut the VAT rate

And help us create

A competitive market

For our beds and our plates

As you know my dear Chancellor

You’re close to our hearts

But elections are looming

And you may depart

So as your last action

Before the big day

Please cut the VAT rate

And you may get to stay!”

That is a little bit of fun, but it lays out the Northern Ireland tourism and hospitality industry’s calls about VAT.

Air passenger duty is clearly a barrier to growth. I trust that the Minister will thoughtfully consider all the calls for evidence. We look forward to hearing a suitable response today and in the weeks to come. I hope that, come the autumn statement, we will be in a position to make some sensible and serious proposals.