Northern Ireland Assembly, 28 June 2011

336 contributions from 71 members. The official report.

Assembly Business

Caitriona Ruane (Sinn Féin, South Down)

On a point of order, Mr Speaker. I put in a question to the Minister of the Environment on 27 May which was due for answer on 7 June. To date, I have not received a response. I understand that it is a new term and that people are busy. However, I think that that is an inordinate amount of time for me to wait to receive an answer.

William Hay (Speaker, Foyle)

I thank the Member for her point of order. Let me take it up with the Minister and the Department, and I will come back to the Member directly.

Ministerial Statement

William Hay (Speaker, Foyle)

I have received notice from the Office of the First Minister and deputy First Minister (OFMDFM) that the First Minister wishes to make a statement to the House.

Peter Robinson (DUP, Belfast East)

In accordance with the requirements of the Northern Ireland Act 1998, I wish to make the following report on the sixteenth summit meeting of the British-Irish Council (BIC), which was held in Lancaster House, London, on 20 June. All Northern Ireland Ministers who attended the summit have agreed that I should make this statement to the Assembly on their behalf.

The United Kingdom Government hosted the summit, and the heads of delegations were welcomed by the Deputy Prime Minister, the Rt Hon Nick Clegg. The Irish Government delegation was led by the Taoiseach, Enda Kenny. The Scottish Government were led by the First Minister, the Rt Hon Alex Salmond. The Welsh Government were led by the First Minister, the Rt Hon Carwyn Jones. The Government of Jersey were represented by the Deputy Chief Minister and Minister for Treasury and Resources, Senator Philip Ozouf. The Government of Guernsey were led by the Chief Minister, Deputy Lyndon Trott. The Isle of Man Government delegation was led by the Chief Minister, Tony Brown.

In addition to the deputy First Minister and me, the Northern Ireland delegation consisted of the Minister of the Environment; the Minister for Employment and Learning; the Minister of Justice; the Minister of Enterprise, Trade and Investment; the Minister for Regional Development; the Minister of Culture, Arts and Leisure; and the OFMDFM junior Ministers.

A full list of participants is attached to the copies of the statement that have been provided to Members.

The London summit again underlined the British-Irish Council’s unique and important role in furthering, promoting and developing links between its member Administrations through positive, practical relationships, and in providing a forum for consultation and co-operation on east-west issues. The Prime Minister, the Rt Hon David Cameron MP, addressed delegates at the commencement of the conference and, in particular, drew attention to the need for member Administrations to work closely together. Member Administrations continue to consult, discuss and exchange information with one another on a wide range of matters of mutual interest.

The summit afforded Administrations an opportunity to provide an update on their respective economic situations and a substantive discussion on their shared objective of promoting growth and its related challenges and opportunities. The Council discussed how best to achieve strong, sustainable and balanced growth that could be more evenly shared across member Administrations. It considered measures to promote economic growth, including incentives to start, finance and grow businesses; the encouragement of investment and exports as a route to a more balanced economy; and the creation of a more educated, skilled and flexible workforce. The Council agreed that member Administrations should continue to learn from one another’s successes and identify synergies between them.

For our part, we highlighted our particular challenges. While welcoming the encouraging signs of growth and our success in attracting investment at a time of deep recession, we emphasised that continuing effort and improved approaches will be needed to grow the economy back to full health and to rebalance it over the longer term. This may, as the Assembly is aware, include a change to the rate of corporation tax. We highlighted again, as we did at the North/South Ministerial Council (NSMC) plenary meeting on 10 June, the difficulties that Northern Ireland faces through the exposure of its banking sector to developments in the Republic of Ireland. There was also a shared concern among the Administrations about the continuing constraints on the availability of finance for homeowners and businesses.

The Council considered and welcomed a discussion paper on an all-islands approach (AIA) to energy resources which was tabled by the United Kingdom Government. It agreed the vision for an approach to energy resources across the British Isles that would enable opportunities for commercial generation and transmission; facilitate the cost-effective exploitation of renewable energy resources; increase the integration of markets; and improve security of supply. The Council agreed principles to underpin that vision and launched a programme of joint work spanning the potential for renewable energy trading, as well as work streams on interconnection and market integration.

The Council discussed the progress of the work to establish a standing secretariat for the British-Irish Council. The Council will receive a further progress report on that at the next summit meeting in Dublin later this year; however, it agreed a target start date for the operation of the secretariat of 1 January 2012, subject to all details and outstanding issues being finalised. This Administration is fully involved in the work necessary to establish the secretariat.

The Council also noted the progress described in update reports provided to it on each of the 11 work sectors of the BIC.

We took the opportunity, under “any other business”, to register our continuing concern with the other Administrations about the United Kingdom Government’s proposals for Her Majesty’s Coastguard and its potential implications for Northern Ireland.

At the conclusion of the meeting, the Council agreed that the next BIC summit will be hosted by the Republic of Ireland in the autumn.

Tom Elliott (UUP, Fermanagh and South Tyrone)

I thank the First Minister for his summary of the BIC summit meeting, much of which comes back to financial issues. I note that there was a discussion about the financial aspects of all the member Administrations and that they all provided an update on their respective economic positions. Given that a significant financial contribution was made to the Government of the Republic of Ireland by the European Union and a separate contribution was made to them by the UK Government, what is the up-to-date financial position of the Irish Government and of the Irish state?

Peter Robinson (DUP, Belfast East)

The Government of the Republic of Ireland gave a detailed exposition of their position and indicated that they felt that a number of the fiscal issues that had caused concern were now under control.

Of course, they emphasised the fact that they had not asked for the bailout but that it had been provided. Those of us who have looked at Northern Ireland’s position have recognised that the assistance that has been given by the European Union and, indeed, the International Monetary Fund (IMF), as well as that which has been given by Her Majesty’s Government, has presented us with a conundrum. To some extent, corporation tax levels in the South have been held down because of a subvention by the United Kingdom Treasury. Therefore, we have placed the onus on the Treasury to rectify the imbalance that we now have with our neighbour in order to ensure that we are able to reduce Northern Ireland’s corporation tax levels as well.

Brenda Hale (DUP, Lagan Valley)

How does the BIC’s work complement other east-west relationships?

Peter Robinson (DUP, Belfast East)

It is worth pointing out that the number of meetings of the British-Irish Council, in plenary and other forms, has substantially increased during the past four years. Work has also been carried out by the Joint Ministerial Committee (JMC), which does not involve the Isle of Man, Guernsey, Jersey, or, indeed, the Republic of Ireland. We also have North/South relationships. Therefore, a range of interconnecting networks assists us in seeing how things are done best elsewhere and, indeed, in learning from mistakes that have occurred elsewhere. It is a growing east-west relationship, with which, I believe, everybody in the House feels comfortable, just as the North/South relationship has increasingly been one that has improved relations with the Republic of Ireland to an all-time high.

Caitriona Ruane (Sinn Féin, South Down)

Go raibh maith agat, a Cheann Comhairle. Go raibh maith agat as an ráiteas. Tá ceist agam don Aire, agus is í an cheist seo í.

Given high energy costs and the importance of developing renewable energy, can the First Minister provide more information on the all-island approach to energy development?

Peter Robinson (DUP, Belfast East)

Of course, what the BIC discussed was not an all-island approach but an all-islands approach — an approach throughout the British Isles. We recognise that we have a link with the Irish Republic, which I hope works well for both jurisdictions. We also have a mainland connection. As regards the all-islands approach, we are looking in particular at what renewables can do to augment the conventional energy supply that we already have on the grid. Northern Ireland is well placed with regard to its contribution towards EU targets. We hope that, with the above-average level of wind around the island, we might be able to make a continuing contribution towards renewables, not only through wind energy, but through wave and tidal energy.

Margaret Ritchie (Social Democratic and Labour Party, South Down)

Bearing in mind the scarcity of indigenous energy resources, can the First Minister confirm that the energy work stream covers the vital area of security of energy supply? With regard to the economy, can he also confirm what discussions have taken place about the need to reduce VAT on tourism services from 20% to a rate comparable to the 9% rate that will exist in the South from 1 July?

Peter Robinson (DUP, Belfast East)

We already have the North/South grid link. We have the link with Scotland. Therefore, not only do we have an indigenous supply, which relies largely on coal and gas, we could, clearly, increase that supply with renewables.

We have an excellent opportunity through the all-island approach to exploit our resources commercially. There is also a spin-off: Belfast Harbour Commissioners’ proposal to bring DONG Energy into the harbour estate. The more we exploit the wind farms in the North Sea and elsewhere, the more it will help jobs in Northern Ireland.

As for VAT, the honourable lady is in a better position to raise that matter in the House of Commons, as it is clearly a matter for the United Kingdom Government.

Chris Lyttle (Alliance, Belfast East)

I thank the First Minister for his statement. He said that there was “a substantive discussion” on economic growth and, specifically, that:

“the creation of a more educated, skilled and flexible workforce”

was identified. Given that the First Minister said that the higher education and student finance budget should receive a light touch, did he take the opportunity to discuss regional variations among the member Administrations in the funding of higher education and student finance?

Peter Robinson (DUP, Belfast East)

Students will be more content with the policies of this Administration on student fees than with those elsewhere in the United Kingdom. The Member’s colleague the Minister for Employment and Learning is bringing proposals to the Executive on how we deal with those issues and their impact on universities. The Member’s colleague spoke during the BIC on higher education and skills, and he reflected the views of the Executive as a whole.

Ian McCrea (DUP, Mid Ulster)

I thank the First Minister for his statement, one of the headings of which is “The Economy”. Will the First Minister outline what discussions took place and give us some detail on them? This Administration faces problems similar to those of other Administrations.

Many Ministers from Northern Ireland attended the BIC. Will the First Minister look at that to ensure that, in comparison to other Administrations, Northern Ireland reduces the number of Ministers who attend?

Peter Robinson (DUP, Belfast East)

The same economic problems face every part of the British Isles to a greater or lesser extent; we all know the difficulties that there have been in the Republic of Ireland. With the possible exception of some of the smaller islands that have special and peculiar circumstances, everyone has had considerable difficulty with the reduction in public expenditure and pressure from a reduced job market. Those issues are common throughout.

Northern Ireland will be slower to come out of recession, as has always been the case in economic downturns. All the analysis of the economy indicates that unless there is— I hate using the word “game-changer” — a factor that gives us a new fiscal instrument that stimulates the economy, we will have a very slow rate of growth and a long time before we narrow the gap between levels of gross value added (GVA) in Northern Ireland and those elsewhere in the United Kingdom.

In relation to the number of Ministers, I would have expected the Member to rejoice that there is a desire in all parts of this House to be part of the east-west relationship to such an enthusiastic extent that we were the largest delegation. A question about the number of Northern Ireland Ministers was asked at the press conference afterwards. Although there is a wide-ranging agenda and Ministers want to contribute on their subject, there is perhaps a need for us to look at how we might curtail the numbers attending. At the same time, we have to recognise that, unlike any other Administration in the BIC, we have a mandatory coalition Government and, therefore, we have five parties, all of which wish to know what is going on at those levels.

So, we have peculiar circumstances, but I am sure that, as we normalise our processes here, we will be able to reduce our numbers.

Francie Molloy (Sinn Féin, Mid Ulster)

Go raibh maith agat. I thank the First Minister for his statement. I will ask two questions, the first about corporation tax. Was an understanding of the other regions’ approach to corporation tax gained in the discussion? What were their general opinions of it? Secondly, is there a plan for planning authorities so that they can deal with applications for energy resources and make sure that they are used properly? Is there a plan to make the likes of wind energy more acceptable to the community at large?

Peter Robinson (DUP, Belfast East)

The Member and I will both be glad that the Speaker was distracted when he said that he would ask two questions. I think that it is clear that other parts of the United Kingdom feel that they, too, should benefit from the ability to vary the level of corporation tax.

The deputy First Minister and I have been very forthright in indicating that we have unique circumstances in Northern Ireland. We share a land border with a state that has a much more attractive level of corporation tax for foreign direct investment and, indeed, a level that helps its indigenous growth. Also, we have come out of a very long period of division and conflict. Our infrastructure has not received the level of attention and investment that it should have. Therefore, we have a historic legacy that requires us to have something that gives our economy a boost. We also face a number of difficulties because we are on the periphery of Europe. So, we have argued that our uniqueness means that Northern Ireland has a special case.

I believe that the consultation paper produced by Her Majesty’s Government indicates that they, too, recognise that Northern Ireland has quite different circumstances to those that prevail elsewhere. We hope that that will lead to the Government’s allowing us to have the power to vary corporate tax.

On the question of energy, one purpose of the AIA is to look at a range of issues, including regulation, planning, research and development, and any environmental gaps that there may be. It will also consider how we might be able to better commercialise and exploit the resources. So, planning is clearly required, although when the Member was asking the question, I got the sense that he was referring more to on-land wind farms than those offshore. I will resist making a personal comment about what I think of on-land wind farms; suffice it to say that I would rather have them offshore.

Gordon Dunne (DUP, North Down)

I understand that the issue of the closing of Her Majesty’s Coastguard station at Bangor was raised at the summit. Will the First Minister indicate the nature of those discussions?

Peter Robinson (DUP, Belfast East)

Colleagues charged the deputy First Minister and me with raising that issue at the summit, and that was duly done. It was, of course, outside the remit of the BIC, but that has never stopped us in the past. The Government acknowledged the concerns that we expressed. We had both been down to Bangor to see the work that is being done. We recognise that this is not just a financial matter, nor should it be considered as one; we are talking about people’s lives and the very clear need for us to have a service that is close to hand and that can provide us with the best possible safety, not just around the coastal areas but on the loughs. That point has been well made to the Government.

I note that one of the Liverpool MPs indicated yesterday that they had had a very good meeting with the Minister on the issue. I hope that the Minister is moving away from the either/or attitude, which describes the choice as either Belfast or Liverpool. The Government should be looking again at their overall proposal for coastguard services for the whole of the United Kingdom. This is something that you cannot play about with for just financial reasons.

Sandra Overend (UUP, Mid Ulster)

I thank the First Minister for his statement. I note the discussions on the electricity grid infrastructure. Will the Minister detail any discussions there may have been regarding the recent takeover of NIE by the Irish Government-owned ESB?

Peter Robinson (DUP, Belfast East)

There was no discussion on that matter. The leader of the Member’s party and I have jointly written on this issue, expressing some concerns. There clearly are many advantages in respect of the availability of the market and what the commercial market can do. We have expressed some concerns, but, wearing my First Minister’s hat, I cannot comment on them.

Jennifer McCann (Sinn Féin, Belfast West)

Go raibh maith agat, a Cheann Comhairle. I, too, welcome the Minister’s statement. The Minister referred to the discussion on the continuing constraints on the availability of finance for homeowners and businesses. Was any update given on the legislation going through Westminster on credit unions that will bring forward alternative sources of revenue and finance for people?

Peter Robinson (DUP, Belfast East)

No, there was no discussion on that issue. The Member has made her point, and it is a matter that my colleagues can take up. Credit unions have played a significant role in Northern Ireland, and the deputy First Minister and I have been working with them as part of the team that was brought in to look at a joined-up approach to dealing with the downturn in our economy.

They have asked for certain things to be done. The Minister of Enterprise, Trade and Investment is responding to those issues, and I hope that that will make that area of activity a lot easier. As it gets more and more difficult to get loans from the banks, it is all the more important that we give every assistance we can to credit unions.

Patsy McGlone (Social Democratic and Labour Party, Mid Ulster)

Go raibh maith agat, a Cheann Comhairle. I thank the Minister for his statement. Given the multi-billions of pounds of public money for bailouts for the banks, and the pivotal role that they have in the growth of the economy, was the matter of banks raised at the meeting? It is crucial to any re-growth there may be, especially for first-time homebuyers but also for the recovery of small and medium-sized enterprises, which are heavily dependent on banks in supporting them through this and helping them into the new growth that hopefully will come.

Peter Robinson (DUP, Belfast East)

I think the Member is right. I do not think we have had over the past number of months a meeting of the BIC, the JMC or the North/South Ministerial Council when we did not discuss the role of the banks. The deputy First Minister and I also met the Chancellor and raised again the issue of our reliance on our main four banks, two of which are based in Dublin and clearly have difficult issues to face.

One of our other banks is a subsidiary of a bank that is now effectively under Government ownership in the United Kingdom, and the other, Danske Bank, is outside Northern Ireland as well. We asked at the JMC meeting that the Chancellor second one of his officials to look at the peculiar banking circumstances of Northern Ireland. I think I am right in saying that he agreed that he would do that.

George Robinson (DUP, East Londonderry)

Now that the dates have been agreed for the British-Irish Council standing secretariat, what further action will follow to get the secretariat up and running, and will Northern Ireland contribute to it?

Peter Robinson (DUP, Belfast East)

Yes, of course Northern Ireland will contribute to it because the push to have a standing secretariat came from Northern Ireland. The target date of 1 January 2012 has been set.

At the previous BIC summit, we agreed that Scotland would be the home of that secretariat. The Scottish Executive have indicated that they will cover the set-up costs. Our contribution will be about £15,000 a year, so we are getting pretty good value. Staff will be co-located at the facility, which we expect to be in Edinburgh, but that issue has to be resolved between now and 1 January. The Scottish Government have to determine and provide us with details of the accommodation that will be available. We will then have to look at staffing issues, procedures and other issues that relate to it, so there is quite a lot of work to do between now and 1 January.

Jim Allister (Traditional Unionist Voice, North Antrim)

Given the telling contrast between the speed and lavish nature of the secretariat that was established for the North/South bodies and the feet dragging over the secretariat for the east-west dimension of the Belfast Agreement, and now the revelation that we will contribute £15,000 to that secretariat even though we contribute over £1 million per annum to the North/South Ministerial Council, does the First Minister, who is now such an enthusiastic operator of the Belfast Agreement, have any explanation as to why the east-west link is so patently the poor relation? Why has it taken the four years that he has been in office to get even to the point of a start date for a secretariat for the east-west dimension?

Peter Robinson (DUP, Belfast East)

I suppose that that is as close as we will get to congratulations from the Member for succeeding where others have failed in getting to the stage at which we have a start date. Some day, the Member will shock us all and silence the House by coming out with one word that is positive or constructive to the Assembly, but we might have to wait some time for that.

Maybe he has not worked it out, but I will give him the pure maths for his own sake, and he can work it out in his own time. If two countries are sharing the cost of a secretariat, their contributions will be larger than they would be to a secretariat in which a whole range of countries, including the United Kingdom Government, incurred the cost. I would have thought that that is fairly basic maths, but clearly it is beyond the Member. [Interruption.]

William Hay (Speaker, Foyle)

Order.

Assembly Business

William Hay (Speaker, Foyle)

The next item of business is the nomination of a Deputy Speaker to act as Principal Deputy Speaker. The process will be conducted in accordance with Standing Order 5A. I will begin by asking for a nomination. Any Member may rise to nominate one of the Deputy Speakers to act as Principal Deputy Speaker. Only a name should be proposed at that point, as I will return to the proposer to speak first in the debate. When I have confirmed that the person nominated is willing to act as Principal Deputy Speaker, a debate relevant to the nomination will take place.

The Business Committee has agreed that only one Member will speak on behalf of each party in the debate. At the end of the debate, I will put the Question on the nomination. The vote will be on a cross-community basis. If the proposal is not carried, I will ask for a further nomination, and the process will be repeated until a nomination is approved by cross-community consent.

If that is clear, do I have a proposal for a Deputy Speaker to be nominated to act as Principal Deputy Speaker?

Jennifer McCann (Sinn Féin, Belfast West)

Go raibh maith agat, a Cheann Comhairle. I propose Francie Molloy.

Jim Allister (Traditional Unionist Voice, North Antrim)

Shame.

William Hay (Speaker, Foyle)

Order, order.

Mr Molloy, do you agree to act as Principal Deputy Speaker?

Francie Molloy (Sinn Féin, Mid Ulster)

I do.

William Hay (Speaker, Foyle)

Standing Orders provide for a debate to take place on the nomination. I remind Members that they may speak only once in the debate. I also advise Members that Standing Order 5(7) requires the debate to be relevant to the nomination. I will not allow Members to stray into any other area.

Members will have up to three minutes in which to speak.

Jennifer McCann (Sinn Féin, Belfast West)

It gives me great pleasure to nominate Francie Molloy. Francie has been a councillor for 26 years, held the position of mayor for two terms and was president of NILGA (Northern Ireland Local Government Association). In his six years with NILGA, he held a number of positions, and has proved his ability to be independent. In 2007, he was nominated as Deputy Speaker and elected from the Floor of the Assembly. Over the past four years in that role, he has carried out his duties in an impartial manner and ensured that Members from all parties were respected and had their say. With that, I wish to nominate Francie Molloy as Principal Deputy Speaker. I am very pleased to do so.

Tom Elliott (UUP, Fermanagh and South Tyrone)

It is interesting to hear Ms McCann speak of Mr Molloy in such a way. I do not think that she and her party always had that opinion of Mr Molloy. It was only a few years ago that he was suspended from that party for some of his actions.

The Ulster Unionist Party has clearly opposed the position of Principal Deputy Speaker, or deputy principal speaker, whichever way round it is. I am surprised at Sinn Féin, and, in particular, Mr Molloy, taking up such a post as a job for the boys in the Assembly. They seem to have bought into this entire process. We will be opposing the nomination.

Mr Speaker, I know that you are aware of Mr Molloy’s conduct last week in the Committee for the Office of the First Minister and deputy First Minister, at which he totally disregarded the ruling of the Chair. That is why I believe that Mr Molloy is unfit to hold the position of Principal Deputy Speaker. Therefore, I look forward to witnessing how he will carry out the role, because I am sure that it will go through on a cross-community vote, thanks to the two main parties supporting each other. I will wait, and judge his performance in days to come. Mr Speaker, in holding your office, you would not allow people to stray off the mark and away from what is being discussed in such a way as Mr Molloy has shown that he is capable of in Committee. Therefore, we oppose this.

Chris Lyttle (Alliance, Belfast East)

My party has endeavoured to be co-operative throughout this proposal. However, in the final analysis at the last stage, we saw no demonstrable need for the change in title and voted against the proposal. It is for that reason that we will be voting against the nomination.

Jim Allister (Traditional Unionist Voice, North Antrim)

Some of the first business of this Assembly when it came back after the election was the first stage of the sordid deal between the DUP and Sinn Féin, which, today, reaches its climax. On this, the last day of this sitting, we will see elevated to the totally unnecessary and pointless position of Principal Deputy Speaker Mr Francie Molloy.

We heard something of his CV from the proposer. We certainly did not hear it all. Other places have heard much more about the CV of Mr Molloy. Those on the DUP Benches, when they go to elections, pretend — yes, pretend — that they are returning to Stormont to resist the Sinn Féin agenda. I have been here only a few weeks, but, every day, I see, hand in glove, the co-operation between the DUP and Sinn Féin. When those Members troop through the Lobby to my right to vote for Mr Molloy, as they inevitably will as the Lobby fodder that they are for DUP/Sinn Féin rule, may the words of their colleague Mr David Simpson ring in their ears.

I remind them what he said of Mr Molloy in the House of Commons when he implicated him in the murder of Eric Lutton. Yet today, people like David Simpson’s colleague Stephen Moutray, who once said that he would go back to his shop before he would support Sinn Féin in government, will troop through that Lobby to elevate the very man who David Simpson told him all about.

Rev William McCrea addressed the House of Commons and told it that Francie Molloy should be arrested for war crimes against the people of the UK. May that salutary lesson ring in the ears of those who today troop through, and prick whatever conscience remains, as they do the bidding and show obeisance by taking whatever action it takes to keep Sinn Féin happy in this House.

William Hay (Speaker, Foyle)

Will the Member bring his remarks to a close?

Jim Allister (Traditional Unionist Voice, North Antrim)

So, I say to each one of them: shame on you for the action you are about to take.

William Hay (Speaker, Foyle)

The Member’s time is up.

Question put that the nomination of Deputy Speaker Molloy to act as Principal Deputy Speaker be approved.

The Assembly divided: Ayes 50; Noes 33.

AYES

NATIONALIST:

Ms M Anderson, Mr Boylan, Mr Brady, Mr W Clarke, Mr Doherty, Mr Flanagan, Ms Gildernew, Mr Lynch, Mr F McCann, Ms J McCann, Mr McCartney, Mr McElduff, Mr M McGuinness, Mr McLaughlin, Mr McMullan, Mr A Maskey, Mr P Maskey, Mr Molloy, Mr Murphy, Mr Ó hOisín, Mrs O’Neill, Ms Ruane, Mr Sheehan.

UNIONIST:

Mr Bell, Ms P Bradley, Mr Buchanan, Mr Campbell, Mr T Clarke, Mr Douglas, Mr Dunne, Mr Easton, Mr Frew, Mr Girvan, Mr Givan, Mrs Hale, Mr Hamilton, Mr Irwin, Mrs Lewis, Mr McCausland, Mr I McCrea, Mr D McIlveen, Miss M McIlveen, Lord Morrow, Mr Newton, Mr Poots, Mr G Robinson, Mr P Robinson, Mr Ross, Mr Weir, Mr Wilson.

Tellers for the Ayes: Mr W Clarke and Ms Ruane.

NOES

NATIONALIST:

Mr Attwood, Mr D Bradley, Mr Byrne, Mr Dallat, Mr Durkan, Mr Eastwood, Mrs D Kelly, Mr McDevitt, Dr McDonnell, Mr McGlone, Mrs McKevitt, Mr A Maginness, Mr P Ramsey, Ms Ritchie.

UNIONIST:

Mr Allister, Mr Beggs, Mr Copeland, Mr Cree, Mrs Dobson, Mr Elliott, Mr Gardiner, Mr Kinahan, Mr McCallister, Mr Nesbitt, Mrs Overend, Mr Swann.

OTHER:

Mrs Cochrane, Mr Dickson, Mr Ford, Ms Lo, Mr Lunn, Mr Lyttle, Mr McCarthy.

Tellers for the Noes: Mr McCallister and Mr Swann.

Total votes 83 Total Ayes 50 [60.2]

Nationalist Votes 37 Nationalist Ayes 23 [62.2]

Unionist Votes 39 Unionist Ayes 27 [69.2]

Other Votes 7 Other Ayes 0 [0.0]

The following Member voted in both Lobbies and is therefore not counted in the result: Mr Agnew.

Question accordingly agreed to.

Resolved (with cross-community support):

That the nomination of Deputy Speaker Molloy to act as Principal Deputy Speaker be approved.

William Hay (Speaker, Foyle)

I offer my congratulations to Principal Deputy Speaker Molloy and look forward to working with him. I ask the House to take its ease as we move to the next piece of business.

Executive Committee Business

Nelson McCausland (DUP, Belfast North)

I beg to move

That this Assembly agrees that the provisions in clauses 122 and 123 of the Welfare Reform Bill, as amended at Committee Stage in the House of Commons, dealing with the transfer of tax credit functions and the supply of information by a Northern Ireland Department, or by a person providing services to a Northern Ireland Department, should be considered by the UK Parliament.

The Welfare Reform Bill was introduced in the House of Commons on 16 February 2011; it contains provision for the introduction in Great Britain of an integrated working-age benefit to be called universal credit. It will be paid to people in and out of work and will replace a range of means-tested benefits and tax credits such as income support, income-based jobseeker’s allowance, income-related employment and support allowance, housing benefit, working tax credit and child tax credit. It will provide support for people between 18 and the age at which the claimant becomes eligible for state pension credit. The Bill also contains provision for the introduction of personal independence payment to replace disability living allowance, changes to housing benefit, employment and support allowance and to the forthcoming child maintenance scheme. The proposals in the Welfare Reform Bill that I have just outlined apply only to Great Britain at this stage. I am considering the position in relation to Northern Ireland and will bring forward proposals to the Assembly in due course.

The areas of the Westminster Bill that apply to Northern Ireland and which require this legislative consent motion deal with the transfer of tax credit functions and the supply of information by a Northern Ireland Department. The motion asks the Assembly to agree that those consequential provisions may be considered by the UK Parliament since they could change the functions of three Northern Ireland Departments and the legislative competence of the Assembly.

By way of background, I should explain that the intention is that there will be no new claims for tax credits after the introduction of universal credit, which is planned for October 2013, after which existing tax credit claimants will be transferred to universal credit through a managed transition process. It is expected that, by October 2017, there will be no remaining tax credit awards. To enable the Department for Work and Pensions to manage the transition process, it may be desirable to transfer tax credit functions from HM Revenue and Customs to that Department.

The Welfare Reform Bill contains an order-making power to allow for the transfer of tax credit functions from Her Majesty’s Revenue and Customs to the Department for Work and Pensions. It also contains an order-making power to allow for new functions to be given or functions to be removed from HM Treasury, HM Revenue and Customs and a Northern Ireland Department.

The power to allocate or remove functions is purely consequential on the transfer of tax credit functions to the Department for Work and Pensions. It is intended that tax credits will remain an excepted matter and that the Department for Work and Pensions will administer tax credits for Northern Ireland until the last tax credit claimants have been migrated to universal credit. That will involve new arrangements for investigating tax credits cases in Northern Ireland, as the Department for Work and Pensions does not have a presence here. It is proposed that the Department for Work and Pensions might seek to enter into an agency agreement with my Department — in practice, the Social Security Agency — to appoint authorised officers who would then be able to carry out the relevant investigations.

Following a transfer of functions, the Department for Work and Pensions will need to be able to access certain HMRC data and to provide to other Departments data relating to tax credits. The Bill includes provision for a wider single two-way data-sharing gateway between the Department for Work and Pensions, HM Revenue and Customs and relevant Northern Ireland Departments, so that information can be shared to facilitate the discharge of their respective functions. That provision is not without precedent. It builds on existing gateways that already extend to Northern Ireland to enable information to be shared and reused for the exercise of functions in relation to social security, child support, war pensions and employment and training.

I expect that Members will have reservations about the wide-ranging proposals in the Westminster Welfare Reform Bill, but I emphasise that they relate to Great Britain, are not a matter that the Assembly has any power over and do not have any bearing on the motion. The legislative consent motion deals with the much narrower technical issues of the consequential changes to the functions of the Department for Social Development, the Department of Finance and Personnel and the Department for Employment and Learning as a result of the proposals dealing with the transfer of tax credit functions and the supply of information relating to Northern Ireland Departments contained in the Westminster Bill. On that basis, I ask the Assembly to support the motion.

Alex Maskey (Sinn Féin, Belfast South)

Go raibh maith agat, a Cheann Comhairle. As Chairperson of the Committee for Social Development, I support the motion. At its meeting of 16 June 2011, the Committee agreed a short report on the legislative consent motion. That report concluded that the Committee will support the motion as it applies solely to clauses 122 and 123 of the Westminster Welfare Reform Bill. The report was e-mailed to every Member, and copies of my letter drawing attention to the report on the Committee’s web page were provided to all MLAs.

As the Minister explained, the provisions relate simply to the transfer of tax credit functions and the sharing of information by Departments here, the Department for Work and Pensions, Revenue and Customs and the Treasury. DSD officials described the provisions as largely minor and technical in nature. As the sharing of information includes the Department of Finance and Personnel, the Committee also wrote to the Committee for Finance and Personnel and received confirmation that DFP is content with the provisions of the legislative consent motion that relate to it.

Although the Committee for Social Development supports the specific provisions that the motion refers to, the Committee’s report notes that the Westminster Welfare Reform Bill contains numerous other provisions, such as the introduction of universal credit and changes to industrial injuries benefit, housing benefit, pensions credit, DLA and so on. The Minister referred to that a moment ago. No doubt, those provisions will come before the Assembly in a welfare reform Bill later this year or in the early part of next year. That will be a completely different matter for many of us and will merit much more detailed scrutiny of its impact on the poorest people here.

In my role as a party representative, it is important to say that we have been advised by the Department that, over the next number of years, the consequence of what has been described as the British Government’s Welfare Reform Bill will be that somewhere in the region of £450 million to £500 million will be taken out of the local economy. I believe that various Committee members share that concern. We believe that those will be stealth cuts masquerading as welfare reform. That will require much more scrutiny because, undoubtedly, many of the cuts that will result from that legislation will have a serious, negative impact on many of the most vulnerable people, while taking a considerable amount of money from the local economy. That will add to the £4 billion of cuts that the British Government have already taken from the block grant.

Michael Copeland (UUP, Belfast East)

I speak as a member of the Social Development Committee. I am content that the matters have been discussed in Committee, and the representations that we have had have been useful and formative.

To any of us who have been involved in trying to assist constituents through the morass that is the benefits and welfare system, it is patently obvious that it is burdensome, cumbersome and difficult to operate as it is. No matter what legislation appears at the far end, there are, for us — for me — three principles that need to be reflected if not enshrined: simplicity in the legislation itself; compassion in the way in which it is interpreted; and respect in the way in which it is implemented. A benefits system that makes it more difficult for people to conduct their life in work rather than out of it cannot in any circumstances be considered compassionate, and, as has been said elsewhere, this legislation is fundamental to the day-to-day life of many of our citizens.

Mark Durkan (Social Democratic and Labour Party, Foyle)

We also support the motion. These are two pretty innocuous clauses in an otherwise draconian Welfare Reform Bill. Although we support the acceptance of those clauses, we do so without prejudice to our party’s position on the Welfare Reform Bill, many elements of which we oppose due to the negative impact that they will have on the most vulnerable people in our society.

Nelson McCausland (DUP, Belfast North)

I thank Members for their contributions. As has been said, we will return to the issue of welfare reform in the autumn. However, the matter before us today is minor and technical in nature, as the Chair of the Committee observed, and relates to just two clauses in the Welfare Reform Bill. So, I thank Members for their contributions and commend the motion to the House.

Question put and agreed to.

Resolved:

That this Assembly agrees that the provisions in clauses 122 and 123 of the Welfare Reform Bill, as amended at Committee Stage in the House of Commons, dealing with the transfer of tax credit functions and the supply of information by a Northern Ireland Department, or by a person providing services to a Northern Ireland Department, should be considered by the UK Parliament.

Committee Business

William Hay (Speaker, Foyle)

The Business Committee has agreed that the motion will be treated as a business motion. As Members know, there will be no debate on the issue.

Pat Ramsey (Social Democratic and Labour Party, Foyle)

I beg to move

That the following Members are appointed as the trustees of the Assembly Members’ pension scheme: Mr John Dallat, Mr Ross Hussey, Mr Trevor Lunn, Mr Mickey Brady and Mr Jim Wells.

Five Members of the Assembly are required to act as pension trustees as set out in the Assembly Members’ Pension Scheme (Northern Ireland) 2008. The present trustees were appointed by resolution of the Assembly in May 2007. Following the recent election, I beg to move the motion with the inclusion of the five new Members.

Question put and agreed to.

Resolved:

That the following Members are appointed as the trustees of the Assembly Members’ pension scheme: Mr John Dallat, Mr Ross Hussey, Mr Trevor Lunn, Mr Mickey Brady and Mr Jim Wells.

William Hay (Speaker, Foyle)

This item is a joint motion from the Committee for Finance and Personnel and the Committee for Enterprise, Trade and Investment. The Business Committee has agreed to allow up to two hours for the debate. The proposer will have 10 minutes to propose the motion and 10 minutes to make a winding-up speech. All other Members who are called to speak will have five minutes.

Conor Murphy (Sinn Féin, Newry and Armagh)

I beg to move

That this Assembly supports, in principle, the case for the devolution of corporation tax powers to the Northern Ireland Assembly; and looks forward to the outcome of the HM Treasury consultation on ‘Rebalancing the Northern Ireland Economy’, the provision of further information on the associated costs and benefits, and the development of more detailed proposals for implementing and exercising the powers.

Go raibh maith agat, a Cheann Comhairle. In its emergency Budget in 2010, the British Government signalled that they intended to examine mechanisms for rebalancing the economy here, including, among other things, the possibility of allowing a more competitive corporation tax rate. The resultant consultation was launched by the Treasury in March 2011 and was extended to 1 July. The initial closing date of 24 June did not afford enough time to bring forward a co-ordinated response on behalf of the Assembly. The joint motion has, therefore, been tabled by the Finance and Personnel and the Enterprise, Trade and Investment Committees to help to inform any response that they or any other Committees or individual Members may wish to make to the Treasury consultation. Moreover, by agreeing the motion, which proposes cautious support for pursuing the devolution of corporation tax powers, the Assembly will send a collective message to the Treasury at this important point in the ongoing negotiations over the possible terms on which such powers could be exercised.

Members will be aware of the fundamental weaknesses in the local economy, which have been well documented and include, for example, greater reliance on the public sector, higher rates of economic inactivity, relatively low incomes, high rates of poverty and a legacy of capital underinvestment. Some of those issues were touched on in the Treasury consultation paper, not least and significantly the lower productivity in terms of gross value added (GVA) per capita compared, with a few exceptions, with regions in Britain.

There is no question that a new approach must be taken to the economic challenges that face us. An economic strategy based simply on more of the same will not achieve the step change that is needed in the economy or go far enough in closing the productivity gap. In its recent report, the Westminster NI Affairs Committee noted that many of those who gave evidence to its inquiry considered:

“that previous policies had not had the desired effect and a significant reduction in corporation tax would be the dramatic change that business”

here needs.

The case for a more competitive rate of corporation tax and the impact that such a step would have on the local economy has been fairly extensively examined over recent years. As well as that recent NI Affairs Committee inquiry, investigations have been undertaken by, for example, the Economic Research Institute, the Economic Reform Group and, more recently, the Economic Advisory Group (EAG), which advises the Minister of Enterprise, Trade and Investment. The evidence from those investigations points to the potential net gains from a more competitive corporation tax rate. The issue was also examined in previous Assembly mandates, including by the previous Finance and Personnel Committee, which tabled a joint motion, again with the Committee for Enterprise, Trade and Investment, on the Economic Reform Group’s report. The Assembly debated and unanimously supported that motion in May 2010.

There can be no doubt that attracting investment here will have a positive impact on the local economy. Among the key benefits of an attractive corporation tax rate that is cited in various reports is an increase in foreign direct investment (FDI). The Economic Advisory Group has highlighted that experience in the South as suggesting that low corporation tax is an important factor in attracting FDI. It also notes that corporation tax incentives in countries such as Estonia and Singapore are one of a number of policy measures that have attracted increased FDI and contributed to significant increases in output and employment.

In its report, the NI Affairs Committee noted that the rate of corporation tax is considered by many to have been a “game changer” in reviving the Southern economy. It also pointed to the Dublin Government’s clear belief that an attractive corporation tax rate remains an “important tool” in helping the South out of its present difficulties.

A Department of Finance and Personnel (DFP) briefing paper issued to all Members in advance of the debate advises that the mid-point estimate for a gross FDI increase is £160 million in year 1, rising to £310 million by year 10. Domestic investment would increase by an estimated £110 million by year 10. The DFP paper also notes that a study undertaken by Oxford Economics on behalf of the Economic Advisory Group estimated that an average of 4,500 net additional jobs a year will be created in the longer term and that the measure would go some way towards creating a more private sector-oriented economy.

Although considerable effort has gone into examining and establishing the theoretical case for a competitive corporation tax rate, it must be recognised that a number of practical issues require more detailed exploration. In a paper commissioned by my Committee, the Assembly Research and Information Service sets out a series of questions to which the Department responded in its own paper. Further clarification is needed in some areas, not least with regard to the implications for the block grant. Members will be aware by now of the Azores judgement, which is an EU ruling that requires that a region bear the cost of any reduction in tax revenue and states that it cannot be compensated by the member state authority.

There appears to be a lack of clarity or agreement on precisely how much corporation tax is collected locally. Therefore, it is difficult to predict what the cost may be. Most assumptions are in the region of £200 million to £300 million a year, although the Assembly Research and Information Service paper notes that DFP has suggested in the past that the figure may be in excess of £400 million by year 5. In its paper, DFP states that:

“The public expenditure implications of this are significant and it is vital that we know precisely how much corporation tax is collected”.

Perhaps the varying estimates arise from different calculation methods, but, nonetheless, I call on DFP to press the issue with the Treasury as a matter of urgency.

In oral evidence to the Committee, Kate Barker, the chairperson of the Economic Advisory Group, reminded members that, at the same time as the public sector bears the cost, there will be immediate benefits to the private sector. Kate Barker also said:

“it is sometimes put as a gamble … To be blunt, doing nothing is much more of a gamble.”

By that, she was cautioning that it would be a gamble to simply expect that the block grant will continue at the same rate as at present and that we would have:

“passed up ... an opportunity to change the game.”

It should also be noted that the Economic Advisory Group report considered that it would be important for the Executive to retain yield from other taxes that would be expected to increase, such as income tax and National Insurance contributions. The NI Affairs Committee called on the British Government to provide clarity on the issue. If that were possible, it could evidently help to mitigate some of the costs that are associated with the rate of reduction. That aspect should, therefore, form a critical part of the negotiations with the Treasury.

Concerns have also been raised that a reduction in corporation tax here would encourage brass plating, profit shifting or tax evasion and that relocation from Britain would result in a net loss to the Exchequer. I do not seek to minimise such concerns. However, the NI Affairs Committee stated that its evidence suggests that that risk:

“is sufficiently well mitigated against for it not to present a persuasive argument.”

DFP also stated that it expects measures to be put in place to minimise profit shifting.

Members will be very mindful that, by itself, a competitive rate of corporation tax would not be enough to rebalance the local economy. Rather, it is one strand in a strategy that should include, among other things, investment in research and development, innovation, education and skills. It should be accepted now, however, that a strong theoretical case exists for the devolution of corporation tax powers. It is clear that much more detailed work has to be done, and much will depend on the outcome of ongoing negotiations with Treasury on how attractive the measure would be in practice.

The motion has been crafted to maximise support among Members. It is vital that the Assembly sends a strong message to the British Government, in particular that fair and reasonable working arrangements for devolving corporation tax powers need to be agreed with the Executive. The negotiations must have the central aim of rebalancing the local economy and must not result in terms that are skewed purely in the self-interest of Treasury.

For my own part, I feel that, as I said, the motion was crafted to ensure a broadly positive response from the Assembly, even in the context of ongoing negotiations. It is recognised that there are concerns, but they echo those that we had in the previous mandate with the devolution of policing and justice powers, when it was felt that the issue was too complex and sensitive for the Assembly. Quite clearly, we have demonstrated since then that the Assembly is well capable of handling those powers.

As has been suggested, this is not the silver bullet to address all our economic woes, but it begins to give us control of the fiscal levers that allow us to shape our own economic destiny, recognise our particular circumstances and not be subject to the whim of ideological changes brought about by a Tory-led Government in Britain. As is evident from the business community across the island, it would also allow us to begin to strengthen the all-Ireland links so that we could harmonise an all-Ireland approach to economic recovery. That has been accepted very publicly by business. Indeed, it has been accepted publicly and privately by many in the Chamber. It affords us the opportunity to begin to seize some measure of control over our economic destiny and to try to shape economic recovery, both in this region and on the island as a whole, and to decide our economic future.

On behalf of the Committee for Finance and Personnel and the Committee for Enterprise, Trade and Investment, I commend the motion to the House.

William Hay (Speaker, Foyle)

I call Mr David McIlveen. The Member has five minutes.

David McIlveen (DUP, North Antrim)

I am grateful for the opportunity to speak on the subject, and I support the motion wholeheartedly.

Less than two weeks ago, I had the privilege of visiting Wrightbus in my North Antrim constituency. In the presence of the Chancellor of the Exchequer, the Minister of Enterprise, Trade and Investment and other representatives from the business community, we heard, one by one, the CBI, the FSB and the Chamber of Commerce speak with one voice. It said that the Assembly should be given the powers to set its own rate of corporation tax, which, although not a cast-iron guarantee of success, is the best — perhaps the only — way that we can reinject some life into the Northern Ireland economy.

There have been many debates surrounding budgets and cuts to public spending in this short term of the Assembly. However, on this issue, talking must be coupled with listening. That means listening to the members of the private sector, on whom to a large extent, most of us agree, the success or failure of our economy relies.

Of course, the cynical among us will say that asking a business owner whether they want to pay less tax will not provoke an entirely surprising response, but we must remember that the majority of small businesses will not benefit directly from a reduction in corporation tax, if we choose to reduce it. However, even the small businesses support it, because they know that the secondary spend that comes from jobs created through foreign direct investment will benefit small retailers also.

If we reduce corporation tax, we must not be unmindful of the cost. We cannot be complacent about that. If public services suffer as a result of a reduction in corporation tax, we, as elected representatives, will have considerable explaining to do. However, the most conservative estimates of economic growth as a result of a reduction in corporation tax see our economy rising by something in the region of 6% a year. Given that the most optimistic forecasts see our current output at around 1·9%, the gains in revenue would comfortably mitigate any losses that we would incur through a reduction in the block grant.

There are huge challenges ahead for Northern Ireland in rebalancing our economy. However, with challenges come opportunities. The Celtic tiger economy in the Republic of Ireland was built predominantly on foreign direct investment from the USA. Given the investment that we have put into the US markets, we should continue to work hard to attract further investment from that area. However, with emerging economies becoming ever stronger in India, China and other parts of the Far East, we are extremely well placed to attract investment from those areas if corporation tax powers are devolved to the Executive. In that regard, there is a huge strategic advantage to our being part of the UK, as it enables foreign businesses to set up a much-coveted base in Britain. If we can further incentivise those companies with a lower rate of tax than the other devolved regions, we will have an opportunity to move Northern Ireland forward to a new level of economic growth.

I conclude by paying tribute to Invest NI, which has exceeded pretty much every target that has been set before it in the past four years. In particular, I pay tribute to Alastair Hamilton, whose leadership, vision and passion for business in Northern Ireland has been and, I believe, will continue to be a major contributor to rebalancing Northern Ireland’s economy.

Leslie Cree (UUP, North Down)

I welcome the opportunity to speak in the debate, as the devolution of corporation tax to Northern Ireland is such an important issue. I also welcome the fact that the two Committees, the Committee for Enterprise, Trade and Investment and the Committee for Finance and Personnel, have brought the matter before the House today. The Committee for Finance and Personnel has looked at the issue and received representation from the Finance Minister. The positives for the devolution of corporation tax to Northern Ireland are well documented. They are increased economic growth; the attraction of foreign direct investment; an increase in jobs, leading to lower unemployment; and the rebalancing of the Northern Ireland economy, which is over-reliant on the public sector.

I want to focus on how a reduction in corporation tax would be implemented, should we have the power to alter the tax devolved to Northern Ireland. Any reduction in corporation tax should be done incrementally. That can be seen through the actions of the coalition Government, who announced major reforms to corporation tax with four 1% reductions to the main rate. The rate was reduced to 26% in April of this year and, by 2014, will be reduced to 23%. In Northern Ireland, we should look at a similar system, whereby we gradually reduce the rate of corporation tax with a view to competing on a more equal playing field with the Republic of Ireland’s rate of 12·5%.

There are a number of reasons why I believe that corporation tax should be lowered incrementally. First, due to the Azores ruling by the European Court of Justice, regional differences in direct taxation must satisfy fiscal autonomy. That means that Northern Ireland’s block grant would have to be adjusted to reflect the cost of a reduction in corporation tax. In order to ensure that we do not inflict too severe a cut on the block in one go, an incremental lowering of the tax would mean that the reduction of the block grant would be spread over a longer time and would have the minimum impact possible on the provision of services to the people of Northern Ireland.

Secondly, incrementally lowering the rate of corporation tax would allow the Executive to respond flexibly to any change in the economy. The economic landscape is unclear in Northern Ireland, especially with a questionable four-year Budget that fails to protect front line health services and includes revenue-raising methods that lack sufficient clarity. I knew that the Minister would appreciate that comment. In those circumstances, it is vital that we have the ability to react to the particular challenges that the economy will present. Altering the rate of corporation tax on an incremental basis will allow us to do that.

Finally, it is essential that the devolution of corporation tax powers be used as one of a basket of measures to increase economic growth in Northern Ireland. The Treasury consultation sets out proposals such as research and development tax credits, an enhanced annual investment allowance, training credits and even a National Insurance holiday. All those measures need to be explored because only a combination of mechanisms will lead to a successful rebalancing of the Northern Ireland economy.

Bearing in mind the points that I have raised, I support the motion.

Dominic Bradley (Social Democratic and Labour Party, Newry and Armagh)

Go raibh maith agat, a Cheann Comhairle. In my party’s view, lowering the rate of corporation tax in Northern Ireland will be a major tool in helping to rebalance the economy here, which is over-reliant on a public sector that is all too often at the mercy of the political whims of whoever is in power at Westminster. The current tools that we have to develop the private sector are useful and necessary but have not been successful in bringing about the growth that we require. We need to develop the private sector in order to generate more employment and spending and to deliver the revenue that we need to provide the best possible public services.

Foreign direct investment will be a major influence in rebalancing the economy, and a lower rate of corporation tax will be a major element in attracting it and closing the productivity gap. Indigenous businesses will also benefit from a lower corporation tax rate, and it will provide our SMEs with additional capacity to invest to grow their businesses.

If the powers are devolved, we should not rush into reducing the rate without knowing the full fiscal implications of that decision. At present, we do not know how much corporation tax is taken in Northern Ireland. There are varying estimates from DFP and the Treasury, and we need an accurate baseline figure so that we can assess the true impact on the block grant and manage the shortfall. We know that corporation tax is volatile and that its take can vary greatly from year to year. To offset the costs associated with the devolution of corporation tax powers, it is important that Northern Ireland is in a position to avail itself of any indirect benefits that result from increased economic activity, such as receipts from increased income tax, VAT, National Insurance, excise duty and, indeed, corporation tax itself.

Although the devolution of corporation tax powers and the lowering of the rate here is not a magical mist that will cure all our economic ills, it is an essential tool in rebalancing the economy, making Northern Ireland a more attractive prospect for foreign direct investment and enhancing indigenous economic activity, which will result in a more prosperous Northern Ireland for all our people. We need the House to unite with enthusiasm behind the motion to ensure that we send a positive message on the issue. Those who negotiate on our behalf on this matter must put forward the strongest possible case for the devolution of corporation tax powers. It is an essential tool in advancing the prosperity of this region, and the SDLP fully supports the motion.

Trevor Lunn (Alliance, Lagan Valley)

I support the motion as proposed, particularly as it specifies the words “in principle” in stating that the Assembly supports the case for the devolution of corporation tax powers.

I feel that the next time we come to this matter, when we have the outcome of the Treasury consultation and all the cost-benefit information available to us, we will have a major decision to make. However, for today, I am happy to support the motion in principle, although I have some misgivings about the best way to proceed in the long term.

If we have a lower corporation tax rate, what will the benefits be, and will it work? I heard the Committee Chair mention that 4,500 jobs would be created per annum over the next 10 years. That figure at least sounds realistic, unlike some of the figures that have been bandied about in the past year. The other day I heard that there would be 90,000 jobs. We would have to find more immigrants from somewhere to fill those jobs — it is just not possible. However, 4,500 sounds like a figure worth going for.

There is no doubt that the overwhelming weight of opinion in Northern Ireland advocates the measure. Indeed, the Northern Ireland Economic Reform Group said:

“it is, without exaggeration, the only means we know of comprehensively changing the economic environment, within a timescale of years rather than decades.”

It is fair to say, however, that there are also well-informed voices, including some who would benefit from a reduction in the corporation tax rate, who take the opposite view. I wonder what the most important criteria are for an industrialist or an investor when deciding where to locate worldwide. I wonder where corporation tax ranks on the list of priorities. That list would include the availability of skilled labour; political stability; good infrastructure; closeness to markets; energy costs; wages levels; and the amount of government support available to establish incoming business. Some of those criteria we meet and some we would struggle with. However, I have heard it argued that no level of corporation tax would compensate for not ticking most of the boxes on that list.

The argument is forcefully made that, to compete for inward investment, we need a rate comparable with that of the Republic of Ireland. Compared with us, Ireland has certainly benefited from a level of inward jobs, but, again, given the present circumstances, what will happen to the Irish corporation tax rate? The pressure is on from big hitters in the EU for Ireland to come more into line. It is a pressure that Ireland has so far resisted manfully, but is that position really sustainable? If the Irish have to go back to the EU for a further bailout, one condition will certainly be a rise in their corporation tax rate. The further argument is which line of investment to prioritise. Should it be this initiative, investment in our universities and further eductaion facilities — we had a good discussion about that yesterday — or support for small indigenous businesses? I imagine that the way forward is a cocktail of all three.

I can think of some people who started small in this country and went on to great things. I remember Allen McClay starting his business, Galen, in Portadown as a one-man band and where it led to. I think of Fred Wilson of FG Wilson, part of Caterpillar. Corporation tax was not a big factor for them when they started their businesses. Eddie Haughey of Norbrook is another example. As a young insurance man, I was famously asked to insure Norbrook when it first opened, but the company that I worked for decided that it did not like the look of it and that it would not go anywhere. [Laughter.] Mr Speaker, I can tell you that, if that company had made a different decision, I would not be here now, that is for sure.

(Mr Principal Deputy Speaker [Mr Molloy] in the Chair)

We are right to support a full investigation of the costs and benefits of devolving corporation tax powers. The final decision regarding public expenditure will require the biggest leap of faith that we in the Assembly have ever had to make. We should not rush our fences on this matter; it is far too important, and there is no reason for haste. Other Members have said that we should take it as it comes. Let us make a balanced, well-informed decision at the end of the day. So, with the caveat that I expressed and those contained in the motion, I support the motion.

Simon Hamilton (DUP, Strangford)

I listened to the Member talk about a leap of faith, but I am not sure which side of the classic Alliance fence he wants to leap to. Having listened to his five-minute contribution, I am still not sure whether he is in favour of devolving powers.

Trevor Lunn (Alliance, Lagan Valley)

Just to be clear: I said at the beginning and at the end of my speech that I support the motion.

Simon Hamilton (DUP, Strangford)

Very good. The Member’s use of “in principle” was key, though.

I welcome the debate, not least its timing, which allows the House to offer its support, I hope, to the Treasury consultation, ‘Rebalancing the Northern Ireland economy’. It is a very timely debate to have to allow the Assembly to endorse in principle, or however we want to do it, the devolution of corporation tax powers.

In the general chorus of positivity on the motion, many Members have said that we would be naive in the extreme to think that devolving corporation tax powers would be an instant panacea to all our economic ills and that looking at corporation tax levels would be the only consideration that an investor would make before investing. Even with 0% business taxes and a low-cost regime across the board, foreign direct investment will not come to Northern Ireland unless we have the infrastructure, the skills and the telecommunications in place. Indeed, businesses will not come here unless we have golf courses, theatres and so on. There is a cocktail of measures that we must have. Companies such as Citigroup and the New York Stock Exchange have come to Northern Ireland, while HBO is making films and TV programmes here. Such things would never have been considered possible 10 years ago. Therefore, Northern Ireland already has huge attractions for investors. We have an almost unbeatable product, but the addition of a low rate of corporation tax would take that almost unbeatable product to a whole new level.

Gregory Campbell (DUP, East Londonderry)

I thank the Member for giving way. He outlines some of the very positive advantages, which I think are recognised across the House. Does he agree that the competitiveness that we could gain versus the cost is something that we will have to analyse? We need to concentrate on the rate — 15%, 10%, 12% or whatever it might be — and be sure that we are concentrating on its competitiveness. The one rate that has a political connotation, and about which people would have very strong reservations, is the 12·5% rate, because some people would use that as a harmonising tool rather than as a competitiveness tool.

Francie Molloy (Sinn Féin, Mid Ulster)

The Member has an extra minute.

Simon Hamilton (DUP, Strangford)

Thank you, Mr Principal Deputy Speaker. The Member’s point is an important one. If we get the powers to reduce the rate of corporation tax, we need to strike it at a rate that is right for Northern Ireland. There is a whole other discussion to be had on how we reach that figure, but the Member is absolutely right. We need to get the right rate for Northern Ireland to allow us to be competitive in what is an increasingly difficult global market.

Quite a few naysayers have said that we should not be discussing the issue at all. As Mr Lunn said, this may be, if not the biggest, one of the biggest policy decisions that we will ever face in Northern Ireland, and we should not face that decision lightly. We should be very careful and considered in our approach. Therefore, I welcome the naysayers’ contribution to the debate, although I do not necessarily agree with what they say. However, we should be cognisant of the concerns raised.

In some ways, though, this is a simple decision to take. Whenever I look into the cupboard of possible policy interventions that would allow a step change to occur in our economy to right the imbalance between the public sector and the private sector here and that would close the gap in living standards — we sit at only 80% of the UK standard of living — the cupboard is pretty bare. In not going after a reduction in the rate of corporation tax, given the positive changes that its introduction might make to bringing investment and jobs to Northern Ireland, making indigenous companies beneficiaries in the process, we will be consigning Northern Ireland to more of the same — a sort of as-you-were economic future. That is not acceptable. We should not be looking at simply trundling along, with more of the same for ever and a day in Northern Ireland. We should be looking at something different and something better for our people.

The benefits are well known: jobs; foreign direct investment (FDI); and spin-offs for local companies. Although colleagues and I have laughed at and ridiculed the basket case that is the Irish economy in some respects over how the bubble down there has burst, I did note that ‘The Irish Times’ last week reported that the Central Statistics Office in Dublin has said that the export market in the South is now at a record high. Irish exports in the first quarter of 2011 were up some 3·8% on the final quarter of 2010, and up 20·6% — valued at €1·5 billion — over the past year.

In spite of that bubble bursting, the Irish export market is doing well. That success is driven by the companies attracted by lower corporation tax. Why do the Irish jealously guard their power to have low corporation tax? We must consider the cost, but our approach must be that we want a lower rate. After that, we can discuss how. Mr Cree left out the issue of skills. If we reduce the rate, we need to have people available to take up the jobs in any number of years’ time. There are a lot of things to be discussed but, in principle, we should respond very positively to the consultation. We should tell the Treasury that we want those powers and make our own decisions thereafter on the future.

Mitchel McLaughlin (Sinn Féin, South Antrim)

Go raibh maith agat, a LeasCheann Comhairle. I welcome the debate and the momentum for change that has built from a fairly lethargic beginning some five or six years ago. We have followed a trajectory that followed the all-party agreement during the Preparation for Government discussions and brought us to this point. The change of Administration at Westminster and the coalition Government taking a different approach from that of the previous Labour Administration have also contributed.

During every debate on the economy here, and we have debated it during much more benign circumstances than exist at present, everyone commented on, lamented or criticised the imbalance in the economy. It is a simple statement of fact: the economy is out of balance. Consequently, it is uncompetitive, underdeveloped and more vulnerable to the global and international economic trade winds. Up to now, the Assembly has experienced extreme difficulty, within its powers and resources, in responding appropriately to grow the economy, which was the number one priority established early in the previous mandate. The difficulty in addressing that was that the Assembly simply did not have the economic and fiscal tools in its toolbox.

I have heard comments on the dangers of harmonised tax regimes on the island of Ireland. That is a particular, sectional view. My opinion is that there are significant advantages in being able to market the island economy and its harmonisation of rates as an economic opportunity for inward investment. The island could be marketed on the basis that it would be location indifferent because no fiscal advantage would apply on any part of the island. Up to now, the one-way street placed one part of the island at a significant disadvantage. However, a race to the bottom does not bode well for any economy, as we have seen over and over again.

I note that the Finance Minister has been careful to say continually to the Assembly that we must be responsible and careful. At times, he came across as negative, but he has done a service to the debate, because lowering corporation tax is not a risk-free option. No MLA will approach the decision not having been alerted to the possible downsides. A lower rate is not a silver bullet, and the decision requires a careful and, in my view, informed judgement. There has been considerable debate, study, research and consultation. Many exchanges have taken place, particularly between business, economic leaders, academia, trade unions and stakeholders. At the end of the day, all recognised the opportunities as well as the dangers.

I want to respond briefly to the warning about incremental change. That is a prudent and correct approach, and I do not argue against it. However, I do argue against — this is not a party political point — taking too conservative an approach. If we go for a lower rate of corporation tax but are afraid to be bold or imaginative, it could deny people the ability to produce early evidence that it is the correct strategy for growing and rebalancing the economy.

Although we should continue to be vigilant of the steps that we take if the power is devolved, there is as much danger in being too cautious and careful as there is in overreaching. Were we given the additional powers, the collective wisdom in the Assembly and the experience and support of Ministers would ensure that —

Francie Molloy (Sinn Féin, Mid Ulster)

Bring your remarks to a close.

Mitchel McLaughlin (Sinn Féin, South Antrim)

— we could deliver on the number one objective of growing the economy.

Paul Girvan (DUP, South Antrim)

I speak in favour of the motion, on the understanding that a reduction in the rate of corporation tax is only one of a number of measures to try to rebalance Northern Ireland’s economy, albeit that I believe that it is one of the greatest opportunities that we will have to attract inward investment. If used correctly, it could reduce the Northern Ireland economy’s reliance on public sector employment. It would be a great revenue generator, not only through the taxes received but for the wider economy, particularly the retail end, which would benefit from the money generated.

A reduction in the rate would give Invest NI a great opportunity to go out and sell Northern Ireland on the world stage. Like my colleague Mr Campbell, I fear our going down the route of setting a target of 12·5%. We should not be aiming to be on a par with what is a small economy of five million in the Republic of Ireland, given that the United Kingdom has a population of more than 60 million.

Dominic Bradley (Social Democratic and Labour Party, Newry and Armagh)

The Member warns the House about establishing a rate of 12·5%. Does he agree with the First Minister, who has espoused the view that a 10% rate might be appropriate?

Paul Girvan (DUP, South Antrim)

Our manifesto states that our ultimate goal is 10·5%. I am happy enough to say that if that were to happen, we would be an even more attractive region in which to invest, I hope and pray. It is not just about inward investment; a number of local companies would take advantage of and benefit from that rate.

There is a fear that we would end up with a number of companies coming in and brass plating, as it is known. I appreciate that measures would have to be put in place to ensure that that did not happen. Look at what the Exchequer in London has done: it has already made changes to the way in which corporation tax is worked in that economy. There is a view to bring it down to 23%, and hopefully that will help there.

Northern Ireland is the gateway to Europe, and I appreciate that America is one of our key markets. The UK has a population of more than 60 million, and I think that we have to look at the strength of the British economy. We know about the fears of all those in the euro zone at present, and we need to take those fears into account. Northern Ireland has the opportunity to look not only to America for inward investment but to one of the world’s leading economies, China. We have a wonderful workforce and a great skills base here. The universities gave a presentation in the Long Gallery yesterday that showed off some of the innovation and ability that Northern Ireland as a region can sell on the world stage. We have to look at that, too.

Corporation tax is only one tool in the box, so we need to consider others, such as how to work with the Planning Service to encourage investment. One of the problems in the past was that businesses were put off because of the protracted experience that was planning process bureaucracy. There was some reform in that area and that is the sort of area that we need to encourage, to open up our economy to a large extent.

I appreciate that the consultation is under way. I have received many positive messages from local businesses, not only from small businesses but from some larger employers such as FG Wilson and other companies that are based in my constituency. It is vital that we encourage them and give them the confidence that we are using every tool in the box to grow our economy and to encourage the creation of jobs in Northern Ireland.

Mike Nesbitt (UUP, Strangford)

I also support the motion. We in the House are here to make the big decisions. Those decisions do not necessarily have a right answer, an exact formula or a scientific equation such as E=mc², and that is the case when it comes to something like corporation tax. The only wrong decision would be to do nothing. The world is moving on, and I know that the Minister of Finance and Personnel will tell the House that all the models and the predictions are based on a fundamental assumption of all other things being equal. I also know that he could tell us that in English and in the original Latin.

There is another Latin phrase that is appropriate; it translates into English as “buyer beware”. As we consider taking the power to set our own rate of corporation tax, there are uncertainties that must be resolved, such as whether Europe will support us or whether we will end up in the European Court of Justice. We must also consider whether we can agree with HM Treasury on the exact current tax take from corporation tax and its implications for the block grant, and whether we can agree with Treasury on what will happen to additional tax revenues and receipts from sources such as National Insurance contributions and VAT.

The world is moving on, not least with Europe ending selective financial assistance (SFA), which was the main tool used by Invest Northern Ireland and its predecessors to attract foreign investment here. For me, corporation tax is not just a replacement for SFA; it will represent a transformational change. SFA traditionally tended to attract cost centres and operations that do not necessarily make a profit for their parent company, and which, therefore, do not find themselves liable to any form of tax, never mind corporation tax. Corporation tax is more likely to attract profit centres, such as those that deal in manufacturing and tradable services, and that will attract taxation.

For me, corporation tax is a starting-line tax. Without the power to set that tax, FDIs will look elsewhere to do business, but having it gives us the opportunity to get them to the starting line and encourage them to delve deeper into our offer. We have heard from other Members about that offer and the package, toolbox and elements that are needed, including improved planning and taxation law, the removal of red tape, and, above all else, the creation of the necessary skills base. Indeed, in a debate yesterday, we talked about the need for our further and higher education colleges to ensure that the ever-widening demand for highly skilled workers is met in the coming years.

I would like to remind the House of why we want the power to vary the corporation tax rate and why we want to lower it. It is not to make the fat cats of business any fatter; rather, it will address some fundamental flaws that have been in our economy for decades. Those include under-productivity and lagging behind the UK average in our prosperity. It will make our citizens better off by creating the environment in which businesspeople can generate the jobs that create the income that yields the taxes that fund excellence in our public services.

In conclusion, this is an opportunity to show the indigenous and international business communities that we, as an Assembly and an Executive, are up to the challenge of transmitting the message of political cohesion and confidence that they are looking for. Finally, if I may refer back to Mr Lunn’s contribution and his honesty in admitting about the one that got away, I am interested to know what he first thought when he heard the Beatles and whether that is why he is not the Alliance Party’s music spokesman.

Francie Molloy (Sinn Féin, Mid Ulster)

Order. As this is the first debate in which the Assembly will hear from Mr Lynch, I remind the House that it is the convention that a maiden speech is made without interruption.

Sean Lynch (Sinn Féin, Fermanagh and South Tyrone)

Go raibh míle maith agat, a LeasCheann Comhairle. Ar dtús, ba mhaith liom mo bhuíochas a ghabháil le muintir Fhear Manach agus Thír Eoghain Theas as deis a thabhairt domh bheith i mo Chomhalta den Teach seo. I would like to take the opportunity to thank the people of Fermanagh and South Tyrone who elected me as a Sinn Féin Member of the House.

In thinking about my speech, I was interested in what a Member from the opposite Bench Mr David McIlveen said in his maiden speech a number of weeks ago. He dedicated his victory to his grandmother, an Irish republican, Mrs Evelyn Margaret McIlveen, who hailed from Bailieborough in County Cavan. My grandmother Margaret Hogg came from the Protestant tradition. She was a Methodist, but she changed her religion when she married at the time of partition. She suffered as a result, and it is from her side of the family that I get my republican beliefs. Mr McIlveen said that he was glad that he could be found on the side of the House on which he sits. Tá mé an-bhródúil a bheith ar an taobh seo den Teach mar phoblachtánach. Equally, I am proud to be on this side of the House as an Irish republican.

Our stories highlight the fact that we are not that far apart despite our histories. If we go back a few more generations to the late 1700s, when the United Irishmen and United Irishwomen fought for separation from England, we see that they consisted mainly of people from the Protestant tradition. It is my hope and vision that we all converge on the same path and build an Ireland that we can be proud of and which reflects our traditions. I dedicate my speech not to any one individual but to my family, particularly my parents, who are in their eighties and nineties and are currently in Donegal, and to my friends and comrades who placed their trust in me during many years of personal struggle.

I move to the motion. Devolution of corporation tax powers is a complex issue. I am not an economist. However, many stakeholders believe that it is one of the key economic levers that can rebalance and kick-start the economy in the North of Ireland. Some experts estimate that over 90,000 new jobs can be created over 20 years by reducing the rate of corporation tax. Central to the argument for reduction is the premise that the probability of attracting foreign direct investment will be enhanced. Attracting FDI is seen as the way to create high-skilled and high-wage jobs. It is also assumed that lower corporation tax will encourage businesspeople to reinvest.

However, I have spoken to businesspeople in my constituency and attended a recent conference on the issue in Enniskillen. To say the least, many are not convinced that all boats will rise with the tide of FDI, particularly in a county that has to rely on indigenous business to sustain the local economy. Fermanagh could be further disadvantaged due to the fact that it relies mostly on the public sector. Any move on corporation tax should be used not as a tool to downsize the public sector but a lever to rebalance the private sector with the public sector.

I contend that, at the macro level, a lower corporation tax level can be an advantage in driving the economy forward but it should not be viewed in isolation. High levels of educational attainment, an increased skills level, increased research and development spending, and increased investment in training all have a part to play in developing a sustainable economy. We must continue to support and, indeed, increase our efforts with regard to small and medium-sized enterprises.

I support the motion, in principle, as a first step towards taking responsibility for influencing the future sustainability of our economy and harmonising corporate tax rates throughout the island of Ireland, particularly for border constituencies, such as Fermanagh and South Tyrone.

Margaret Ritchie (Social Democratic and Labour Party, South Down)

I very much welcome the debate, which is extremely timely. Our thanks are due to the two Committees that have set it up. The debate comes at a time when the Treasury consultation on devolving tax-varying powers to the Northern Ireland Executive is drawing to a close. It comes just before the time when really detailed engagement on the cost of lowering corporation tax in the North is due to begin.

I have made it clear many times that the SDLP’s position is one of strong support for the devolution of tax-varying powers to the Northern Ireland Executive and for the subsequent lowering of corporation tax, although I recognise the fact that there is a downside in the cost, which I will come to later. We also believe in varying other taxes, and we have argued repeatedly that, if we are to move our economy out of recession and onto a new growth trajectory, we need to take control of more economic levers.

The ability to vary taxation in the North is a major new economic lever, and even though it comes at a price, it must be cost-neutral to the Treasury, and, therefore, we have to grab it with both hands. Given our failure to do much for the economy using the only other economic lever currently available to us, which is public expenditure, with our, I suppose, policy-lazy and unimaginative Budget, we must surely try to make the most of this opportunity.

Happily, the vast majority of public representatives and the five parties in the Executive are fully behind a lower rate of corporation tax. However, although some of the trade unions and the MP for South Down — sorry, North Down, I hasten to correct myself — are opposed to a lower rate of corporation tax, I am particularly concerned about one politician, our Finance Minister, Mr Wilson. Not only has he stated his scepticism on numerous occasions but he has made it clear that he does not share his party’s enthusiasm for a lower rate of corporation tax. I will go further. On a spectrum of support for lowering the rate of corporation tax, Mr Wilson is closer to the outright opposition of Lady Hermon than to the unequivocally in-favour position of his DUP colleague, the Enterprise Minister, and he is completely at odds with the position of his colleague and party leader, the First Minister, who not only supports the lowering of corporation tax but argues that it should go below 12∙5% to 10%, a point already referred to by my colleague Mr Bradley.

I know that the DUP is an increasingly broad church, which we welcome. However, in this case, the problem is that the dissenter is the Finance Minister, and he is the person whose job it is to lead the team that will negotiate the terms and, ultimately, the cost to all of us of lowering the rate of corporation tax. How can he lead a successful negotiation for a concession that he does not believe in? How can he make sure that the cost is closer to, say, £100 million than £500 million if he does not believe in the project in the first place? I believe that his opposition is fundamentally misplaced. As with the Budget, there is a policy-laziness and a lack of imagination at work in DFP. His position is one of excessive caution and fear of change, masquerading as prudent management. So who should lead the negotiation on the ultimate cost of this proposition?

Let me immediately correct myself and tell you that, when I raised the matter with the Chancellor of the Exchequer at our meeting last week, he told me that there would be a price but not a negotiation. The cost of lowering the rate of corporation tax would be determined independently by the Office for Budget Responsibility. However, although the Chancellor has kindly described the process, he is wrong about the negotiation because no instant calculation can objectively determine the correct cost to the Treasury of lowering the rate of corporation tax in Northern Ireland. Too many fundamental assumptions are open to question, and there are many complex and debatable variations in that calculation.

Ultimately, the bottom-line figure will be arrived at following intensive discussions between economists and their political masters from all sides, and that is effectively a negotiation. It is not only prudent but vital to our interests that we put forward the strongest possible economic argument for the lower end of the range of possible costs, and the only people whom I have heard put forward a credible argument here are from outside the government service.

Let us be clear: we fully support the lowering of the rate of corporation tax, while recognising the downside.

Francie Molloy (Sinn Féin, Mid Ulster)

Will the Member please bring her remarks to a close?

Margaret Ritchie (Social Democratic and Labour Party, South Down)

We believe that Northern Ireland must put its best foot forward.

Gordon Dunne (DUP, North Down)

I welcome the opportunity to speak to the motion.

There is no doubt that there is a real need to grow the economy in Northern Ireland, as the current balance is considered overly dependent on the public sector. Our economy needs to be driven more by the private sector. With a vibrant private sector, Northern Ireland would benefit greatly from more wealth and prosperity, economic opportunities and jobs through new investment. A reduction in corporation tax would encourage investment and provide a much-needed boost to our local economy, which has, unfortunately, become too dependent on the public sector.

Much of the current infrastructure is already well placed to complement a competitive and vibrant private sector. Northern Ireland enjoys good transport links, a modern telecommunications framework and, thanks to our two leading universities, an excellent skills base. Although there is always room for improvement in those areas, we currently have a good base from which to start as we seek to grow Northern Ireland and make this country the best place to do business.

Foreign direct investment (FDI) has the potential to be highly successful in achieving the required rebalancing of the economy. However, it also depends on a corporation tax rate that will enable Northern Ireland to close the gap with the rest of the UK and compete for investment with the Republic of Ireland, which currently has a tax rate of 12·5%. That rate looks set to continue long into the future.

A reduction in the rate of corporation tax is a long-term policy, as it is a long-term economic plan designed to benefit this country and ensure a prosperous future. It is inevitable that such a reduction in corporation tax will have short-term effects. One such impact that we will have to face is a reduction in the block grant. This is a central issue, and it is important to have clarity on it. It is imperative that we do not create an extra burden on ourselves by reducing public spending. It would be foolish significantly to reduce public spending in areas that help to attract and maintain a good business-friendly environment. It is essential that we are not short-changed and that we get a good deal.

There is clear evidence that a reduction in the rate of corporation tax would attract FDI to Northern Ireland. We require more direct manufacturing jobs. Northern Ireland must return to being a place where engineers carry out research and development on future projects, which they take through to development, production and manufacturing in a competitive marketplace. Having listened to the views of important professional bodies, such as Invest NI and the Federation of Small Businesses (FSB), who are undoubtedly better placed than many of us in the House today to assess the benefits of reducing corporation tax, I feel that this is an opportunity to bring real and lasting benefit to our economy.

Jim Allister (Traditional Unionist Voice, North Antrim)

The Member said that he had listened to views. The one report not mentioned in the debate — doubtless, the Member has read it — is that by PricewaterhouseCoopers (PWC). Will he comment on the fact that it states that there is no clear evidence of a correlation between low corporation tax, per se, and high levels of FDI? The Member seems to think that it is a magic formula for increasing FDI. What about the PWC report?

Francie Molloy (Sinn Féin, Mid Ulster)

The Member has an extra minute.

Gordon Dunne (DUP, North Down)

Throughout the world, the evidence is that a reduction in corporation tax leads to significant improvements. Some like to regard it as a tax reduction that will benefit only the large multinational companies. However, the FSB’s recent survey in May 2011 concluded that the overwhelming majority of owners of small businesses in Northern Ireland believed that the lowering of corporation tax would have a positive impact on the local economy. It concluded that that would help to improve the conditions for a competitive, business-friendly environment.

For too long, our manufacturing has been unable to compete against the rest of the world. We now seek to compete with countries in the Far East, such as China. I am aware of a large manufacturing company in Belfast that is involved in government contracts. It sources material locally, sends it to Vietnam for sub-assembly, and returns that to Belfast for final installation in the completed product.

It is important that we do all we can to expand and advance our already well-established aerospace and pharmaceutical industries and further help to promote our proud reputation for innovation and invention across the spectrum of industries. We need to be able to compete competitively again in the world market and see an increase in foreign investors who will develop our skills, grow our economy with increased productivity, increase employment —

Francie Molloy (Sinn Féin, Mid Ulster)

Bring your remarks to a close.

Gordon Dunne (DUP, North Down)

— and help to create a more prosperous future for our country. We need to demonstrate to the world that Northern Ireland is open for business. I support the motion.

Phil Flanagan (Sinn Féin, Fermanagh and South Tyrone)

Go raibh maith agat. Comhghairdeas, a Phríomh-LeasCheann Comhairle, as do phost nua. Éirím le tacaíocht a thabhairt don rún.

I support the motion and the plans to devolve corporation tax to this Assembly. For many years, we have argued that fiscal powers should be transferred to this Assembly and that decisions on the rates of taxation that should be set need to be taken by locally appointed Ministers.

The potential for devolved corporation tax is only one small part of this. This debate is not about a reduction in corporation tax but the devolution of the powers to set the rate. Whether or not one agrees with a reduction in corporation tax is not the issue at hand. If we manage to get these powers devolved, then we can begin a discussion on what the actual rate will be.

There is a corporation tax rate of 12·5% in the South. That has often been heralded as the main reason why so many foreign investors decided to locate there. It may have been one reason, but it surely was not the only one. Huge multinational companies decided to locate in the South as a result of a wide range of factors, including a high number of skilled people willing to work, a young and educated population, widespread use of the English language, and a decent level of infrastructure investment.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

I listened carefully to what the Member said. He referred to the skills base in the South and a young, well-educated population. Does that description not exactly suit our own situation here in Northern Ireland? However, the one thing that is different is the corporation tax rate. Is that not really an argument in favour of a reduction in corporation tax and the centrality of that in transforming the economy?

Francie Molloy (Sinn Féin, Mid Ulster)

The Member has an extra minute.

Phil Flanagan (Sinn Féin, Fermanagh and South Tyrone)

I am quite baffled by the question. There was quite a bit in there that I missed, but I will go on, and if the Member wishes to intervene again, he can.

A lot of the jobs that were created have now disappeared, and we have seen how quickly that can happen. Those measures that I referred to, and to which the Member referred as well, are the kind of things that we need to put in place to ensure that our economy, in particular our private sector, is enabled to grow sustainably.

We also need to work on the basis of co-operation, as opposed to competition, to grow our all-island economy. For too long, the argument has been put forward that in the North we are over-reliant on our public sector and handouts from the British Government. Yet the British Government tell us all this without the knowledge of how much tax, including corporation tax, is accrued here.

Before the Assembly can take a decision on what any future rate of corporation tax will be, we need full clarity on what the implications may be for the block grant and our public services. At present, those implications are unclear. The future of our economic success is not simply a matter for DFP or DETI. As we all know, growing our economy is the responsibility of many Departments and of the Executive as a whole.

We rely on our education system to ensure that young people receive the right training, advice and support to equip themselves for a fast-moving and challenging economy. We need proper investment in our road network and telecommunications infrastructure to ensure that businesses can compete, transport goods and communicate effectively. We also need to see reform on how procurement takes place so that small and medium-sized enterprises can have access to public contracts, limited though they may be at present.

In the past, much of the focus was on attracting foreign direct investment to create jobs and grow our economy. We, as an Assembly, need to realise that the people who will grow our economy in a sustainable way are those who live here and those who have an entrepreneurial spirit. Those are the people who require our help.

Mr Nesbitt referred to Invest NI, and there has been a lot of focus on its work. It is clear that it is going to have to change its tactics for attracting foreign direct investment, as a result of the abolition of SFA from 2013.

We also need to ensure that any additional revenues that are generated from increased taxation — income tax, VAT and National Insurance contributions — are retained by the Executive. That is particularly important given the threat of a cut to the block grant, although, as I have said before, the British Treasury has no idea what size any cut might be.

This debate has been going on for quite a while, and opinions have been mixed across society. Mr Lynch referred to some of the scepticism in Fermanagh. I look forward to this debate gaining momentum and to a full and frank discussion taking place from this point on.

Whether any potential reduction in corporation tax would benefit our small and medium-sized enterprises, particularly in areas west of the Bann, is questionable. We need to see a wide range of measures being put in place to sustainably grow our economy. Those must include a job creation strategy and continued investment in education, skills and infrastructure. We must focus on supporting our indigenous businesses as well as growing our tourism and agrifood sectors and putting measures in place to ensure that the benefits of any reduction in corporation tax are felt across our society and not just within big business. Go raibh maith agat.

Alastair Ross (DUP, East Antrim)

There has been recognition from virtually everyone that lowering the rate of corporation tax in Northern Ireland will not be the silver bullet to transform our economy. Mr Hamilton, in his opening comments, said it would not be a panacea. Ms Ritchie was unfair on the Finance Minister when she said that he was reluctant to take this step. He is right to inject some realism into this and say that it is not going to be a panacea. In 2007, the Finance Minister spoke about how devolution would not be the panacea for all our ills, even though it would be significantly better for us than direct rule. Lowering corporation tax would be significantly better for us by transforming our economy, rather than us continuing as we are. Although all of the Ministers have been careful to say that it is not a silver bullet, we have agreement that the devolution of corporation tax powers will be a significant lever in our economic toolkit.

I listened to the Chairman of the Finance Committee, and I must disagree with him, because this is not about harmonisation of taxation across Ireland; it is very much about competitiveness. Just as businesses in Northern Ireland are at a disadvantage when it comes to air passenger duty because we share a land border with another EU region, this is another prime example of how business in Northern Ireland is at a disadvantage, due to the adjoining nation having a lower rate of corporation tax.

I look around the world to places where there are lower rates of corporation tax. The Secretary of State is always very keen on pointing to Canada and the results that it saw when it reduced corporation tax. In Europe, we can look at Estonia; we can look at Singapore. All of those areas have had lower rates of corporation tax and have been successful in attracting more investment. Indeed, the national Government at Westminster have modestly reduced the rate of corporation tax for the United Kingdom, which is recognition from Treasury that it can have a positive impact in stimulating the economy.

Of course, lowering corporation tax must sit alongside other fiscal and economic levers that this Executive can operate. It will attract further foreign direct investment in coming years, but there are other things that businesses will look at. Yesterday, I spoke about university funding and making sure that we continue to have a highly skilled graduate workforce. After companies look at the rate of corporation tax, they will look at the quality of the education system and the type of graduates that are coming out of our universities. Indeed, they will look at the quality of our universities, as well as at telecommunications, infrastructure and all those sorts of issues.

One of the key points is that having a lower rate of corporation tax gives Northern Ireland a unique selling point. When Invest NI or businesses look for investment, the lower rate of corporation tax will be a very attractive proposition for companies before they look at some of the other things that Northern Ireland has to offer. It is very much about our getting a foot in the door.

It is telling that lower corporation tax is supported not only by Members, but, as Mr McIlveen said, by members of the business community, including small businesses. Although small businesses might not directly benefit from a lower rate of corporation tax, they recognise that further job creation in Northern Ireland will have a knock-on effect down the supply line, and everyone can benefit from that.

There is a need to grow the private sector in Northern Ireland so that we become less reliant on the public sector. Lowering the rate of corporation tax could well be the tool that we need to help rebalance our economy and ensure that, in future years, the gap in the standard of living between people in Northern Ireland and those in the remainder of the United Kingdom is closed. I fear that if we do not do something quite dramatic, that gap will continue to be as wide as it is today.

We said that corporation tax can increase FDI. An independent economic advisory group suggested that there could be up to 58,000 new jobs created by 2030. That would be around 3,500 to 4,500 new jobs a year. We need to make sure that we are ready for this. As I said, it is not just the high-end graduate jobs but jobs further down the supply chain and local indigenous businesses that can benefit.

As Members have said, it will also help us to become more of an exporting economy, which is something that Northern Ireland needs to move to in future years. Indeed, even the more modest projections and assumptions point to the reduction of corporation tax as having a positive impact on the Northern Ireland economy.

It is important to say that, although it will stimulate the local economy, it is important that we get a fair deal from Treasury in getting the powers to lower corporation tax. Of course there will be a cost to the Executive, and that has to be taken into account, but I believe that that can be managed. It should not be viewed as a barrier but as an investment in our economy and in this country to grow our private sector and create more jobs in the future.

I believe that, if we can get the power to do that —

Francie Molloy (Sinn Féin, Mid Ulster)

Bring your remarks to a close.

Alastair Ross (DUP, East Antrim)

It is important that the Executive plan it carefully and that we can see the realisation of a more vibrant private sector in Northern Ireland.

Ross Hussey (UUP, West Tyrone)

I begin by commenting on the many languages that have been used here today. We have had Irish, Latin and English, and it was good to hear one of the Members on the other Benches comment that one of the strong selling points of the Irish Republic is the ability of people there to use the English language. It is good to see that the ability to speak English is something that we should be taking forward.

In the past, the Minister suggested that my speech was written by Owen Paterson. I can assure him today that the only Owen in my speech is Tír Eoghain, and County Tyrone at that. I hope you can understand my Tyrone accent today, Minister; I will speak slowly for your benefit.

I welcome the opportunity to speak in the debate. As a member of the Finance and Personnel Committee, I thank all those who spoke before me, and I thank the Committees for bringing the issue to the House. The rebalancing and growth of the Northern Ireland economy is the number one priority for the Assembly throughout this mandate, and we must work to make sure that we deliver for the people of Northern Ireland on that front. Let me state from the outset, as my colleagues have done, that the Ulster Unionist Party is in favour of devolving the setting of the rate of corporation tax to Northern Ireland. We recognise the unique situation that Northern Ireland finds itself in, with a vast over-reliance on the public sector and a land border with the Republic of Ireland, which has a very low rate of corporation tax at 12·5%.

Devolving corporation tax powers has been at the forefront of discussions around addressing the economic problems before us. It has been a much-debated topic, and it has received support from the majority of the House. However, today I want to deal with two main issues that are imperative to the success of the devolution of corporation tax powers: the effect that a decrease would have on the Northern Ireland block grant, and how a decrease would be administered.

First, the devolution of corporation tax powers will have obvious consequences for the Northern Ireland block grant, given the Azores ruling. At present, the cost to the block grant that is being mooted is far too high. However, there seems to be some disagreement as to what the figure actually is. The estimates provided by her Majesty’s Treasury differ significantly from those provided by the Department of Finance and Personnel. Last year, DFP calculated that the cost to the block grant would be in the region of £400 million by year 5, whereas the two estimates by the Treasury put that figure at between £225 million and £270 million by year 5. Although I appreciate that those figures are estimates that have been done at a fairly early stage in the process, further work must be carried out to find out precisely how much our block grant would be reduced by should a decrease in corporation tax be taken forward.

Secondly, I want to deal with how the devolution of corporation tax powers would be administered. That is an area that we need to think about now, as it impacts heavily on the cost of devolving corporation tax powers. The two obvious options would be that the corporation tax is charged so that it is administered by the Department of Finance and Personnel through Land and Property Services, or it could remain as it is now, and continue to be administered by Her Majesty’s Revenue and Customs.

The advantages and disadvantages of both options need to be given serious thought. However, the main issue with the administration of the tax is that Northern Ireland should have the ability to decrease the rate of corporation tax without taking the final decision on by how much it should be reduced. That would give the Northern Ireland Executive the time and latitude to consider what is best for the Northern Ireland economy and to react to an ever-changing economic environment.

Finally, I want to reiterate what a number of Members have said already in the debate, which is that the devolution of corporation tax is neither a silver bullet nor a panacea for the Northern Ireland economy. It needs to work in conjunction with a number of other initiatives. Nevertheless, the benefits that it can bring will be tangible for the people of Northern Ireland, in the form of more jobs and greater economic growth. I, too, was an insurance official, but, unlike Mr Lunn, I would have thought a little bit harder about Norbrook, and I might have taken the risk and gone with it. However, that decision has passed us by. I look forward to greater economic growth in the Province, and, for that reason, I support the motion.

Maurice (DUP, Fermanagh and South Tyrone)

I have listened intently to what Members have said in the debate. I do not want to be the Job among everyone, but I suspect that I may be, because I do not share the total enthusiasm that has been demonstrated today. The old adage of the need to be careful of Greeks bearing gifts is very appropriate in this case. We have some very good examples, at which we should take a long, close, hard look.

I am pleased in two respects. First, that the motion contains the phrase, “in principle”. I am glad that that is there. Secondly, I am glad that the leader of the SDLP brought it to our attention that the Finance Minister is cautious. I congratulate him on that. That is a sign of maturity, not of weakness, and it demonstrates to me that, in fact, he is not going to jump in with both feet and say that everything is well and wonderful because we have got corporation tax down to 12·5%. Let it be clearly said that there is no such thing as a free lunch. We will learn that very shortly, if and when the powers are devolved.

I would like the Minister, when he sums up today, to tell us exactly what this is going to cost to get corporation tax down to 12·5%. I have no doubt that he will, because he is more than capable of doing it. I hear and read about all sorts of figures. I have heard £400 million, £300 million and £200 million mentioned. I do not which of those is true, or, indeed, if any is true, but I suspect that the figure of £300 million may not be far away.

Very recently, the computer company Dell withdrew its entire operation from its base in Limerick and relocated to Poland. We all know that the corporation tax rate in the Republic of Ireland is 12·5%. We also know that the rate in Poland in 19%, but that did not stop Dell from uprooting and taking its whole operation there. The rate of corporation tax in Poland is 50% higher than that in the Republic of Ireland. The lower corporation tax rate did not keep Dell in Limerick. It may have kept it there for a while, but Dell saw other opportunities in Poland and moved there.

Not every Member said that the devolution of corporation tax is a panacea for all our economic troubles. It is anything but. If we were to speak to 10 different economists about corporation tax — I will not name them or embarrass them — and ask them the specific question of where on a scale of one to 10 they would put the importance of lowering the rate of corporation tax, they would put it at six or seven.

In other words, at least six other issues are more important than corporation tax. I wonder what they could be. I believe that the cost of labour is certainly one of them and that educational attainment is another, as is a stable society. Those are three things that will help to move our economy in the right direction.

It also has to be said that a major international computer company recently selected Northern Ireland as its European research base. Its managing director confirmed that tax was not an issue. So, I say to the House and to the Minister — I do not think that the Minister needs it said, but I will say it anyway — that we need to be cautious.

Francie Molloy (Sinn Féin, Mid Ulster)

The Member should bring his remarks to a close.

Maurice (DUP, Fermanagh and South Tyrone)

I am happy that the Minister is in that mode, and I have no doubt that he will bring a common-sense approach to all this.

Alasdair McDonnell (Social Democratic and Labour Party, Belfast South)

The SDLP’s position on corporation tax is clear and has been consistent not just for a few years but for 15 or 16 years. Indeed, many years ago, when some of us went to Pittsburgh for the second White House conference, it was the famous Tony O’Reilly who convinced me on the matter. If the Executive are serious about governing in an effective and efficient way and about creating effective and efficient economic benefits for businesses here and for the people of Northern Ireland, I would be in favour of devolving not just corporation tax powers — that should be done first — but all tax powers locally, so that we can have much greater influence on what we do and how we do it.

To maximise the impact and create a level playing field across the island of Ireland, the rate should be set at 12·5%. The power to devolve tax cannot be separated from the level of the tax, and to focus on devolving powers without reference to setting a competitive rate would be to render this debate meaningless. There is absolutely no point in taking the power if we do not use it. I believe that that rate would dramatically change our economic landscape in a relatively short time.

All too often here, whenever we discuss our economy, we talk about the block grant and how we might tweak it a bit here or there. However, there is much more to our economy than working with the block grant. Only this morning, I was at a business breakfast seminar in Belfast City Hall. The focus of the event was on enhancing Belfast’s competitiveness, and, time and again throughout the discussion, economists, businesspeople and other political representatives brought up the importance and value of a lower rate of corporation tax. It is clearly seen as a tool with which to build a bigger and better private sector.

Far too often in Northern Ireland, we have a habit of knocking ourselves, encasing ourselves in silos or restricting ourselves under a glass ceiling, with a cannot-do as opposed to a can-do attitude. However, we should not lose sight of the fact that Northern Ireland has lots of positives to offer to investors. To ensure that we build a bigger, stronger and better private sector, as well as reducing corporation tax, we must bundle those positives. We have a large pool of skilled, cost-effective labour. Although it may not be as cost-effective as some inward investors would like, compared with the labour markets in London, Dublin and the main European cities, it is relatively cost-effective. Beyond labour costs, we have a relatively low cost base. We are in a prime location for trading and for exports. Our tourist industry has huge potential. We have a very strong IT sector, and we have the devolved Assembly and Executive.

We have the powers to make choices and decisions for the benefit of Northern Ireland. The devolution of corporation tax powers is one decision that we must make. In a relatively short time, it will enable fair competition and dramatically increase the economic attractiveness of Northern Ireland. Corporation tax at a competitive rate will, as the evidence overwhelmingly indicates, speed up economic growth. It will bring in foreign direct investment and increase the number of people in well-paid, sustainable jobs. Some people estimate 90,000 new jobs over 20 years. That may be a slight exaggeration, but most commentators talk about more than 64,000 jobs.

The ability of reduced corporation tax to speed up inward investment and economic growth in Northern Ireland is important against the backdrop of the clear intent of the Treasury to slash the block grant. The fact is that a reduced devolved corporation tax will, in the medium to long term, increase tax revenue for the UK and, in turn, help to offset any reduction. That is why it is important that we debate the details of implementing the tax change —

Francie Molloy (Sinn Féin, Mid Ulster)

Bring your remarks to a close.

Alasdair McDonnell (Social Democratic and Labour Party, Belfast South)

— and make a strong, persuasive case to the Treasury.

Jim Allister (Traditional Unionist Voice, North Antrim)

Not for the first time, and, I suspect, not the last, I am somewhat out of step with the consensus in the House. However, I feel a little less lonely since Lord Morrow’s contribution. In the Budget debates, the Minister liked to refer to me as Elijah. Well, Elijah and Job probably had quite a lot in common. If the Job of the DUP Benches would like to volunteer as a Teller, I could give him some useful employment in a few minutes. I hope that he proves more stoical in his resistance to corporation tax powers than he did having started down the same road in respect of policing and justice.

People in the House like to talk about game-changers. The game-changer in regard to corporation tax was the Azores judgement. At a stroke, it revolutionised the debate and made it abundantly and irrefutably clear that, if you go for corporation tax, you must, because of the fiscal autonomy requirements, adjust your block grant. We in Northern Ireland, whether we like it or not, have a huge fiscal deficit, and the block grant is the one thing, as the Minister well knows, that gives certainty to our budgeting. Going down a road where you play fast and loose with the block grant and take risks with it in a state of total blindness because you have no idea of what the actual working figures will be seems to be the absolute height of folly.

Remember, there is no reverse gear when it comes to corporation tax devolution. Therefore, there is supreme danger in sleepwalking into a situation in which we devastate the block grant for the sake of some sort of aspiration. All that I have heard in this debate is aspirations; I have not heard any reality talked at all. The volatility of the receipts from corporation tax makes anyone who thinks seriously about it back away pretty fast, just as the Welsh have. It is on the point of the volatility.

Much nonsense has been talked about the impact that it would have on foreign direct investment. I remind the House that the Irish Republic had low corporation tax from 1958. That did not do it any good in the 1950s, the 1960s, the 1970s and most of the 1980s. It is not the panacea; it is not anywhere close to the panacea. Those who think that it is are sleepwalking —

Maurice (DUP, Fermanagh and South Tyrone)

Will the Member give way?

Jim Allister (Traditional Unionist Voice, North Antrim)

Certainly.

Maurice (DUP, Fermanagh and South Tyrone)

Thank you. It is now Job speaking. I hear what the Member says. I made it clear that some Members said that it was not the panacea or silver bullet. Does the Member accept that it is imperative that the Northern Ireland economy is always competitive and that our nearest rival is the Republic of Ireland?

Jim Allister (Traditional Unionist Voice, North Antrim)

Of course. I want to see the economy totally rebalanced in Northern Ireland. I am not opposed to that at all — far from it. What I am opposed to is taking steps that we then regret and taking steps that distance us from the centrality of our equal citizenship as part of the United Kingdom. There is an ideological issue, which is that common taxation lies in close relationship to common responsibilities and benefits. That is why the party that sits over here — Sinn Féin — is suddenly so ideologically wedded to the reduction in corporation tax. It is not because that party believes in low corporation tax.

I sat in the European Parliament for five years and listened to Bairbre de Brún and her Marxist clique constantly demand soaking the corporations and higher corporation tax. That is their ideology. In the Irish Republic, they fought elections saying that they would introduce higher corporation tax, but, suddenly, because it happens to fit with an overriding political ideology — harmonising taxation on the island of Ireland — they are now the prophets of low corporation tax. They are no such thing. They are the economic illiterates of the House.

Simon Hamilton (DUP, Strangford)

I have heard the Member say what he is against. We are well used to hearing what he is against. If he genuinely believes in the rebalancing of the Northern Ireland economy, will he tell us what he is for? In all this bluster, we have not heard him suggest anything that would make the step change in the economy that the rest of us are in favour of.

Jim Allister (Traditional Unionist Voice, North Antrim)

I suggest that the Member studies the economy of Germany. It has relatively high corporation tax, but it has one of the best success rates in foreign direct investment. Why? Because —

Francie Molloy (Sinn Féin, Mid Ulster)

Bring your remarks to a close.

Jim Allister (Traditional Unionist Voice, North Antrim)

— it has multiple aspects to its attraction package that make it an attractive place to invest.

Steven Agnew (Green, North Down)

I support the motion. Like Trevor Lunn, I support in principle the devolution of corporation tax powers and other fiscal powers. We should look at the powers that we have on the whole. However, the real question for me is what we should do with those powers. For that reason, I want to voice the many concerns that I have about some Members’ apparent willingness to rush head first into reducing corporation tax to 12·5% or less.

Yesterday, the Assembly passed a Budget that was decimated by cuts passed down from Westminster. Indeed, the Finance Minister seemed to suggest that we should praise him for being able to present any kind of Budget. He even went further and suggested that those who criticised it were nothing but whingers. I do not subscribe to that view, as I opposed the Budget, but I agree that, given the cuts that we have had to face, it was a very difficult Budget to produce. For that reason, I am astonished that we are seeking to voluntarily reduce our block grant further in order to cut corporation tax, which PricewaterhouseCoopers ranks as seventeenth in the list of factors that influence companies that are looking to invest.

A question that the Finance Minister often asks of those of us who dare to propose amendments to his Budget is “Where will the money come from?”. Well, where will the money come from if we reduce corporation tax and have our block grant reduced? We have not had that question answered, and I have yet to hear what cuts to services and job losses will result from that potential cut to the block grant.

There are other potential costs that have yet to be outlined. How much will the administration burden be? I put that question to the Minister, and, as yet, there has been no estimate. Therefore, Members are supporting the reduction in corporation tax without the full facts. My understanding is that the administration costs will be quite significant.

Varney estimated that brass plating could cost us in the region of £80 million in further reductions to the block grant. Another concern that has been raised is that, if the power to reduce corporation tax were devolved and receipts were to drop, would we then seek the introduction of borrowing powers that might be necessary to mitigate that possibility, given that we do not have those powers?

We know that there will be costs. The costs are guaranteed, but the benefits are purely speculative. Many Members have talked as though the various projected figures on new jobs are guaranteed. They have said that they do not know how many jobs will be created but it will be tens of thousands. We do not know that. At this point, it is speculation.

I welcome Simon Hamilton’s contribution that we must consider the matter seriously and look at all aspects of it. In doing so, we should look at the alternatives. I am a member of the Committee for Enterprise, Trade and Investment, and I asked departmental officials what alternatives the proposals were being marked against. The only alternative that they have been marked against is doing nothing. I agree with Members that we should not do nothing; we have to address the state of our economy. I propose that we should at least mark the proposals against investment in the green new deal. The costs are similar, so why not see which has the better outcomes? The green new deal will help not only to boost our economy but to move us towards a lower-carbon economy and to reduce our reliance on ever-diminishing fossil fuels, the prices of which are rising. Let us look at the two proposals and compare them. The benefits of the green new deal are not speculative. There are guaranteed benefits, and, if we invest in it, we will create jobs.

Although I am willing to support the motion —

Francie Molloy (Sinn Féin, Mid Ulster)

Draw your remarks to a close.

Steven Agnew (Green, North Down)

I implore the Finance Minister and the Enterprise Minister to explore the alternatives before we rush head first into a potentially very damaging tax cut.

Francie Molloy (Sinn Féin, Mid Ulster)

The Minister of Finance and Personnel, Mr Sammy Wilson, will have up to 20 minutes to respond.

Sammy Wilson (DUP, East Antrim)

It will be 20 minutes. I thank everyone for contributing to the debate on a very important issue. In fact, it is probably one of the most important policy issues that we will debate, contemplate and, finally, have to make a decision about in this mandate. The issue will have very long-term consequences, potentially positive and negative. Therefore, it is important that the debate be considered and that we have as much input into it as possible.

From my party’s point of view, the parameters of the debate and the objectives of the policy are all about what we will do to make the Northern Ireland economy more competitive; it is not about making our economy more like that of the Irish Republic and converging with that economy. Mr Allister sees it as some kind of plot by Sinn Féin to drag us into a fiscal united Ireland. Indeed, he pointed out that Sinn Féin spokespeople in the European Parliament used to be ranting, left-wing communists. Lots of biblical characters have been mentioned. We have had Job here and Elijah here, and we have Saul of Tarsus over here. They have had a Damascus road experience. They have been converted. I would have thought that Mr Allister would welcome that and not condemn them for it. I would have thought that, in Mr Allister’s book, a consideration of more mainstream economic thought would be a benefit rather than something to be criticised for.

Let me make it clear that, as far as we are concerned, this is about what we should do to change the face of the Northern Ireland economy. Member after Member said that. We cannot go on with a situation where we, on average, have 80% of the average GDP in the United Kingdom. We cannot go on with a low-productivity economy. We cannot go on with an economy that is dominated by the public sector. Even the activities that go on in the private sector are very heavily dependent on public sector spending and on low-wage-type activities. We cannot go on that way, and, therefore, we need to look at change.

The economic theory behind it is that one way in which we might do that is to look at how we give fiscal incentives to the private sector to expand. I accept a lot of the points that were made by those who were more sceptical during the debate. It would be foolish of me, as Finance Minister, as an economist or as an observer of real life, to do otherwise. Indeed, many of those who support the change have made it clear that they understand that there is no silver bullet and no panacea. People can pull evidence out from different sources, and some people will point at reports and economic theories that suggest that, if you reduce the tax burden and reward people for the activities that they undertake, they will have an incentive to undertake more of those activities and, if you let them keep their profits, they will have more money to invest and, therefore, to expand their firms. Therefore, there is an incentive effect.

Mr Allister pointed out that the PWC report indicates that that is not necessarily the case, and it is not. You could look at some low-tax economies and find that there has not been that stimulus. As Mr Nesbitt pointed out, when economists look at all those things, if they want to isolate the impact of one variable on the economy, they have to make an assumption that rarely applies in real life. Ceteris paribus — I have got the Latin in as well — or all other things remaining equal is not always the case. Hence, what Mr Allister said about the situation in the Republic is quite true: for a long time, it had a 10% tax rate, and that had no impact. Then it had a 12% tax rate, and that did have an impact because other things changed as well. Therefore, anyone who says with certainty that this will suddenly make the economy grow magically does not understand or has ignored many of the economic complexities.

One thing that we do know is that there are lots of modern examples of how a reduction in corporation tax and in taxes on profits has had a dramatic impact on the rate of growth, not least in the country that is next door to us. For that reason at least, we have to consider it. We cannot simply write it off, as some did during the debate, and say that there are other ways and, therefore, we do not have to consider it. It would be remiss of us to do that. Indeed, if we want to rebalance the economy, we have to look at that.

The second point that I want to make is that, no matter how you look at this, there will be costs involved. Let us not pretend to ourselves that there will not be. I know that some Members said that, in the long run, it will give us more revenue than it will cost us. That depends on what you wish to include in that revenue. We know from all the reports, whether from the Treasury or the EAG, that, in 10 years’ time, even with the best of circumstances, we will only break even. The worst report shows that, in 20 years’ time, we could still have a negative fiscal impact on this economy, so we have to bear that in mind. Even if it creates 4,500 higher-paid jobs in each of the next 20 years, resulting in a thriving economy that enables young people to stay here, get the rewards that they want while living in a healthier, happier, more prosperous economy that employs more people with a better lifestyle, not much of it, apart from the tax take, will register on our fiscal balance. However, it will change the face of Northern Ireland, which is what the Assembly is here for. It will give the people whom we represent better prospects and enable us to hold on to the best of our talent. For that reason, when we look at the costs and benefits of lowering corporation tax, we cannot look at the fiscal benefits and costs alone and decide that, because of them, we will not go down that route.

That does not mean that we recklessly imperil in the short and medium term our ability to provide public services. The job creation models’ predictions vary from 1,500 additional jobs a year to 4,500 a year. Anybody naïve enough to believe that a model can project economic activity and the impact of a policy 20 years in advance does not know a great deal about economic modelling. Many models are lucky to survive two years in our changing circumstances. Those who say that there is an element of faith or gambling involved in economic models are absolutely right. That is why it is imperative that we scrutinise the corporation tax policy to the nth degree in making our decision. That is why a debate such as this — I hope that there are many more like it — is so important.

We have to consider the immediate fiscal burden. People have said that I differ from other Ministers on this, but I do not believe that at all. Ministers have differing responsibilities: some are interested in job creation, and others look at the wider benefits to society. As Finance Minister, my responsibility is to look also at the impact on public finances, because I must produce a Budget every year and we must ensure that Departments do what we want them to. That is why it is important that we consider the costs.

Ms Ritchie said that I was not fit to lead the negotiations because I brought some of those issues to the debate. Indeed, she tried to make me choose between two women: Lady Hermon and Arlene Foster. However, I tell you one thing: had she put herself in that bunch, I would have told her which of them I would not choose. [Laughter.] The puppyish devotion that she —

Alban Maginness (Social Democratic and Labour Party, Belfast North)

I am going to tell Arlene.

Sammy Wilson (DUP, East Antrim)

I am going to be told on, and I have to fly to London with her later. I will probably get it in the ear.

Adopting a puppyish, wide-eyed devotion to this without bringing to bear any critical faculties is certainly not how to go into corporation tax negotiations with the Treasury.

When we go to the Treasury, it is important that we are aware of all the pros and cons and that we go in cautiously and go in hard, because there is much to be gained. I cannot remember, but I think that it was Mr Allister who asked what the upper limit of the cost would be. In any report that I have seen so far, the upper limit is about £355 million a year. If we had to take that as a deficit for the next 20 years, it would, of course, be absolute folly to say that we should go down that route, given all the uncertainty surrounding job creation, etc. Despite what Ms Ritchie said about the Chancellor stating that there would be no negotiation, there will be considerable negotiation. She was correct to say that there would be no negotiation on the amount of income tax. As several Members pointed out, once the amount of income tax has been established, the Azores ruling is that we have to pay whatever the bill happens to be. However, there is considerable variation.

Jim Allister (Traditional Unionist Voice, North Antrim)

On that very important point, once that figure is negotiated, is it set in stone? David Gauke, the Exchequer Secretary, told the Northern Ireland Affairs Committee that, if corporation tax receipts were less than expected, the Northern Ireland Executive would have to deal with that. Clearly, that indicates that you are on your own. Once you set the figures, is that the long-term consequence?

Sammy Wilson (DUP, East Antrim)

I am glad that you raised that point, because I wanted to come to it. I noted the issue of volatility raised by Mr Allister and Mr Agnew. One danger would be that, if receipts went up and down, the block grant would become more volatile. As far as I am concerned, one area of negotiation that would be open to us is where those variations occur, and there will be variations. Over the past five years, the percentage of corporation tax collected in Northern Ireland has varied between 1·6% and 1·1% of the United Kingdom total. Therefore, there is considerable variation over the economic cycle. Although we would have to pay the bill, there would be an acceptance that those variations could be evened out through adjustments to the block grant. Therefore, in the good years, we would probably pay back, and, in the bad years, we would take in. Although it is not impossible to deal with that, it is an issue, and the Member was right to raise it.

Of course, other issues are open to negotiation. The Treasury assumed a profit movement of, I think, £70 million. The Azores ruling does not require that to be attached to the bill. Although the Treasury assumed that profit movement, it might never materialise. Indeed, in discussions that DETI officials had with Europe, it was made clear that any profit movement would, of course, come under the Azores ruling, but that it could be decided after the event, rather than being anticipated and added to the bill. We want to negotiate that with the Treasury.

If the investment were to succeed, the other thing that could help to offset the cost would be counting in the additional receipts from National Insurance contributions, additional VAT receipts and PAYE, because more people would be employed. That could have a considerable offsetting effect — up to 20% of the total bill — which would reduce the impact of the reduction in the block grant.

The administration figure has not been decided, although we have received some indicative figures. However, given that I know that a tax should not cost a disproportionate amount of money to collect, either in administration or compliance, the figures struck me as very high. That is another area that we would want to negotiate with the Treasury. When trying to reduce the size of the public sector here, it would be ironic to set up in Northern Ireland a parallel tax-collecting system, which would not have the benefit of economies of scale, etc. Anyway, firms would not want to deal with two different tax offices. So, I would rather see it kept with HRMC and the cost set at a realistic level.

Other suggestions have been made as to how the cost might be reduced. I am glad to see that the Ulster Unionist Party has demurred from its past position on how to reduce the costs. In its manifesto, it had a rather enigmatic phrase; it said that we could offset the cost by looking innovatively at business rates. I do not know what that means. I see Mr Cree in the Chamber, so he might want to tell us what it means. The only way that I can see how you would look innovatively at business rates is if you said, “For the reduction in corporation tax, we are going to put up business rates.” If we were to do it, and we had the maximum figure, you are talking about a 60% increase in business rates, which would apply even to those small businesses that do not benefit from corporation tax changes. I suspect that that is one of those policies that the Ulster Unionist Party thought was clever at the time but which it has decided it does not want to pursue any longer. It is surprising that three of its Members who spoke in the debate never mentioned it. Maybe that is another one that it has dropped from its manifesto.

It has also been suggested that a new rate could be introduced incrementally. I am not so sure that I agree with that, because all the evidence so far shows that corporation tax is not an end in itself; it is simply a means of getting the door opened when we go to talk to foreign firms to try to get them to invest in Northern Ireland. It is the appetiser. Then, when the real tax accountants in the firm get to it, they look for such things as tax credits, the cost of labour, etc. If it is the door-opener and simply the means of getting listened to, why would we reduce it incrementally? A reduction to 18% will cost us but will not get the door open; a reduction to 16% will cost us but will not get the door open; and a reduction to 14% will cost us but will not get the door open.

Francie Molloy (Sinn Féin, Mid Ulster)

Will the Minister draw his remarks to a close?

Sammy Wilson (DUP, East Antrim)

I will.

You would be paying the cost, but you would not be getting the benefit.

I have not got to deal with all the points that were raised in the debate. It has been a useful debate. I am sure that there will be many more debates about the issue. It is one that the Executive, the Assembly and Committees are going to have to address.

Maurice (DUP, Fermanagh and South Tyrone)

Will the Minister give way?

Francie Molloy (Sinn Féin, Mid Ulster)

The Minister is out of time.

Sammy Wilson (DUP, East Antrim)

Therefore, it is important that there is a debate not only among the wider public, but in the Assembly, so that we come to a considered decision on what will have long-term consequences, good or bad, for the economy of Northern Ireland long after many of the Members who are sitting in the Chamber are gone.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

Thank you, Mr Principal Deputy Speaker. I welcome the debate and thank the Chair of the Finance and Personnel Committee, in particular, for proposing the motion. I apologise to him for being late into the Chamber. I did not hear all of his remarks, because I was held up at a Justice Committee meeting.

I echo what the Minister has just said. This has been a very useful debate. It has also been a very mature debate, and the consensus in the Chamber was quite properly challenged by those who reserve a more sceptical position on the devolution of corporation tax powers and the reduction of corporation tax. Those interventions were useful in challenging a consensus in the Chamber, because it is important that we examine and address all the issues that arise. There are many difficult issues involved in, first, the transfer of the tax and, secondly, the lowering of the tax, which is the ultimate objective.

I welcome this opportunity to speak as Chair of the Enterprise, Trade and Investment Committee on this very important and pressing issue. It has been just over a year since the two Committees co-sponsored the first debate on corporation tax in the Chamber. There has been much discussion on the matter since, and much has been written on the issue. As Mitchel McLaughlin said, it has taken time to gather momentum, but we have reached the stage at which there is an air of expectation both within and without the Chamber that the powers will be devolved to the Assembly.

In opening the debate as Chair of the Finance Committee, Mr Murphy highlighted the obstacles that we will have to overcome and the practical concerns on which we require clarification and agreement before corporation tax is devolved. We need to know where we stand on the impact on the block grant; on compliance with the Azores ruling; on the level of corporation tax collected here; and on the measures to be put in place to counter so-called tax tourism, which is an important issue. Very importantly, we need clarity on the mechanism to be developed to ensure that we retain the benefits of any increase in revenue from other taxes.

There will be costs in the short term to pay for this opportunity. It is an opportunity, and that is how we should view it. As Mitchel McLaughlin said, it is not risk-free, but if we are to move forward, we have to take some risks. We should recognise the opportunities that exist.

It is appropriate that I concentrate on the longer-term future and on the opportunities and benefits that a reduced rate of corporation tax can bring. It is sometimes said that corporation tax is not the only factor, or, in many cases, the most important factor in determining where a foreign company will invest. That point was made by Simon Hamilton and others. Factors such as transport, logistics, infrastructure, labour costs, productivity, telecommunications infrastructure, education and skills are considered equally or even more important. However, as the Prime Minister, David Cameron, said in the Chamber earlier this month about us:

“You have excellent transport connections to the rest of the UK, to Ireland and to the rest of Europe. You have the English language; great educational results; two brilliant universities; highly competitive operating costs; 100% broadband access; Project Kelvin, linking north America, Northern Ireland and western Europe; a strongly pro-business climate”.

Those are important factors to remember, and it was timely that the Prime Minister reminded us of them.

Although having a competitive rate of corporation tax is not the only important factor, it is one of the few for which we currently do not possess responsibility. That is the point that I was attempting to make to Mr Flanagan in my intervention. That is why it is so important that those powers be devolved as soon as possible. We need to rebalance our economy through growing the private sector. We must develop an economy that is driven by the private sector and that creates more wealth, more economic opportunities and more jobs through new inward investment. We need an economy that provides opportunities for our indigenous businesses, large and small, to grow and prosper.

Dominic Bradley said that the current tools are simply not working. That was echoed by David McIlveen and other Members. Albert Einstein was quoted earlier in the debate in respect of E=mc², but I will quote him again:

“We cannot solve our problems with the same thinking we used when we created them.”

Let us think on that. Control over corporation tax is an example of the new type of thinking that we need to embrace if we are to solve the economic problems that we face today. Perhaps this is the “something better” that Simon Hamilton referred to in his speech. He emphasised the point that we cannot have more of the same but must move on. I listened carefully to Mr Allister, but the point must be made that we are moving to a situation post-2013 when we will not have state aid for many business enterprises coming here. What do we do in such circumstances? We must have some alternative strategy.

Attracting business and more investment, and providing opportunities for businesses to grow, will, inevitably, bring jobs. Treasury estimates for domestic investments are up to £65 million in the first year alone. That is considerable. Treasury estimates for foreign direct investment are for an increase of up to £200 million in the first year. Again, that is very substantial. The Northern Ireland Economic Reform Group estimates up to 90,000 new jobs over 20 years. In a statement, Almac, one of our leading and most respected indigenous businesses, said that it would double its workforce of 2,000 if corporation tax were reduced. That is not only encouraging but, if mirrored by other companies, suggests that the figures are not simply aspirational or optimistic but achievable. It begs the question: what would Sir Allen McClay have achieved with a 12·5% corporation tax in Northern Ireland?

As was mentioned by Mike Nesbitt, another key reason for decreasing the rate of corporation tax is the need to narrow the productivity gap with Britain. That is a key aspect of the previous Programme for Government and DETI’s regional innovation strategy. We have got to narrow that gap. This is one way of doing that.

Although some short-term sacrifice may be associated with decreasing the rate of corporation tax, as we attract investment, grow the economy and create more employment, there will be increased tax benefits through additional revenue from increased income tax, National Insurance, VAT and excise duty. Those benefits will be realised in the long term, but it is important that we, who are charged with planning for the long term, look beyond the horizon and plan for a brighter, more prosperous time for future generations. A lower rate of corporation tax can make an enormous contribution to that.

I recognise the scepticism expressed by Mr Allister and Mr Agnew. Mr Agnew referred to the green new deal. The green new deal is not incompatible with lower corporation tax. The green new deal and the devolution of corporation tax are not mutually exclusive.

Francie Molloy (Sinn Féin, Mid Ulster)

Bring your remarks to a close.

Alban Maginness (Social Democratic and Labour Party, Belfast North)

I commend the motion to the House.

Question put and agreed to.

Resolved:

That this Assembly supports, in principle, the case for the devolution of corporation tax powers to the Northern Ireland Assembly; and looks forward to the outcome of the HM Treasury consultation on ‘Rebalancing the Northern Ireland Economy’, the provision of further information on the associated costs and benefits, and the development of more detailed proposals for implementing and exercising the powers.

Francie Molloy (Sinn Féin, Mid Ulster)

Due to Question Time starting at 2.00 pm, the Assembly will suspend until that time.

Sitting suspended at 1.48 pm.

On resuming (Mr Deputy Speaker [Mr Beggs] in the Chair) —

Culture, Arts and Leisure

Alasdair McDonnell (Social Democratic and Labour Party, Belfast South)

1. asked the Minister of Culture, Arts and Leisure to outline the uptake of EU funding by arts and cultural organisations in the 2010-11 financial year. (AQO 207/11-15)

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for his question. My Department delivers arts and cultural services through arm’s-length bodies such as the Arts Council and the Armagh Observatory. The Arts Council proactively encourages its funded organisations to make use of European funding. It also works closely with Visiting Arts, the managing authority for the EU culture programme, hosting workshops to assist the application process. However, information on uptake will not be available until September this year, when the results of the Arts Council-funded organisations survey are complete. I am aware that, in recent years, arts organisations have used funds under the culture programme and the lifelong learning programme. In 2010 and 2011, the Armagh Observatory obtained EU funding of £250,000 for three projects. That will help the observatory’s offering to primary schoolchildren.

Alasdair McDonnell (Social Democratic and Labour Party, Belfast South)

Has the Minister got any plans to take action, and, if so, what action will she take, to encourage local arts and cultural organisations to better access funding from the EU and elsewhere?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I am aware that, recently, some groups, particularly in the Member’s area of south Belfast, have asked to meet me to discuss how smaller groups can have better access to European funds. The Member will be aware that larger groups with international partners have successfully achieved funds on their own. However, I will talk to the Arts Council to ensure that smaller groups, single artists and artists’ collections will have better use of European funding in the future. I welcome the Member’s advice or views on any particular issue.

John McCallister (UUP, South Down)

Does the Minister think that the Office of the Northern Ireland Executive in Brussels could do more to help her Department to access potential funding?

Carál Ní Chuilín (Sinn Féin, Belfast North)

My Department liaises with the Office of the First Minister and deputy First Minister’s (OFMDFM) office in Brussels to try to access better opportunities for European funding. I know that the creative industries in particular have been very successful in securing funding. As regards reviews and lessons learned, sure there is always room for improvement. I am quite happy with progress to date. I am concerned about smaller groups’ access to funding. That is primarily my arm’s-length bodies’ responsibility, rather than OFMDFM’s.

Phil Flanagan (Sinn Féin, Fermanagh and South Tyrone)

Go raibh maith agat, a LeasCheann Comhairle. Will the Minister undertake to increase the level of engagement by her Department and arm’s-length bodies in the EU, including establishing a greater presence in the bureau in Brussels and applying much greater focus on the potential of the EU culture fund?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for his question. It is similar to the question that John McCallister asked. I will keep a watchful eye on specific programmes, including those relating to fisheries and creative industries, and even on better use of structural funds or funds for culture, arts and leisure. Although there may be different programmes and progress in some areas and sectors, clearly, the perception exists that a lot of money is distributed from Europe but that local people cannot access it. Therefore, through liaison with the Brussels end of things and even with groups on the ground, I will, certainly, keep a watchful eye on the issue and will bring it back in the new term.

Alastair Ross (DUP, East Antrim)

2. asked the Minister of Culture, Arts and Leisure whether she has held, or intends to hold, meetings with the Northern Ireland Commonwealth Games Council about the 2014 Commonwealth Games in Glasgow. (AQO 208/11-15)

Carál Ní Chuilín (Sinn Féin, Belfast North)

With the Deputy Speaker’s and Alastair Ross’s permission, I will begin by congratulating Rory McIlroy on his fantastic achievement in the US Open golf championship. This is the second year in a row that one of our local golfers has succeeded. It would be remiss of me to not acknowledge that today on behalf of the House.

Since taking up office last month, I have not yet had the opportunity to meet the Commonwealth Games Council to discuss the 2014 Commonwealth Games in Glasgow.

I can confirm that engagements and discussions are ongoing. I have not received an invitation from the council as yet, but I am keen to meet it to discuss the Commonwealth Games or any other issue.

Alastair Ross (DUP, East Antrim)

On this side of the House, we too congratulate Rory McIlroy. Indeed, we conveyed our congratulations last week.

Does the Minister agree that it is important that we get as many teams as possible from Northern Ireland to compete in the Glasgow games? Will she ensure that the governing bodies of each sport, Sport NI and the Northern Ireland Commonwealth Games Council are appropriately funded so that we can build on the successes of Delhi?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I concur with the Member’s sentiments. It is important that the successes achieved in Delhi be our benchmark, and they are in my Sport Matters strategy. It is not easy for any athlete to compete under the pressure of bringing medals back home. The target that was set for Delhi was five and that was exceeded. The same target is set for the Commonwealth Games in 2014.

The Member is right: support and resources must come from the sporting bodies to ensure that we give our athletes every possible opportunity to achieve success.

Alex Maskey (Sinn Féin, Belfast South)

It is an opportune time to congratulate athletes and to look forward to the next games, when, no doubt, the boxing fraternity here will excel again and achieve more medals than all the other sports put together. However, I do not mean to be ungracious about anyone else’s success.

Can the Minister give us any further information on whether discussions are under way between Sport NI and the Commonwealth Games Council?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for that question, and fair play to him for getting the boxing in. You are on record. Well done, Alex.

As I said to Alastair Ross, discussions are under way and will continue. They will take on a new focus as the time grows near. In the Sport Matters strategy, there are two targets for Commonwealth Games, including the number of medals to be won in Glasgow. Sport NI, along with the sporting organisations, needs to ensure that every opportunity and all support is made available to all the athletes. I believe that the discussions are going fairly well. It is expected that any revision of the strategy would have to be concluded and any views from those bodies taken on board, I would say, by October of this year, in preparation for the games.

Karen McKevitt (Social Democratic and Labour Party, South Down)

Can the Minister confirm whether discussions have taken place with other nations to utilise Northern Ireland’s training facilities in preparation for the Commonwealth Games in 2014?

Carál Ní Chuilín (Sinn Féin, Belfast North)

To be honest, I am not aware of that in relation to the Commonwealth Games. I am sure that the Member knows that intense discussions are ongoing, led by Sport NI, to attract other countries to come here for their pre-games training for the Olympics. I will obtain that information for the Commonwealth Games and send it to the Member.

Sandra Overend (UUP, Mid Ulster)

3. asked the Minister of Culture, Arts and Leisure whether she will bring forward an indigenous or regional strategy rather than an Irish language strategy. (AQO 209/11-15)

Carál Ní Chuilín (Sinn Féin, Belfast North)

It is my intention to prepare separate strategies for the Irish language and the Ulster-Scots language, heritage and culture. That reflects the wording of the St Andrews Agreement and the Northern Ireland (St Andrews Agreement) Act 2006 and the different needs and stages of development of each language.

Sandra Overend (UUP, Mid Ulster)

I thank the Minister for her answer. Does she agree that the St Andrews Agreement called for a regional minority language strategy and not solely an Irish language strategy?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I am clear as to what the St Andrews Agreement means. It is also provided for in the agreement that I can take the strategies separately, and that is what I intend to do. I have had some discussions with some of the stakeholders, but not with all of them. Discussions and consultations with the stakeholders will intensify over the summer. I met some stakeholders in Derry on Saturday who are affiliated the Apprentice Boys. Their emphasis was not solely on language but on heritage and culture. However, it is within my gift to take forward separate strategies, and that is what I intend to do.

Caitriona Ruane (Sinn Féin, South Down)

Will the Minister provide information on what previous consultation was undertaken by the Department in the North on Acht na Gaeilge?

Carál Ní Chuilín (Sinn Féin, Belfast North)

My Department has undertaken two formal public consultations and an equality impact assessment on proposals for Irish language legislation. The first, which sought views on legislative approaches, took place in December 2006 and lasted until March 2007; the second, which was from March 2007, sought views on possible draft clauses. I intend to seek Executive agreement to a further public consultation about renewed proposals for legislation.

Dominic Bradley (Social Democratic and Labour Party, Newry and Armagh)

Go raibh míle maith agat, a LeasCheann Comhairle. Gabhaim buíochas leis an Aire as na freagraí a thug sí go dtí seo. Ba mhaith liom a fhiafraí den Aire cad iad na príomh-eilimintí a cheapann sí a ba chóir a bheith mar chuid de Acht Gaeilge.

What key elements does the Minister consider should be part of an Irish language Act?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for his question and his ongoing commitment to Acht na Gaeilge and the Irish language strategy. I have many ideas about what key elements the legislation should contain; however, I think it appropriate that I wait for the consultation before sharing them. Nevertheless, the Member will know, as I told the Committee and repeated in public, that a rights-based approach to legislation is the best, and only, way forward.

Jim Allister (Traditional Unionist Voice, North Antrim)

No later than this morning, during the corporation tax debate, the Minister’s colleague Mr Flanagan regaled the House with the benefits of the English language as an attraction for inward investment. Why, therefore, does the Minister want to waste valuable resources on promoting a language that will disadvantage young people in seeking employment in these hard economic times, instead of better equipping them to be more proficient in English?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I have no comment on what the Member alleges my colleague to have said. That is his opinion. There is plenty of documentation that having more than one language helps people, constituencies and communities with their economic development. I suspect that economic development and well-being are not really what the Member is hinting at. I hope that that has answered whatever sort of question he had.

Colum Eastwood (Social Democratic and Labour Party, Foyle)

4. asked the Minister of Culture, Arts and Leisure what action she is taking to promote cultural and sporting activities in border areas. (AQO 210/11-15)

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for his question. My Department actively promotes cultural and sporting activities in the border areas as it does in all areas of the North of Ireland. There are many activities across my Department’s areas of responsibility, and I want to give him a few examples.

Northern Ireland Screen funds and works closely with three creative learning centres in Crossnacreevy and Armagh, as well as one in the Member’s constituency in Derry. Waterways Ireland manages the Erne navigation and the Shannon-Erne waterway and is preparing plans for the extension of the navigation from Upper Lough Erne to Clones in County Monaghan. Moreover, Sport NI, which has invested more than £11 million over the past three years in border district council areas, is also involved in cross-border initiatives to promote sporting activity on an all-island basis.

Colum Eastwood (Social Democratic and Labour Party, Foyle)

I thank the Minister for her answer. Given that Derry City Football Club plays in the League of Ireland and is a cross-border team in that regard, is the Minister considering funding the Brandywell stadium?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I do not know whether the Member is aware that I visited the Brandywell stadium on Saturday. I have to say that there was a hard sell. To be frank, the conditions in the Brandywell stadium are not befitting of the team. I am aware that it is managed by Derry City Council, and, through Derry City Council and the citizens of Derry, we need to pool our efforts to do what we can to promote better use of the Brandywell. That will happen only when there is a fit-for-purpose facility.

Raymond McCartney (Sinn Féin, Foyle)

Go raibh maith agat, a LeasCheann Comhairle, Gabhaim buíochas leis an Aire as a cuid freagraí. I congratulate the Minister. I know that she visited the Brandywell on Saturday. Indeed, she took time out to meet Eamon Zayed, a Derry City footballer who was the subject of racist abuse, and I thank her for taking the initiative. In relation to sporting activities in and around Derry and other places, could the Minister give us some outline of what her plans are in relation to angling, particularly on an all-island basis?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for that supplementary question. To put it on the record again, the racist abuse that the player received will have no support from anybody in this House.

I suspect that my colleague’s senior colleague Mr McGuinness may have prompted him to ask his question about fisheries and angling. There are a number of fisheries and waterways attached to my Department. There are more than 60 fisheries available to the public on purchase of a licence and permit. My Department has distributed around £5 million in Peace II funding to develop water-based tourism in the sector over the past 10 years and has generated a great deal of angling and tourism around the border, particularly around the lower ends of Donegal. My fisheries officers maintain good links with their counterparts in the South, particularly in relation to lower and upper Lough Erne.

Mike Nesbitt (UUP, Strangford)

If the Minister agrees that participation in grass roots sporting activities qualifies as preventative spending in health terms, what are her plans for cross-cutting initiatives with the Health Minister?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I welcome that question. As recently as this lunchtime, myself and the Health Minister met to discuss, first, using our Departments to promote better health and well-being, which was an issue raised in a legacy report from a previous Culture, Arts and Leisure Committee, and, secondly, joining up the Departments more through sports and the arts, particularly for better health promotion on suicide prevention and mental health, while also looking at physical health. We are looking at initiatives and events that we can use across different age sectors, because we are acutely aware that what may be OK for young boys may not be so for older people.

I think that the Member is probably hinting at the fact that where joined-up government can work together to take a collaborative approach to support those who are particularly vulnerable, that is what we need to do. If those are the Member’s sentiments, I fully welcome them.

Gregory Campbell (DUP, East Londonderry)

5. asked the Minister of Culture, Arts and Leisure for an update on the funding allocated by her Department to Ulster-Scots and Orange cultural groups for events during the current year. (AQO 211/11-15)

Carál Ní Chuilín (Sinn Féin, Belfast North)

During 2011, the Ulster-Scots Agency allocated the following funding to Ulster-Scots groups: £478,000 for music and dance tuition; £145,000 for festivals; £72,000 for summer schools; £29,000 for partnership funding; and £31,000 for other eligible projects. The Department for Culture, Arts and Leisure (DCAL) has also allocated £450,000 to the community festival fund, which is administered by local councils on a match funding basis. Some of this funding has been provided to the Ulster-Scots and Orange cultural groups, and it is likely that those groups will receive funding again this year. The Arts Council has also made awards of £54,000 to the Royal Scottish Pipe Band Association and £25,000 to the Ulster-Scots community network in this financial year.

Following a competitive process, the Grand Orange Lodge of Ireland has been identified as one of two suitable organisations to work with DCAL to develop proposals to implement the objectives of the cultural awareness strategy, whose objectives are to build understanding of cultural traditions in the North and contribute to a shared and better future. Work on that, on a three-year basis, is expected to start in July. NI Screen administrates the Ulster-Scots broadcast fund, and, since April, it has allocated awards to five projects totalling almost £500,000 out of a budget of almost £1 million.

Gregory Campbell (DUP, East Londonderry)

The Minister has outlined a package of measures, all of which have, obviously, been carried out in the past year or several years. She must understand the low esteem in which she is held because of recent decisions that she has taken in her Department. Does she think that she will be able to put aside the baggage of the past and the violence and all that went with it, which, by her own admission, she was involved in, and try to administer departmental funds and resources impartially for the greater good of all the people of Northern Ireland for the future?

Carál Ní Chuilín (Sinn Féin, Belfast North)

Tá. Yes.

Robin Swann (UUP, North Antrim)

I thank the Minister for her answer. She made reference to pipe bands. Taking into consideration the importance of the marching bands and the Ulster-Scots and Orange cultural groups, following the study done by her Department into marching bands, what investment does she intend to make, given the opportunities for development that were outlined in that study?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for his question. I have not had the opportunity to read the results of that study, but I appreciate the culture, the background and the community that some of those bands are involved in. In fact, they are part of the community.

I intend to meet some of the leaders of the different band associations to work through some of the issues. Once I have read the study, if the Member has any further questions or needs any further detail, he can come to my Department. The door is always open.

Anna Lo (Alliance, Belfast South)

The Minister mentioned the cultural awareness strategy. Does the strategy include ethnic minority cultures?

Roy Beggs (UUP, East Antrim)

That is not particularly relevant to the substantive question, but the Minister may wish to answer.

Carál Ní Chuilín (Sinn Féin, Belfast North)

To be quite honest, there is nothing specific about ethnic minorities in the strategy. There are cultural awareness activities in the strategy, but I want to try to work, in the first instance, with Belfast City Council, particularly given the work that it has done on some of the mayor’s events and the cultural awareness week. I want to look at some of the programmes that are there to make sure that they are inclusive, because the last thing that I want is for people to be looking in from outside and feel excluded.

Cathal Boylan (Sinn Féin, Newry and Armagh)

Go raibh maith agat, a LeasCheann Comhairle. This is my first opportunity to wish the Minister all the best in her new post. How are decisions made on the festivals that are successful in securing funding from the community festivals fund?

Carál Ní Chuilín (Sinn Féin, Belfast North)

Decisions are made primarily by local government. The Member has not been involved in local government for some time, but that is where the decisions are taken and where the money is distributed. I see the value in that, because elected representatives have worked for and represented communities and have fought particularly hard for this fund over the years. So, it is important that local government still has that involvement.

However, I am aware that some groups did not receive funding. I am not encouraging them to short-circuit their local council, but if there are particular areas or issues that those groups feel their councils did not take into consideration, they need to write in, in the first instance, and let my Department know.

Jo-Anne Dobson (UUP, Upper Bann)

6. asked the Minister of Culture, Arts and Leisure to outline the priorities within the £4 million budget of the creative industries innovation fund and how she will ensure that the budget is allocated equitably. (AQO 212/11-15)

Carál Ní Chuilín (Sinn Féin, Belfast North)

The creative industries are recognised locally and internationally for their potential job and wealth creation. They also stimulate wider innovation and expert focus growth and can, therefore, make a contribution to rebuilding and rebalancing the economy. Funding secured by my Department will provide support for creative businesses as well as sectoral initiatives to harness the potential of creative skills and strengths across the North.

By supporting innovation, we can help create the content, products, services and experiences that are capable of competing in global markets. Priorities will focus on export activity; cross-sectoral collaborations; high-growth subsectors, such as digital content; and harnessing the innovation and entrepreneurial potential in the culture, arts and leisure base. Funding to businesses will be on a competitive basis, but my Department and other agencies will promote and encourage applications from across the North.

Jo-Anne Dobson (UUP, Upper Bann)

I thank the Minister for her answer. Will she outline how she intends the creative industries innovation fund to work with the rural development programme to ensure that creative industries in rural areas are considered?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I thank the Member for her question. I am acutely aware that 52% of that fund comes from Belfast. It is not a fund that needs to be spread across the North because it is there; it has to respond to initiatives that are economic in their base. I will endeavour to liaise with my colleague on the rural development fund, because I do not want further gaps to be created between urban and rural. People living in rural areas should have the same opportunities as people living in the city. So, I will endeavour to take that on board.

Pat Ramsey (Social Democratic and Labour Party, Foyle)

I welcome the Minister’s response. I think we all recognise the importance of the creative industries in a modern society and the potential for job creation. Will the Minister outline to the House what her Department is doing to ensure that there is a good spread of the creative industries outside the greater Belfast area?

Carál Ní Chuilín (Sinn Féin, Belfast North)

Apart from the answer that I have just given, I am aware of the creativity in the Member’s constituency in Derry, which I witnessed first-hand on Saturday. I am actually surprised to go through Question Time with no one asking me about funding for Derry City of Culture. Here is an opportunity to use creative industries to export and import and to support entrepreneurial and business growth. I will endeavour to ask my officials to compare with my colleague, particularly around the urban and rural gaps.

Cathal Ó hOisín (Sinn Féin, East Londonderry)

Go raibh maith agat, a LeasCheann Comhairle. Does the Minister have a formal strategy for developing the creative industries?

Carál Ní Chuilín (Sinn Féin, Belfast North)

I do have a formal strategy. I have about two pages of an answer here, but, in short, I do. I also want to make sure that people are aware of any development or any potential to harness innovation for any of the sectors. I intend to try — maybe, if it is useful — to bring forward a synopsis of that strategy and forward it to all Members, so that everyone has the same information at the same time.

Samuel Gardiner (UUP, Upper Bann)

7. asked the Minister of Culture, Arts and Leisure for an update on the sale of the former Public Record Office of Northern Ireland (PRONI) site at Balmoral Avenue, Belfast. (AQO 213/11-15)

Carál Ní Chuilín (Sinn Féin, Belfast North)

The site at Balmoral Avenue was vacated in January 2011 and is now surplus to requirements. As there was no sustainable interest from other parts of the public sector in acquiring the premises, my Department has obtained outline planning permission for the site to achieve the most favourable return from sale. The site was placed on the open market from 8 April 2011. The sale, which is being managed by a local agent, has been advertised in several local property publications and websites. There has been interest from a number of parties who have viewed the premises, and we anticipate that my Department will receive a reasonable offer or number of offers shortly.

Samuel Gardiner (UUP, Upper Bann)

What steps has the Minister taken to help implement the Bain report, which, by relocating government jobs out of Belfast, would free up government buildings in Belfast for sale, rental and other solutions?

Carál Ní Chuilín (Sinn Féin, Belfast North)

In the last four weeks, I have opened the new PRONI building. Unfortunately for the Member, that is in east Belfast. In relation to the Bain report, I have to be honest and say that I am not aware, but I will find out and write to the Member in due course.

Education

Jim Wells (DUP, South Down)

1. asked the Minister of Education for an update on his Department’s plans for a newbuild for Down High School, Downpatrick. (AQO 221/11-15)

John O'Dowd (Sinn Féin, Upper Bann)

Go raibh maith agat, a LeasCheann Comhairle. A capital scheme for the extension and refurbishment of Down High School was announced on 21 March 2001 by the then Minister, Martin McGuinness. The scheme formed part of a PPP cluster, which also included Tor Bank special school and Lagan College.

The South Eastern Education and Library Board (SEELB) subsequently withdrew the school from the PPP cluster with a view to providing a new school on a greenfield site.

The SEELB has since been involved in a protracted search for a suitable site. Having obtained planning permission in December 2009, the board submitted a revised economic appraisal to the Department in January 2010, which is currently with the Department’s technical advisers. The proposed major capital scheme for Down High School is not in the Department’s investment delivery plan, but it is one of a large number of schemes that are at an early stage of planning.

Over the next four years, my Department is faced with limited capital funding, which will impact on its ability to deliver new school building projects. I am looking closely at how to make best use of the capital funds to address the most pressing needs and maximise educational benefits for children and young people. That work will be a priority for me and my officials in the coming months. In the autumn, when I have considered the options available to me, I wish to be in a position to make a statement on the way forward to the Assembly. As a result of the Budget, I will not be able to bring forward all the projects that are currently planned or in the early stages of planning. That is a difficult position for any Minister, but the capital funds available to me simply will not build the number of newbuilds that schools, quite rightly, seek at this time.

Jim Wells (DUP, South Down)

That is extremely disappointing news from the Minister, because the project has been ongoing for over 10 years. At present, the very successful Down High School finds itself in extremely cramped conditions, with many Portakabins being used as classrooms and a building that costs a small fortune to keep in an adequate state of repair. The school pulled itself up by its bootstraps and successfully attracted students from Down district and further afield. Will the Minister indicate to the Assembly that, when it comes to revising the capital list, Down High School can be confident that it is, at least, well up towards the top of that list?

John O'Dowd (Sinn Féin, Upper Bann)

It would not be reasonable for me, as Minister, ahead of an announcement, to indicate anything about an individual school’s application. I would like to be able to tell the Member that School A, B or C will go ahead, but I have to be responsible for the budget that I have been allocated. I have to ensure that the projects brought forward in this and other financial years are a priority, that they will meet the needs of the educational framework into and beyond the coming decades and that they are sustainable. Each school will be judged on its merits and proposals. I want to be in a position to make a substantive statement on the matter to the Assembly in the early autumn.

Karen McKevitt (Social Democratic and Labour Party, South Down)

What discussions has the Minister had with the Minister of Finance and Personnel about the £270 million backlog in the school maintenance programme?

John O'Dowd (Sinn Féin, Upper Bann)

During the recent monitoring round, we made bids for further funds to deal with the maintenance backlog in the school estate. When I spoke to the Finance Minister at the Executive, I told him that I wished to hold a series of meetings with him to discuss the entire education budget. It is clear, however, that, as Education Minister, I will have difficult decisions to make in future. I am prepared to make those decisions. I cannot simply go to the Executive, put my hand out and ask other Departments to divvy up moneys if I am not prepared to make the difficult decisions required in education. That includes the restructuring of education services and how those are delivered in the twenty-first century.

Samuel Gardiner (UUP, Upper Bann)

Will the Minister confirm the latest situation with the newbuilds for Lurgan College and Portadown College? What is the timescale for that action?

Roy Beggs (UUP, East Antrim)

That is a little further afield from the original question. It is up to the Minister whether he wishes to answer.

John O'Dowd (Sinn Féin, Upper Bann)

I do not have the specific information in front of me. I understand that the Member has submitted a question for written answer. I asked for further information on that matter today. Those projects fall into the same category as those that Mr Wells spoke about and any other projects mentioned by Members. They await my deliberations on a capital budget and on how we move forward with capital building.

Francie Molloy (Sinn Féin, Mid Ulster)

2. asked the Minister of Education to outline the effectiveness of his Department’s ‘Every School a Good School: A Policy for School Improvement’ and what plans he has to develop this policy in the future. (AQO 222/11-15)

John O'Dowd (Sinn Féin, Upper Bann)

‘Every School a Good School’ has been very effective in raising standards. In 2006, some 53% of school leavers achieved at least five good GCSEs, including maths, English and, for those in Irish-medium settings, Gaelic. In 2010, the figure improved, with an increase to 59%, which equates to almost 3,000 more young people achieving those results. In the past two years, the inspectorate evaluated provision as either outstanding or very good in 143 schools. Last week, at a reception to celebrate those schools, I was delighted to be a host and to see members of the education family and the Education Committee.

Ensuring that schools are supported in addressing the areas for improvement identified by the Education and Training Inspectorate is a central element of Every School a Good School. Most settings improved between initial and follow-up inspections by at least one performance level, including schools placed in the formal intervention process that had been evaluated as inadequate or unsatisfactory. Since 2009, 28 schools have entered the formal intervention process and eight schools have successfully exited it. However, we cannot be complacent. We remain average by OECD standards, and too many young people are leaving school with poor literacy and numeracy skills. I will continue to implement the school improvement policy and the new literacy and numeracy strategy to ensure that all our young people fulfil their potential.

Francie Molloy (Sinn Féin, Mid Ulster)

I congratulate the Department and the Minister on their success so far. What effect will budget restrictions have on the Every School a Good School programme in future?

John O'Dowd (Sinn Féin, Upper Bann)

Dealing with a heavily depleted budget clearly leads to concerns that it will have an effect on the educational outcomes of young people who are going through the schooling system. My predecessor and I have urged those in charge of budget lines throughout the education system — there are over 1,200 budget lines in education — to prioritise front line education services. I am meeting the education and library boards to go through their budget allocations and to discuss how we can ensure that budgets are used to maximum effect, not only to sustain our education system but to improve educational outcomes for the young people involved.

Conall McDevitt (Social Democratic and Labour Party, Belfast South)

I am sure that the House will be very concerned to hear the Minister’s assertion that the cutbacks will impact on every aspect of the education sector. Will the Minister assure the House that the now inevitable impact on children — children will pay for the cutbacks — will be monitored closely? In addition, will he tell us specifically how he will ensure that the quality of every child’s education and the right that every child in this region has to an education will not be undermined in any way by the proposed cutbacks?

John O'Dowd (Sinn Féin, Upper Bann)

I thank the Member for his question. Many of the responsibilities relating to that question and the comments rest with me, as Minister of Education. I must ensure that the constrained financial circumstances in which we are working do not affect front line services. However, I do not admit that that is inevitable. I have to make decisions, as does the House, on how to plan and distribute education services. We are dealing with an outdated education management model. The five education and library boards and the several other bodies that manage education are no longer an effective or efficient way to deliver education. So, the public would certainly expect us to ensure that, before going anywhere near classrooms to seek savings, we modernise service delivery and squeeze every penny that we can out of bureaucracy. That is the way to ensure that our limited funds achieve the maximum educational outcomes for young people.

Sandra Overend (UUP, Mid Ulster)

3. asked the Minister of Education for his assessment of integrated education. (AQO 223/11-15)

John O'Dowd (Sinn Féin, Upper Bann)

I take my statutory duty to encourage and facilitate the development of integrated education very seriously. The integrated sector continues to grow, with over 20,000 pupils attending 43 primary and 20 post-primary integrated schools here. My Department will continue to respond to parental demand for any and all education sectors, where proposals are robust, provide value for money and meet specified criteria.

My Department is exploring other means of sharing and integrating, and opportunities for cross-sectoral collaboration for young people at Key Stage 4 and post-16 are presented through the entitlement framework. Members will also be aware of the project being developed in Omagh for a shared education campus, where post-primary schools can relocate to a single site. Each one will retain its own ethos but develop shared facilities and teaching expertise in the best interests of the people of Omagh and surrounding areas.

Sandra Overend (UUP, Mid Ulster)

I thank the Minister for his answer. Does he plan to use co-operation between schools on the delivery of curriculum entitlement and on achieving a sufficiently wide subject range as a means of achieving greater and more effective cross-faith integration? In addition, what stage has he reached in his discussions with CCMS and the education and library boards on the matter?

John O'Dowd (Sinn Féin, Upper Bann)

Clearly, one of the ways forward for integration and the sharing of services is for schools to work together. You will note that, through area learning communities, there is greater sharing of services and resources and sharing with pupils moving back and forth between schools. That is an effective and realistic way of moving forward in respect of shared futures.

I am not one for glossy documents, consultants’ reports, commissioners’ reports and commissions; I want to see practice and reality on the ground. When I visit schools, particularly in the post-primary sector, I witness the sharing of resources and services across the sector. That can improve. Although I have had individual discussions with CCMS and the boards about how we move that forward, I would welcome further discussions between all the education providers on sharing services. Even if we were flush with money, there is a duty on all our education providers to start sharing services and to allow our young people to meet and exchange with one another in the school setting.