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Select Committee on Northern Ireland Affairs Minutes of Evidence

Examination of Witnesses (Questions 220 - 229)



  220. So what level of resources would they have to put in?
  (Mr Smyth) It would probably be disproportionate. Ralph, can you comment?
  (Mr Clarke) We are talking of 500 miles of land border. They are completely stretched trying to follow up on fuel and they've been very unsuccessful, perhaps picking up only 4 per cent or 5 per cent of them. That means a cost to the Exchequer of £300 million, £200 million of which goes to the southern Exchequer.

Mr Pound

  221. I am reluctant ever to introduce any discussion of the Barnett formula into any debate where we do not have 48 hours ahead of us. However, the Construction Employers Federation and the Friends of the Earth have both argued for a recasting of sustainability funds and obviously for a large proportion of the fund to be distributed to Northern Ireland. Are you collectively today satisfied with the proposed distribution of the sustainability fund?
  (Mr Smyth) No.

  222. I had one shake of the head—two head shakes.
  (Mr Clarke) Clearly not is the unanimous answer. The whole financial impact of the tax—we talked about £35 million going out in terms of £1.60 x 22 million tonnes and we were getting £7 million back from national insurance contributions. Mr Robinson's budget alone will be impacted by £8 million according to a note that I read last week. That is vastly unfair. The sustainability of getting £1 million back in terms of per head of population instead of the 10 per cent that we are contributing is unfair and disproportionate to Northern Ireland.

Mr Bailey

  223. How much do we get back through the national insurance?
  (Mr Clarke) I think the estimate was £7 million.

  224. £7 million.
  (Mr Clarke) Yes. Six hundred thousand people times £12.

  225. That is interesting because I asked this question of QPA and received a letter which stated that it was only half a million pounds.
  (Mr Clarke) That may have been in relation to the sustainability fund where the sums are very modest.
  (Mr Fidgett) The £12 figure is not contested, so that would support your contention as a simple multiplication.

Mr McCabe

  226. I want to come back to something that Mr Fidgett said to me a few moments ago. I cannot recall the CBI ever arguing for more regulation. I wondered on that basis whether you had made any effort to cost the regulations you are advocating.
  (Mr Fidgett) The regulations already exist in both planning laws that apply throughout the UK, with some slight differences in Northern Ireland but the same principles apply. The policies and law that influence how planning permissions and conditions attached to them are granted already exist and are capable of being reviewed, and are constantly reviewed by Government, and increasingly by the Assembly. From that point of view, that is part of life that the CBI accepts. We do not necessarily argue for more regulations; it is perhaps unique so worth commenting on in that sense. But in that case it is a direct way of dealing with the externalities that have been identified. We are subject to those regulations at the moment; we are quite happy to debate whether they are entirely appropriate, are tight enough, or should be altered in whatever way. That can be done on the basis of sound science and technical merit and we can happily engage in those sorts of discussions. Taxes would be preferred only if they could be as targeted and effective as regulations but without the additional bureaucracy that goes with them. Here that is far from being the case.


  227. You climbed out of that rather nicely.
  (Mr Smyth) I did not hear the word "more" coming into it. He did talk about regulations and my colleague on my left spoke of problems in that we do not have enforcement of existing regulations and that having enforcement would go a long way towards meeting overall environmental objectives.

Mr Bailey

  228. May I come back on the national insurance point? The response from the Construction Employers Federation was: employment and construction industries 34,500; the quarrying sector 5,600, giving a total of 40,100. Average earnings were £13,465. It gives various reductions. Those figures multiplied by 0.1 per cent rebates give a total rebate of £39, 947. How do you square that with the figure that you gave?
  (Mr Smyth) We took the whole working population in Northern Ireland of 695,000.

  229. Would it not have been better in this instance to take only your particular industry?
  (Mr Fidgett) Yes. It is comparing apples and pears in that sense. That is part of the key point that whilst the tax itself affects a particular part of the industry, the national insurance discount applies more generally, therefore it has a disproportionate effect.

  Chairman: Gentlemen, thank you very much. That has been very helpful. We shall send you a copy of the transcript of the draft evidence. Thank you very much for coming and helping us with our inquiry.

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Prepared 11 December 2001