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27 Nov 2006 : Column 905

Kelvin Hopkins: Does the hon. Gentleman accept that one of the reasons for such strong growth in the Irish economy is massive fiscal transfers from the European Union? Something like 5 per cent. of its economy is due entirely to those transfers. When they stop, Ireland may have a bit more of a problem.

Sammy Wilson: Of course, those massive transfers were intended for the development of Ireland’s infrastructure, such as roads, to which I shall refer in a moment. Companies were attracted to come to and stay in the Republic, however, by a tax regime that enables them to keep more of their profits.

Mr. Peter Robinson: With regard to Northern Ireland having a differential corporation tax headline rate, two key factors are involved. First, we are, I hope, coming out of years of conflict. Secondly, we are the only part of the United Kingdom that has a land frontier with a country that has a much lower level of corporation tax.

Sammy Wilson: I thank my hon. Friend for that point. We share a land boundary with the Republic, so the tax differential affects us much more than other parts of the United Kingdom. Once low corporation tax is seen to work in Northern Ireland, however, I am sure that other parts of the United Kingdom will want to benefit from it.

Mr. Newmark: The reason why a more competitive tax base has worked in the Republic of Ireland is that lowering tax has resulted in more tax revenue being collected. That is the most important point.

Sammy Wilson: I think that the hon. Gentleman mentioned the Laffer curve earlier, about which I used to speak to my economics students all the time. I do not think that they understood it too well.

Mr. Devine: You would want to point out that when people visit your GP practices and doctors in Northern Ireland—

Mr. Deputy Speaker: Order. The hon. Gentleman must use the correct parliamentary terms when addressing hon. Members.

Mr. Devine: I am sure that the hon. Gentleman is aware that although his constituents do not pay tax when they visit their doctors, those in the Republic pay €50 per visit. That is additional taxation. The system is not just based on lowering corporation tax; it is based on other forms of collection.

Sammy Wilson: Although, as I have said, the current administration has many advantages, unfortunately waiting lists to see a doctor in Northern Ireland are much longer than those in any other part of the United Kingdom. That forces many people to seek private care rather than waiting for treatment from the national health service.

I am concerned about Northern Ireland’s huge infrastructure deficit, which—as was pointed out earlier by my hon. Friend the Member for Belfast, East (Mr. Robinson)—is a legacy of years of the troubles. As a result of the IRA bombing campaign, resources
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were diverted to either security provision or compensation to undo the damage done by terrorists. It is significant that the very people who caused that damage are those who now complain most about the effects it has had on the Northern Ireland economy.

I am particularly interested in some of the proposals in the Queen's Speech. First, there are the proposed changes in the planning system. I believe that one of the factors that has had an impact on economic growth in Northern Ireland is the slowness of that system. The simplest planning application takes an average of six months to go through the system; in some council areas it takes a year, and a major application can take up to two or three years. When Tesco began to come to Northern Ireland after the ceasefires, it described its experience of the system as “like wading through treacle”, because the process of obtaining planning permission was so difficult and slow. I shall be interested to see what measures will be introduced to improve the planning system in that part of the United Kingdom, and I hope that some of them will be mirrored in our own economy.

Secondly, there is the proposed reform of welfare. I welcome the Government’s earlier legislation, especially the measures to take people off incapacity benefit and put them into work. I think it important for us to give people opportunities to contribute to society. Let me say in deference to some of the Members sitting on my right that when it comes to welfare, I am of the Churchill rather than the Polly Toynbee school. I believe in safety nets, not in cosy blankets, and I think it important for welfare reform to be part of the restructuring of the economy.

Thirdly, I am very interested in the legislation on serious and organised crime. As the Northern Ireland Affairs Committee has pointed out, organised crime is a massive drain on the economy in Northern Ireland. It deters investment, undermines existing industries and, of course, is used to swell the coffers of terrorist organisations. Although much work has been done, the proceeds of organised crime are still very difficult to seize. We must find a way of conveying the message that crime does not pay.

We hope that many of the measures that will have an impact on economic growth in Northern Ireland will find their way to a devolved Assembly. Indeed, part of what the Queen's Speech promised for Northern Ireland has already been delivered. We may not approve of the way in which that Bill completed its passage last week, the rapidity of its progress or the lack of scrutiny, but we believe that it will make any future devolved Assembly a safer Assembly, with safeguards that were not in the Belfast agreement and are likely to make the Assembly more stable. Now it is up to Sinn Fein to deliver on the other side, and give a commitment to supporting the police and law and order.

We hope that, having provided the legislative framework within which we believe devolved government can work, this Government will put pressure on those who wish to be part of government in Northern Ireland to support the police and create the right conditions for confidence and stability in any devolved Administration. However, regardless of what might be done and what powers might be vested in Northern Ireland, the huge macro-economic decisions that will affect our economy will be
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made in this place. One of my reasons for wanting to speak tonight was my belief that it is important for the right economic policies to be established nationally, because they have an impact on the regions of the United Kingdom—an impact that is sometimes exaggerated and magnified.

I believe that the Government have got some things right and some things wrong. For those that they have got right, we will praise and support them; for those that they have got wrong, we will oppose and condemn them.

8.35 pm

Mr. David Anderson (Blaydon) (Lab): I apologise for my absence earlier. I had to attend an all-party parliamentary group meeting.

The hon. Member for Tatton (Mr. Osborne) seems to want us to have collective amnesia. Unfortunately for him, while he was at Eton some of us were in the real world, dealing with the impact of a low-tax economy and the reality of the social policy led by his leader’s former employer, who really did believe that unemployment was a price worth paying. Who paid it? Not him or his ilk. It was paid not by the elite in this country, but by the poor, the old, the weak and the vulnerable, and the millions who were forced on to the dole. It was paid by the families of men and women who were left devastated by the so-called modernisation of British society, and by the towns and villages up and down the country that had the heart pulled out of them.

In 1986, as a member of the National Union of Mineworkers, I attended the National Coal Board review hearing with my hon. Friends the Members for Easington (John Cummings) and for Sunderland, North (Bill Etherington). Few other people bothered to attend. In 1986, unemployment was at 18.2 per cent. in the region where we lived. It was said that

At the time, the National Coal Board said, “It is not for us to decide.”

in the closure under discussion. The gentleman heading the review team said:

There can be no discussion of poverty and deprivation in this country without mention of the word “Easington”. My hon. Friend the Member for Easington was chair of Easington council, and what he said in 1986 came true. It came true because people did not listen to the words that he and other people spoke.

Who else lost out because unemployment was a price worth paying? The young kids who had to resort to the youth training scheme and the youth opportunities
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programme; elderly people forced out of care by public service budget cuts, and those who could not get care in the first place; young people who turned to crime and drugs as a way of life instead of following their parents into the world of work; the skilled men who could not get work and were told to curl up in the corner and go away. I am also thinking of people like my friend Keith Lamb, a skilled mechanic for 26 years who spent three years on the dole from 1992 and then got a job making cardboard boxes for £82 a week; the children taught in leaking classrooms in classes with too many pupils by teachers who were ground down by the lack of opportunity of the pupils in their charge; the dedicated ancillary workers in our public services—the porters, the cleaners, the school-meals workers—who were either forced out of their jobs by compulsory competitive tendering or forced into a future of reduced wages, fewer holidays and disgraceful sick pay schemes and were told that they were no longer part of the NHS team; and the public sector professionals trying to hold together our health and social services while expending their skills and time in constant budget cutting, reorganisations and redundancy negotiations, watching a lifetime of work disappearing before their eyes.

Those people are not figments of my imagination, and such job cuts are not imaginary. They are real people. I am talking about the simple statistics of the nightmare of that time: 3 million people on the dole and one in four people living in poverty, and generational unemployment having become a way of life. They are real people: people I lived with, grew up with, worked with and played with. They are the people I represented as a trade union activist, the people who came before me as a member of the social security appeal tribunal and the people I looked after as a care worker in social services. They are the people who paid the price for the arrogance, the short-termism and the lack of concern and care of a political ideology that did not believe in responsibility and the concepts of society or community.

It was for those reasons that not only people from my background but the people of this country rejected the Conservative party. Its current position is riddled with inconsistencies and fake promises rather than real policy, and people know that it is not possible to have good social policy at the same time as massive cuts are being made in public services. I do not know whether the sums for that are £17 billion, £21 billion, £40 billion, £50 billion or more, but I do know that if the Conservatives do that they will not find it possible to protect and defend public services, and the most vulnerable people in our society who rely on them. No matter how hard they flip-flop and how hard they pretend that they care, people will not be conned by them again.

Mr. Devine: Does my hon. Friend agree that caring, compassionate Conservatism is a contradiction in terms?

Mr. Anderson: It is absolutely a contradiction in terms, and the people who lived through the times I am talking about will never accept that it is anything other than that.

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Mr. Philip Hammond: Listening to the hon. Gentleman’s rant, one would think that the incoming Conservative Government of 1979 inherited a perfectly functioning economy. Does he not accept one shred of responsibility for the massive economic changes that had to be made in the 1980s as a result of the disaster that this country had sleepwalked into in the ’70s?

Mr. Anderson: I accept that it became quite clear that social deprivation was not a price worth paying. The measures taken by the Conservative Government were not the right ones to take; they destroyed people’s lives and destroyed the economy of this country.

To ensure that people are not conned by the Conservatives again, Labour Members must not just sit back; we must have a real policy position based on past results and on a stable economy to give people faith in our ability to deliver. Our past results have been remarkable and we should be proud of them; we should not take any lectures from Conservative Members. We are spending more money than ever before on our pensioners, especially on those who need it most.

Mr. McGovern: My hon. Friend speaks eloquently and forcefully about his part of the country, and I wish to make a point about Scotland. On the day of the Queen’s Speech, anyone who was not careful when watching the television might have stumbled across the hon. Member for Banff and Buchan (Mr. Salmond) proclaiming that the Queen’s Speech did nothing whatever for Scotland. As a Scottish MP I find that a bit puzzling, and I should take this opportunity to say that I was also saddened by the earlier scathing remarks about Dundee of the hon. Member for Angus (Mr. Weir), which will be heard not only by the people of Dundee but by his party colleague, the hon. Member for Dundee, East (Stewart Hosie).

Does my hon. Friend however agree that reform of the Child Support Agency and of the pension system to ensure good and adequate pension provision for the next 40 years and other crucial reforms amount to a lot being done for Scotland, and does he further agree that Scots will—

Mr. Deputy Speaker: Order. The hon. Gentleman has given his hon. Friend enough to agree with him about for the time being.

Mr. Anderson: I was going to say that I could not agree more, but I could have agreed more if my hon. Friend had been allowed to speak for a bit longer. The benefits that have come from this House and have been shared across the United Kingdom are obviously positives. The hon. Member for East Antrim (Sammy Wilson) mentioned that he had seen real improvements on the ground in his part of the country, and it is clear that those north of the border have also seen such improvements. Their experience is similar to that of the people where I come from: we have removed the scourge of youth unemployment; we have built extra support for working families and their children; we have lifted thousands of children out of poverty; and we are rebuilding the very fabric of society through new schools and new hospitals, and by refurbishing millions of homes.

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Let us not forget that we would not be here today without the national minimum wage and the tax credits that some Members have tried to rubbish in this House today. There have clearly been problems. But there has also been massive good news for people who have had tax credits. We need to do more, however.

Our Government must do more. The pension reforms are key to the long-term future of this country, and they are well-timed and necessary, but they must reflect the needs of the people of this country. To that end, I urge the Secretary of State to look at the issue of raising the retirement age in the knowledge that not all people have shared in the increase in longevity that there has been in this country. Manual workers still die much earlier in this country than do professional workers, and the factors linked to that should be considered. Likewise, raising the school leaving age may reduce the time that people spend in work, but let us not pretend that hard work did not kill anybody. Look at the facts. When the retirement age for miners was reduced in the 1980s from 65 to 62, their average life expectancy was 65 years and two days. It is no wonder that the mineworkers’ pension scheme was so well financed—there was nobody alive to take money out of it.

In the effort to build up security in retirement for tomorrow’s pensioners, I urge the Secretary of State to work with the representatives of today’s pensioners in order to address their real needs now. I understand his reluctance to concede the demands of the National Pensioners Convention, which has called for him to raise the basic state pension to the level of the minimum income guaranteed for all. I also understand his reluctance to reinstate the link with earnings, and I appreciate the problems associated with paying a full pension to all citizens in order to deal with the unjust treatment of women in retirement. However, he has to accept that the NPC and other representative groups, including Age Concern, are genuinely concerned about the real-life experiences of the older people of today.

In particular, I hope that the Secretary of State will address the case put forward by the NPC that the national insurance fund is massively over-funded, standing at £22 billion above its recommended “safe cash flow balance” level. It is clear that a fund that was set up and paid for by yesterday’s workers is now being withheld from them in their present position as today’s pensioners. A provision reinstating the link between pensions and earnings should be included in the pension reform Bill and not left to chance or the fate of the market. Using the national insurance fund for this purpose would remove that uncertainty. What cannot be denied is the legitimacy of the concerns expressed by pensioners’ organisations. I urge my right hon. Friend the Secretary of State to hold a genuine consultation with them during the Bill’s passage.

In the shorter term, I return to the point that I made during today’s Question Time—the real impact on older people of the energy price increases that have occurred in the past three years. This is a real-time issue. National Energy Action believes that today, 2.8 million people face real fuel poverty. The Government’s statistics are based on a figure of 1.2 million people, but that goes back almost two years. I urge the Secretary of State to address this issue. If he
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cannot do so in the short term, will he at least consider building in to next year’s state pension a heating upgrade to cover the shortfall?

In calling for that, I have come full circle. Our lack of control over the utility companies and the price hikes are a direct result of the policies adopted by the Conservatives in their orgy of self-indulgence as they sold off our national assets. Nobody told Sid while he was buying his cut-price shares that he would end up paying through the nose for gas and electricity, or that water prices would quadruple as pipes leaked and drought orders and hose-pipe bans became the norm. Sadly for the Conservatives, some of us will never suffer from political amnesia. We will neither forget nor forgive the waste that they laid across this country, and this country will not turn to them while their policy is based on rogue promises and economic nonsense.

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