Examination of Witnesses (Questions 60-70)
RT HON
SHAUN WOODWARD
MP, MR NICK
PERRY AND
MS HILARY
JACKSON
30 JANUARY 2008
Q60 Chairman: Perhaps you can deal
with those points in a note if you cannot answer them specifically
now.
Mr Woodward: I can give you a
very brief answer, which is to say that, as you know from that
Act, the specifics of what information will be captured by police
are still the subject of work. They will be subject to a consultation
process. I take the point that you are making, Chairman. I am
more than happy to discuss with the Home Office and with my colleagues
in Scotland and Wales to try and answer the question that you
have given me but, as you know, we have not yet finally arrived
at the specific information which is going to be captured under
that legislation.
Q61 Sammy Wilson: Secretary of State,
if the work is not completed how can you give the assurance that
people travelling from Belfast today to London will have no different
experience in a year's time?
Mr Woodward: Because self-evidently
people travelling from Belfast either have to do it by boat or
by air, and in so doing by and large have to produce photographic
identification. That is why I do not believe that there will be
any difference for those people at all. The issue you raised was
about people going from Edinburgh to London. As I said to you,
the danger is that anything I say will be misunderstood. I am
therefore more than happy to discuss that with my colleagues but
I stand by what I have said: I have seen nothing in any of the
proposals that are circulating in Government at the moment which
lead me to believe there will be any difference for anybody travelling
from Belfast today and Belfast this time next year.
Sammy Wilson: So what is this consultation
likely to be about?
Chairman: We must move on.
Q62 Kate Hoey: What is the secondary
legislation needed for then in the answer to my question that
I got just three weeks ago?
Mr Woodward: The secondary legislation,
as I understand it, brings the power into force but, again, I
am more than happy to write to the Committee with the specifics
on that.
Chairman: I think we will want to look
at this very carefully. I think the points raised by both my colleagues
are entirely relevant and we will possibly want then to question
you specifically on this.
Q63 Sammy Wilson: Chairman, he does
not have to go into the details but the Secretary of State has
said that there will be consultation about the proposals. If there
is to be consultation on new proposals about travel arrangements
between Belfast and London I just want to know how the Secretary
of State can give us an assurance today ahead of that consultation
document and the decisions then based on that consultation document
that there will be no difference between the arrangements for
my travel from Belfast to London today and the arrangements for
my travel from Belfast to London in a year's time.
Mr Woodward: And, as I have said,
you are going, I am afraid, to have to wait until you see those
proposals, but, as I have said also, without this being distorted,
this is not going to involve a passport, and you are not going
to find—
Q64 Kate Hoey: That is irrelevant.
Mr Woodward:— that there
is a substantial difference for anyone travelling today and this
time next year.
Chairman: Can we move to SOCA?
Q65 Lady Hermon: I would like to
discuss with the Secretary of State the merger and the difficulties
that appear to be arising from the merger of the Assets Recovery
Agency and the Serious Organised Crime Agency (SOCA). Secretary
of State, when did you last meet with the Assets Recovery Agency?
Mr Woodward: I am sure I have
had conversations with them but I have not had a specific meeting
with them.
Q66 Lady Hermon: Are you aware that
certain staff members within the Assets Recovery Agency have written
to various constituency MPs, and I know Mr Wilson has also received
correspondence, as I have, from very concerned staff members who
are very troubled about the arrangements that are being made for
the transfer? Are you aware of difficulties within the Assets
Recovery Agency?
Mr Woodward: Paul Goggins has
direct responsibility for this area, so it would be unfair for
me to comment on his day-to-day work, and his day-to-day work
undoubtedly embraces the concern that there is by some about the
merger that is taking place. That being said, I am confident that
Paul is dealing with it extremely well.
Q67 Lady Hermon: The other issue
that has been raised more widely is that the Serious and Organised
Crime Agency will feature and focus on in the Northern Ireland
context just those very issues—serious and very organised
crime, so that in fact the smaller paramilitary organisations
that still rule the roost in some areas in terms of their criminality
(and we have touched on fuel smuggling earlier on and all the
other criminality they get up to) will not come on the radar for
SOCA. Is that the case?
Mr Woodward: No, that is not the
case. The assurances which the former Home Secretary, John Reid,
gave to my predecessor do not lead me to share your concern. Nick,
you have been dealing with this so you might provide some more
reassurances.
Mr Perry: Absolutely. The Home
Office have given us the assurance that they recognise that in
Northern Ireland's particular circumstances the kind of threshold
that applies across the country as a whole may not be appropriate
and they have given a commitment that there will be no reduction
in the level of the effort that goes into assets recovery in Northern
Ireland. I know Paul Goggins and Vernon Coaker are due to meet
staff from the Assets Recovery Agency in the next week or so to
hear their particular concerns about the merger, but I know that
at a recent meeting with Mr Goggins the Home Office Minister was
happy to repeat those assurances.
Q68 Chairman: We had assurances at
the time the merger was announced and we were somewhat reassured
but there is a continuing concern, and it is a concern that is
shared south of the border as well as north of the border, and
we would like you, Secretary of State, to take a particular interest
in this because it is crucially important that there should not
be any unfortunate developments as a result of this merger, either
in the way that staff are treated or in any other way, and we
are particularly concerned that there should be no diminution
of resources in tackling what are clearly very important issues.
Mr Woodward: Let me reassure you
that there is no wish to see that diminution take place for the
very self-evident reason that the work of recovering the assets
from criminals is extremely important. One of the most effective
routes to dealing with organised crime, as you know, is to disrupt
the individuals and at the end of the day if they see that they
cannot hold on to the proceeds of their crime undoubtedly it becomes
a less attractive life pursuit, so I have no ambition whatsoever
to see the resources compromised in the merger that is taking
place and the issues of personnel that you raise are obviously
ones that need to be taken into very careful account. As I say,
Paul has been doing a lot of work on this but, Chairman, I accept
your invitation and I will be very happy to discuss that with
you at a future date.
Q69 Sammy Wilson: I want to link
this question with a previous issue which was discussed. The Mr
Bigs of fuel laundering are primarily located in South Armagh.
Their names are known to Her Majesty's Revenue and Customs and
they are sitting on a multimillion-pound empire. Could you give
us an assurance that first of all they are not immune from investigation
by HMRC or the Assets Recovery Agency because of their previous
paramilitary connections, and, secondly, you probably cannot give
us an answer here today but could you at least write and let us
know whether or not their names, all of which are known and they
own garages across the greater Belfast area, have been passed
on by HMRC to the Assets Recovery Agency for investigation?
Mr Woodward: On your last point,
I am very happy to look at that and I will come back to you. On
the first point, unequivocally nobody is immune from prosecution;
absolutely nobody is immune from prosecution.
Q70 Mr Anderson: I want to move on
to the Varney review, Secretary of State. In the various inquiries
over the last three years it has constantly been raised about
the disparity between the tax regimes in the south and the north
and the impact that has on the economy. I have two questions.
First, obviously, the result of the first review was negatively
received in Northern Ireland. What has that done to relationships
between the Treasury on this side of the water and the people
over there? Secondly, I understand there is a second review that
is supposed to be replying by May in terms of the US Investment
Conference. Is that likely to be on time and do you have any input
that you can tell us about what is happening?
Mr Woodward: The first Varney
review that took place and that we published at the end of last
year concluded that it would not be appropriate to cut the levels
of corporation tax in Northern Ireland to match those of the Republic.
Sir David did a considerable piece of work which I imagine the
Committee has had a chance to look at, but if anybody has not
I would recommend closer study of it because I think what it demonstrated
was that perhaps the premise on which the original proposition
was made, namely, if Northern Ireland enjoyed the same level of
corporation tax as the Republic it would enjoy the same kind of
Celtic economy, did not follow through. Self-evidently, if it
were the case that 12.5% corporation tax was the magic key then
the Republic would attract all the foreign inward investment that
is enjoyed elsewhere, and it begged the question why, even though
we have a corporation tax rate of 30% (shortly to be 28%) we do
so well with inward investment if after all the big difference
is whether it is a 12.5% or 30% rate. What Sir David found, of
course, was that the key factor which had inhibited investment
in Northern Ireland had been instability and the Troubles, and
that what was absolutely critical was to provide stability. Then
what he found was that being part of the United Kingdom was extremely
attractive to those who might want to make investments because
it would offer access to markets both within the rest of the United
Kingdom but also, because of sharing the island itself, within
the Republic. Then what became important were issues around skills
and retaining young people when they leave school or university.
What was also important was start-up costs and what again he revealed
was that the cost of opening an office in Dublin is around £42
a square foot whereas in Belfast it is around £15 a square
foot, and therefore, if you could produce an environment which
put together stability, low cost rental, plus skills, the question
that was begged was were there other things that could make a
really big difference? What he found was that cutting corporation
tax would be a blunt instrument and it would not lead to a commensurate
level of new investment in Northern Ireland from outside the United
Kingdom, although it certainly might lead to a distortion of existing
investment in GB to Northern Ireland where head offices would
take advantage of relocation. What we therefore asked him to do
was to look at the current Northern Ireland economy (and the current
economy is transformed as a result of stability) and see whether
or not in Varney II there were other measures that could be taken
that would help in the short term to long term investment creating
long term stability, long term job creation, and that is why we
figured on a timescale of May, and we did that in co-operation
with the Executive in Northern Ireland so that in Varney II (as
it might be distinguished from Varney I) there is collaboration
between officials in the Treasury and those working for Sir David
Varney with those officials working for the Finance Minister and
the Executive. I hope that the piece of work that will be produced
in May of this year will be instructive, and I hope the timetable
will not slip because I think it will be an excellent piece of
work to have in time for the conference. The most important distinction
that really emerged from Varney I was the size of the public sector
in Northern Ireland and the Republic, and I think if there is
any indication as to where real investment opportunity lies it
is that in the Republic the size of the public sector is 34% and
in the Northern ireland it is in excess of 70%.
Chairman: Thank you very much for that.
At that point we will bring the public evidence to a close. I
would like to thank you very much for the answers you have given
and my colleagues for the questions they have asked and we will
now go into private session for an informal discussion.
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