Select Committee on Northern Ireland Affairs Minutes of Evidence


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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