CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 314 -i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

NORTHERN IRELAND AFFAIRS COMMITTEE

 

 

Political Developments in Northern Ireland

 

 

Wednesday 30 January 2008

RT HON SHAUN WOODWARD MP, MR NICK PERRY and MS HILARY JACKSON

Evidence heard in Public Questions 1 - 70

 

 

USE OF THE TRANSCRIPT

1.	This is a corrected transcript of evidence taken in public and reported to the House. This transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
2.	The transcript is an approved formal record of these proceedings. It will be printed in due course.

 

Oral Evidence

Taken before the Northern Ireland Affairs Committee

on Wednesday 30 January 2008

Members present

Sir Patrick Cormack, Chairman

Mr David Anderson

Mr Gregory Campbell

Rosie Cooper

Mr Christopher Fraser

Mr John Grogan

Mr Stephen Hepburn

Lady Hermon

Kate Hoey

Dr Alasdair McDonnell

Stephen Pound

Sammy Wilson

 

________________

Memorandum submitted by Northern Ireland Office

 

Examination of Witnesses

 

Witnesses: Rt Hon Shaun Woodward MP, Secretary of State for Northern Ireland; Mr Nick Perry, Director General, Policing and Security Directorate, and Ms Hilary Jackson, Director General, Political Directorate, Northern Ireland Office, gave evidence.

Q1 Chairman: Secretary of State, you are very welcome. We are being broadcast this afternoon and the clerk has just advised me that we ought to start promptly at three because of the fact that so many will be hanging on your words in Northern Ireland and elsewhere. Before I welcome you formally at three, perhaps you would just like to introduce your two officials. We do of course know Nick Perry well.

Mr Woodward: Chairman, thank you very much indeed. In the spirit of openness and transparency, I think I will introduce my two colleagues by name and then I will allow them to describe briefly to the Committee what they do for themselves. Nick Perry and Hilary Jackson.

Mr Perry: Chairman, I am Director General of the Policing and Security Directorate and I look after policing and related matters.

Ms Jackson: I am Director General for the Political Directorate.

Q2 Chairman: You are both very welcome. Secretary of State, could I now formally welcome you and say how grateful we are to you for coming. Welcome, Nick Perry and Hilary Jackson. This is the first time that you have appeared before the Committee formally although you very kindly met us when we were in Northern Ireland in October, and we had a good discussion then. It is the first time you have given formal evidence to the Committee and we look forward to seeing you at regular, if not too frequent intervals during the course of the year. Is there anything that you yourself would like to say by way of introduction before I begin the questioning?

Mr Woodward: First of all, Chairman, can I thank you very much indeed for asking me to be before the Committee. It is a pleasure to be here this afternoon and it is a pleasure to have the opportunity to talk about what I imagine will be quite a wide range of issues. I think it might be helpful to signal to the Committee that obviously, we are now on our way to it being 12 months from the restoration of the institutions in Northern Ireland. Of course, there are critics but, by and large, it is my perception, and I believe it is the perception of the public in Northern Ireland by and large that this has been an extremely successful period. Whilst this is very much a process and not an event, it would be true to say that I think we are really seeing the opportunity for people in Northern Ireland to embrace a very different kind of shared future, and that the work of the Executive and of the Assembly of course is difficult - governing is difficult; everybody in this room knows that governing is difficult - and there are disagreements but this is truly a different Northern Ireland. It is certainly a Northern Ireland which, if I remember as a BBC reporter back in the 1980s, it is a completely different atmosphere. As I am sure this Committee will have found, it is perhaps indicative most of all that the kind of issues that are being discussed by people in Northern Ireland today, whether it is in the pub or in the Assembly or in the Executive, are issues that really make a difference to ordinary people's lives, ordinary people's work, and those are the issues of jobs, the issues of the Health Service, of education and of course, the last remaining part of the jigsaw is the devolution of policing and criminal justice, and I am sure you will want to touch on that this afternoon. Of course, it is not straightforward but, nonetheless, huge progress has been made, huge confidence is being achieved and I think again significantly, yes, there have been a small number of incidents that have taken place in the last six or eight months that of course have rightly attracted the interest and scrutiny of the public and the politicians, but what we have to see, I think, and the critical question to ask ourselves is when those incidents have taken place - and I am referring here specifically to the appalling murder, condemned by everybody, of Paul Quinn; I am talking of, for example, the attacks on the two police officers at the end of last year; I have in mind, for example, the attacks on the Orange Halls that have taken place. What is significant is that it has been universally condemned and that we are seeing a level of co-operation from the public with the police which, in the words of the Chief Constable, he has not seen before. We are not yet there. We in this room all know that but the fact that we are not there should never be allowed for us to obscure the progress that everybody in this room and everybody in Northern Ireland has made. Yes, it is difficult but the progress is significant and the benefits for the people living and working in Northern Ireland are absolutely huge.

Q3 Chairman: I think we would all in varying degrees endorse all of that and we ourselves have noticed these differences. When we were in Northern Ireland less than a fortnight ago, and indeed in the Republic, we were particularly encouraged by the ever-increasing co‑operation between the two police forces and so on. We welcome what you say. We know it to be true but we also know that some of the very unfortunate and some of the appalling incidents to which you have referred are of continuing concern. What I would like to do is just to ask you a couple of questions myself, and then bring in colleagues for a whole range of issues. As you move towards complete devolution, and you are a long way along that path, how do you envisage the relations between the Northern Ireland Office and the departments of the Northern Ireland Executive developing?

Mr Woodward: I described in my opening remarks, I think, devolution very much as a process and not an event, and I think the work being conducted by the Northern Ireland Office, both in the run-up to the St Andrews Agreement itself and subsequently, has been very much part of that process. For our part, the British Government will have prepared the institutions of policing and criminal justice for devolution for May, as set out in the timetable. Colleagues from the DUP I know will readily point out to me that of course, whilst they absolutely in principle signed up to the Agreement, the timetable contained within the Agreement, which envisages stage two taking place in May of this year, was not something which they were readily obliged to sign up to. Nonetheless, I have noted, and I think everyone would acknowledge, that whatever differences there may be, people are certainly working within the spirit of wanting to achieve that. Institutionally, therefore, we will be ready once the Assembly, First Deputy, First Minister, indicate that there is cross-community support, to make that transfer in May of this year but it would be foolish for me in any shape or form not to recognise that this has to be something that the parties have to want and agree to.

Q4 Chairman: Absolutely, yes.

Mr Woodward: So this is not something which will be imposed by us on the Assembly, on the Executive, not least because it would be unworkable. Equally, I am still continuing to work within the spirit of the St Andrews Agreement and the timetable to make sure that we can meet the requirements if the Assembly and the political parties reach such an agreement within that timescale. Of course, we are encouraging the parties to want to meet that timescale because we believe that actually there is an appetite amongst the institutions and amongst the public to complete that process of devolution. I can perhaps best highlight this by talking about the outstanding work that is being done by the Executive and the Assembly in the preparations for the Investment Conference in May of this year. The work that Nigel Dodds and his colleagues have done has been exemplary. They have attracted considerable interest in the United States in wanting to come to a major conference that will take place in May of this year. However, in support of their work what I find again and again - and it has been readily endorsed by the White House and elsewhere - is of course everybody who wants to make an investment in Northern Ireland believes that law and order is a secured issue. I do genuinely think that if we find ourselves in May of this year unable to proceed to stage two, we will very carefully need to work together to provide the reassurances to those who wish to make substantial investment---

Q5 Chairman: I sure that you will do that and I am sure that can be done. I do not want to foreclose on you now because this is a crucial area and we will further down the line come on to it, with one or two specific questions. I was concerned about the relationship between the NIO and the departments as and when - and do not let us go into the details as to precisely when - full devolution occurs, what will the relationship be? What will the presence be within Northern Ireland? The Northern Ireland Office will continue. Will there be a shedding of many people? What is going to happen?

Mr Woodward: Of course the presence of the Northern Ireland Office will continue, as indeed there is a Scotland Office. What I think we have to envisage here is, we obviously have to give the public value for money. It is our intention not to try and run any kind of parallel department. We will reduce our functions to those functions which are not transferred. I would envisage that being a few hundred people. Of course we are engaged with all those members of staff in the Northern Ireland Office at the moment and with the trade unions to make sure that that transfer is achieved in a way that is satisfactory to all the parties concerned. We are, after all, talking about changing people's lives in terms of their working practices. I believe that is being very much embraced. The issues which are still the ones that have to be firmly addressed are the ones that the Donaldson Committee on working on. Those are issues around the nature and structure of the model of a new Department of Justice but again, Chairman, if I can just remind you, it is not that we are in a space whereby in practice there are very clear delineations between those remaining areas with the British Government and those that have been transferred. If you take, for example, the inquiry you have done yourselves into the Prison Service, you immediately see the way in which the Prison Service and the Health Department in Northern Ireland are working together. In fact, you could almost move through every single department---

Q6 Chairman: Or not, as the case may be.

Mr Woodward: Exactly, and you will see levels of co-operation, and indeed, if you take policing itself, the fact that Sinn Fein have joined the Policing Board means that this is not some single event that we are approaching. It is a process, and much of the co-operation is already taking place.

Chairman: Of course it is. I do not want to be rude but I would like to ask for reasonably crisp questions and answers because there is a lot of ground to cover. I would like to move towards the background to the devolution of policing, et cetera and to bring in Dr McDonnell at this point.

Q7 Dr McDonnell: Thank you, Secretary of State, for your answers. I want to pick up on a couple of points, particularly on the activities of former paramilitaries and the growing confidence in policing that you referred to earlier. Could you give us some information or some idea as to how much of a threat you see the former paramilitaries, or dissidents, let us call them, posing at the moment.

Mr Woodward: I think first of all I absolutely stand behind the last IMC report and previous reports to that and the distinction they make between the activities of PIRA and other paramilitary groups. I think we have absolutely no reason to question the judgement the IMC have reached on that issue. There are outstanding issues, however: the conduct of those individuals in RIRA is an obvious case in point, the activities that took place with two attempted murders of police officers at the end of last year, very, very serious crimes and the resurgence of the kind of thing that many of us in this room had hoped had gone away but it very clearly has not. It is not wishful thinking to want it to go away because it is a normal society precondition that actually police officers are not murdered by criminals masquerading as paramilitary organisations. So yes, there is a threat out there. The murder of Paul Quinn - that is an issue, but again, I do not think that should be allowed to obscure the progress that has been made. Again, I think, as some of your own Parliamentary colleagues have said, Alasdair, one of the best ways we can really put a lid - and I am not trying to be unrealistic; I am trying to be realistic - in revealing just how these paramilitary individuals or so-called paramilitary individuals are really isolated in their community is to move forward to stage two of devolution of policing and criminal justice. They have no support in their community. We know that. Undoubtedly, if you take the case of Paul Quinn, there is, regrettably, an atmosphere of intimidation which still operates. We should put that on the table now and recognise it but it is an atmosphere which we will be better able to deal with by completing devolution than by resisting devolution and to some extent giving ammunition to those criminals who wish to disrupt the process. What they are trying to do is upset the confidence that is being built in the community. What they are trying to do is to make people afraid of taking responsibility.

Q8 Chairman: Secretary of State, just a minute. I do not want you to go on too long because there is a real perception in Northern Ireland that there are those who are sharing power who are also sharing knowledge of some pretty terrible things, and one of the things that came across in the informal meetings and the more formal ones we had, both in Dublin and in Belfast, a couple of weeks ago was yes, of course there must be devolution but the timing must be right and, if it is pushed too quickly, the whole thing could blow up in your face. There has to be an absolute certainty in the minds of those who are sharing power with the other parties and of the public that nobody is giving succour to those who have committed terrible deeds. This is the underlying agenda. I think one has to recognise that.

Mr Woodward: Then let us immediately pick that up and let us remind everybody that every single member of the Executive has taken a pledge of office. There are those out there, regrettably, who will try and use murky perception to prevent this from happening. I regret that because I actually think that if we look fairly and with clarity at this issue, and it is up to this Committee and others to provide clarity in what might be a murky background in some areas, to recognise that not only has every member of the Executive taken the pledge of office but when the murder of Paul Quinn happened there was condemnation across the political spectrum, and this is a very, very different position from a few years ago.

Chairman: Of course it is.

Q9 Dr McDonnell: We seem to have got on to Paul Quinn now. I was hoping to come to that later. Secretary of State, are you suggesting, as I have gathered from you when you were talking there about, as they call themselves, the Real IRA, that Quinn's murderers came from that background?

Mr Woodward: No, what I am drawing on here - and again, I am very careful not to provide a running commentary on the police investigation, obviously specifically by the Garda, obviously they are doing that in conjunction with the PSNI and yes, I am in constant contact with the Justice Minister in the Republic about this, and it would not be helpful for me to provide a running commentary on the police investigation, although I know that some people have been tempted to do so. What I will say is that the Chief Constable has made it perfectly clear that it is conceivable that either former or low-level members of PIRA may have been involved - may have been involved - but equally, the Chief Constable has made equally clear that there is absolutely no basis whatsoever for believing that this had any authorisation, which is exactly the kind of issue that would have worried this Committee very seriously a few years ago. I do not want to prejudge this investigation but what I do want to do is to make sure that we keep a very clear sense of fact and fiction, and when it comes to, hopefully, the police making arrests, that we find ourselves in a position by which we have not obscured our judgement by providing a running commentary to the investigation as it proceeds. It is a difficult investigation but the police do have very substantial numbers of leads and they do have a very large number of people who they are talking to. Again, I think we have to recognise that that is substantial progress on what we would have seen just two years ago.

Q10 Dr McDonnell: Secretary of State, I do not dispute the progress but one of the things I am trying to establish here is that I am not aware, and I do not think a lot of others will be aware, of the South Armagh brigade of the Provisional IRA ever requiring authorisation or clearance over 30 years. Probably what a lot of people are seeing out there is that that is still the case and they are still relatively freelance. I do not want to drag it out and I do not want to compromise any court cases but there are fairly reliable reports that the young man Nugent, who was a material witness to Paul Quinn's murder in that he was lured with Paul Quinn to the scene of Paul Quinn's death, has been threatened.

Mr Woodward: I was aware of those press reports and the stories that were circulating before they were published in the newspapers over the weekend. The Chief Constable takes those things very seriously and, again, let me remind you of the Chief Constable's words in relation to this, which is that we will do everything we can to help bring Paul Quinn's killers to justice. That means we are conscious of the need to ourselves make sure that there is adequate protection for those people who may wish to be not only people who help the police with their inquiries but actually may be prepared to go into the witness box. We will do everything we can to build that climate of confidence so that people who are brave enough to come forward and actually reveal the killers of Paul Quinn can do so.

Q11 Sammy Wilson: Can I take the Secretary of State back to a point which he made at the very start of his submission. I know, Secretary of State, that you are keen to have devolution of policing and justice on the timetable which presumably the Government had agreed with Sinn Fein but I do not think that people in Northern Ireland and those involved in the Assembly can work to a particular government timetable. We have to think of the stability of the Assembly. You mentioned that first of all there was huge public demand for this. Perhaps you would just clarify on what you base that. Secondly, that there would be an expectation from those who would be coming to the Investment Conference in May that it may even compromise the Investment Conference in May if there had not been devolution of policing and justice. I am not aware that those who have done preliminary work on this received any such indications from those they spoke to in America. I wonder if you would just clarify for the Committee on what you base your claim that there is a public outcry for devolution of policing and justice in Northern Ireland and that secondly, somehow or other, those who would come to this Investment Conference may be less than willing to attend, or indeed to invest money in Northern Ireland, if devolution of policing and justice did not occur. Is it not more important for them simply to know that there are no bombs going off and people being killed?

Mr Woodward: There is quite a lot wrapped up in that question, Chairman. Let me just try and deal with some of the statements that were made in the preamble which, if they were allowed to rest, I think would be somewhat dangerous. It is not that I am keen on devolution; it is actually that the public are keen on devolution. They voted for it last year. They voted for it when the Assembly was restored. Of course, everybody in this room wants stability. That does not mean that I want it any less than you want it, Sammy. The fact of the matter is that actually, opinion polls, which you will be as aware of as I am, show that in excess of 60% of the public actually think we can get on with devolution of policing and criminal justice. That is not an unstable position if 60% of the public want it. Do I want to see that as 90% or 100%? Of course I do, and so do you. I do not think we are divided in any shape or form on the issue of wanting stability in Northern Ireland. To pick up what the Chairman said earlier, there is no wish on our part to unnaturally drive this forward but the fact of the matter is co‑operation is taking place, Sinn Fein are part of the Policing Board. The reconstituted DPP has embraced those who have not been on it this time last year. Huge progress is being made and when I report to you that this is what I am being told in America in relation to the Investment Conference, it is just that. Most of the people who are coming to the Investment Conference this May, who we all welcome, I can tell you do not even think that there is an issue about stage two devolution. They think, quite rightly, as Sammy interprets it, it is about the bombs not going off any longer but what we all know in this room, I think, is that actually, it is essential that politicians in Northern Ireland can take responsibility for policing and criminal justice as the best way of preserving a peace which means that bombs will not go off.

Q12 Chairman: These people coming over want a stable environment. That is what they want. They want to feel they can go out at night, have a meal, wander the streets of Belfast, go to the trade fair the next day, have their conference. That is what they want.

Mr Woodward: They want a bit more than that, Chairman. They actually want to know that if they are going to invest 10, 20, 30, 100 million dollars, that actually this is not philanthropy but it is investment, and that is what fundamentally distinguishes the money that may be about to be invested in Northern Ireland from much of the money that has been invested in the past. Those in the past - and we should thank every single one of them - have often tended to be as much philanthropic as investors. What distinguishes the people coming this May is that the investment is investment, precisely because of the shared future and the commitments that every single politician in Northern Ireland has made to this new Assembly.

Q13 Chairman: Of course, and we would all agree with that. The future must be assured and the transition must be smooth. I do not think there is any difference between any of us on that but I think there are just worries about the pace of this latest, last bit of devolution and my colleagues are merely seeking to ask questions on that.

Mr Woodward: I recognise the pace but you said earlier, Chairman, 100% certainty. I do not think any of the moves that have been made in Northern Ireland, very bravely, by people have ever been in truth on 100% certainty. They have always been about an assessment of the risks and being prepared as an article of faith to move to the next stage. We will not ask people to do something that we would not do ourselves.

Q14 Chairman: Of course not. I would like to move on a little because one of the things that has constantly come up with our investigations has been this issue of fuel smuggling. It is a crime - and it is a crime -that does have victims. There is a good deal of intimidation in the background to get people involved in it. Let me choose my words with great care and then bring in Rosie Cooper. There is a real perception that people are not caught often enough, are not pursued vigorously enough, and when they are punished, they are not punished heavily enough. I think that is the perception that this Committee has found some evidence to support. There have recently been articles in the press in Belfast following investigations through Freedom of Information and so on which would seem to bear that out to a degree. Would you like to comment on that?

Mr Woodward: Would you like to ask your question first?

Q15 Rosie Cooper: Sir Patrick has fundamentally asked quite a lot on the statements I was going to make. When we did the organised crime inquiry, there was some real fear on behalf of some of the people who gave evidence to us - and they were very brave but the overriding impression I was left with were people who were faced with smuggling, be it of petrol and cigarettes or whatever, and the inability or the acceptability of the powers that be to ignore that. In some of the press statements six years ago when there was a Customs crackdown, 15 people were convicted of fuel frauds; last year it was only four. So it goes on. If the Revenue just wishes to get some of their money back and does not treat it as seriously and does not want those people convicted and going to jail, what we are doing is we are condoning it; it is obvious to everybody in Northern Ireland that that is the case; and it makes it look as if it is a victimless crime. Criminals getting away with it is just not acceptable. There is a second part to that, which is, how does cross-border co-operation helped to reduce the amount of fuel going across the border? That does not take away one jot from the bit which is there is fuel in Northern Ireland and, by whatever means, the Revenue is not getting the money, those people are not being prosecuted, it is open crime season and it is not acceptable.

Mr Woodward: I of course share the view of this Committee, as you said in your report, that there is no such thing as a victimless crime, and we too easily make this distinction that somehow there is a group of crimes for which there are victims - those who are raped or mugged - and those for which there are no victims because this is a financial crime of sorts. The loss to the Exchequer and the loss to public services in Northern Ireland is huge, so I entirely share the views of the Committee that this is a problem because it does have a victim. I also share the view of the Committee, again highlighted in your report, that it may seem astonishing that only 1% of those who are actually involved in this end up being convicted. I think it is probably worth remarking, as when you were doing your work on the Committee, that there is a way of judging this other than simply the numbers of convictions: the interruption of the business of fuel laundering, the closing down of the operation - that process of disruption to the criminal is equally important. There are two dimensions. One is that you want the laundering to stop and secondly, you want the people who are doing it put away. I would therefore say to you that this is a really difficult issue for us to address. It is particularly difficult in the context of Northern Ireland because of the border. I think of the proposals that the Committee put forward, the Danish example is an interesting one, as we said in our response to the Organised Crime Task Force investigation. It is something we should again review, and we plan to do it later on this year, because we should leave no stone unturned. We may have said some months ago that the Danish model would not be the right model for us and we have said we should continue to look at it, and we will look at it but I think it is important to balance convictions with disruption. I think it is important for us to constantly renew our efforts to try and tackle this and again, the Organised Crime Task Force is doing work on that and the work that the Minister of State, Paul Goggins is doing is extremely important but it would be a shame if we only judge it on the number of convictions. I think there is significant interruption and disruption to the criminals doing it but I do not for one moment sit here complacently saying that I think we are sufficiently on top of the issue. We clearly are not.

Q16 Rosie Cooper: Can I ask you, Secretary of State, is there any political dividend for not prosecuting this as hard as you might?

Mr Woodward: No, there is no political dividend in allowing any crime to happen. Condoning crime should never happen and it would be irresponsible in the extreme if anybody took a message from this that we in any shape or form condone it. We have to stop it and we have to do everything we can to stop it.

Chairman: That is reassuring.

Q17 Mr Anderson: Secretary of State, you said in response to Rosie Cooper that what we want to see is people put away. Our information is that actually, nobody has been put away for fuel laundering and fuel smuggling charges. There have been convictions but nobody has served any time whatsoever. Can you confirm that and is that not showing that there is no real disincentive for these people? Yes, you might disrupt them but it is not really a disincentive in what we have heard in evidence is a £380 million business.

Mr Woodward: David, I share your view about this entirely and one of the issues I am looking at - and I cannot promise the Committee that there will in the end be such an offence - but one of the things I am very keen for us to look at is whether or not we might be able to create a specific offence of fuel laundering. That is going to involve quite a lot of work over the coming months and it may come to nothing. One of the problems, as you know, about seeking a conviction is that sometimes it is what you are trying to get a conviction for. One of the areas that I am anxious that we pursue while we have responsibility and continue to have responsibility for policing and criminal justice is to see whether or not we actually have all the means, both for the police and the criminal justice system, at their disposal to secure convictions of people involved in this. If it were the case that we could find a definition of fuel laundering as an offence which might allow us to actually secure more successful convictions - and I will say this all too readily - if I could replace the number of people who are serving sentences in prisons in Northern Ireland for fine defaulting with people who are fuel laundering, I think we would all be a lot happier.

Q18 Mr Hepburn: If the Home Secretary were to turn round and say to all the burglars in the country "If you are caught, all you've got to do is give your stuff back", there would be anarchy. The impression that we get from our investigations in Northern Ireland on fuel smuggling is that Customs, once they catch somebody, after an in-depth investigation costing a lot of money and a lot of man hours, all they do is say, "Just give us some money back and you can go free." What sort of incentive is that to actually stop offending?

Mr Woodward: I cannot really disagree with anything that you have just said, Stephen. I just remind you again that I am asking officials to look at whether or not we may be able to increase the means at the disposal of the police and the criminal justice system to actually put these people away.

Chairman: I think we are to some degree encouraged by that and we would encourage you to be, to use the jargon, even more robust on this, because it is something that has troubled us all over a long period.

Q19 Sammy Wilson: I hear the Secretary of State's assurances but over the last three years - these are your own figures that you have just given us - a 1% conviction rate. I would imagine for any other crime in the United Kingdom a 1% conviction rate would be regarded as fairly deplorable. I think Stephen Hepburn was wrong when he said that all they ever ask for is the money back. Only in a small minority of cases do they ask for money back and in three years, although it is reckoned smugglers may have netted £30 million, less than £500,000 has been asked for back when seizures have been made. There is a feeling within Her Majesty's Revenue and Customs by those officers who want to do something about it that you are happy enough to get a lorry but all of the names are known, the big players are known, the people who own petrol stations, and even the petrol stations which are owned by them which become the outlets are known. What I want to know, Secretary of State, is if you know the names of the big suppliers, if HMRC even know the names of the garages which they own and which they use to distribute this fuel from, if they know the lorries they use and the fact that they probably have 20,000 lorry journeys per year, why do we get such a paltry amount and why are the Mr Bigs immune from prosecution?

Mr Woodward: Again, as you will know from your investigation, there has been, and indeed among some in HMRC, a view that 1% somehow represents a figure which is what are believed to be in the public interest in terms of the volume of prosecutions. I suspect there is not a single Member of this Committee would agree with that view and I think this Committee is very clearly suggesting this afternoon, as indeed it has done before, that you would like to see significantly more than 1% being successfully prosecuted.

Q20 Chairman: You are dead right!

Mr Woodward: I have to say I entirely share your view and therefore I can only repeat again that it is because I share your view that I am working with officials to see whether or not it may be possible to ensure that there is a more effective way of being able to ensure that we are able to bring those involved in this before the courts and actually put them away.

Q21 Kate Hoey: With the greatest respect, Secretary of State, I am glad you said you were not complacent because, quite honestly, your opening remarks on this were complacent and gave that impression. The reality is that this is a kind of litmus test for ordinary, decent, law-abiding citizens of Northern Ireland of whether the law is being effectively carried through. It seems that you are saying almost that HMRC has a particular view. You are the Secretary of State. You have heard how strongly people feel about this. If you need stronger measures and you need the law changed, is it not your job to come forward as quickly as possible with those requirements?

Mr Woodward: That is why I said in my opening remarks, and I am very happy to underline it again, I am looking at whether or not we may be able to bring forward a specific offence which would make it easier to prosecute people. I think there is a view among some at HMRC that actually the figures of prosecutions are satisfactory to serve the public interest. I think that is an important discussion that we are having with the HMRC at the moment, because it is perfectly clear to me and has been perfectly clear to me that this is not a satisfactory rate of prosecutions, but again, one word of caution: it is not going to be easy to make dramatic progress on all of this. This is something that we have to do incrementally. We all know the dangers of trying to over-sell this, so I do not want anyone to walk out of here this afternoon thinking that I have made a guarantee to introduce an offence that is going to dramatically change the position.

Q22 Kate Hoey: Why?

Mr Woodward: Because I do not want to mislead people. There have been too many people who have thought that all you have to do is announce an offence and you end the problem. If we could simply do that, we would have no knives on the street and no guns on the street. It does not work like that, as you well know. One other word of caution here: this is not the only criminal practice that worries people in Northern Ireland, so let us not turn and fetishise this into being, as you described it, your own phrase, the litmus test.

Q23 Kate Hoey: A litmus test.

Mr Woodward: This is an indication of an area where we need to make progress but an area that I know this Committee is going to want to come on to. Just as there are injustices here, there are injustices in other parts of the system. When you see, as some people have characterised, a prison system that puts away many, many people for not paying fines on the scale they do in Northern Ireland, there are other injustices to remedy as well.

Chairman: There are. We are grateful for what you said but your motto at the moment seems to be festina lente, "make haste slowly". Just substitute it for festina, "make haste".

Q24 Lady Hermon: Secretary of State, it is not very long ago since you formally and officially opened the Woodlands Juvenile Justice Centre in my constituency in North Down. You will be well aware, I am sure, from the media coverage that there was a very serious incident involving a young offender who injured three members of staff. Could you kindly give us an update on the state and condition of the three members of staff, whom we all wish well, and also the young offender himself?

Mr Woodward: The first thing I would say to you is that the members of staff, I believe, are now at home, having received treatment. This is a very serious event to have happened. You and I share a view about the new centre which we opened together. It is an outstanding facility. It does not give me any pleasure to tell you that the staffing arrangements over the weekend when the incident took place were not unusual. It did not take place because unfortunately we were low on staff that weekend. We were not. There were normal staffing arrangements in place but the event nonetheless happened. What is taking place now inside the centre is an investigation into why the incident took place and as soon as we have the findings of that we will take the steps to remedy it if there are lessons to be learned. I do not know whether or not this was an isolated incident which occurred due to a series of aberrational circumstances or whether or not there are truly lessons to be learned. My mind is open on that and I do not want to prejudge the outcome of an internal investigation, except to say that we take it very seriously, and obviously we are concerned about the staff.

Q25 Lady Hermon: Obviously concerned about the staff. I am very pleased to hear that. What additional support and perhaps training have been offered to the staff since the incident?

Mr Woodward: I cannot tell you about that. I am very happy to write to you about any additional training.[1] I should think realistically though at this stage what we are looking for is making sure that the staff are home and are making a good recovery, that actually the work with those who are detained there is not interrupted by this - and I have no reason to believe that it has been - and making sure that the staff receive sufficient areas of support and confidence, and again that is happening. Whether or not this will lead to different training patterns, again, I think we have to wait until an investigation has been undertaken and completed because we have to make a distinction between whether this was an aberrational set of circumstances or whether or not truly there are lessons to be learned and, if there are lessons to be learned, they will be.

Lady Hermon: But there is clearly not a deficiency in staff numbers.

Chairman: Can we move to more general matters.

Q26 Lady Hermon: Sir Patrick has indicated, and other Committee members have also indicated, that in fact the Committee has just completed its inquiry into the prison estate in Northern Ireland and, Secretary of State, you have already alluded to the great injustice that is actually perpetrated against a large number of people who are kept on remand for a very lengthy period of time in prisons in Northern Ireland and also the very high percentage of prisoners who are actually fine defaulters. How is the Northern Ireland Office proposing to deal with both of these issues?

Mr Woodward: I think first of all you have to become properly aware of the problem and, in the context of only having been there for six months, it is certainly an issue which I am now more than confident to say I think this is a very real problem that I believe as Secretary of State we need to address. For as long as I am there, we will now really begin to tackle this area. A parallel that I would draw was when I became aware of the problem with waiting lists in Northern Ireland. People were waiting for six years in the Health Service and when I left after 12 months they were waiting 12 months. We will tackle this area. I cannot promise to deliver great results overnight although that is a very tempting thing to do. Somebody the other day said to me it is almost Dickensian to think that we have prisons with these volumes of numbers who are effectively debtors. I can see why it is hard to disagree with that judgement in some ways. It does seem to me to be ludicrous that we are spending millions of pounds locking people up for what might only be a period of three or four days for fine defaulting on sums of less than £600 by and large and in many cases less than £200. It is a difficult issue to tackle. Again, we have an institutionalised problem and we have to do this by achieving a consensus. I can promise you that it begins with a will from me to want to address this and, whatever cynicism there may be by some, I do have a track record in the Health Service of having dramatically changed waiting times and I am prepared to sit down over the coming months and look at this problem and realistically see how we can address it. The problem of remand is, I think, a much harder problem to tackle but it does begin with a will to want to address it. We have seen an improvement; we have seen a small reduction this year and that is progress. The work again that Minister of State Paul Goggins is doing on this with the Justice system is extremely important but I think there is no substitute for us giving a very clear lead on this issue. It is unacceptable that we have these incredibly long delays in the justice system in Northern Ireland, and I think it is unacceptable and I think it is a huge waste of resources to see people being locked up on the scale that they are in Northern Ireland for defaulting on fines. There are many other remedies available, from community service to other measures that can be taken, some of which we are now looking at but we need to accentuate that and we need to make progress on it and we need to make progress on it with haste.

Chairman: Absolutely, yes. That is very important.

Q27 Lady Hermon: Secretary of State, you did mention the phrase "institutionalised" problem". Which institution is to blame? Is it the Prosecution Service, is it the PSNI, is it the prison regime, is it the legislation, is it the Northern Ireland Office for not bringing forward legislation when we have known about the problem for such a long time?

Mr Woodward: I do not think we will actually make a huge amount of progress by singling out any one of those institutions. I think it is a collective problem, and I think it is a collective problem which, if we actually approach with a view to finding a collective solution, we will make progress on.

Q28 Mr Grogan: I have just one question on organised crime gangs and so on. In our report on organised crime we said that we saw a continued role for non-jury trials in certain circumstances. What would be the view of the Northern Ireland Office?

Mr Woodward: The view of the Northern Ireland Office on non-jury trials has already been made clear. Northern Ireland presents a very special set of circumstances precisely because of its very difficult troubled past. I would love to tell you that I could see a future next week when we could dispense with any of those sorts of arrangement. Regrettably, that is not on the immediate horizon but the progress that we are making towards that is huge. If one takes the whole principle of non-jury trials and compares numbers of those now with those of 10 or 15 years ago, the difference is truly dramatic. We are making progress and I only wish we were making the same kind of progress in dealing with some of the other issues that we have discussed this afternoon as we are with that.

Q29 Mr Grogan: But you would see circumstances - what sort of circumstances?

Mr Woodward: Again, let me be really frank about this. One of the things I hope is that this is a decision we will not be making. One of the things about the future shape of the judicial system and the criminal justice system in Northern Ireland is that it frankly ought to be being decided by those politicians who were elected in Northern Ireland. What I would like to do is to hand over a criminal justice system in as good a state as it can be for the period we have reached in Northern Ireland, given the background and the troubles Northern Ireland has had. These are decisions that should be reached by politicians there and I hope that what we will pass over will be a system that people can work with and evolve and appropriately make local for people who live and work in Northern Ireland.

Q30 Lady Hermon: Secretary of State, the Northern Ireland Office has responsibility for the criminal justice system until devolution of those powers. At the present time there is the availability of non-jury trials where there is intimidation of witnesses or where there is the possibility of jury tampering. Is it your belief that in fact non-jury trials, given the mention of the Paul Quinn incident and a key witness there and also the Robert McCartney case, which of course has not also been fully dealt with, are those appropriate for non-jury trials?

Mr Woodward: What Nick is saying of course is it is a matter for the DPP, and it is, and you are inviting me to have a view on it. Ultimately, it is a matter for the DPP but what I want to see, whether it is about Paul Quinn or any other area, is the people responsible for the murder of Paul Quinn or the attempted murders of police officers coming before the courts and serving time. I want it to be part of a judicial system which the public across the piece, both sides of the communities, can respect and believe is fair. I want to be careful here about just taking advantage of my position before this Committee this afternoon to say what I would like to see. What I want to see is the people who did these crimes put away. We have to recognise the special circumstances of Northern Ireland, so I think it will depend upon when those convictions hopefully can be secured and I think we have to recognise that we are moving into a different frame in Northern Ireland. We are not yet there on some of these things but of course, the really interesting thing on this, as the Chief Constable has said, is the volume of co-operation that they are now getting from the community. It is not the same as saying that we have a level of co-operation which is going to see every one of these witnesses going into the witness box. We have to nurse people into that position. We have to deal with that climate of intimidation but we should not, in our concern about that, fail to recognise the progress that is being made, and there is real progress being made.

Chairman: I want to move on now to looking at the past. Before we deal with some of the really tricky issues, there is one legacy issue that Stephen Hepburn wants to ask about.

Q31 Mr Hepburn: It is the future of the redundant military sites. Can you give us your view on whether they should go for full market value and the money go to the Treasury or do think it should be passed over to local communities as some sort of community asset?

Mr Woodward: Let us again just put the facts on the table. We have the five sites that were gifted in 2002, and then we subsequently have an ambiguous phraseology in the 2003 joint declaration about further sites which "might" be gifted. As you know, the Government has been absolutely steadfast in its commitment on the first five and those have been transferred. Note to everybody: in advance of people asking for more sites to be gifted, it would be quite good to see, for example, resolution on what is going to be done with the Maze achieved. This is something to which I hope very much there is a satisfactory resolution quite soon because if it had been able to have been used as a national stadium in the run-up to the Olympics, it would have been a fantastic symbol to the rest of the world for the future of Northern Ireland. It is a great shame that it has spent eight months being caught up in an internal debate between the political parties. That is a matter for the political parties but it is quite hard for me, in trying to bring pressure to bear on other members of the Cabinet, whether it is in the Treasury or the MoD, when talking about possibilities of any help being given on other future military sites if they see the kind of internal wrangling that is taking place over the Maze. As you know, there are two particular sites in Omagh that have attracted interest. I am meeting Pat Doherty - Sir Patrick wrote to me about this - next week. I think this is a really ingenious proposal for the site. As you know, DSD have been in negotiation with the MoD about this for around 24 months now without yet achieving a satisfactory resolution themselves. I am in discussion with my colleagues in the MoD and the Treasury about this. Again, I raise no expectations as to what the outcome may be because there is no agreement to gift further sites beyond those of 2002. However, there is equally a commitment by the Government to do all it can to help in Northern Ireland and I will continue and endeavour to do my best but, as I say, it would certainly help me if we could get an early resolution on the Maze.

Q32 Kate Hoey: I think it is important that the Secretary of State is challenged a little bit on that. I do not want to go into the whole Maze project but I think it is important that perhaps the Secretary of State should be aware that if this had been handled differently from the beginning and the people of Northern Ireland, in the sense of the real supporters of sport in Northern Ireland, had actually been involved and to try and almost use it, as you are using it now, as a form of blackmail really, that you are almost implying that if they do not get the Maze sorted out, we are taking our ball away. The reality is the money should be there for sport in Northern Ireland and for the sports governing bodies and for the people of Northern Ireland through their elected representatives and their parties and the Finance Secretary in Northern Ireland to decide how they are going to go forward on that.

Mr Woodward: Kate, I think that is a bit of a travesty of what I said. There is no blackmail here at all. What I am simply saying to you is that it would help my case when discussing this with colleagues if we could actually see progress in terms of the sites we had gifted, particularly the Maze, because of the Olympics and the opportunity it represents. It would be particularly helpful to me, and that is a very different phraseology from the one that you just caricatured of what I said.

Q33 Sammy Wilson: Secretary of State, you did single out the Maze. Girdwood Barracks, for example, has not been decided on yet. Why particularly use the Maze?

Mr Woodward: Because the Maze is being used by politicians in Northern Ireland for reasons we all understand as something of a political football and it is constantly appearing in the headlines. As I say, there is a fantastic opportunity to be taken here.

Q34 Kate Hoey: Yes, but it may not be the right site for a national sports stadium, as this Committee in fact commented on.

Mr Woodward: This, of course, is a matter for politicians in Northern Ireland. I am simply saying that it would help me in making a case to others if it were possible to actually demonstrate that this would not be the subject of wrangling but actually is a subject for purpose.

Chairman: It would help us a little if you would refresh your memory by looking at our report on to tourism, where we did in fact make a recommendation on this. Maybe you could just look at that.

Q35 Stephen Pound: Good afternoon, Secretary of State. Before I ask my question can I just quickly say, in your preamble you mentioned attacks on Orange lodges. Firstly, I am not a frequent visitor to Orange lodges but I have read the reports. Do you feel, from your position, from your vantage point, that there is an element of co-ordination in these attacks, or is this the sort of mindless vandalism that we tend to see throughout the rest of the United Kingdom?

Mr Woodward: It is certainly very tempting to conclude, as some have done, that there may be a level of co-ordination. The First Minister and others had a meeting with the Chief Constable just before Christmas, and indeed I had a meeting myself with both parties and indeed members of the Orange Orders as well to discuss this. The Chief Constable does not believe there is a co-ordinated campaign taking place. There is no question that, with 67 attacks since April of last year, this is a significant and dramatic increase in the number of attacks in previous years, which were in the low double figures. So this is a serious issue. I fear that what we are seeing here is more copy-cat than co-ordination. There is absolutely no reason to believe - and I quote here the Chief Constable - that this is the work of any kind of concerted paramilitary campaign. Nonetheless, for those who are victims of this crime, it is appalling, and it is cowardly as well because of course they do it in places where they are least likely to be caught. They do it in the middle of the countryside in the middle of the night. The Chief Constable is taking action on it, has increased resources, has increased the numbers of patrols. It is very difficult. We remain in contact with those who are most concerned about this but, again, one of the things I think is important has been to note the condemnation that has come across the political spectrum and one of the fiercest proponents in terms of criticism is the Deputy First Minister, who made it unequivocally clear how strongly he condemns the attacks on the halls and how much he wants to see the perpetrators of this caught and brought to justice, as I do.

Q36 Stephen Pound: Thank you for that. Moving forward to the past, the independent Consultative Group on the Past was set up in June last year with your predecessor as the progenitor, if not the godfather. How do you feel the infant is doing?

Mr Woodward: This is a Herculean task. There is no question, and you will have taken evidence and spoken to the Chief Constable as a very good example of this, about just what an understandable but nonetheless burden it represents on police time dealing with the past, the numbers of officers the Chief Constable has to deploy to deal with the past. Having said that, I believe it is absolutely right that we deal with the past. We cannot possibly move forward into a new and secure shared future in Northern Ireland without recognising that the past is something we are all going to have to come to terms with. I do not believe this is about drawing a line under the past. It is about coming to a place whereby we can live with the past without it gripping us and not being able to go forward. I think the Commission therefore was an inspired idea, and I think it was inspired because it was necessary and it was important that it was not the British Government or the Irish Government coming forward with a proposal. It had to be independent but, in being independent and in seeking people's views and in holding public inquiries, you will inevitably court all sorts of sensationalist responses from people. So when they have a public inquiry and people come forward and say they think there should be an amnesty, I absolutely understand why people, some of them in this room, immediately come forward and say to the British Government "Can we absolutely have a guarantee that you will not have an amnesty?" It is understandable that people are going to put forward these ideas, and that is the value of having an independent group at this stage. It is valuable precisely because they can actually go and see whether or not there is a consensus. It may be there is no consensus. It may be that it is too early yet to find a way to settle on some of these issues which, very understandably, tear people apart. We still have nobody effectively having been held to account for the Omagh bomb, the worst atrocity in the whole of the troubles. You can understand how this tears communities in half but equally we can understand how living with communities being torn in half ten years ago meant that we could make no progress. So people did make progress because clearly we had achieved a moment when it was possible to go forward. The work of the committee, and I think it is being brilliantly led, is very difficult. I do not know whether they will come to us at the end of this year or the summer of this year and say there is a consensus. It is perfectly clear to everybody in this room that there is a group of issues for which it is going to be very difficult to find any consensus, but maybe the first question we need to ask is whether or not there is a consensus yet on whether or not people want the past to be addressed. It may be there is not, and if there is not a consensus even on the issue of, "Do you want the past to be addressed so we are not just gripped by the past?", we will have to recognise that the work of the Consultative Group will be much more difficult and take much longer than we anticipated.

Q37 Stephen Pound: Secretary of State, you talked about the impact on the PSNI. Could you, just for the record, give us some indication of the level of funding provided by the NIO for this specific purpose of Historic Enquiries?

Mr Woodward: £34 million was the amount of money that we set aside for the Historic Enquiries Team. They have spent a proportion of that and they are currently dealing with cases which, as you know, are in chronological order by and large up to the mid 1970s. We believe that in itself will be enough, but let us put this in the context of a policing budget of a billion pounds. Let us put that in the context of a very difficult past. Let us put that in the context that there are some 4,000 families related to people who lost their lives in the Troubles, many of whom have no basic information about the circumstances of the murder that took place. One of the things that I think was extraordinary about the work of the Historic Enquiries Team, which I believe is appropriately funded, was when it revealed to me the work it did with the family of a young British soldier who was killed in the 1970s. It was only last year that the family learned the circumstances and learned about the fact that when the young man was shot in the streets of Belfast - he died two days later in hospital - it was Catholic passers-by who tried to save his life, who took him to the hospital. They had no idea about that and yet the family had nursed for 30 years a hatred of the Catholic community in Belfast. The material was sitting in a box. The material was put together by the team and they shared it with the family. It has changed that family's view of the past considerably. I would be very surprised if the work of the Consultative Group on the past in any way moved away from the work that needs to be undertaken by the Historic Enquiries Team. I think much of that is rightly about giving people information they do not have and it is very basic. I think the bigger issues, the kinds of issues that have attracted huge media attention in the last few weeks, are undoubtedly issues that will be hugely divisive. I do not know whether they can find a consensus on that. It is not for me to judge. It is not for me to provide a running commentary, but, perhaps like everybody else, I hope it will be possible to find a consensus but I certainly do not underestimate the task involved in that.

Q38 Stephen Pound: Do you anticipate that there will be a drawdown from the PSNI budget to service Eames/Bradley?

Mr Woodward: To service the Historic Enquiries Team?

Q39 Stephen Pound: Sorry - that separate strand.

Mr Woodward: Given that we have given them a separate £34 million budget to fund it, it would be remarkable if at this stage, having spent less than 50% of it, they now needed to draw down on it, and, given that we have managed to secure for the Policing Service in Northern Ireland an extremely good settlement for the future, I would be very surprised if they felt they needed to do that.

Q40 Lady Hermon: Is it correct that the leadership of Sinn Fein, in particular Mr Adams, continues to lobby you as Secretary of State for an amnesty for OTRs, on-the-runs? Does he continue to lobby you?

Mr Woodward: He does not lobby me for an amnesty for OTRs, no.

Q41 Lady Hermon: Oh, that was very carefully put.

Mr Woodward: I am answering a very carefully phrased question.

Lady Hermon: In other words OTRs are still raised directly with you?

Q42 Chairman: Are you being lobbied by anybody?

Mr Woodward: I think the answer to, "Am I being lobbied on these issues?", is that of course I am being lobbied on these issues, but again, let us be perfectly clear: the Government made its position absolutely clear on OTRs when we found ourselves having to withdraw the legislation. The answer that the previous incumbent, Peter Hain, gave on this issue is one that I stand by.

Lady Hermon: Thank you.

Q43 Mr Campbell: Will that procedure change in the future?

Mr Woodward: Will what procedure change?

Q44 Mr Campbell: What you have just said, that your stance is the same as your predecessor's.

Mr Woodward: My stance is the same as my predecessor's. We will not be reintroducing that piece of legislation.

Q45 Mr Campbell: Will you be reintroducing a piece of legislation similar to it?

Mr Woodward: Look: I think this is really an interesting line of inquiry. There are issues to be addressed in this at the moment which I am addressing. I am more than happy if you want at a future stage to sit down and discuss this issue but if your question is am I spending time looking at the issue of OTRs now, the answer is no, I am not.

Q46 Mr Campbell: You have not allayed my fears, Secretary of State, with that answer. We will come back to it. I do not want to reintroduce the issue of devolution of policing and justice either at this stage, Secretary of State, but you did say in answer to a previous question that the reason that it was an issue and it was being discussed was not because you were in favour of it but because the people voted for it. I think I am summarising fairly accurately what you said. It is not really a question, just a statement to rectify that inaccurate statement. I was elected to the Assembly, as were my colleagues, and we were not elected on any basis of a definitive date for devolution of policing and justice. It was not on our manifesto, nor did any individual at any door mention it to us. I understand there are opinion polls but that is simply to redress what you said earlier. I want to move on to another transfer, not the devolution of policing and justice but the issue that you also alluded to about transferring prison healthcare from the prison regime to the Department of Health. You alluded to it almost as an example of, and I would not like to use the phrase "seamless transition", things going smoothly and yet the Committee has heard that there appears to be some delay, if not difficulty, in the transfer.

Mr Woodward: The transfer will be finalised on 1 April of this year. I think it is absolutely right that the transfer takes place. I think it will produce far better healthcare for those who need it once the transfer takes place. There were issues to be negotiated but, to be honest, Gregory, what this reveals is the difficulty of maintaining a comfortable split between those functions which were transferred in stage one and those which are to be transferred. Equally, let me just say about both my colleague Paul Goggins and the Health Minister in the new Executive that we managed to find a resolution and they worked brilliantly to find it, and I think the outcome will be good for everybody and it will be particularly good for those -----

Q47 Chairman: This Committee unanimously recommended it.

Mr Woodward: Absolutely.

Q48 Mr Campbell: I just have one other question, Chairman. I did not get the chance to get in on the general political issues so could I just ask you a question, Secretary of State, on the wider matter of political developments in Northern Ireland? There is a parity issue that has been getting knocked around for some time now which has not been addressed and I wonder if you could give us some assistance on it, if not today in the near future. In recent years the Irish Government has offered facilities for people in Northern Ireland to acquire Irish passports in conjunction with the Royal Mail at various post offices, and that is fine; people can do that if they choose to purchase Irish passports, even though for many of them they have never lived in the Irish Republic but they wish to have an Irish passport; they can do that. There is not the same facility for the 40,000 people who, according to the last census, were born in the Irish Republic but live in Northern Ireland and wish to acquire a British passport. Obviously, it is a Home Office issue, but would it be possible for you to examine that? As I say, there are up to 40,000 people who in every other respect are British citizens - they pay British taxes, vote in British elections. In fact, the Speaker of the Northern Ireland Assembly is one such person affected. They cannot get a British passport. They have to go through a convoluted naturalisation process in order to get a British passport while the others can acquire an Irish passport by simply turning up at the post office to get one. Would you be able to help in examining that and perhaps applying some pressure to the Home Office to rectify what appears to be a parity issue that does need rectifying?

Mr Woodward: The answer is yes to your question. As to whether I would be able to apply pressure, let me have a look at the issue and I am more than happy to work with you and come back to you on it.

Chairman: Thank you very much indeed. I want now to touch on a number of different issues, first of all the Common Travel Area.

Q49 Kate Hoey: Secretary of State, I hope you will be able to clarify what seems very confusing, this suggestion that the Common Travel Area may be changing, and particularly answers to questions which seem to contradict one from Paul Goggins saying that there was no question that the Common Travel Area would end, whereas a question answered to me just a couple of weeks ago said that the power would be brought in in secondary legislation and that everybody who travels across will have in some way to give information on who they are and what they are. First of all could I ask how often you travel back and forth to Northern Ireland?

Mr Woodward: A lot.

Q50 Kate Hoey: And how often do you travel on British Midland, EasyJet, whatever?

Mr Woodward: The answer is I do but I think you will also understand that in a public session I am not going to talk about my travel arrangements, for rather obvious reasons, so let me resist the temptation.

Q51 Kate Hoey: I appreciate that, Secretary of State, but we are grown-up people. What I am really asking is do you ever travel in a normal way?

Mr Woodward: Yes.

Q52 Kate Hoey: Would you like to clarify then what you think this is all about and how you hope as Secretary of State to protect United Kingdom citizens living in Northern Ireland travelling back and forward from being treated any differently from people travelling from Scotland to London?

Mr Woodward: The first thing to say is that the stories which have appeared in newspapers about passports being required are erroneous. Having laid that canard to one side, the issue before us is whether or not we can improve on the security arrangements in relation to a climate of international terrorism and, secondly, deal with issues to do with illegal immigration. That is what has driven the reviews that have taken place and which have therefore touched on the Common Travel Area. As I said at the beginning, there is not going to be suddenly a requirement for people to be carrying passports. However, we already have legislation with provision for those, for example, travelling by plane, since you have touched on the issue of travelling by plane, to make sure that people are who they say they are and, frankly, that is common sense.

Q53 Kate Hoey: But that is general across the United Kingdom.

Mr Woodward: Exactly, but what we are doing is reviewing the arrangements between the islands for the very obvious reason that they do provide an opportunity for those who may wish to exploit the vulnerability that opens up precisely because of island-to-island travel that takes place, and in reviewing that, yes, we are working very closely with our colleagues in the Irish Government to make sure that no particular vulnerability has been opened up as a result of that, but there are absolutely no plans to end up with a system which some have worried about, which is whether this is going to mean that within the Common Travel Area people are going to have to travel with passports. They are not.

Q54 Kate Hoey: Forgetting passports - I think we have all accepted that; I never carry my passport going back to see family in Northern Ireland, I carry an identity thing, the House of Commons one, which they accept; they accept all sorts of things - the issue is whether the person travelling from Belfast at perhaps a day's notice or whatever is going to have to do anything other than simply turn up in the normal way with their identity which is required at the moment.

Mr Woodward: We are not proposing to make any fundamental changes that would depart from that at all.

Q55 Kate Hoey: So what is this all about then?

Mr Woodward: There are lots of newspaper stories that appear which unfortunately are exaggerated and I think that what we have here is something which has been distorted. That does not take away from the fact that it is obviously a matter of national security for us to constantly review travel arrangements to make sure that in relation to international terrorism but also in relation to issues of immigration we are not more vulnerable that we can otherwise realistically be in a way that is disproportionate.

Q56 Kate Hoey: And the extra vulnerability in the case of Northern Ireland is because people are travelling from another country, a foreign country, the Republic of Ireland, into Northern Ireland and then into England, so it is not Northern Ireland citizens that are a threat?

Mr Woodward: It is not necessarily that any citizens are a threat. It is about making sure that those who are a threat do not exploit the Common Travel Area as a way in which they can ----

Q57 Kate Hoey: I am sorry, Chairman, but I think this is really important for people who are travelling back and forward to Northern Ireland, many of whom almost commute these days, working two or three days and going back.

Mr Woodward: I do not disagree with that; it is very important.

Q58 Kate Hoey: What is the difference then between that and someone travelling from Edinburgh?

Mr Woodward: I do not believe anybody travelling from Belfast this week will notice any difference in the arrangements this time next year.

Q59 Mr Campbell: But will someone travelling from Edinburgh to London? That is the point, I think. Will there be any difference between people boarding a plan in Belfast and boarding one in Edinburgh?

Mr Woodward: I have jurisdiction for Northern Ireland but not for Scotland. Again, I think there is a possibility that what I have just said could be distorted. Let me simply say that in relation to Northern Ireland, for which I have responsibility, people travelling today to Belfast or from Belfast this time next year will notice no difference whatsoever.

Chairman: Secretary of State, could you let the committee have a short paper on this and could you, before you submit it, consult with your colleagues who have Scottish and Welsh responsibilities so that the committee can be assured that so far as -----

Sammy Wilson: It is not just Scottish and Welsh; it is the Home Office as well.

Chairman: Perhaps I can just finish my question, Mr Wilson.

Stephen Pound: And the Foreign Office.

Chairman: Perhaps you could consult with all the relevant parties and give us as comprehensive an outline as you can and then we may well wish to come back to you on it.

Sammy Wilson: Chairman, can I just ask two questions? First of all, what information will be required to be captured to be available to the police so that they can see who people are, where they are going, how they can be contacted, et cetera? What information will have to be supplied so that the police can capture it, as has been indicated, under section 14 of the Police and Justice Act and under the e-Border scheme? Secondly, will whatever information is required to be supplied by people living in Northern Ireland travelling, for example, to London be exactly the same as what would have to be given by people travelling from Dublin to London?

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.[2]

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.[3] 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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[1] Additional note to follow

[2] Additional note to follow

[3] Additional note to follow