Simon Hamilton
Strangford · Democratic Unionist Party · Northern Ireland
“I have emphasised to the Member and the House before, that, whilst I accept that those are not good enough — that is why we have been developing the plan — there are alternative technologies in place that can present opportunities for those who just cannot get acceptable speeds.”
“I thank the Member for his intervention. There are some initiatives that I believe will help and act as a driver to improve broadband access. One such intervention is the broadband universal service obligation (USO), which is being taken forward by Her Majesty's Government.”
“I thank the Member for his question. However, he is conflating two issues. I wrote to his party leader, and indeed to all Assembly party leaders, before making the announcement that I did last week about wanting to publish the details of the businesses in receipt of the non-domestic RHI scheme. It was my intention to do that tomorrow.”
“<BR /> <BR />The Chancellor, in his autumn statement, made some more funding available for telecommunications, and my Department is studying that and seeking to avail itself of that to the fullest possible extent.”
“In addition, my Department is managing a contract for the delivery of the superfast rollout programme, which, by 31 December, will provide access to superfast broadband with speeds of at least 24 megabits per second to a further 38,000 premises, both business and residential, across Northern Ireland, including in the Newry and Armagh cons…”
“I signalled the intention to do this a few weeks ago. The Member and the House will know that inspections of all installations would have taken place over the 20-year lifetime of the RHI scheme.”
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“It is a good, healthy, productive relationship, with a lot of shared and mutual interests. I want to keep it that way and continue to learn from each other on an ongoing basis.”
“I meet regularly with Brendan Howlin, the Minister for Public Expenditure and Reform. I meet Michael Noonan regularly as well, but for budgeting, public spending and reform matters, it is with Brendan Howlin that I have most engagement. <BR /> <BR />He and I meet regularly at the SEUPB and North/South Ministerial Council bilaterals. We also meet in plenary session, but we use those opportunities to have broader discussions about our respective responsibilities. We have been taking forward work around reform and talking about the experience that the Irish Government have had in reforming their public sector and trying to learn some lessons from their experience. Equally, they have been trying to learn from our experiences of reform of government in Northern Ireland.”
“They have the ability to borrow only up to £400 million, whereas we have the ability to borrow £3 billion. Those are flexibilities that the Welsh Government, and, I am sure, the Scottish Government, are quite interested in and would like to take forward in their conversations with UK Government Ministers.”
“I regularly meet Ministers from other devolved regions. At the start of the year, I had a very positive meeting with Jane Hutt, the Welsh Finance Minister. It was a meeting that she was very keen to have to learn of the experience we had in the Stormont House Agreement. It was not a discussion about the very late nights and lengthy discussions but was about the results coming out of the Stormont House Agreement, particularly around financial flexibility and borrowing. <BR /> <BR />It is fair to say, and I am sure that Jane will not mind me saying it, that the ability to borrow to offset the resource pressures of a voluntary exit scheme and the ability to hold on to receipts from major asset sales and convert some of that into resource expenditure is of interest to the Welsh Government in their pursuit of more powers around borrowing.”
“However, because of the increase in employment, PAYE receipts, National Insurance contributions, and the profits that companies in the hospitality sector will make and the tax they will pay on those profits over time, it can yield a net benefit for the Exchequer. <BR /> <BR />Clearly, this is something that the UK Government will have to consider in the round of the pressures they are facing in public spending, just as we are facing pressures. I sympathise with my Treasury colleagues in having to take those sorts of decisions, but the fact that we now have good, strong evidence from the Irish Republic that the policy, when pursued, can work and can work substantially well, means that there is no reason why it should not happen across the UK.”
“There is now a broad campaign across the whole of the United Kingdom. We are not permitted to reduce VAT within regions of a member state; you can do it across the whole of a member state in the EU and specifically within the hospitality sector. The fact that there is now a broad-based campaign across the UK is helpful. <BR /> <BR />We have evidence from our near neighbours in the Irish Republic of how successful it can be, not just in boosting tourism numbers but in boosting employment and bringing a net benefit to the Irish Exchequer. That is the point that I would labour with the Treasury. <BR /> <BR />Yes, you will have a reduction in VAT revenue because you will have reduced the rate.”
“One of the points I made to the Treasury Minister was that my counterpart, the Irish Finance Minister, Michael Noonan, in his Budget in October, confirmed that VAT for certain parts of the hospitality sector in the Irish Republic would be cut indefinitely. The reason he took that decision was that an independent evaluation showed that the reduced rate of VAT for the hospitality sector in the Republic, where it is down at 9% for some categories, has increased employment through the creation of 30,000 new jobs and brought a benefit to the Irish Exchequer of €165 million. It is because of that compelling case that I want to back Pubs of Ulster, and the other organisations that are pushing for this cut, to see the same thing happen across the UK.”
“When I was on the Back Benches, not that long ago, I tabled a motion calling on the Chancellor of the Exchequer to reduce the VAT rate for the hospitality sector, as he is permitted to do under EU law. That would mirror the experience of the Irish Republic, where the VAT rate for the hospitality sector was reduced very successfully. My predecessor Mr Wilson followed that up with the Treasury about two years ago, and, in the last number of weeks, I have written again to the Financial Secretary to the Treasury, David Gauke, building on the campaign that the Member has highlighted, which is led by Pubs of Ulster but is backed by many other hospitality sector bodies in Northern Ireland and beyond, for the VAT rate for the hospitality sector to be reduced.”
“Frustrated as the Minister and many others might be, he might have achieved a reduction in the number of teacher training places, because it might have forced the closure of Stranmillis college in particular — something that I and many others did not want to see happen — but the best way to achieve a successful outcome that everybody buys into is to proceed on the basis that we have now created a space to consult the colleges, bring them into the tent rather than keep them outside and work with them to agree a way forward. If they fail to agree that way forward, the Executive and the Minister will have to look at other ways to achieve reform, but crudely and bluntly cutting their budget and forcing them into slow but certain decline and death is not the way to achieve reform.”
“There are many areas of higher education where we produce too many graduates; it is not just teacher training. I welcome the fact that universities have been reducing the number of places in what, I think, we would all agree are lower-priority areas for our economic development. That is a good first step in the direction of reform. <BR /> <BR />This is not a problem that has appeared overnight; it is a long-standing one. There have been unsuccessful attempts to resolve it.”
“It also gives an opportunity for consultation with them to achieve the reform that is absolutely required but would not have been achieved in a way that any of us would have wanted by just crudely and bluntly cutting their budgets.”
“There was no political consensus in the House, where a motion was clearly passed with 80-odd votes in favour of the proposal not to cut the premia. Proceeding in a blunt and crude way by simply cutting the colleges' budgets in a very un-Alliance fashion, I have to say, by just doing it over the heads of those institutions and without consultation would have produced a perverse result. In particular, Stranmillis college, which is, of course, in the Member's South Belfast constituency, would have fallen by the wayside very quickly, and I do not think that that would be an intention or consequence that any of us would want. Maybe some wanted to see it, but certainly I and many in the House did not want to see that happen. <BR /> <BR />The decision that the Executive took not to cut the premia now gives us the space to work with the colleges.”
“No one, including me, would deny that reform of teacher training in Northern Ireland is required, and I have heard many saying that in the House over the past number of weeks when the issue has been discussed. I would be one of the first to accept that we still produce too many teachers in Northern Ireland, with, I think, four institutions producing qualified teachers. There is an absolute need to reform the system. I do not agree and the Executive have not agreed with the way in which her colleague — indeed, my Executive colleague — the Minister for Employment and Learning has gone about trying to achieve the desirable aim of reform. You do not achieve change, in my view, in the way that Minister Farry brought forward his proposals. There was no consultation or attempt to bring the colleges with him.”
“That does not naturally translate into automatic agreement on the paper, but I assure the House and, more to the point, the members of staff who may be listening to or reading what I am saying that I will bring that paper to the Executive when I am permitted to by the changes in how the Executive do business. It will then be up to those who have been holding it back to put their money where their mouth is on the issue. I hope that, in the not too distant future, we can get some resolution.”
“Having looked at the issue again and having brought forward an Executive paper that included a satisfactory way of dealing with the issue that, while not dealing with any legal claim — there is no legal claim — dealt with the need to recognise the work that was done, I recognise that that has not proceeded. As I said, I think that that is regrettable. I am hopeful that the changes to the way in which the Executive do business that were agreed in the Stormont House talks may allow the paper to be brought forward in a way that would not have been possible in the past.”
“<BR /> <BR />I want to correct the Member in one respect — well, not correct him but point something out: there is no equal pay issue in this regard. That was clearly proven by the courts in the judgement by Justice Babington a couple of years ago. That does not take away from the very valid points that the Member and, indeed, many others Members have made to me. I recognise those points and hope that those who have at least verbally supported the calls by those members of staff in the past can now back that up with positive action.”
“The House and, indeed, the Member will know and, I hope, appreciate that I have had huge sympathy for that issue since coming into office. Indeed, I tasked officials in my Department to look at the issue again and, as a result of that work, I brought a paper to the Executive that I believed was capable of resolving it. Unfortunately, that paper has yet to be tabled before the Executive, and, therefore, no decision has been taken. That is regrettable. There are some in the House who have pretended to support the very members of staff whom Mr Hussey has spoken about, but, when a proposal to resolve the situation was put to them, they walked away and have not allowed it to be taken forward. That is deeply regrettable.”
“At a UK level, it is widely anticipated that the current trend of reducing public-sector budgets will continue in the short to medium term. In that respect, we should anticipate resource DEL reductions and plan accordingly. The precise impact of the forthcoming 2015 spending review on the Executive’s budget will ultimately be shaped by the policies of the incoming UK Government and the degrees of protection that they offer to comparable services such as health and education.”
“The access to finance implementation panel has produced a very good set of recommendations, many of which are being progressed. One of the key ones that we continue to progress between my Department, the Department of Enterprise, Trade and Investment and the British Business Bank is the proposal to develop a property overhang fund in Northern Ireland. As Members will appreciate, it is the overhang of bad debt around property that stifles the ability of many businesses in Northern Ireland to grow. Again, in an innovative and creative way, we are looking at trying to produce a product or a fund that would help to deal with that issue to allow those otherwise very solvent and very able businesses, which are capable of growing, to grow and to do so free from the property overhang that has been stifling their ability to do so.”
“That is why, to reiterate the point, Invest Northern Ireland has moved into the space by providing products that can offer a bit of a bridge between what businesses can get from regular banks and what they need to take forward projects. Different products and a recognition that there are different ways to finance business growth are probably what need to be appreciated more than the need to bring more competition into the local market.”
“<BR /> <BR />The access to finance implementation panel that Arlene and I created made the point in its conclusions that we did not need to radically change the structure and that what we needed more of was different products, recognising that the lending environment had changed, probably utterly, so it is not a case of getting new banks to come into the market. I would not dissuade any new banks from getting into the market. If they want to come, that is perfectly fine — it is a business decision for them — but all banks, including those that are established in Northern Ireland, need to behave differently and produce different products.”
“In some ways, my view on the structure of the Northern Ireland banking situation is not going to change it. It is what it is. There has been an encouraging entrance of what might be described as "challenger banks". The interesting thing about that is that the challenger banks in Northern Ireland are the established banks in mainland UK. The likes of Barclays, Santander and HSBC are becoming much more active in the business market in Northern Ireland and are obviously backed by pretty healthy balance sheets. They provide some competition for the four local banks. Even though none of them are owned locally, they are the four big traditional banks in Northern Ireland, and they are getting some competition from those challenger banks.”
“Those figures are testimony to the fact that, just as our overall economy is changing, so is the availability of finance to businesses. Whatever about the banks and what happened in the past, we need our banks to function properly if we want our economy to function properly, and all of us will welcome those very positive figures and the move in the right direction.”
“The latest figures available are for the third quarter of 2014, and they show that new approved borrowing by SMEs in Northern Ireland stood at £407 million. That was the highest quarterly amount since the data series started back in 2010, and it was 15% higher compared with the same period the year before. The approval rate for SME loans remains high, with over nine out of 10 applications being approved. <BR /> <BR />I appreciate that there will still be many issues, which is why the Executive, principally through Invest Northern Ireland, continue to have a range of products like the growth loan fund and the small business loan fund in the marketplace to assist those who still have difficulties with getting conventional finance from our banks.”
“A primary objective of creating the joint ministerial task force, which I sit on alongside the economy Minister, Arlene Foster, was to get better data on lending in Northern Ireland. Many of us in the House will recall that, when the crisis began, and there was a drop off the edge of the cliff in lending in Northern Ireland, whilst we knew that that was happening, we had no data to back up what we believed to be the case. <BR /> <BR />We have been fighting a long, but thankfully fruitful, battle to get better data published. We now receive much better data quarterly from the British Bankers' Association.”
“The uptake of programmes delivered by the British Business Bank in Northern Ireland is improving, with latest figures indicating that those have facilitated £40 million of lending and investment to businesses in Northern Ireland. <BR /> <BR />Access to finance is a crucial issue, and I assure the Member that I will continue to press for suitable initiatives where they could have a positive impact in Northern Ireland.”
“The Joint Ministerial Task Force on Banking and Access to Finance has met four times, most recently on 2 February. My key focus on the task force has been on ensuring that everything possible is being done to improve access to finance for local businesses. I am pleased to be able to say that the lending environment is improving, with more businesses successfully securing the finance that they need to prosper and grow. I also recognise that challenges remain for many of our firms. That is why I have been pressing to ensure that the benefits of national initiatives are being felt in Northern Ireland. Thankfully, we are seeing progress on that front.”
“We would do that in the context of a changing budgetary environment. We have predicted the need to reduce the headcount by 20,000 over the next number of years, but that was done on the basis of Budget projections that were valid six months ago. The reality of the Budget in the future may change positively or negatively. Many things around budgets and the impact of the headcount need that we have in the Civil Service and the broader public sector are sometimes in a state of flux. <BR /> <BR />It is something that we will have to keep under review, but I do not think that there will be much escaping the need to reduce significantly the numbers working in the broad public sector in Northern Ireland.”
“I accept the point that there is a degree of risk in proceeding with such an ambitious and radical scheme over such a short period. One of those risks, as the Member identified, is that it might be undersubscribed. <BR /> <BR />My belief, and the anecdotal evidence, is that there will be no problems in the first year, or, indeed, in the first couple of years. It is a scheme over a four-year period, so there will be many for whom voluntary exit does not work or suit their circumstances now but may do in the third or fourth year. <BR /> <BR />The Executive have agreed to proceed with a voluntary exit scheme. They have not considered any other option at this stage, but if the scheme did not work or realise the savings that we are anticipating, we would have to look at what other options might be there.”
“We have done nowhere near that, which is why we need to do what we are doing now. The simple answer is that, whilst recruitment freezes are part of the equation, they would not realise quickly enough the quantity of savings or number of people to leave the service.”
“The Civil Service needs to release 2,400 people next year, and we would not achieve that by recruitment freezes alone. The same applies to the 20,000 figure across the whole of the public sector. Recruitment freezes and those other strategic personnel interventions will play a key role in getting us to 20,000, but, given the pressure that there is on public finances immediately — from the next number of weeks into the start of the next financial year — it is essential that, to realise those sizeable savings, we have a voluntary exit scheme. <BR /> <BR />I have no hesitation in saying that it is far from an ideal course of action, but it does reflect experience elsewhere. Whitehall had a voluntary exit scheme in 2010 and was able to reduce its size by around 10%.”
“I know that the Member has submitted a question for written answer. He will appreciate that, sometimes, the answers that come back first throw up issues that I would like to tease out so that I can give the Member or, indeed, any Member in the House a good answer and the answer that they want. <BR /> <BR />The leaver rate for the Civil Service is roughly 4%, which means that you would ordinarily expect just over 1,000 members of staff to leave next year for whatever reason, whether it be retirement or just deciding to go. The Member will appreciate, therefore, that releasing 2,400 people — Departments have identified that they need 2,400 fewer staff next year — would not be achieved by a recruitment freeze alone or by other measures. That is why I said to Mr Weir that time is of the essence.”
“That will allow Departments to realise, from the first tranche of people who go, six months' worth of salary savings, which will help them to live within their means and set them up very well to make a full year's savings in future financial years.”
“It is, perhaps, a little less painful than other interventions might be, but £30 million, while very welcome, will not deal with the pressures that Departments are facing. A voluntary exit scheme is necessary because it will achieve much larger savings and will do so much more quickly than a recruitment freeze might be able to achieve. <BR /> <BR />In addition, time is of the essence, and that is why we need to progress very quickly with the scheme. I am glad that the Executive agreed in recent weeks to proceed, which will allow the scheme to be opened to staff at the beginning of March. We are still on timetable to release the first tranche of people by around September 2015.”
“The objective, as I said in my first answer, is a permanent pay bill reduction. That is, of course, in the context of trying to deal with significant pressures on our Budget next year. Even though those pressures were able to be closed somewhat by the allocation of a further £150 million in the final Budget, some Departments, including mine, are dealing with significant reductions next year. A permanent pay bill reduction is the number one objective. <BR /> <BR />It is worth reiterating that it is one of a number of strategic personnel interventions. The others include a recruitment freeze, an embargo on promotions and the suppression of what are called funded vacancies in Departments. Those interventions alone will save an estimated £30 million in 2015-16, which is very welcome.”
“<BR /> <BR />The indicative pay bill savings were calculated using the median salary by grade of the total full-time equivalent posts required to be released to generate the required savings. Staff will be released in tranches throughout the period between September 2015 and March 2016. This means that the full six months’ pay bill savings will be realised only for those released in the first tranche, with savings reducing for those released in later tranches. The £88 million saving represents a full 12-month period when all staff have been released.”
“The overarching objective of the Civil Service voluntary exit scheme is a permanent Northern Ireland Civil Service (NICS) pay bill reduction in the 2015-16 financial year and beyond. Civil Service Departments have advised that the pay bill savings they need to make via the voluntary exit scheme in 2015-16 equate to approximately £26 million, and around £88 million a year thereafter. This is based on the indicative number provided by Departments of around 2,410 full-time equivalent posts to be suppressed. These figures assume sufficient applications to effect this quantum of pay bill savings. However, due to the voluntary nature of the scheme, it is not possible to be definitive at this early stage on the numbers who will be released or the savings that can be generated.”
“Plans to develop a voluntary exit scheme for the Northern Ireland Civil Service are well advanced. The Executive agreed the preferred option at their meeting on 5 February. It is intended that the scheme will be launched on 2 March 2015 and will be open to virtually all civil servants, including part-time staff, below permanent secretary and analogous grades. We anticipate that those selected to leave under the scheme will do so in tranches between 30 September 2015 and 31 March 2016.”
“That is where there is a great opportunity for those investors, some of which we have already spoken to, that see the potential of investing in Northern Ireland. That will attract the sorts of players that have not really been in Northern Ireland or entertained investing in Northern Ireland in the past. It is a vehicle that will bring those sorts of players to the table.”
“From the public-sector side, we have used conventional capital to invest in infrastructure. Traditionally, that has gone to roads infrastructure, hospitals, new schools or whatever. This gives us the ability, on a large scale for a long number of years, to invest in other sorts of infrastructure that are of economic and social benefit to Northern Ireland. I look forward to the feasibility study and to dealing with many of the issues that the Member raised. It will give us the confidence to move forward with creating the fund, to leverage in finances from the EIB in the first instance and to try to work with potential international investors that might see the attraction of investing in Northern Ireland. <BR /> <BR />All of us will appreciate that there has been underinvestment in our broad infrastructure over the last 10 or 20 years.”
“I know that it can sometimes be frustrating that there is a lot of process in delivering things like this. Although there is a feasibility study, some people might say that we should just get on with it and identify the sort of schemes that we want to fund. This is an absolutely essential stage. Whilst we indicated some areas of investment and infrastructure where it might be possible, including social housing, urban regeneration, energy efficiency and energy production, it is not limited to that. It might be limited in the short term because of the volume of money in the fund, but, in the longer term, as we leverage in more funding, there might be the opportunity to expand that even further. <BR /> <BR />We have an exciting opportunity through the fund to do things on a scale that we have not done before.”
“It has encouraged us to look at other opportunities to finance the fund; someone raised that issue during the Budget debate earlier. I do not want to get into details about who it might be, but we are beginning conversations with large-scale potential international investors that might be able to take the initial £1 billion in the fund up to a much higher level and, therefore, do much more for Northern Ireland in developing our infrastructure.”
“The Executive have agreed an indicative allocation of over £40 million to the investment fund in 2015-16 to kick-start it by getting some finances into its balance sheet. We hope that that will leverage in additional finance from, first and foremost, the European Investment Bank (EIB), which we have been working with incredibly closely on this project from roughly this time last year. I pay tribute to the EIB for its engagement and work in the genesis of the fund and throughout the last year. I look forward to its input to the feasibility study and to having it as a partner in taking the fund forward. The EIB and I are not against trying to draw in finances from elsewhere. Obviously, it is keen to top up what we put in.”
“Some energy production or infrastructure schemes would swallow up all of that £1 billion very quickly. It may be smaller-scale energy production projects at the outset. I stress again that this is very much a long-term fund. We want it to grow from £1 billion into much more. Therefore, the possibilities of what might be funded in the future are quite exciting.”
“I do not want to prejudice the outcome of the feasibility study or, indeed, what money might be given out of or lent from the fund in future, but there are any number of energy production projects or schemes rolling out across Northern Ireland or in the pipeline or at various stages of development that could avail themselves of this. Let us bear in mind that at the outset we hope there will be around £1 billion, primed by up to £100 million of the Executive's own funds.”
“The feasibility study will hollow out in much more detail the areas for future investment from the fund. It will try to take a very long-term view of infrastructure investment. Energy production, energy efficiency and renewables are some of the areas of potential investment opportunities we identified in consultation with the European Investment Bank. Government has an interest in investment in these areas, as it does in other areas like social housing and urban regeneration, but does not always take the lead role. Energy production is one that it might invest in.”
“They have previous experience of advising on the establishment of similar funds and are well-placed to deliver the study. I expect this study to conclude in late May, and I look forward to considering its conclusions and recommendations.”
“With your permission, Mr Speaker, I will take questions 2 and 12 together, as they both relate to the Northern Ireland investment fund. Members will recall that as part of the draft Budget I announced my intention to establish a Northern Ireland investment fund. I am pleased to report that significant progress has since been made. A DFP-led project board has been set up, which includes representatives from DSD, DETI, Invest NI and the Strategic Investment Board. This project board met before Christmas and will now meet regularly as the project advances. <BR /> <BR />The first key milestone in the establishment of the investment fund is the completion of a feasibility study. Consultants Deloitte were appointed on 3 February to take forward the study, and work is now under way.”
“Sometimes that will not work in every Department, but the good practice that is going on needs to be shared across the board. Dealing with stress is no different. A Civil Service-wide stress action plan is also being developed and has been included as a key action point in the Civil Service people strategy, which we are now rolling out. We are very keen to do all that we can whether through innovative or new policies to address stress, in particular, and sickness absence across the board.”
“As I mentioned in my response to Mrs Cochrane's question, stress accounts for around a third of all sickness absence. Clearly, we want to focus on finding out the reasons for that and on putting in place initiatives and policies to alleviate it. There was a Northern Ireland Civil Service-wide stress survey in 2014, the previous one having been conducted five years before that. The survey is being managed by a cross-departmental working group, whose role is to develop a response to the findings on behalf of their Department and feed back best practice and shared experiences. We have found frequently from handling sickness absence that very good and, indeed, best practice in some Departments leads to a measurable decrease in the numbers of staff who are off sick.”