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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“No, I will not. I am in the middle of a point that I wish to make to Mr McCallister and, indeed, to the whole House. <BR /> <BR />With the VES, the operative word, as Mr Weir said, is "voluntary". Mr McCallister and others referred to it as a voluntary redundancy scheme. It is not a voluntary redundancy scheme. It is a voluntary exit scheme and there is a distinct and important difference between them. I brought a paper to the Executive outlining the early-stage work that is required for a voluntary exit scheme to move forward within the timetable that we and Departments need it to move forward in, which is that it opens in early March and the first tranche of people will leave the public sector in and around August/September. The business case on that is being completed. In fact, I think that it has been completed.”
“Some 215,000 people are employed across Northern Ireland in the public sector, and we are trying to reduce that by 20,000 posts, through a variety of means, including, predominantly, a voluntary exit scheme. That is a very radical and very ambitious plan, and it needs to be handled with a degree of sensitivity and caution. I can give the assurance, not just to Mr McCallister but to the House, that, as we take that very serious piece of work forward, it will be dealt with with sensitivity and in a cautious manner.”
“I do not disagree with a lot the sentiment in the wording of the amendment or, indeed, in many of the comments. I am sure that the Member will appreciate and understand that I disagree with several of the comments that he made, but I could agree with the general thrust of where he was headed. <BR /> <BR />There are several points that I want to make in response to that amendment. The first is around the idea of noting "with caution". It is almost those two words that would prevent me from supporting the amendment, which asks us to note with caution the flexibility to borrow to pay for the voluntary exit scheme. We are all handling the voluntary exit scheme with caution. It is a very radical initiative that is being taken by the Executive to move forward with reducing headcount and the number of posts in the broad public sector.”
“I begin by thanking Members for their contributions to the debate, which has been useful. I especially thank those who supported the 2015-16 Budget. I tried listening to those who spoke against it and noted several of the comments that they made. In the 40 minutes or so allotted to me, I will attempt to respond to as many of those as I possibly can. I hope that, given that short time, there will be an understanding across the House that I will not be able to respond to every single point raised by Members. <BR /> <BR />I will go almost in reverse order. I will come to what I described in my opening comments as the very courageous amendment that was put forward in the names of Members from the Ulster Unionist Party, but I want to go in reverse and deal with Mr McCallister's amendment first, if I might.”
“is most appropriate. I hope that Members do both in equal measure. <BR /> <BR />I will have plenty to say later, especially on one amendment, which, at this point in time, I would describe as very courageous. In the meantime, I commend the Budget to the Assembly.”
“I have spoken about what I would have wanted in this Budget, but I have also listened to other Ministers, Committees and the public, and that has shaped the final Budget. There will always be those who are prepared to stand up and say what services should be funded. There are not so many that are prepared to listen to the reality that we have finite resources and that extra funding for one thing means less funding for another or more taxes for everyone. <BR /> <BR />In this week, when we mark 50 years since the death of Winston Churchill, our Prime Minister has been encouraging people to share their favourite Churchill quotes. At this point in the debate, with several hours left and many Members to make their contributions, perhaps Churchill's remark:”
“The essential agreement on welfare reform, coupled with considerable Barnett consequentials flowing from the Chancellor's autumn statement, allowed the Executive to make allocations of an additional £150 million, bolstering the budgets of many Departments over and above their draft Budget position. I am pleased that the bulk of that extra funding has gone to education, employment and learning and policing. <BR /> <BR />Given the position taken by some Executive Ministers on the Budget, I anticipate that a number of Members today will use their time to disagree with the Budget. That is their right. The truth is that this is not a perfect Budget. There will always be differing opinions on budget allocations, in times of prosperity as well as in times of fiscal consolidation.”
“I am sure that no one in this Assembly — or, indeed, beyond — is under any illusion about that fact. The public sector must undergo reform and transformation, and this Budget allows that to commence. <BR /> <BR />The Stormont House Agreement provided the Executive with a financial package of measures that, along with agreement between the five Executive parties on welfare reform, permits us to place the public sector here on a sustainable footing for future years. The agreement struck between the Executive parties on 19 December is a deal that allows us to move forward with much-needed reform and restructuring of the public sector.”
“<BR /> <BR />I do not intend to rehearse the detail of my speech last week when I presented the Budget to the House, but I want to make a few key points before we debate and vote on the 2015-16 Budget. First, I would like to express my appreciation to the Committee for Finance and Personnel for its work in shaping the Budget and providing the level of scrutiny it does, which helps give the Assembly and the wider public confidence in the Budget that has been agreed. Members will be well aware of the financial environment confronting us in 2015-16 and in the years thereafter. We do not have the luxury of excess in our Budgets. We are faced with the challenge of doing more with less. That scenario means that we must confront difficult decisions on what the public sector should be doing and what it should not be doing. Change is coming.”
“The motion before the House today is one of the more important ones that this House will debate. In any Administration, the Budget is the bedrock that underpins the delivery of services and ultimately plays a pivotal role in the success of those services. Our Budget should, in so far as it can with the limited resources at our disposal, reflect the priorities of our people. I am proud to say that this Budget is one that supports key services, like health and education; underpins economic growth; provides a platform for the reform and restructuring of our public sector; and places Northern Ireland's finances on a secure footing for the future.”
“So, whilst I would be concerned if the project were not able to absorb that amount, I accept that it may not be able to because it is subject to planning and various other processes. Whilst that would create some difficulty for us in spending the money, I will continue to encourage Ministers to put forward schemes that can use financial transactions capital so that we can use all of this new but very difficult-to-spend source of funding.”
“Thankfully, we were able to deposit around £40 million to the University of Ulster — sorry, the Ulster University, I still cannot get my head round calling it by its new name — which has eaten up all of the financial transactions capital allocation for this year. <BR /> <BR />There is a large £50 million allocation against this project for next year. Obviously, that project is subject to planning permission. Should it not go ahead, it creates a difficulty for me in spending that money. The broader point is that the creation of the Northern Ireland investment fund, which I announced in the draft Budget and topped up with a further allocation in the final Budget, is an opportunity for us to deposit money from financial transactions capital that may not be spent in-year for spending on projects in the future year.”
“I think that we have been talking at cross purposes. Initially, that is what I thought that he was asking, but he mentioned European funding, which confused me a little. An indicative allocation of £50 million has been set aside for that project, which developed as result of work carried out by the Member's own Minister's Department of the Environment, which had been working with the Strategic Investment Board and identified it as a possible project that could avail itself of financial transactions capital. The Member will be aware that my Department has had difficulty in allocating all of our financial transactions capital in-year.”
“The project that the Member raises is a large one. Obviously, it is subject to planning permission and has to go through various processes in that respect. I certainly would not want my position to influence or be seen to be influencing that one way or the other. I am not aware of, although I would not rule out, a possibility of EU funding being secured by the developers of that scheme. My only interaction with that scheme was through the Budget and a bid by the Department of the Environment, which was working with the Strategic Investment Board on the development of a bid that may use financial transactions capital, which is, of course, a source of capital funding that we receive as an Executive from Westminster, not Europe.”
“Sorry, there was a little noise in the Chamber. I think that he was asking what the plans were for that money if it does not go —”
“I think that what we do in scrutinising the work can sometimes be criticised as being a little too rigorous and onerous. However, given the difficulties that we have experienced in Northern in the past, and some that there may be even currently, it is still important that we ensure that that level of scrutiny is there.”
“No evidence has come to me in recent times of money being spent by whatever source in the public sector, and certainly not within the remit of the Executive, going to dissident republican or any other paramilitary organisations. If Members have evidence of that, I encourage and urge them to raise that immediately with the appropriate Minister or me so that it can be passed on. <BR /> <BR />Some in the community complain that the audit situation that we have for many funds — I am thinking particularly of Peace III, or Peace IV, as it will now be — can be too rigorous and difficult. It is important to balance testing properly with ensuring that people who are legitimate can go about their business without too much difficulty.”
“It is very important that that happens forthwith. With the support and assistance of the National Crime Agency elsewhere in the United Kingdom, it has been possible to bring people to justice for a whole range of hideous crimes that have been in the media. However, that has been denied to us in Northern Ireland. It is high time that the resistance of those in this place who have been a roadblock to the NCA extending its remit to Northern Ireland yields, and we are allowed to get the benefits of the NCA operating here.”
“We would all be very concerned and worried if any public funds, or funds from whatever direction they come, were finding their way into the pockets of criminal gangs or paramilitary organisations, irrespective of what community they come from. As the Member would agree, those people, whether they are of loyalist or republican persuasion, have nothing to offer this country and wish only to drag us back. There is no support in the community for what they do. That is why I am very keen, as I am sure the whole House is, on pursuing all those who are involved in paramilitary activity. Those who are involved in criminal activity should be pursued and brought to justice. <BR /> <BR />The Minister of Justice has been trying to take forward proposals to extend the remit of the National Crime Agency (NCA) to Northern Ireland.”
“We will continue to pursue anything that we can digitally, process-wise or just in introducing local firms to those in the public sector on both sides of the border, as there are huge opportunities for Northern Ireland firms to sell into the Irish Republic as well.”
“There were lots of public sector buyers there from both sides of the border, and hundreds and hundreds of local companies spoke to them about what they offer and what they could bring. They were just having good conversations about what might be possible. A lot of business was done at, and as a result of, that event. <BR /> <BR />Another way in which I am trying to simplify the process so that local SMEs can see much more clearly what work is going on is the launch in April 2015 of a new tendering system called eSourcing NI, which will simplify and standardise our approach and make it easier for firms in Northern Ireland to complete tenders.”
“We should do everything that we possibly can within the law, which is very much governed by EU directives that have changed and are in the process of changing in a way that will assist local firms and SMEs to gain more contracts. <BR /> <BR />I can think of a couple of things that we are actively involved in to try to encourage our small to medium-sized enterprises to get involved in procurement. Many of them are put off by the size, scale and complexity of it. The Central Procurement Directorate has been working very closely with InterTradeIreland, which runs several "meet the buyer" events across Northern Ireland and the Republic of Ireland each year. I attended one recently at the Ramada Hotel at Shaw's Bridge.”
“Those statistics are probably quite revealing for many people who would have instinctively thought that the number being awarded to Northern Ireland firms was much, much lower than 75%. This is not a situation where we can rest on our laurels.”
“The Executive spend roughly between £2·7 billion and £2·8 billion a year on contracts for goods, services and capital projects. Between April and December 2014 — the first nine months of the financial year — centres of procurement expertise in Northern Ireland awarded 2,277 contracts, which had a total value of around £1·2 billion. Interestingly, 83% of those contracts were awarded to SMEs, and 75% of contracts were awarded to Northern Ireland firms. The perception sometimes is that Northern Ireland firms do not win in our government procurement system. A situation where three quarters of contracts go to Northern Ireland firms and 83% go to SMEs, which dominate our economy, shows that our government procurement system is open for business and is very much open for local business.”
“Given where the market is, with some activity and assets starting to sell, that is not an unreasonable target to have, and I hope and trust that we will make it. That money will be able to be used for investment in capital elsewhere.”
“The Executive have set a target in the Budget of around £158 million of capital receipts, which includes asset sales. The original draft Budget proposal that came forward from officials was £108 million. We thought that that was not ambitious enough, so we have increased the target by £50 million. Sometimes, we talk about the £158 million as "asset sales", but it is not all asset sales: some of it will come from the repayment of, for example, financial transactions capital that has been lent to the private sector. Those repayments come back in as capital receipts, as do repayments of coownership loans and some other housing schemes. <BR /> <BR />So there is a target, which is not too ambitious. Having had £108 million already identified, we have expanded that by roughly 50% — taking it up by another £50 million.”
“Some of them will continue, and the Budget has a bearing on them, because Departments do not know whether they can achieve an extension of a target if they do not have the same amount of money within their budget going towards that particular area of spend. Now that the Budget is set for next year, subject to agreement by the House tomorrow, the various Departments can proceed with updating, revising, changing, altering — whatever is required — the Programme for Government targets that are relevant to them.”
“Mr Deputy Speaker, I am sure you will have noticed, as I have, that, although this is supposed questions to the Minister of Finance and Personnel, it has morphed very quickly into questions for virtually every other Minister in the Executive. <BR /> <BR />The Programme for Government, and updating it and extending it by a further year because of the extension in our mandate, is not the responsibility of my Department; it is a responsibility of the Office of the First Minister and deputy First Minister. The extension will be a year, and, whilst there will be some new targets — my Department will be adding targets in a revised Programme for Government — many of the existing targets will have been met and therefore will not need to continue.”
“I have no difficulty in confirming that a voluntary exit scheme will be voluntary. The Executive have agreed outline issues around the scheme. We agreed to create a transformation fund that will be administered by a steering group headed up by the head of the Civil Service. It will be a four-year scheme with £700 million. The flexibility permitted by the Stormont House Agreement will allow us to populate that fund. <BR /> <BR />Agreement has still to be reached on some of the mechanics of it all, but after we have had consultation with the trade unions, the scheme will, hopefully, be open for applications from around March of this year, with the first civil and public servants availing themselves of the voluntary exit scheme and leaving around the end of the summer or early autumn.”
“Interestingly, they also agreed that local government, given where it is in its reform, should also be encouraged to avail itself of the opportunities that our shared services around IT, HR, networks and other areas present for it to save money quickly.”
“The five Executive parties agreed on 19 December a range of reform and restructuring measures, which went to Her Majesty's Government as part of our negotiations and discussions around the Stormont House Agreement. I developed that into a reform and restructuring plan, which went to and was passed by the Executive last Thursday. <BR /> <BR />The plan includes a voluntary exit scheme, which was mentioned earlier. It also includes the expansion of shared services. Whilst there has been a lot of consolidation and rationalisation at a central departmental level, that has not always expanded to arm's-length bodies and other agencies. <BR /> <BR />The Executive are now agreed that every central government body should be brought onto shared services platforms when contracts permit.”
“The scheme is not being taken forward by my Department but by the Office of the First Minister and deputy First Minister. The Executive discussed this issue last week, and things are proceeding positively. I expect that, when legislation is brought to the House and, hopefully, passed, we will be in a position to see a reduction in the number of Departments from the start of the new mandate in 2016.”
“I very much welcome the reduction in the number of Departments. My party thought the number was wrong back in 1999, when the current Departments were created. We have been consistent in the House about that. In fact, one of the first motions that I brought as a Back-Bencher called for a reduction in the number of Departments. I am very glad that that is now happening. The Executive will be able to save money as a result of that rationalisation. Unfortunately, it will not be enough to deal with the budgetary problems that we have. The bigger prize will be in areas where there has been a disjointed approach to policy and policy development and implementation. Those will be brought under the auspices of one Department. <BR /> <BR />It is not just about cheaper government but smarter government. I welcome the savings that will accrue.”
“My Department has introduced a range of shared services in relation to HR, training and IT, which were previously the responsibility of individual Departments and which, together, realise efficiencies of around £12 million a year. My Department also recently commissioned an independent review of the Northern Ireland Civil Service's HR arrangements that will make recommendations on future HR organisational structures and staffing levels. That may result in further rationalisation. <BR /> <BR />Following on from the Stormont House Agreement, I am considering a range of measures aimed at helping Departments to live within their 2015-16 budget and beyond for consideration by the Executive. The proposed reduction in the number of Departments will also assist in the process of rationalising functions.”
“That is something that we should be very proud of in Northern Ireland and it is testimony to, for example, our skilled workforce, but also to some of the other policies that the Executive have pursued around high-speed broadband access and ensuring that there is good collaboration between our universities and colleges and business. <BR /> <BR />There are other costs that are not affected by the Executive directly, such as the low rental cost of grade A office accommodation, particularly in Belfast city centre. There are other reasons that attract investment into Northern Ireland and those are issues that have to be factored into any conversation and ultimately any decision that the Executive make around the rate of corporation tax they want to set, now that we have the ability to do that.”
“These are important points that are worthy of discussion. The Executive would be wrong to proceed directly to a particular rate because that is the rate that they have in mind. It is worth noting that, over the last number of years, whilst we have not been able to compete with the Irish Republic for some of the higher-end, higher-tech jobs, we have competed pretty well and we stand out, in a UK context, as the second-best region — London being the number one — for attracting in foreign direct investment per head of population.”
“Whilst we were not able to fill in the whole of the gap in the Department for Employment and Learning, there has been targeted investment of around £35 million in key areas, including the development of more skills in conjunction with the Department of Enterprise, Trade and Investment. In that regard, whilst the Budget does not particularly deal with corporation tax, it deals with aspects, including skills and economic development, which are preparing us for the day when we have a reduced rate of corporation tax and the economy, hopefully, grows as a result.”
“<BR /> <BR />I was keen, and the Executive agreed, that it was important that the Budget for 2015-16 should do as much as it could to plan in a more material way, rather than a reduction in spending, for skills and continuing to attract investment. Now that the legislation is proceeding through Westminster, it is a good time for Invest Northern Ireland to change what it does and go out and sell Northern Ireland as a place in which to invest in anticipation of a lower rate of corporation tax. That is why I was keen to support and enhance its budget, which has been increased by over 10% in the next year. <BR /> <BR />Similarly, it is important that we still create a pipeline of skilled workers, who are the engine of any economy.”
“There is no work as such included in the 2015-16 Budget, which was laid before the House last week and will be debated tomorrow. That is because the reduction in the block grant will not come until we have reduced the corporation tax rate in Northern Ireland and there is that gap. At the earliest, that will not be until the 2017-18 financial year. As I pointed out to Mr McCartney earlier, as the Executive plan for either a three-year or a four-year Budget coming out of the next comprehensive spending review, that is something that we will have to bear in mind in crafting that Budget, which will have to be done towards the end of this year.”
“This is not a policy that is aimed particularly at benefiting one part of Northern Ireland over another. Indigenous firms, irrespective of where they are located, will be paying a lower rate of corporation tax and, clearly, it is up to all of us right across Northern Ireland, aided and assisted by Invest Northern Ireland but also with the new local government institutions in place, to work to attract investment into Mid Ulster or wherever in Northern Ireland. It is something that will reap benefits for everyone in all parts of Northern Ireland.”
“I am not sure what has happened procedurally with regard to who has been called. <BR /> <BR />The reduced rate of corporation tax will apply to all firms across Northern Ireland, irrespective of where they are located. I have had occasion to visit the Member's constituency; indeed, it is Mr McCrea's constituency as well. I visited some of our biggest manufacturers, who are based in that neck of the woods. It is one of our well-hidden secrets that 40% of the world's mobile screening equipment is made in County Tyrone. Firms that have already invested there are well placed to expand their group portfolio in Northern Ireland. There are Swedish and American-owned companies operating in County Tyrone that, perhaps, would see a reduced rate of corporation tax as an opportunity to expand their operations.”
“Even in very difficult times, that was still the backbone of their economy and is now boosting their economy into growth. This is a prize that is worth pursuing and will, I hope, result in not just 40,000 new jobs but more and further investment by local firms, as well as attracting foreign direct investment.”
“If the economy is growing, you are bringing in more jobs and they are higher-paid jobs, there will be an increase in average salaries across Northern Ireland. That is something that those of us who have been very supportive of the devolution of corporation tax have wanted to see. It is backed up by the research that has been carried out by various institutions on our behalf and, indeed, not on our behalf. That is the prize of corporation tax. <BR /> <BR />There is a cost involved, and difficult decisions will be required around that, but there are benefits to doing it. When you look at other states, particularly the South of Ireland, that have reduced their corporation tax rate, you will see what they have been able to do in reducing their rate of corporation tax and bringing in investment.”
“The work carried out by Ulster University's Northern Ireland economic policy centre follows on from work carried out by others; in fact, it builds on the work done by Oxford Economics. This piece of work suggests that there would be a net new job increase of 37,500. That is nearly 40,000 jobs, which is not far off the previous estimates. It shows that, by around 2033, there would be an increase in productivity of 5·9% and that the economy as a whole would grow by 11%. <BR /> <BR />The Enterprise Minister's comments about increases in salaries were not well reported by the BBC. Clearly, if your economy is growing by over 11%, you are bringing in 40,000 new jobs and those new jobs are going to be higher-paid new jobs, the average effect across the economy would be around £3,000 of an increase in salaries. So, there is undoubtedly that case.”
“Very clearly, over the next six months or so, the Assembly and Executive will have to take a very clear decision about where they want to go on this issue. There is a wealth of evidence out there on the benefits. It does not matter what research is done, it is more or less the same on the benefits there would be to Northern Ireland. Clearly, there are issues that we have to consider around cost and how we might pay for the inevitable reduction in our block grant. These are issues that the Executive will have to ponder, and the Executive will recommend to the Assembly. However, the Member is absolutely right: these are entirely in the hands of Executive Ministers and Members of the Assembly.”
“It is a key condition of the Azores ruling that, as well as having economic and administrative autonomy, we are able to set procedurally our level of corporation tax. That is something the Executive will have to ponder, consider and decide on very quickly. Our Budgets for the next three or four years after 2015-16 will be largely set out by the comprehensive spending review. Whatever Administration is formed in London after the general election in May — you never know who might be involved in influencing that — will have a comprehensive spending review that will cover three or four years. Obviously, that will overlap with the timing of our ability to reduce the corporation tax rate from April 2017 onwards.”
“Indeed, the research conducted by Ulster University's economic policy centre suggests that, if a reduced rate of 12·5% were implemented from April 2017, productivity would be 5·9% higher by 2033 than it would otherwise have been. In addition, the economy would be 11% larger, and 37,500 net new jobs would be created. Of course, the potential benefits and associated costs of reduced corporation tax will depend on the rate that is struck and the timing of when that lower rate is applied. Ultimately, these will be matters for the Executive and the Assembly to decide in due course.”
“<BR /> <BR />Her Majesty's Government have indicated that they are confident that the proposed design of the Northern Ireland regime will be Azores-compliant. That view has been reached because Northern Ireland has institutional autonomy, in that it has its own administrative status. It will have procedural autonomy, since the Assembly will have the ability to set a rate free from Westminster influence. Furthermore, it will have economic autonomy, because the block grant will be adjusted to reflect the corporation tax revenues forgone by Her Majesty's Government. <BR /> <BR />With regard to the economic impact, research commissioned by the Department of Enterprise, Trade and Investment demonstrates a very strong case for reducing corporation tax.”
“With your permission, Mr Deputy Speaker, I will answer questions 2, 3, 5 and 12 together, as they all relate to the transfer of corporation tax rate-setting powers. <BR /> <BR />As, I am sure, Members are aware, the UK Government introduced the Corporation Tax (Northern Ireland) Bill in the House of Commons on 8 January 2015. It will enable the transfer of corporation tax rate-setting powers to the Northern Ireland Assembly from April 2017. The passage of the Bill through the UK Parliament is conditional on the implementation of key measures to deliver sustainable finances for Northern Ireland. Therefore, although I welcome the progress that has been made so far, the momentum must be maintained.”
“My primary concern, which ought to have been the House's primary concern, was that the impact of the reductions in expenditure, which the Department will still face, should be limited on the classroom. Certainly, the £63 million allocation, which the Member's party voted against, topped up by the Minister of Education to a total of £80 million, will assist in ensuring that the classroom is protected and defended in the next financial year.”