Thanks to our MPs at Westminster for continuing to raise the issue of the Presbyterian Mutual Society with the decision-makers in London, and especially for this good question from Dr William McCrea during Prime Minister’s Questions today, which extracted a re-affirmation of his pledge from the PM. Here’s what Hansard reported:
Dr William McCrea (South Antrim) (DUP): Before the election, the Prime Minister said:
“If I am Prime Minister a Conservative and Unionist Government will work with the Northern Ireland Executive to ensure a just and fair resolution of the PMS”— the Presbyterian Mutual Society—and continued: “you’ve done the right thing and you deserve for that to be recognised and rewarded.”
How soon will that pledge be honoured?
The Prime Minister: I am determined that we will honour that pledge. This is important. I know how angry people in Northern Ireland are when they hear British politicians say, “Of course, nobody lost any savings in the crash.” People did lose money, including in Northern Ireland, and they are right to be upset and angry.
A working group is trying to go through those issues and to find an answer. My right hon. Friend the Northern Ireland Secretary is involved in that, and the Chancellor is engaged in the issue. It is not easy, but we are determined to find a solution so that we can give satisfaction to people who lost money in Northern Ireland and who currently feel that they have been let down.
It was interesting, in some clear role-reversals, to hear the former Secretary of State taunt the current Secretary of State about the PMS. It’s just a pity Mr Woodward didn’t sort it all out when he was in power.
Mr Shaun Woodward (St Helens South and Whiston) (Lab): I thank the right hon. Gentleman and the Minister for their kind words. It has been a huge privilege for my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) and I to serve the people of Northern Ireland. Whatever my future, which is in the hands of my hon. Friends, the right hon. Gentleman can be sure that we will continue our bipartisan support for his policy.
During the general election, the right hon. Member for Witney (Mr Cameron) talked about targeting Northern Ireland and the north-east of England for special cuts in Government spending. The Secretary of State tried to blunt that with the prospect of cutting corporation tax, but he will know from the Azores ruling that it is legal only if Northern Ireland bears fiscal consequences. What is his estimate of the annual additional cut the Treasury would have to take from the annual block grant to fund a cut in corporation tax to 12.5%?
Mr Paterson: I am grateful for the right hon. Gentleman’s comments, but I would just like to correct an inadvertent comment on my colleague the Prime Minister, who did not target Northern Ireland; he just said, correctly, that it is one of those parts of the United Kingdom that is over-dependent on the public sector. On the question of the corporation tax sums, I say, bluntly, that nobody knows. That is why I am working closely with my Treasury colleagues-in particular, the Exchequer Secretary-to work out exactly the cost. Some international accountancy firms have estimated that, according to the Azores ruling, about £100 million to £150 million would have to be taken off the block grant.
Mr Woodward: The right hon. Gentleman will know that Northern Ireland is over-dependent for a very good reason: because of the troubles. The answer to the question is contained in the report produced by Sir David Varney for the Treasury, and it is that £300 million would be taken out of the block grant. I simply say to the right hon. Gentleman that the net cost to the Exchequer for 10 years would be estimated at £2.2 billion. He is a very good sort of fellow, so why does he not level with the people of Northern Ireland? Just as his party’s electoral pact with the Ulster Unionists left them with nothing, just as his party’s talks on the Presbyterian Mutual Society look like leaving small investors with nothing, the promises on corporation tax will result in at best nothing and at worst an invitation to his right hon. Friend the Chancellor to wield the axe.
Mr Speaker: Order. I ask for brevity, please, from the Front Benchers; other Members want to get in.
Mr Paterson: I am sorry that the tone has descended. All my colleagues in Front-Bench positions inherited the odd prawn behind the radiator. We inherited Northern Ireland and a whole bag full of old langoustines stuck under a radiator going at top speed. We face a long-term problem with the economy. The Varney report is, sadly, now out of date. It cited a figure of more than £300 million, whereas the independent Northern Ireland Economic Reform Group, which carried out a detailed study of the benefits that a reduction of corporation tax would bring, gave a lower figure. The fact is that we do not know yet, and we will be studying this in detail and introducing our proposals later in the autumn.
The Prime Minister: My hon. Friend makes a very powerful point, which is that in our relations with local government, at a difficult time in terms of budgets, we should be giving it money and taking away the ring-fencing and complications and all the different grants. We should say, “There’s the money. You’re democratically elected, you decide how that money is spent.” That is what people are going to see from this Government, and I think it will be welcomed by local government up and down the country.