PARLIAMENTARY DEBATE
Northern Ireland City Deals - 9 October 2024 (Commons/Commons Chamber)

(Urgent Question): To ask the Secretary of State for Northern Ireland if he will make a statement on the Northern Ireland city deals.

As the Chancellor set out in July, the Government have inherited a £22 billion black hole in the public finances. As a result, the Treasury is having to consider a range of measures to deal with this significant problem. Last month, the Treasury informed the Northern Ireland Department of Finance that the UK Government’s contributions to the Mid South West deal and the Causeway Coast and Glens deal would now be considered as part of the spending review. The Belfast regional city deal and the Derry/Londonderry and Strabane city deal are unaffected and proceeding as planned. Since the announcement of the pause on those two deals, I have met with the First Minister, the Deputy First Minister, the Chief Secretary to the Treasury and the Northern Ireland Finance Minister. I will also be meeting the chief executives of those two deals shortly.

Everyone in Northern Ireland understands the importance of the city deals to economic growth and encouraging investment, and this Government are committed to working with the Northern Ireland Executive and businesses to make the most of the huge economic opportunities that now lie ahead. That is shown by the progress being made on the Belfast region city deal and the Derry/Londonderry and Strabane city deal. I attended the Derry/Londonderry and Strabane city deal signing on 18 September. The UK Government’s £105 million investment will help to progress transformative innovation, digital and health projects, which will build on the region’s well-established research excellence. The Chancellor will set out the results of the first phase of the spending review on 30 October, which will include an update on the two outstanding city deals.

I call the shadow Secretary of State.

As the House will know, on the evening of Friday 13 September—the day after we went into recess—the Government took it upon themselves to make a number of announcements affecting Northern Ireland: the cancellation of the Casement Park project; the decision that Sean Brown’s family will not be given a public inquiry into his murder; and the subject of this urgent question, the pausing of four Northern Ireland city deals. It is quite something to instantaneously unite all the political parties in Northern Ireland, but that was the feat achieved by the Government on the evening of Friday the 13th.

The House will be aware of how crucial the city deals are, providing significant investment to boost economic growth, create jobs and enhance infrastructure and bringing together Westminster, Belfast, local councils and private investment. We are pleased that the following day, after considerable confusion, the Government U-turned and announced that the Belfast region city deal and the Derry and Strabane city deal would go ahead, but the other two regional growth deals—the Causeway Coast and Glens deal and the Mid South West deal—now sit in limbo.

Critically, those deals cover areas that have not had the same levels of investment in recent years as big cities. One need only look at the empty shops in Enniskillen and Armagh to understand that these deals are badly needed. Can the Secretary of State tell the House why was the decision to pause taken at such a time and why was it announced in such a way? Following that announcement, why was there then a U-turn on two of the deals but not the other two? What criteria were used to make that decision?

The Secretary of State has referred to money. He knows that the so-called black hole, for which the Government have provided no breakdown, is partially of Labour’s making, given the above-inflation pay rise that it has chosen to award to the unions. He will know that the money involved is, in the world of the Exchequer, not that significant and, crucially, will deliver major returns to Northern Ireland and to the UK.

I ask the Secretary of State for two things. The first is an apology for how the matter was handled; I know he would not have wanted it to happen in the way it did, but someone should take responsibility for how the House and the people of Northern Ireland have been treated. The second is that, in negotiating with the Treasury in the run-up to the Budget, he will be the lead advocate for un-pausing those city deals.

I am grateful to the hon. Gentleman for his response. On the matter of Casement Park, since he raised it, I will say that we took the decision for the reason we set out, and I think it is one that he supports. On the question of Sean Brown, I set out in my letter to the family why I had reached the conclusion that I did.

I would just correct the hon. Gentleman: the Belfast city deal was never affected at all—it is roaring ahead and is a great success. In the case of Derry, I was pleased to attend the signing of the deal, which will now progress to its next stage.

I would also simply say to the hon. Gentleman that the public finances inheritance the last Government left us—[Interruption.] Well, the last Government made a load of promises but never identified where the money to pay for them would come from, and then they were turfed out and left this Government to deal with the problem. That is the reason for the situation with these two city deals. He can rest assured that I, as Secretary of State, will continue to make the case for the two city deals, which is why I said in my opening answer to him that everybody in Northern Ireland, including me, understands their importance, and I will continue to make that case. But in those circumstances, the Chancellor has found it necessary to look at a whole range of commitments that were made by the last Government for which no funding had been identified, and the fault for that does not lie with us, and if any apologies are required, a belated apology from the other side for the mess they left us would be much appreciated.

I call the Chair of the Northern Ireland Affairs Committee.

Cities and towns in Northern Ireland have already missed out on levelling-up funding under the previous Government, as I saw at first hand as shadow Minister, so the uncertainty regarding the city deals has been quite a hard hit on the people in Northern Ireland. I seek further reassurances from the Secretary of State that the people of Northern Ireland will not be overlooked in the Budget.

I absolutely recognise the uncertainty that this has created and, as I have indicated, I will be meeting the chief executives of the two deals very shortly. Given the uncertainty while we await the outcome of the first phase of the spending review, the particular problem that they face is that a lot of effort goes into progressing these deals with the private partners, because the money comes from the Government and from the Northern Ireland Executive in the form of match funding, and then other partners, including the local councils, and they do find themselves in a difficult position— I will not hide from that.

The only other thing I would say is that those two deals are much further back in the process than those for Belfast and Derry; for the Causeway Coast and Glens deal the heads of terms had been signed in April of this year, and for the Mid South West deal the terms had yet to be signed—I think they were due last month. Then there is a further process under which the programme of the deal itself is developed to then get to the stage that Derry reached on 18 September, when the financial agreement is signed and then the business case and the projects are unlocked. So I recognise that it is difficult and, as I have already indicated to the councils, I will continue to argue for the cause of these deals.

I call the Liberal Democrat spokesperson.

The four city and growth deals for Northern Ireland are critical mechanisms in revitalising industries and creating new economic opportunities across key regions in Northern Ireland. The pause in UK Government funding has caused, by the Secretary of State’s own admission, uncertainty, anxiety and lost impetus in key investment projects under the city and growth deals framework. The Mid South West deal represents over £250 million of investment across the region. The decision to allow projects in Belfast and Derry to proceed while pausing those in the Mid South West and Causeway regions risks reproducing the very imbalances that these deals were designed to tackle, widening inequities and inequalities across Northern Ireland. I have had the opportunity to speak to the hon. Member for Lagan Valley (Sorcha Eastwood), who brought to my attention the risks posed to the agri-bio innovation centre in Dromore by the Government’s withdrawal of secure funding.

Therefore, on behalf of Northern Irish businesses, councils and residents, especially those in the poorest regions, I ask the Secretary of State the following questions. What actions are the Government taking to mitigate those regional economic imbalances and to tackle inequalities, especially in the Mid South West, and what assurances can be provided that rural areas will not be forgotten, again especially in the Mid South West and the Causeway Coast?

Order. You are allowed one minute and you are now well over that, so I am sure you are coming to the end this very second.

Sorry, Mr Speaker. I will end there, with thanks.

I am grateful to the hon. Gentleman, whom I welcome to his post—this is, I think, the first time we have faced each other. He makes a fair point about the areas covered by the two deals that have been paused, and the contrast between them and Derry and Strabane, and Belfast. It is important that, in the end, we see economic growth right across Northern Ireland, so I do not dissent from his proposition, but the reason we are in this difficulty is the legacy that this Government have found. Any responsible Chancellor must, in the circumstances, find a way of straightening out the public finances, which were left to us in a really bad state.

My right hon. Friend is not the sort of person who would make this announcement unless there were huge pressure to do so, but I am aware that pausing a project, especially when people are in post, is not completely cost-free. Will he reassure the House and people in Northern Ireland that there will be some way of maintaining a degree of momentum on the projects that have been paused? If he could give us any costings on that, it would be helpful.

My hon. Friend makes an important point. The House may have seen that yesterday, the Northern Ireland Executive—whose funding is secure because of the deal that was offered, including the financial deal that was part of the restoration of the institution, which the whole House welcomes—announced that they are proceeding with their share of the contribution, which I hope will offer some comfort to those in the two city deal areas who are working out what this means. It is important that clarity on the future is delivered as quickly as possible, which is why I set out that we will learn more on 30 October.

May I speak up for the city deals, which have been subject to a significant amount of work in communities across Northern Ireland? The city deals were reviewed earlier in the year under the previous Government, at the time of the “Safeguarding the Union” agreement, and the decisions made then were part of that deal. The Secretary of State is making representations on the deals, but I urge him to bear in mind that this was discussed earlier in the year and was part of the overall agreement made to get Stormont back up and running.

I absolutely take the right hon. Gentleman’s point, given his long experience in these matters and the role that he and others have played in assisting with the restoration of the institution, but I would very gently observe that if the matter was reviewed then, what was decided did not quite make its way into the fiscal inheritance that we have found ourselves left with. That fiscal inheritance—rather than a lack of support for the deals; I think the whole House supports them—is the cause of the problem.

City deals are a serious tool for economic growth. That is why the Social Democratic and Labour party initially proposed them, and why we continue to be their champion. They support skills and employability, create decent jobs and, crucially, leverage private and foreign direct investment, driving much-needed regeneration in infrastructure in parts of Northern Ireland that have been overlooked. I am pleased that the Government are honouring their commitments to Belfast and Derry, but they should know that the decision, and its announcement on a Friday night, caused very serious frustration and a loss of public trust in Northern Ireland—although the Tories still have a thing or two to teach about uniting the parties in revulsion at announcements. Will the Secretary of State clarify the reasons for the pause in the Causeway Coast and Glens and Mid South West region deals, and can he assure us that he will be a champion for the deals with the Treasury?

I will indeed be that champion. May I take this opportunity to congratulate my hon. Friend on assuming the leadership of her party? We all wish her well in that endeavour. I also express our appreciation of the former leader of the SDLP, my hon. Friend the Member for Foyle (Colum Eastwood), who is sat next to her. Let us be frank: the truth is that when bad news is forced on the Government, it is unwelcome, whenever it is announced.

The Secretary of State will know that city deals were talked of for a long time, but it was in 2017 that the Democratic Unionist party got a commitment from Government—a commitment that would not just impact us but be of benefit to everyone in Northern Ireland, creating opportunities for growth in cities and regions throughout Northern Ireland in a phased, programmed, sensible and strategic way. The decision to pause both the Causeway Coast and Glens and the Mid South West region deals was unnecessary, and I think the Secretary of State accepts that. Given that no arrangements were in place to agree the necessary financial requirements, there was no need to pause the deals because of a lack of finance.

As I think the Secretary of State acknowledges, this decision places in jeopardy the matched funding from private investors, as well as the ability to proceed with the food and drug development centre in Coleraine, the Enniskillen bypass, and myriad other important and strategically significant proposals. As we wait until 30 October, it would inject confidence if this Government were to say that they recognise the importance and value of city deals; are determined to deliver on these aspirations, which will be key regional economic drivers in Northern Ireland; and recognise, as I think the Secretary of State does, that pausing these proposals was foolish.

I do not agree with the right hon. Gentleman’s last proposition. As I have already indicated to the House, given the fiscal inheritance, the prudent thing is for the Government to say, “We need to look at a range of things in the round.” I entirely recognise that this decision is unwelcome to many people. The best thing we can do is give certainty as quickly as possible, which would assist, but I entirely understand the practical difficulties that this decision creates in the meantime. I will learn more about that when I meet the chief executives of the deal areas.

The House is united, though, on our shared desire to maximise economic growth in Northern Ireland. This week, we have had a really good example of that with the announcement of the very significant order that has gone to Wrightbus. This is a company that nearly went bust; then investment came in, and it is now helping to deliver the bus transportation of the future from a factory that I and many other Members have had the chance to visit. There are a lot of good things happening in Northern Ireland, and we need to build on them.

What representations has the Secretary of State made to the Treasury about the continuation of these two city deals?

As I am sure my hon. Friend understands, anyone holding my office, including me, will argue the corner of Northern Ireland. I will continue to do so.

As the Secretary of State who secured funding from the Treasury for the first two deals—the Belfast city deal and the Derry/Londonderry and Strabane deal—I am very pleased that they are going ahead, but I have concerns, because I remember the impact that that announcement had on business confidence across Northern Ireland. What discussions has the Secretary of State had with businesses involved in the private sector element of these deals, to make sure they know that there is a commitment to them?

The right hon. Member is very generous and kind to me, but I cannot claim credit for the Belfast city deal—it was unaffected by the announcement that the Treasury made—and the signing of the full financial deal for the Derry and Strabane city deal was scheduled anyway. After clarification, that deal is going ahead, but when I meet the chief executives shortly, I hope to learn more about the point she raised about the practical impact. It is important that we understand the impact; that will inform the representations that are made.

It seems to me that these questions would be better directed at the Treasury, because that is where the decision was made. I thank the Secretary of State for the work he did over the weekend after the 17th to secure the much-needed Derry city deal. He has said that there will be an update in the Budget about the other two deals that have been paused. Can he confirm whether that will be an update or a decision?

Although my hon. Friend encourages me to, I will not speak for the Chancellor. She will tell us what is in the Budget when she stands up on 30 October.

The Secretary of State will remember that when he and I were at the signing of the Londonderry deal in September, I lobbied him strongly to get the other two deals over the line. He has outlined the meetings he has held, but given what he has just said about not meeting and talking with the Chancellor about this, will he be meeting the Prime Minister? He has met other people, and we need to get these deals up and running—over the line—to get much-needed investment into areas such as mine and the Mid South West.

I very much enjoyed seeing the hon. Gentleman at the signing of the Derry/Londonderry and Strabane city deal—it was a great event. It is the responsibility of all of us in the House who have the interests of these two deals at heart to make representations to everyone who can influence the final decision.

The Secretary of State has talked about his engagement. Local authorities have a really important role to play in stimulating and facilitating growth, so can he keep local authorities in mind as he seeks to keep engaging, and as he ultimately gets us the solution that people want?

I certainly will do that, which is precisely why my next meeting on this matter will be with the chief executives of the two deal areas. They will no doubt tell me about the challenges they face at the moment, but it is the partnership that makes these deals so successful, as Belfast and Derry/Londonderry and Strabane demonstrate. By bringing together the United Kingdom, the Northern Ireland Executive, the local authorities and private investors, we get a synergy that results in extraordinary things.

I assume that the Secretary of State has done an impact assessment on the uncertainty costs of this decision, and will know how it will impact growth in Northern Ireland in particular. If so, can he publish that impact assessment? Secondly, I assume that the improved futures funding in Northern Ireland is unaffected by this decision. Can he confirm that, please?

I am not aware of an impact assessment that has been done. At the end of July, the Chancellor announced all the things that she would have to look at in dealing with the very adverse fiscal inheritance from the previous Government. I apologise to the right hon. Gentleman, but I did not hear what he was referring to in the second part of his question.

The Chair of the Northern Ireland Committee, the hon. Member for Gower (Tonia Antoniazzi), referred to levelling-up funds. Is the Secretary of State aware that commitments to businesses from those funds have also been paused in Northern Ireland? In particular, Belfast International airport in my constituency was looking forward to £2.3 million from levelling-up funds, and was only told a fortnight ago that the funding was now on hold. It is not only the city deals; levelling-up funds are affected by this decision.

The hon. Gentleman is right: a number of things have been paused. I can think of a levelling-up project in my constituency that has been paused as a result of our fiscal inheritance. That is what the Treasury is having to deal with.

As the Secretary of State knows, one of the unsung and often undervalued benefits of city deals is that they underpin the argument for the rebuilding of a new, post-conflict Northern Ireland, delivering normalcy and forging partnerships between sectors. That is an argument that is often lost on the bean counters in the Treasury. Can he assure the House that he will be making that key point as we all seek to rebuild Northern Ireland in the image of what we would all like it to become?

The hon. Gentleman makes a powerful and important point. The progress that Northern Ireland has made over the past 26 years since the signing of the Good Friday agreement is what everybody is striving to continue. I am confident that the Treasury will pay close attention to the exchanges on this urgent question, and the hon. Gentleman’s eloquence speaks for itself.

I have listened to the answers that the Secretary of State has given, and I cannot understand his logic. First, one of the reasons for not progressing with these deals is that they are not far enough advanced. Does he not recognise the amount of money that has already gone into developing them, and how this decision puts that money at risk? Who will put further resources into those schemes if there is no certainty at the end?

The Secretary of State has talked about Northern Ireland being part of economic growth. In the Causeway Coast and Glens case, much of the investment will be for economic growth, whether that is the development of food and drugs at the University of Ulster, the innovation hub at North West Regional College, or the innovation hub in Cushendall. By not having those schemes in place, the Secretary of State is going to affect economic growth, so can he explain the logic of the decision he has made?

In fairness to myself, I have pointed out that these two schemes are not as far advanced as the Belfast and the Derry/Londonderry and Strabane city deals, because one of them only recently signed its heads of terms and the other has yet to do so. From memory, the time it took for the Belfast and the Derry and Strabane deals to get from heads of terms to full financial deal signing was between two and a half and three and a half years. So there is some way to go based on past experience, precisely because a great deal of work has to be done in partnership with the private sector, the Northern Ireland Executive, local businesses and the councils to put the shape of the deals in place. The right hon. Member makes a powerful argument for clarity as quickly as possible.

Could I suggest that the Causeway deal was particularly well thought out and balanced in its proposition? It is therefore very disappointing to see it paused, particularly for the small but vital village of Bushmills, which services the vast number of visitors who come to the Giant’s Causeway. For years, there has been a neglect of infrastructure there. Roads have been clogged with cars because there is not adequate parking in and about Bushmills. This project was going to address that, as well as community rejuvenation in the village. Therefore, there is an immense sense of disappointment in Bushmills in my constituency at the lost opportunity. Will the Secretary of State, bearing in mind the strategic significance of Bushmills to the advancement of the great Giant’s Causeway project, make a particular case for the reinstatement of the Causeway project?

The hon. Gentleman speaks up very strongly on behalf of Bushmills and the Giant’s Causeway area. I know that all other Members representing constituencies affected by the decision the Treasury has had to take will be doing exactly the same. I think all the projects are important, but he makes the case very powerfully.

There is quite a lot of information already available about the two schemes that are going ahead, what they have achieved and what the plans are. I think that is readily available, if the right hon. Gentleman needs it, and I will bear in mind the point he makes about information on the other schemes. He and the House have already heard me say a number of times that clarity as soon as possible would be in the interests of everybody.

The Secretary of State has kindly agreed to meet the council leads in the Mid South West deal area, for which I am a Member of Parliament. Upper Bann, Fermanagh and South Tyrone, and Mid Ulster are all included, but he will note that the other MPs for those areas are absent from this place.

The Secretary of State speaks of partnerships, synergy and the great things that can be achieved. Sadly, in the Mid South West deal area, we are not going to be able to achieve them because the main partner has pulled the plug and paused the deal, which is impacting on infrastructure, tourism and regeneration. Will the Secretary of State assure the House today that he will make the case for the Mid South West area, which is home to over half a million people and a vital economic driver in Northern Ireland within this United Kingdom?

I have already indicated to the House that I of course give that assurance. As I said in answer to the previous question, all those who have an interest in these schemes progressing and who are concerned about the impact of the pause—the plug has not been pulled, and you cannot pause a plug, but I think the hon. Member will understand the point—should be making the case, too.

If the two city deals do not go ahead and the money is not found through the Treasury, will those deals continue to be parked or will they be dead and buried forever? Can the Secretary of State give a reassurance that those deals will continue, maybe further down the line?

I think we are going to have to wait for the Chancellor’s announcement on 30 October, but as I have already told the House, other partners are involved in those deals. Of course, I welcome the Executive’s announcement yesterday that they will proceed with the funding of elements of those deals out of the money that they have.

I thank the Secretary of State for his statement. With your indulgence, Mr Speaker, would the Secretary of State extend our collective thanks to the emergency services and local people for their response to the Strangford college bus crash on Monday past in my constituency? It is a miracle that no one was killed, and we thank God for that.

There have been headlines over the last few weeks about potential pauses of funding for city deals in parts of Northern Ireland, some of which cover areas of my constituency. Can the Secretary of State clarify that in the future action will be taken to ensure that funding that is offered will be delivered, and that devolved nations will not suffer as a result of central funding shortfalls here?

With your permission, Mr Speaker, I echo what the hon. Gentleman said about that bus crash. I must say that, when I first read the report, I was very fearful—I think we all were—about what might have been the consequences. I think the response of the emergency services was terrific, and I wish all those who were injured the very best for the future. I understand that the school is providing support, because it must have been and is still a very traumatic experience for the students who were on the bus.

In answer to the hon. Gentleman’s second point, we would all like to live in a world of certainty on a whole load of things. Being in government is about having to deal with the bits where certainty is not quite as certain as the hon. Gentleman may have hoped.