House of Commons Northern Affairs Committee

Responsibilities of the Secretary of State for

Oral Evidence

Wednesday 6 November 2013 Rt Hon Mrs Theresa Villiers MP, Secretary of State for Northern Ireland

Ordered by The House of Commons to be printed 6 November 2013

HC 798 Published on 23 December 2013 by authority of the House of Commons London: The Stationery Office Limited £6.00

cobber Pack: U PL: COE1 [SO] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 1

Oral evidence

Taken before the Northern Ireland Affairs Committee on Wednesday 6 November 2013

Members present: Laurence Robertson (Chair)

Mr David Anderson Kate Hoey Mr Joe Benton Nigel Mills Oliver Colvile Ian Paisley Mr Stephen Hepburn Andrew Percy Lady Hermon ______

Examination of Witnesses

Witnesses: Rt Hon Mrs Theresa Villiers MP, Secretary of State for Northern Ireland, Julian King, Director General, and Mark Larmour, Deputy Director, Northern Ireland Office, gave evidence.

Q1 Chair: We will start the public session. start-up loans scheme, which has been highly Secretary of State, you are very welcome. Thank you successful in England and Wales, is now rolled out in very much for joining us. There is a range of issues Northern Ireland. The banking taskforce established we would like to discuss with you. Perhaps you would under the pact has started its work and was helpful like to introduce your team and make a brief opening in providing some input into the recent decision on statement. Ulster Bank and RBS. Mrs Villiers: I would be delighted to do that. I will That is the more positive news. Obviously, the keep it very brief, though. I am sure you all know security situation continues to be a grave concern. The Julian King; he is the Director General of the threat level remains at severe, as it has been for Northern Ireland Office. Mark Larmour leads on several years now. We have of course seen a number security matters at the Northern Ireland Office. of attempted attacks and a number of very disruptive In the intervening months since I last had a general hoaxes over recent weeks. My assessment of the formal exchange with this Committee, there has been security situation, having discussed it with the PSNI a great deal of good news for Northern Ireland, and others, is that the severity of the threat has not including the G8 being a tremendous success, the gone up; it continues at a significant level of severity. World Police and Fire Games and the / These things tend to be cyclical. Londonderry City of Culture—to name but three. Sadly, the reality is that, even at times when the There has also been more positive news on the attacks are not necessarily being reported in the Northern Irish economy, with some indications that newspaper, there is continuous planning and targeting the economy is starting to turn a corner and some by dissident republicans. They remain small in more positive news in relation to the different number, but they can be lethal and the Government sectors—and of course in relation to unemployment. remains vigilant, working with partners in the PSNI However, we all recognise there is still much to be to do all we can to counter the threat from dissident done on that. republicanism. The PSNI are also working very hard We have also seen some progress in efforts to deal in terms of dealing with criminality within the former with societal divisions in Northern Ireland, with the loyalist paramilitaries. publication by the Northern Ireland Executive of their Those were a few thoughts to kick off with; I would Together: Building a United Community document, be delighted to take whatever questions you have. which is something both I and the Prime Minister Chair: Thank you very much, Secretary of State. have pressed for progress on. We welcome its Perhaps we could start with the security situation. publication and we are very much looking forward to seeing it become an actual programme and actually Q2 Oliver Colvile: Generally, would you like to be delivered. bring us up to date with the security situation, because Of course, the signing of the economic pact between there have been a number of letter bombs, including the Government and the Northern Ireland Executive one to you, I think. was positive. We will see our two administrations Mrs Villiers: Yes. working more closely than ever before to build Oliver Colvile: I am very sorry to hear it. prosperity in Northern Ireland. The additional Mrs Villiers: I am grateful to you for your sympathies structural funds in Peace IV will help support the on that. Although my name was on that letter bomb, programmes set out in the Shared Society document the people really at risk were those who handled the by the present Deputy First Minister, as will the parcel en route, which would be someone just doing additional capital borrowing powers. their job at a Royal Mail sorting office or the very There are also a number of other schemes designed to brave individuals at Stormont Castle post room, who help business access the finance they need, which is a actually identified the parcel and realised it was matter I know your Committee is considering. The suspicious. I would like to pay tribute to them. cobber Pack: U PL: COE1 [E] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Ev 2 Northern Ireland Committee: Evidence

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour

Postal workers at Mallusk and Lisburn were also becoming prey to those who would try to draw them responsible for identifying the other letter bombs. It is into either criminality or terrorist activity. despicable that people who are just turning up for a day’s work can find themselves at risk as a result of Q5 Oliver Colvile: This is not only an issue for dissident-republican activities. It continues to be the Northern Ireland, though. This is an issue for other highest priority for the UK Government to keep our parts of the country as well. The problem in Northern citizens safe, both in Northern Ireland and elsewhere. Ireland is the underlying issue of and the This is one of the reasons we have devoted extra problems that have gone on within that. resources to national security matters in Northern Mrs Villiers: That is right, yes. Similar challenges do Ireland. exist elsewhere in the UK—and, indeed, elsewhere in As I have said, having discussed the latest spate of the world. The danger is that people will be drawn attacks with both the Chief Constable and other into gang culture. Educational opportunity—particular security advisers, it seems to me that we are not seeing early-years education and early intervention—is a a step change in terms of the risk. The risk has been helpful way to try to prevent that from happening. severe for some years now and it continues to be so. Oliver Colvile: After all, in London we saw riots taking place at one stage. We should not therefore Q3 Oliver Colvile: Do you think there is an issue think it is only in Northern Ireland that these issues with young people feeling that it is more exciting for happen; they do occasionally happen here on the them to get involved in terrorist activity rather than mainland too. trying to do other legitimate things such as getting Mrs Villiers: Yes. jobs? Do you think this is an issue we need to do something about? Q6 Oliver Colvile: Do you get the impression that Mrs Villiers: Certainly, when one is seeking to UVF is in the process of re-emerging as well? What counter terrorism, looking at the reasons why people is your feeling about that? might be drawn into terrorism is very important. There Mrs Villiers: This is something I have discussed on are a number of excellent programmes being run in many occasions with various people over recent Northern Ireland by, for example, Co- weeks, because of the concerns about the UVF. The operation Ireland, that are designed to raise the advice from the PSNI has been consistent on this: expectations of young people and demonstrate that there is no evidence to indicate that the leadership of there are all sorts of opportunities for them, which are the UVF has abandoned its ceasefire and there is no potential alternatives to being drawn into dissident-republican activity. evidence to suggest they are preparing to or planning to. For example, I know a number of those programmes by Co-operation Ireland and others use former However, it also appears to be the case that individual offenders who have been involved in terrorism in the members of the UVF are involved in criminal activity. past to explain to young people what a devastating Certainly, it is vitally important that the PSNI do all impact this kind of activity has on victims and what a they can to bear down on that and bring those disastrous impact it can have on perpetrators as well. responsible to justice. They assure me they are doing that and, certainly, I would take this opportunity to encourage anyone who has any knowledge of this sort Q4 Oliver Colvile: This is not, however, only about of criminality to bring it to the attention of the people who get involved in terrorism. It is also those people who, frankly, just get involved in rioting and authorities. all of those kinds of things, too—especially Oliver Colvile: Thank you very much for coming in. youngsters. You may not agree with me; I would be I wonder whether or not either one of your interested to hear your views. They do not feel compatriots might also like to comment on any of that particularly engaged with other things that are going which we have had a conversation about. on in Northern Ireland as well and so they feel slightly Mark Larmour: I would leave it there. left out of the whole loop. Oliver Colvile: You are quite happy with everything How can we engage with those people, who are that has been said. perhaps not in employment or education—NEETs— Chair: I thought you might say that. There are no and ensure we put together measures to try to help more questions on the particular section. We will them? To what extent do the move on to the talks with Dr Richard Haass. We did Northern Ireland Executive and the Assembly have to meet Dr Haass last week in private, but we would like play slightly different roles? to ask you one or two questions about the process. Mrs Villiers: There are a number of programmes designed to prevent young people being drawn into Q7 Lady Hermon: It is very good of you, that kind of criminality, but it has been the subject of Secretary of State, to come with your colleagues this significant debate in light of the scenes of violence we afternoon to give us evidence. I know you work very have sadly witnessed on the streets of hard in Northern Ireland. Often it goes unrecognised, Northern Ireland over recent months. Educational but I do appreciate what you do, batting for underachievement in certain parts of the community Northern Ireland at the Cabinet table. Thank you, is something that is important to consider. This is Secretary of State. obviously a devolved matter, but it will be a key role Before we move to the Haass talks, can I ask for the Executive and the Assembly in addressing that Mr Larmour a question about the UVF, as it is his underachievement as a way to prevent people from specialism? Is it the case that the UVF is recruiting cobber Pack: U PL: COE1 [O] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 3

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour more members into its ranks? Is it the case that the Q12 Lady Hermon: Heaven forbid that the Haass UVF are engaged in extortion? talks are not successful; I do sincerely hope they are Mark Larmour: I cannot answer those questions. You successful—for all of our sakes. However, if they took evidence from the Police Service in were not, Secretary of State, what do you think would Northern Ireland last week and they set out their be the implications and the fallout for the Northern picture on that. Certainly, we get briefings as a Ireland Executive and those parties that are central to Department, but I would not have that information these negotiations? to hand. Mrs Villiers: I very much hope they will succeed. In the hypothetical situation they do not, Northern Q8 Lady Hermon: Secretary of State, do you know Ireland will continue to pay the price for these whether they are recruiting? divisions. It will continue to face a situation where Mrs Villiers: I believe there may be some indication decisions on flags can lead to protests and public of recruitment, but there is no indication that disorder. There is a genuine economic price that is recruitment is with a view to encouraging criminal or attached to the continuing tensions around these terrorist activity. issues. It would be very positive for Northern Ireland in terms of quality of life and the economy if progress could be made on these issues. If it is not, it will Q9 Lady Hermon: That is a very diplomatic answer. certainly hold back progress on building social I will analyse that afterwards. Thank you. cohesion and the economy. Secretary of State, could you identify your precise level of engagement within the Haass talks? Q13 Lady Hermon: I agree entirely with your Mrs Villiers: I am very closely engaged with how they observations, but let me push you a little bit further. are going. It is absolutely right that Northern Ireland’s What do you think will be the impact on public political leadership take ownership of and lead on confidence in the Northern Ireland Assembly and these matters, but I and the rest of the UK devolution if the five parties cannot agree to the Government are very supportive of the process, which formula in negotiation with Dr Haass? is why I have met with Richard Haass three times and Mrs Villiers: Obviously, there would be have had conversations with him on the phone. My disappointment. However, everyone recognises that officials have also had a number of engagements with these are immensely difficult issues to resolve. There him and his team. is a reason they are still unresolved 20 years after the We are endeavouring to provide advice and support to Downing Street declaration. They are the subject of help and assist him in the task that he is facing. I also sharply different opinions, depending on which keep in touch with the Irish Government regarding tradition you come from in Northern Ireland. this, since there are implications for them in relation Certainly, there would be disappointment if we do not to some of the issues being discussed under the see progress under the Richard Haass process and we Richard Haass process—not least of which is the certainly hope we will do. legacy of the past. Q14 Lady Hermon: Are you optimistic? Q10 Lady Hermon: Why has the British Mrs Villiers: I am pretty optimistic, actually. Government chosen not to make a formal submission Lady Hermon: That is good. to the Haass talks? Mrs Villiers: Certainly, Dr Haass has set himself a Mrs Villiers: If we are going to get solutions on these rather tight timetable, but he is a very impressive matters, they need to come from within individual. He is determined and there have been a lot Northern Ireland. This was exactly the kind of process of positive signals from the political parties indicating the Prime Minister has been encouraging the they are willing to make progress. Executive to undertake. It used to be the case, if there was a problem in Northern Ireland, the default Q15 Kate Hoey: Adding on to this, under the solution was the Prime Minister and Taoiseach Agreement there were certain things that helicoptering in with proposals. It is a sign of the should be discussed with the Irish Government and maturity of the devolved institutions that they are now certain things that should not. Are you concerned at trying to fix these problems for themselves. Of course, all that Dr Haass seems to have been discussing they do have the support and the encouragement of certain parts and elements with the Irish Government both the UK Government and our counterparts in that are not, under the Belfast Agreement, the Dublin. responsibility of these talks? Should the Irish Government have been involved in that? Q11 Lady Hermon: How often has Mrs Villiers: It is not a problem that Dr Haass would actually met with Dr Richard Haass since he started choose to discuss a wide range of issues with the these talks? Irish Government. As you say, there are certain things Mrs Villiers: The Prime Minister has met Dr Haass that are pretty much within the devolved domestic on one occasion and the Deputy Prime Minister has sphere—like parading, for example. A broad dialogue also met him on one occasion. The Prime Minister with all sorts of people who have an interest in the did, of course, have the opportunity to discuss the outcome of these matters does no harm. process with the First and Deputy First Ministers and I would not say it was necessary for Dr Haass to others when he was in Belfast for the investment confine his conversations with the Irish Government conference. to certain defined areas under the Belfast Agreement. cobber Pack: U PL: COE1 [E] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Ev 4 Northern Ireland Committee: Evidence

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour

Q16 Oliver Colvile: Thinking through the process of and suggestions to come from within Northern Ireland all of this, my understanding is that Dr Haass is and, specifically, from the Haass process itself. probably going to report before Christmas. This is the If the Haass process does not successfully reach a ideal scenario; it may go a bit further. Will you then conclusion on parading, the current system will come here to this place and make a statement to the continue. It is vital that the determinations of the House as to what has actually been found? One of the Parades Commission are respected. They have the things I called for during the course of Business of force of the law of the land, and I would urge the House questions last week was the possibility of everyone, whatever they think of those us also having a debate about what his findings are. I determinations, to make sure they abide by them. wanted to understand how engaged your Department However, if the Haass process does not reach a might get in actually trying to find some answers to conclusion on a revised mechanism for determining some of the issues that he raises. parading, as far as I can see, the current system is Mrs Villiers: I am at the mercy of business managers, going to continue for the foreseeable future. but I would certainly hope that this House would get the opportunity to consider the conclusions of the Q19 Ian Paisley: Secretary of State, I know you do Haass process. not mean it like this, but unfortunately that looks like Oliver Colvile: That is good a bribe. It says to the unionist majority, who have no Mrs Villiers: I am not, however, able to say in truck or time for the Parades Commission, “If you do advance quite what form that will take. It is a good not take the medicine from Dr Haass, you will idea to give at least some time in the Chamber to continue to take the medicine from the Parades consider the outcome. Obviously, that will be the case Commission, which you disrespect.” That is not a in the Assembly as well. good recipe for success. I am not casting aspersions on Dr Haass necessarily, Q17 Chair: The Leader of the House rather but we need to hear that if there is not the success that suggested that it was more your responsibility. We we hope there will be—and we do genuinely hope have to break through this a little bit. I would have there will be—you are ready and willing to take up thought a statement was required at the least. the cudgels on this difficult issue again and drive it Mrs Villiers: Yes. Certainly, depending on what the forward, as the Secretary of State for conclusions of the Haass process are, legislation might Northern Ireland, to a point where we get agreement. be required: for example, if there were to be an Mrs Villiers: The best option for those who wish to agreement on a new system for determining parades see change and reform in the way decisions are made matters. Indeed, some flags matters are still in the on parading is to find a solution through the Haass reserved space. Changes in relation to those two issues process. It would not be right at this stage to start might require legislation—as conceivably might talking about fallbacks and further reviews of how matters relating to the past as well. parading operates. There is a real opportunity here to consider a range of options for reform of how the Q18 Ian Paisley: I will start, Secretary of State, by system works. I would urge people from across the welcoming you in the same manner as my colleagues community and across the political parties to seize have. It is good to see you at the Committee again. I that opportunity—particularly those who do not like take the public opportunity to condemn those who how the current system has been working. sent you the letter bomb, which is absolutely repugnant and intolerable. I am delighted that no one Q20 Ian Paisley: If Haass proposes to scrap the was hurt, as I am sure you are. Parades Commission because he has found an The failure of the Parades Commission to achieve alternative, will you endorse that? consent from the majority community in Mrs Villiers: We would need to see and consider the Northern Ireland obviously means that parading and proposals. However, if he manages to get an the solution to those difficult parades that are called agreement on an alternative system, it is highly likely contentious continues. This will continue to be a that we would take steps to implement that through major problem for Northern Ireland and affect all of legislation. the areas we spoke about in terms of community relations and the economy if it is not solved. Q21 Mr Anderson: Secretary of State, it has been Obviously, Dr Haass has bitten off this one and hopes more than 15 years since the first post-peace-process to be able to come up with a solution. I do not want atrocity happened at Omagh. Throughout those years, to cast any aspersions on his ability to find a solution. the Omagh Support & Self Help Group (OSSHG) has Can you assure us that you and your team are working been campaigning for a public inquiry. Over the years, on alternatives at this point in time, which could be various shades of this Committee have been trying to brought forward quickly and expeditiously after help them get that. Certainly, on the previous December if, come Christmas, Dr Haass does not have Committee, the Chairman was very involved. We have the solution and has not found the silver bullet? personally been involved since then to try to help Mrs Villiers: We should not assume that Dr Haass these people to get to the bottom of what went on that will fail in his attempts to find a revised solution. day and the lead-up to that event. Naturally, on parading matters I have looked carefully Earlier this year, you decided that there should be no at a number of alternatives—for example, the ones public inquiry. Michael Gallagher, whose son Aiden that were discussed previously—but I certainly feel was killed in the bombing, described your decision as that, at this point, it is important for those proposals “trivial”. How do you respond to that criticism? cobber Pack: U PL: COE1 [O] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 5

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour

Mrs Villiers: It was a difficult decision. I reflected on Q24 Mr Anderson: Is it not a fact that a public it at length. I would particularly like to pay tribute to inquiry could ask questions that people must answer? the work of the OSSHG and other organisations that At the moment, we have a situation where, in the last support victims of Omagh and other atrocities, like Parliament, our Chairman actually offered to go and Families Moving On. look at the evidence held by the officers of the state It seemed very clear to me that this is an issue that in camera and report back to the Committee and say, has been extensively investigated in a succession of “I have looked at this and I am telling you that I am inquiries. I was not convinced that a public inquiry satisfied.” Even that was refused. Does that not give would provide further answers or facts that have not us, who hold yourself and other officers of state to already been disclosed or which are not already being scrutiny, real concern that there is something there the investigated by the Police Ombudsman. As you will state does not want people to see? Unless this is made be aware, the Police Ombudsman is looking public, people will continue to feel there is something specifically at the allegations raised by this Committee that has gone on that should not have. in its very hard-hitting report on Omagh. Mrs Villiers: The Gibson report very clearly I did not think there was a justification for an concluded there was nothing in the intelligence additional process on top of what has already material that could have prevented the attack from happened and what is under way by the Police taking place, and it is clear to me that the summary Ombudsman. that was published accurately reflects the conclusions of a very detailed report by Sir Peter Gibson. Q22 Mr Anderson: You will be aware that the Inevitably, with material this sensitive, there are limits Committee actually have funded legal support to go on what can be put in the public domain, but the over all the evidence that has been available and have summary was very clear about the impact the had a huge job getting access to that evidence. intelligence material could have had. It could not have Neil Oliver, who was involved with the Committee, prevented the bombing from taking place. has written to me. He says that you made your, as he described it, terse and brief letter of less than 300 Q25 Mr Anderson: The report that has been done words, denying an inquiry, and afterwards you invited for this group challenges that evidence, does it not? the group to meet. He says there was “tea, biscuits In a nutshell, it says that, had the state been more and cake, but no sympathy”. He says, “Furthermore, proactive in trying to prevent what happened in no proper or comprehensive answers were given to Omagh, it may well not have happened; however, many points that had been put forward to her in favour because there was an attempt by the state to protect of holding a public inquiry.” people in the security services, which is obviously Is that a fair description of the meeting you had with something that needs to be looked at, innocent them? You did not give them any reasons why you people died. decided. Mrs Villiers: I do not believe that was the case. The Mrs Villiers: I certainly would not describe the Gibson report is very clear that the intelligence meeting in that way. I have repeatedly expressed my material that was available could not have been used sympathy and condolence for all who suffered as a to prevent the bombing. There was no evidence of result of the Omagh tragedy. It was one of the most that. The reality is that it is simply not possible to appalling atrocities. I have repeatedly expressed my publish that kind of material publicly without sympathies. I set out the reasons behind my decision jeopardising, as you say, not only the lives of both in the meeting with the families and with this individuals but our ability to fight terrorism in the Committee. future.

Q23 Mr Anderson: Certainly, as long as this is not Q26 Mr Anderson: Am I to take from what you say discussed fully in the public arena, there is a feeling you have no intention of revisiting this decision? that the Government knows more about the Mrs Villiers: I have no current plans to look again at circumstances leading up to the bombing than it will this decision, but I expect that it may be ventilated in admit to. This surely has to be an issue for us to be the courts. Obviously, we will await the outcome of really concerned about, as representatives of the state. any legal proceedings. Unless this is actually brought into the public arena, it will never be laid to rest. Q27 Mr Hepburn: Does the Secretary of State not Mrs Villiers: It has been extensively examined in the agree that, unless we close the door on some of these public arena. If one looks at the experience of public issues, part of the community are not going to be inquiries, they are not by any means all universally moving ahead and will never move ahead? The successful in providing answers. An illustration of that Chairman and a few other members met with the is the Billy Wright Inquiry, where, in the end, the families of the Ballymurphy massacre some weeks inquiry failed to reach a conclusion on the key fact in ago in here. Again, certainly, speaking for myself, I issue, which was how weapons were smuggled into was touched by their sincerity and the injustice in that one of Europe’s highest security prisons. case. They will never move forward unless they find A public inquiry is not simply a cure-all. It does not some answers. What they are requesting is some sort necessarily give real answers, and I was not convinced of inquiry—i.e. a Hillsborough-style inquiry, not a that it would add anything to the 10 inquiries that have inquiry—whereby they can get to the taken place already. bottom of the injustice that they have experienced in cobber Pack: U PL: COE1 [E] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Ev 6 Northern Ireland Committee: Evidence

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour their lives. Will the Secretary of State not listen to Alan Shatter, we both agreed that there would be those people? significant practical difficulties in doing it. Mrs Villiers: Like my predecessor, I do not think a public inquiry is appropriate in that case. They have Q31 Lady Hermon: Could you give an example of made their request for a Hillsborough-style review, a significant practical difficulty? and that is something I am considering at the moment. Mrs Villiers: Whose legal system would govern it? Where I disagree with you, however, is that one We know from public inquiries that the reality is that cannot assume that just because you have a public they usually spend the first five years being judicially inquiry, that means a conclusion. Evidence indicates reviewed. Is it Irish law or is it the law of Northern from the experience of public inquiries that, no matter Ireland that would be determinative? how detailed they are, no matter how lengthy they are, at the end of the process there are many people who Q32 Lady Hermon: The bombing was in Omagh, still do not feel their concerns have been resolved. I which is in County Tyrone in Northern Ireland, which have huge sympathy for everyone who has lost loved is part of the . I would have thought ones or suffered directly as a result of the troubles, the jurisdiction of United Kingdom courts was but public inquiries are, by definition, selective; you established. The bombing was in Omagh. cannot have one for every one of the 3,500 deaths Mrs Villiers: Yes. However, if it was literally a cross- from the troubles. border inquiry that involved the Therefore, they can only be a partial and arguably a as well, it would be not very easy to say that the divisive solution, because they can be deployed in applicable law was necessarily that of such a limited range of cases. Northern Ireland. It would be quite a difficult one to resolve. Q28 Mr Hepburn: That is your opinion. How will Even if the two Governments were able to agree on you go forward with the Ballymurphy case? that, you could guarantee there would be interested Mrs Villiers: I will look carefully at the review that parties who would be heading straight for a they consider and in due course make a decision. It is judicial-review application to challenge that decision. important for me to talk to the various people impacted before reaching a conclusion on whether a Q33 Lady Hermon: Has that played a significant review would be appropriate in that case. It is also part in your decision? true to say that there are processes already under way Mrs Villiers: It was one of a number of factors. The in relation to inquests, as well, which, having being main reasons for my decision were that I believe this blocked for some time, are now going forward. atrocity has been extensively investigated by a number of inquiries—at least 10 different ones—and I did not Q29 Lady Hermon: There have been suggestions in feel a further public inquiry would add anything to the the past that successive Irish Governments—and, processes that have already been undertaken. That was indeed, successive American Governments—have not why I decided we should not go ahead and that any wanted a public inquiry into the appalling Omagh outstanding issues were better resolved via the bombing. Secretary of State, could you confirm that Police Ombudsman’s process, which is already under you have not come under any pressure from either the way. Irish Government or, indeed, the American government to say no to requests for a public inquiry Q34 Kate Hoey: Secretary of State, I am really quite into Omagh? shocked at what you have just said. There was a call Mrs Villiers: Certainly, I have had no sort of for a public inquiry in Northern Ireland. No-one asked representations from the US Government on this for it to be a cross-border public inquiry. issue. Mrs Villiers: OSSHG did ask for it to be cross-border. Lady Hermon: There have been none at all. Mrs Villiers: There have been none I can remember; Q35 Kate Hoey: Are you really saying that one of I can check that. On the relations with the the strong influences was the position of the Irish Government, I did consult them for their views Irish Government? and, certainly, both I and the Irish Justice Minister, Mrs Villiers: I am saying we discussed the Alan Shatter, were worried about the practicalities of practicalities and both of us agreed that there would a cross-border process. Both Minister Shatter and I be some significant legal difficulties with the had real concerns about the practicalities of doing that. cross-border process, which the OSSHG were asking for. As I said, the main reason for the decision I took Q30 Lady Hermon: Two friendly countries, who are was because of the extensive investigations and both members of the European Union and who have inquiries that have already taken place into the co-operated on so much, find that there are difficulties . in co-operating on a public inquiry into Omagh— which was the greatest mass loss of life: 29 people Q36 Kate Hoey: Have you asked the and two unborn children—and that they could not co- Irish Government whether they are delighted that operate and get over the difficulties of a cross-body those soldiers who were involved in the terrible inquiry. Bloody Sunday tragedy are going to be prosecuted Mrs Villiers: I am not saying it would have been and investigations are going on? Is the impossible, but, in the conversations I had with Irish Government involved in everything we do now cobber Pack: U PL: COE1 [O] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 7

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour in terms of our judicial system in Northern Ireland? Mrs Villiers: It would not be appropriate for me to Kingsmill? disclose the details of the conversations we had, but Mrs Villiers: It is a very positive outcome of the some of the families certainly did not want a public Belfast Agreement that relations between London and inquiry—and they have been public about that. Dublin are better than they ever have been before; that involves engaging on a whole range of issues. Q39 Mr Benton: Is it 10%? You do not have to go However, I have not had a conversation, as far as I into their names. What was the proportion? can recall, with anyone in the Irish Government about Mrs Villiers: A number of them are on record as the police investigation following on from the having said they do not want a public inquiry. Bloody Sunday Inquiry. Q40 Oliver Colvile: I have had a practical thought, Q37 Mr Benton: Welcome, Secretary of State. Can I which you might consider. To my mind, this is a just go back to your answers to the questioning by my grieving process that we have had to go through; it is two colleagues here? I would strongly support a a very complicated grieving process. It may, however, public inquiry into Omagh. Listening to your be worthwhile to talk to someone like Cruse, which is responses, I am reminded of the Hillsborough Inquiry, a very good charity that deals with people who have in which I was very involved at the time. We all know lost husbands, wives and loved ones as well. That from recent events how that turned out. This is what might actually help. I can quite understand all of the strikes a chord with me, because the very same issues to do with going through public inquiries and justification for not holding an inquiry was uttered at things like that, but maybe you might look at finding that time by the right honourable Member for a process by which some of these people could be Blackburn, who is a very close colleague of mine. I helped through that difficulty. remember going through all of this. I raise a question Mrs Villiers: Certainly, I would be happy to. There is to you, despite how deeply you feel assured: would a range of programmes run by the Executive that are you not admit to the possibility that, in the light of the designed to support victims in relation to the Hillsborough experience, there could be something troubles-era atrocities and those, like Omagh, that worthwhile in having a public inquiry, if only because took place after the troubles were thought to have that is what the public are actually demanding? I come to an end. support it strongly. One of your other reasons for justification is that a Q41 Oliver Colvile: Earlier on today, I was at the further inquiry would cause trauma. I appreciate your Finucane meeting, which took place as well. We have sensitivities in that regard, because, quite obviously, all heard stories whilst we have been on the Northern going down that line again is going to cause trauma. Ireland Affairs Committee about these issues. You do At the same time, however, the pursuit of justice is so end up hearing very harrowing stories. Anything deep in the people affected by these tragedies, such as which will help people through this really big grieving Hillsborough. It seems only right and proper, in a way, process is going to be very helpful. that they are prepared to undergo that trauma yet Mrs Villiers: I have met many victims of the different again. Events have proved that people are prepared to atrocities that took place during the troubles and undergo it. I am putting this to you and, in a way, I afterwards. I found it very moving. It has been a am in fact appealing to you at least to reconsider. As privilege to hear their stories, and it is welcome that Stephen Hepburn said, this will fester and fester. The the Richard Haass process will be looking at legacy only way to arrive, really and truthfully, at justice— issues and what they can do to try and deal with the irrespective of how painful or hurtful it is—is to go past, though I very much hope, as we concluded in down this road. our debate here in this House, that the needs and Quickly, to conclude, I wanted to make a comparison concerns of victims will be at the forefront of their in terms of Ballymurphy. I do not know whether I am deliberations and conclusions. right or wrong, but, judging by your answers here today to this Committee, I am quite prepared to Q42 Andrew Percy: Apologies for arriving a little predict there will not be an inquiry into the bit late. Undoubtedly, this is a very difficult call. I Ballymurphy situation either. I am sorry for taking so have two very brief questions. Firstly, I share the long, Chair. concerns previously raised and I hope the views of Mrs Villiers: I cannot add a huge amount to what I the Irish Government were not a determining factor— have already said about my reasons for turning down important though they may be. I was wondering, the request for a public inquiry. It is worth adding that however, what the determining factor against an the families of victims were not united in their view inquiry was. Secondly, following that, with all of these on whether a public inquiry was wanted or not. There sorts of things, is there not a certain inevitability to were some people my officials consulted who this? The calls will not go away; they will not certainly did not want a further inquiry—and that was disappear; and, eventually, a public inquiry of sorts something I did take into account. There is not a will be granted. uniform view amongst either the families or the Mrs Villiers: I have already set out my reasons. I general public as to whether there should be an believe that the Omagh attack has been extensively inquiry. investigated. There have been around 10 investigations and inquiries already into the Omagh Q38 Mr Benton: What proportion of those people attack. I did not feel that a further public inquiry did not want an inquiry? would add to those or substantially reveal facts that cobber Pack: U PL: COE1 [E] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Ev 8 Northern Ireland Committee: Evidence

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour had not already been revealed by the investigations Mrs Villiers: Yes. The Prime Minster has said that a taking place. I was also conscious of the fact that there decision in principle on whether to devolve is a Police Ombudsman inquiry, which is under way, corporation tax will be made no later than the Autumn looking at remaining implications with a particular Statement next year. focus on the work of this Committee. I could not Chair: Next year? justify a further process in addition to the ones that Lady Hermon: Next year—2014. have already happened. It is worth recalling that a Mrs Villiers: Otherwise, it would be in two weeks’ public inquiry will not necessarily provide conclusive time. answers; it has not done so in all cases in the past. Chair: Indeed, that is what I was hoping. Carry on. Mrs Villiers: I do not want to get your hopes up Q43 Andrew Percy: What do you say about prematurely. The reason for that is twofold. Firstly, it inevitability? enables further technical work to continue within Mrs Villiers: I do not believe it is inevitable. I HMT and HMRC on how you would devolve it in certainly do not believe it is inevitable that there will practice and addressing some quite difficult questions be a public inquiry. The OSSHG families have made around things like tax-motivated incorporation. clear their intention to apply for judicial review. We It also enables the decision to be taken when the wider will be engaging with them on that and, at the constitutional picture is clearer following the outcome conclusion of that judicial review hearing, we will of the referendum in Scotland. However, I can assure obviously take very seriously any judgment by the the Committee that HMT and HMRC are working on courts. taking forward the practicalities of devolution, with a view to ensuring that, if the Prime Minister’s decision Q44 Mr Anderson: In your statement, Secretary of in 2014 is to go ahead, we should be able to move State, in response to a question you were asked earlier fairly rapidly to legislation, with the hope and by my colleague regarding how many did and how expectation of completing that within this Parliament. many did not support an inquiry, you said some supported an inquiry, but many did not, inferring that Q48 Lady Hermon: Will it be before the next the majority did not. Is that true or is it just me reading General Election? this the wrong way around? Mrs Villiers: Yes. It will be a tight timetable. Mrs Villiers: No, I certainly did not mean to assert Lady Hermon: It will be very tight. that. All I would assert is that some of the families did not want to have a further public inquiry. Q49 Chair: Could I ask what the relevance of the Mr Anderson: However, many possibly did. Scottish referendum is? Mrs Villiers: A number of them clearly did, yes. Mrs Villiers: It is so one can look at devolution in the Mr Anderson: That is not what you stated. round. It is true that we have a pretty asymmetrical picture on devolution, with different settlements in Mrs Villiers: If I said the opposite, I did not mean to. different parts of the United Kingdom for all sorts of reasons. There is no need for a uniform picture, but it Q45 Mr Anderson: There is another thing here, to is important, when taking these important decisions, which you can reply if you want. You mentioned the to look at the potential impact across the devolution fact that there are lots of atrocities and there have been picture as a whole. lots of investigations; I accept that. Would you accept from me that there is no other case that has the same Q50 Lady Hermon: Why was it thought appropriate concern about the potential level of state intervention to devolve tax-raising powers to the Welsh Assembly? as this one has? This is not a criticism of the Welsh Assembly or, Mrs Villiers: I would not accept that. There are many indeed the decision. I am just curious to understand cases where there is controversy around the way the why the decision was taken to devolve tax-raising police investigated and the way the state acted. Sadly, powers to the Welsh Assembly ahead of the Scottish that is a recurring theme in relation to a number of referendum results. the tragedies. Mrs Villiers: On stamp duty land tax, which is the key decision that has been made in relation to Wales, Q46 Mr Anderson: The investigation comes after the Government has asked the Northern Ireland the event. The concern here is that there was a failure Executive whether they are interested in having that to do things before the event, which allowed the event devolved. It was part of our discussions around the to happen. That is why this is so very serious. economic pact. It is an avenue that the Northern Mrs Villiers: As I say, in terms of the controversies Ireland Executive might choose to go down. With the around different incidents in Northern Ireland’s past, Northern Ireland Executive, we are committed to questions about police investigations and the role of looking at other options for tax devolution in addition the state are very frequent; it is not an issue confined to the corporation-tax work that is going on. to the Omagh attack. There are far fewer technical and practical issues around the devolution of stamp duty than there are in Q47 Nigel Mills: This is a bit of a change in tack. relation to corporation tax, where there are important Could you update us on the situation with devolving issues to take account of in terms of how corporation corporation tax rate setting to Northern Ireland? Has tax devolution might change people’s behaviour and there been any progress in the last year, since you affect the overall way that people run their businesses were last here? and how they incorporate. cobber Pack: U PL: COE1 [O] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 9

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour

We have seen examples of that in the international Mrs Villiers: I am afraid that our obligations under context in the way companies approach international the EU Treaty would mean we would have to deduct rules on corporation tax. Those issues—and the it from the block grant. potential for avoidance—do mean that the technical and practical issues around devolution of corporation Q56 Kate Hoey: Once we get out of the tax are much more significant than they are for European Union we could do it. stamp duty. Mrs Villiers: If we were to repeal the European Community tax, yes. Q51 Lady Hermon: Is the Northern Ireland Mr Anderson: You walked straight into that one. Executive already looking positively and enthusiastically at the devolution of other tax-raising Q57 Chair: On that point, could I ask for powers? clarification on what the difference is between Mrs Villiers: You will really have to ask them that short-haul and long-haul changes? question. Mrs Villiers: My assumption would be that the Lady Hermon: I am asking you. reduction in revenue as a result of the devolution of Mrs Villiers: Certainly, it is something we will be long-haul APD would have been deducted from the looking at with them over the next few months. If they block grant. The reality is that the tax take for are interested in it, we will see what we can do to take long-haul APD is small, because there is not a huge things forward. amount of long-haul traffic going into and out of Northern Ireland. That is why that change was Q52 Lady Hermon: Are you saying that you are affordable for the Executive. unsure whether they are enthusiastic or positive about it? Q58 Chair: It is all relative, though. Is there an Mrs Villiers: Certainly, their priority is the devolution in-principle rule from Europe or is there not? of corporation tax. They are prepared to look at other Mrs Villiers: Yes, there is an in-principle rule from forms of tax devolution, but those are not nearly as Europe. If you devolve and reduce a tax in a particular important to them as the devolution of corporation tax. area, that area has to fund it. The same rules apply to long-haul air-passenger duty as they do for short-haul Q53 Nigel Mills: In respect of another tax we could air-passenger duty. The practical difference is that a think about devolving, have there been any deduction of the cost of long-haul air-passenger duty discussions about short-haul air-passenger duties? Is reduction is considerably smaller than the 90 million that something we would be happy to devolve if they that would be required to reduce short-haul APD. asked for it? Chair: It sounds like a typical European fudge to me. Mrs Villiers: If we were to receive a request from the Mrs Villiers: No, it is just the way it is. We are stuck Executive, we would consider that. However, as I said with the Azores judgment, which says that deduction at Northern Ireland questions, there is no getting away has to happen. from the fact that devolution and reduction or Nigel Mills: It is the same for corporation tax, which abolition of APD in Northern Ireland would be a very might prove quite expensive as well. expensive change for them to make. The EU rules Lady Hermon: Yes, of course—several hundred require the costs associated with the tax reduction to billion. be deducted from the block grant. I imagine that is one of the reasons why the Executive has not made a Q59 Nigel Mills: Could we come back to look at request to devolve short-haul APD, because it would more general efforts to rebalance the economy away be difficult to afford a significant reduction in that tax. from reliance on the public sector and, perhaps, what successes have been achieved in encouraging inward Q54 Lady Hermon: How expensive is very investment into Northern Ireland in the last recent expensive for the Northern Ireland Executive? period? Mrs Villiers: I do not know. I believe there are Mrs Villiers: Certainly, the investment conference that estimates of figures; I could try to find them out for the Prime Minister attended was very successful. The you, certainly. It is always quite difficult to predict. First and Deputy First Minister felt that it was the However, my very helpful Director General has most successful ever staged in Northern Ireland. We passed me a bit of paper. Certainly, the estimate by have seen significant inward investment by companies Simon Hamilton was that the block grant could be like Allstate and HBO. The Executive and Invest NI reduced by up to 90 million a year if short-haul APD have a lot to be proud of in relation to that. We have were devolved and scrapped. been very supportive of the work they have been doing to attract inward investment: for example, by Q55 Kate Hoey: You would not have to do that if adapting the tax system and extending our film you recognised the unique situation of Northern tax-credits to high-end TV, we secured a fourth series Ireland in terms of flying. You would not have to of Game of Thrones being filmed in Belfast. HBO reduce the block grant. The United Kingdom were very clear that, if the Chancellor had not Government could decide this was a priority in terms extended the tax credit to high-end TV, they would of economic development or tourism as well as not have been able to afford to bring Game of Thrones ordinary people being able to travel back and forth. back to the Paint Hall studios in Belfast. cobber Pack: U PL: COE1 [E] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Ev 10 Northern Ireland Committee: Evidence

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour

Q60 Nigel Mills: One way of rebalancing the what is affordable. I have been very clear with him economy that was not envisaged was the decision to that I very much hope a way can be found to keep close the DVA office in Coleraine. Do you have those jobs in Coleraine; however, I will respect the anything you would like to update us on regarding decision made by my colleagues in the that? Department for Transport. Lady Hermon: That is a proposal; it is not yet a decision. Q65 Lady Hermon: Are you arguing to keep them, Mrs Villiers: I was speaking to Robert Goodwill about Secretary of State? this a few days ago. I know that he has seen a number Mrs Villiers: I have made it very clear that I hope a of representatives from Northern Ireland and has way can be found to do that. These are matters, further representatives coming to see him over the however, which will ultimately be for my colleagues coming days. As I said at the Dispatch Box, I made to decide—and they will have my full support on very clear the concerns there are about this potential whatever decision they ultimately make. closure in Northern Ireland. I have also emphasised Chair: Members of the DVA have asked to meet that it is very important to look at the wider economic members of this Committee not in formal session, but impacts of a possible decision to close the DVA. in a meeting tomorrow. However, this is a difficult situation. The Minister will have to look very carefully at the efficiency issues and Q66 Kate Hoey: Is it not a resignation issue for you the need to deal with the deficit and reduce costs in if those jobs are lost? the DfT. They will also need to consider what the best Mrs Villiers: No. way is for people to access electronic and web-based services as well. Q67 Nigel Mills: One suggested way out proposed by the Finance Minister would be to transfer the DVA Q61 Kate Hoey: Are you prepared to go to the functions to the Executive and devolve that as well. Is Prime Minister on it? He was very keen on the G8, that something worth looking at? and he was there. It does seem a bit like one hand is Mrs Villiers: The Prime Minster has been very clear doing one thing and the other hand is then making that we are happy to look at devolutionary proposals the decision to close it, which will be taken by the from wherever they come. We would certainly look Government, if they actually do decide to. Are you seriously at that. It is also worth considering whether going to see him? there is other work the DVA could conceivably do. Mrs Villiers: Certainly, I have discussed this with the Ultimately, if the news is not good on the DVA, it just Prime Minister. I briefed him on it and discussed it makes it all the more important that both the with him. He is well aware of the issues. The First Government and the Executive work together to find and Deputy First Ministers have raised it with him on private-sector jobs to replace those that might be lost a number of occasions. He is very much aware of in the public sector. the issues, but it is ultimately going to come down to Transport Ministers. Q68 Nigel Mills: I have a couple of questions on banking. You will be aware that is our current inquiry. Q62 Kate Hoey: Who will make the final decision? There has been some disquiet about the potential fate Mrs Villiers: Robert Goodwill will make the decision. of Ulster Bank, depending on what RBS decides to do, but that appears to have gone away a little. Have Q63 Kate Hoey: He will personally sign it off. It will you been involved in those discussions about ensuring not go to the Secretary of State or to the Ulster Bank is a healthy, viable bank in Prime Minister. Northern Ireland? Mrs Villiers: I am sure the Secretary of State for Mrs Villiers: Yes, I have had a number of Transport will be notified of the decision and will be conversations with my Treasury colleagues, including aware of it, but my understanding is that the actual the Chancellor. It was very helpful to have the input decision is going to be made by Robert Goodwill. of Northern Ireland Executive Ministers on various occasions as well. I was very concerned about the risk Q64 Lady Hermon: Secretary of State, before we that Ulster Bank might be cut adrift from RBS and move on to another topic, could I have confirmation the nightmare scenario of it becoming the bad bank from the Secretary of State that you are batting to for all of the RBS Group’s toxic debts. I am very keep the jobs at the DVA in Coleraine, in Northern pleased that has not happened. Ireland? I would ask you to confirm that the wider The announcement last week is an important step picture has been looked at. This is not just about forward. Ultimately, it will mean that Ulster Bank not efficiency savings. Amongst loyalists and those who only continues to be an important part of a UK-wide feel very acutely aware of their British identity, operation, but it will also have the worst of its toxic centralising jobs such as those in Coleraine debts removed from its balance sheet and put into this somewhere else within the UK—at the DVLA in new internal bad bank. Ulster Bank will be better able Swansea—is perceived as a polite disengagement by to service business and consumer needs in the British Government from a key region within the Northern Ireland. It simply has not been able to act as United Kingdom. Does that play into your decision a normal bank over recent years. I know that staff and that of Robert Goodwill? have done their best and worked hard, but if your Mrs Villiers: This issue is not driven by any balance sheet is that impaired it does make it very disengagement. Robert Goodwill will need to look at difficult to act in a normal way. I hope this will mark cobber Pack: U PL: COE1 [O] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 11

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour a fresh start for Ulster Bank, though there will also be private-sector jobs. One of the single largest some further difficult decisions in the future. employers in Northern Ireland is the tobacco industry. They employ 1,000 people in my constituency. On 10 Q69 Nigel Mills: While we are on state-owned bad December, if this Directive comes into place, they will banks, is there any progress on NAMA’s activities and have to sack 300 people, because their machines are their impact on Northern Ireland? set up in such a way that they can only produce packs Mrs Villiers: I have met NAMA and I certainly had of 10. Those jobs will move to their other European various discussions with the Irish Government on this. plants. That means my constituency will lose 300 In some ways, there certainly is some positive news jobs. If you put that on top of the 300 we could about the way NAMA has tried to work with potentially lose to Swansea, we might lose 600 in the borrowers and find a pragmatic way through, rather private and public sectors. than pushing through a fire sale of assets. It is not all This Committee contends that you can stop both from bad news, but if you have particular concerns about happening. Whatever happens with Swansea, it is a instances where NAMA have been acting in a way matter directly for the Government. This is a matter that is causing difficulties in the Northern Irish now directly for your Government. Can you stop the economy, I would be delighted to hear them and take implementation of the EU Tobacco Products Directive them up with NAMA directly. on 9 December? If you do not, the consequences for Northern Ireland are dire. Q70 Nigel Mills: I can think of some outside Mrs Villiers: Where I agree with you is that decisions Northern Ireland, actually, but that is not for today. on the Directive need to be made on the basis of Did you chair the Joint Ministerial Taskforce on evidence. In looking at the evidence, you need to look Banking and Access to Finance in Northern Ireland a carefully at the possible health impact of changes, but, few weeks ago? also, you need to look at the economic impacts. Mrs Villiers: Yes. Obviously, there is a need to make sure that we do not do something here that exports an industry and does Q71 Nigel Mills: Is there any update you could give not have a significant impact on public health. You us on what was discussed or what the outcomes of will appreciate that this, though, is a matter for my that might have been? colleagues at the Department of Health to speak on. Mrs Villiers: I hope I remember all of the issues. We They will make decisions. had a discussion about RBS and Ulster Bank’s future. I thought we were quite a bit further away from the We also considered the UK Government lending 9 December date for implementation, because it has schemes and the concern they were not performing as only relatively recently gone through the well in Northern Ireland as elsewhere. In particular, EU Parliament. I am, however, happy to look at that. we were looking at the Enterprise Finance Guarantee I can assure you that my colleagues—when they go scheme, which I would certainly really like to see to the Council of Ministers and decide how to vote on having a broader appeal in Northern Ireland. We had this—will be looking at the evidence, just as they did a brief discussion of Help to Buy as well. Those were in relation to plain packaging. the main things, but I can check whether any other issues came up and drop you a line about that. Q73 Ian Paisley: Secretary of State, I would appeal to you to speak to the Treasury, to your colleague, Q72 Ian Paisley: Secretary of State, I remember Ms Morgan, and to the Health Minister, Secretary of 12 July this year for very obscure reasons. Your State Hunt, and appeal to them not to pursue this Health Minister said, on the floor of the House, that policy and to block it, because of the dire they were not going to proceed with plain packaging consequences it will have, primarily on employment for cigarettes because there was not “sufficient in Northern Ireland but, secondly, we are awaiting evidence” at that point and they would now search for evidence on the big picture. Your Government has and await the evidence before making a decision. That already announced that they are awaiting evidence and is an eminently sensible way to formulate policy: look they should await that evidence and look for how to at evidence and base your decisions on it. deal with this issue. Grappling with tobacco products However, on 9 December this year, the European is a difficult issue. Thirdly and finally, however, if you Tobacco Products Directive will come into force. If it cannot buy packs of 10 cigarettes and smaller pouches is not opposed by Her Majesty’s Government, it will of roll-your-own tobacco, quite frankly people will mean the very evidence we were waiting to see will not go into the supermarket or shop and spend £7 or no longer be pertinent and they will then implement £8 for a packet of cigarettes; they will go to the man the changes without the evidence. In particular, they who sells it from the boot of his car and they will will eliminate packets of 10 cigarettes; the minimum buy packs of 10 that are illegally imported by him. you will be able to buy will be 20 cigarettes. The Criminals will benefit; society will, unfortunately, be minimum amount of roll-your-own tobacco, which is harmed; and the consequences are bad for the single largest sales product in the the Treasury, because you lose the tax take on all of United Kingdom, will be 50 grams as opposed to a that. minimum of 20 grams. I would appeal to you today to go and knock on the What does that mean for Northern Ireland? You made door of the Secretary of State for Health and on the a very interesting comment a moment ago. You said door of Ms Morgan, ask them about this policy and there has to be a rebalancing of the economy. If tell them very strongly about the consequences for public-sector jobs go, we have to search for Ulster. cobber Pack: U PL: COE1 [E] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Ev 12 Northern Ireland Committee: Evidence

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour

Mrs Villiers: As I say, it will be important for them Q77 Mr Hepburn: One side of the community, to take into account the economic impacts and, of particularly the loyalists, feel as though they have lost course, the impacts on smuggling and tax evasion as out during the process. Presumably you would reject well. I am sure they will do that. I am happy to pass that. How would you answer loyalists if they came on your comments today. Ultimately, these are matters forward and made that assertion to you? for them to decide—not the Secretary of State for Mrs Villiers: I have had many discussions with them Northern Ireland. about this. It is always worth remembering how much the peace settlement has transformed life in Q74 Kate Hoey: Secretary of State, 300 jobs are Northern Ireland. People in Northern Ireland do not probably going to go—though hopefully not in live with that day-to-day threat of a terrorist attack. Coleraine; 300 at least will go if this goes through. The reality is, despite the DR threat, most people in You are the Secretary of State for Northern Ireland; Northern Ireland can now live a normal life, which you are the person who should be in there batting for would have been impossible during the troubles. The Northern Ireland. security apparatus has been dismantled, and the hassle Mrs Villiers: I do bat for Northern Ireland. that went with it. The Belfast Agreement has also Kate Hoey: I appreciate that you do on a number of settled Northern Ireland’s place in the issues. I am simply saying that, rather than you saying United Kingdom on the basis of consent, and all of you will pass on my colleague’s remarks— the indications are that there is a majority now for that Mrs Villiers: These are difficult issues. There are position, and every likelihood that will continue into factors to be taken into account on both sides—both the future. There is also now constitutional and legal the economic ones and the health ones. My colleagues protection for identity under the Belfast Agreement, both British and Irish. at the Department of Health are better able to make those judgments than I am, because they have the lead There are many ways in which everyone across the responsibility here. This is not a matter for the community has gained from the Belfast Agreement. Secretary of State for Northern Ireland to decide. However, I can assure you that the Government will Q78 Mr Hepburn: I did hear a fact I was surprised look with care at the economic impacts of the by: there are more peace walls in place now than there Draft Tobacco Products Directive before they make a were before the signing of the Belfast Agreement. decision on that. Who do you think is to blame for that? Mrs Villiers: I believe it is true that there are more interface walls now than there were when the Q75 Mr Hepburn: It is said that Northern Ireland is agreement was signed. It is difficult to attribute blame more segregated now than ever; what is your view? for that. The sad reality is that, at the moment, people Mrs Villiers: From the many people I meet out and living around those interface walls generally want about in Northern Ireland, my impression is that the them there. That is why they are there. It is important vast majority of people in Northern Ireland have for the proposals in the Executive’s strategy for moved beyond sectarian prejudices and building a united community going forward. At the preconceptions. There is no doubt that in parts of the heart of those is finding a way to reassure the community there are still some very significant communities that currently have interface walls that it divisions. I welcome the Executive’s efforts to address is going to be okay, and that the law-and-order and them. It should be a very high priority for the crime situation can give them the confidence to see Executive going forward and that is one of the reasons those walls coming down and to build confidence that I hope the Haass talks will succeed, because they look they can live side by side with their neighbours at issues that can cause such tension and instability, without having to have huge walls between them. It and play into those underlying sectarian divisions. is not a process that can happen quickly. The Executive is right to say that it has to be a process of Q76 Mr Hepburn: What role do you think the building confidence over a period of time. Tying it in British Government and local politicians have in with regeneration projects in deprived communities is respect of bringing the communities together? also a helpful way forward. Mrs Villiers: Certainly, it is one of my priorities to work with and encourage the Executive to go forward Q79 Chair: Education is obviously devolved, but last with programmes that unify the community. This was night Stephen and I, and maybe one or two others, at the heart of the economic pact the two were at a very large dinner held in the House of Lords administrations signed. This was addressed directly in by the Integrated Education Fund. Obviously, there is terms of the peace-wall additional funding to try to some integrated education in Northern Ireland. How support those kinds of community cohesion important do you see that as being? It is still a very programmes, but also with the additional capital small percentage of children who are educated in such borrowing powers. a way. How do you view that? The first of that money is being drawn down to Mrs Villiers: The integrated schools movement has support the Shared Educational Campus at Lisanelly, done a tremendous amount of good work. Addressing which will be a big step forward in ensuring that more sectarian divisions in education is not only about children can share part of their education with people integrated education. It is important to find ways to from different communities. Pushing forward with address those divisions whilst also respecting parental those shared education opportunities is, obviously, a choice. In my constituency, I am a great advocate of crucial part of bringing the community together. faith schools. I would find it difficult to turn around cobber Pack: U PL: COE1 [O] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 13

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour and say that people in Northern Ireland were not David Ford is working very hard to try to secure allowed to send their kids to a faith-based school. agreement from Sinn Féin and the SDLP. The It is crucial to find a way to ensure that all children Chief Constable’s concept of vicarious liability is well have the chance to spend part of their education worth considering. However, there is a continuing learning alongside children from different debate around the direct relationship between the backgrounds. You can do that via more integrated NCA and the Policing Board. Certainly, the Home schools, but you can also do that with the shared Secretary has been very flexible, and Keith Bristow campuses I was talking about before, like Lisanelly, has made it very clear that he would be prepared to and a range of other ways to get schools working go the Northern Ireland Policing Board and appear together, sharing classrooms or sports facilities. It is also in front of the Justice Committee in the vital that this work is done, but trying to force Assembly. What was on the table when the Bill was everyone into one single integrated model is not the going through Parliament would have secured the right way forward to do that. primacy of the Chief Constable and been consistent with the devolution settlement, but we continue to Q80 Chair: Indeed, I attended a faith school myself work to see whether there is further reassurance we and I am grateful for it. Where I went, however, is can give to secure agreement within the Executive for very different from West Belfast, for example. It is the extension of the NCA’s remit. not a matter of forcing them together. In fact, one could argue they are forced apart now. Q83 Ian Paisley: Are you prepared to put a deadline Mrs Villiers: Certainly, as I say, integrated education up and say, “We will allow this flexibility to remain should play an important part in addressing sectarian in place until such and such a point”? I am not asking divisions. It is also important that faith-based schools you to reveal that point in time, but are you working make sure they reach out beyond a single faith, to to a deadline, so at some point, if you cannot get ensure that children have the chance to know people agreement, either yourself, the Home Secretary or the from other faiths and from none, and others from Justice Minister will proceed to the point that different community backgrounds. something is done to address this terrible issue, where Northern Ireland is now left prey to some of the Q81 Chair: The school I was Chairman of Governors world’s worst international criminals? at was also a Church of England primary school, but Mrs Villiers: If you set deadlines, the implication 54% of the population were Muslim, because they would be that the House of Commons would legislate respected the value of religion although it was not at that point. We would be left with the same necessarily their particular angle. Surely there are constitutional problem. opportunities there, are there not? Ian Paisley: That is why I am not asking you to set Mrs Villiers: Certainly, many faith schools across the them publically. UK accept children from other faiths. Again, though, Mrs Villiers: I am not sure that a deadline is a viable that is not the only way to make sure they engage with way forward on this, but I will continue to make the a cross-community mix. There are schools that have a case very strongly that, without NCA being able to single-faith intake that do great work in the broader operate in devolved areas of criminality, it will make community with other schools and other institutions it harder for the police to fight organised crime, child from different faiths and backgrounds. exploitation and international crime. All of these things will be more difficult for the PSNI and we will Q82 Ian Paisley: Secretary of State, this is about the have a financial cost for the Executive, because the National Crime Agency. Last week, the PSNI or other institutions will have to develop their Chief Constable gave evidence to us. He said that the own capabilities on, for example, chasing after NCA not being extended to Northern Ireland could criminal assets and dealing with the proceeds of result in Northern Ireland becoming a place of great crime. attraction to international crime. Last year, I recall we took evidence from the First Minister in the Q84 Ian Paisley: On a different subject in the same Parliament Buildings in Stormont. He indicated that area—crime—in Northern Ireland the Exchequer he agreed with the view that if the Northern Ireland loses £20 million every week because of smuggled Executive could not get it operational in fuel and unpaid duty on fuels. As you know, the Northern Ireland, Parliament should legislate over our Committee has carried out an inquiry into this issue. heads in Northern Ireland and get on with it. They are looking for new technology and a new Last week, the Chief Constable said that concerns marker in the fuel, as I understand it. The Cross about accountability could be overcome if he became Border Fuel Fraud Enforcement Group that was set vicariously liable for the actions of the NCA. Are you up to deal with this has now come to an evaluation of prepared to make him vicariously liable, let this those who have looked at the marker. That evaluation process now be put to bed and get the NCA is now complete, and my understanding is that the operational in Northern Ireland as it should be? Republic of Ireland authorities are anxious to proceed Mrs Villiers: We are not prepared to legislate over the to the point of implementation. This would be good heads of the Assembly, because that would be quite a news; how quickly can the Government push the fundamental breach of the conventions underlying the button on implementation on our side? Belfast Agreement and the devolution settlement. It Mrs Villiers: My understanding is broadly the same would have a very destabilising effect. I do not believe as yours, in that the evaluation group has completed that is an option. their evaluation and presented their recommendations. cobber Pack: U PL: COE1 [E] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Ev 14 Northern Ireland Committee: Evidence

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour

They are with UK Ministers now, and I am certainly Mrs Villiers: It comes up at almost every discussion I anxious to see this come to a conclusion. I will take have with the PSNI and in frequent discussions with this up with David Gauke, who is the lead Minister colleagues as well. on this. Q89 Kate Hoey: Do you have a regular weekly or Q85 Ian Paisley: Do you think we could have this monthly meeting? by Christmas? Mrs Villiers: The security-interface meeting is once a Mrs Villiers: I do not know. I can certainly check that month. It is at least once a month, but there are very with Treasury colleagues. often conversations in between times. It is a difficult situation. I can understand the Chief Constable’s concerns, particularly about his problem in terms of Q86 Ian Paisley: I understand that there is probably the coincidence of a number of people possibly a lead time for new technologies to be taken up retiring early to take advantage of a particular anyway; it would be weeks and weeks and weeks opportunity and the difficulty in replacing them, given away if the button were pushed today. However, the uncertainty about his long-term budgetary Secretary of State, if something was done by position. There is some work going on between Christmas it would be the biggest slap in the face to officials at the DoJ and the Department of Finance some of these international gangsters and criminals and Personnel; the Northern Ireland Office is also that run riot in our community, and you would get one taking part in that to try to find a way forward. of the biggest cheers from society for at last taking on We have obviously secured additional resources in this issue, where the Government is losing lots and this current spending review and in 2015–2016. I lots of money every week. continue to believe that the primary responsibility here Mrs Villiers: I agree that it is very important to move has to be with the Executive to find the funds out of as quickly as we can, and I will make sure that is the block grant, but we have demonstrated in the past conveyed to HMRC and HMT colleagues. that we will do all we possibly can to support and help. Given the budgetary restraints that policing is Q87 Ian Paisley: Finally, remarks were made under right across the UK, I cannot make promises at recently by the Irish Minister for European Affairs, this stage as to whether that additional funding we Paschal Donohoe TD, that he was concerned by what have provided will continue into the future. However, he described as the British Government’s efforts to I know this is a problem; I am working closely on water down EU co-operation in the fight against crime this, and I am keeping in touch with colleagues and by, for example, pulling out of 130 EU judicial and the PSNI about it. home affairs agreements and opting back into the Kate Hoey: Would you be prepared to say you are EAW only under changed terms. Do you have any confident at this stage they have enough resources for response to that? the next year, given a situation similar to some of the Mrs Villiers: The Home Secretary has looked very things that have happened over the last year? carefully at justice and home-affairs measures. As a Mrs Villiers: I believe they have sufficient resources, party, the Conservatives have always had concerns but we do need to look at the future of their funding about the expansion of EU power into the area of beyond 2015–2016 to make sure we give them the justice and home affairs. We have taken into account resilience they need. those concerns and, also, looked at the practicalities to see which of these measures genuinely assists the Q90 Chair: Some strong comments were made at the fight against crime and that is what is behind the British-Irish Parliamentary Assembly, which you very process the Home Secretary has undertaken. We are kindly attended, by Judith Gillespie about funding. I very determined to defend our sovereignty and to cannot remember her precise words, but she said that defend against inappropriate encroachment by the pattern of policing and way of policing would be Brussels, while being pragmatic and ensuring, if and affected by the resource situation. She was quite clear when these measures are actually helpful for tackling about it. criminals, we will opt back into them. Mrs Villiers: One of the reasons why we have Chair: Secretary of State, could I clarify what time provided additional money for national security you have to leave us today? policing is to free up resources, so that the PSNI can continue to deliver community policing, which is Mrs Villiers: It is just around now. crucial not only in the fight against crime and public Chair: With apologies to other members, there is one reassurance, but is also hugely important in final issue we need to discuss: PSNI resources. normalising attitudes to policing. We will continue to work with the police to do all we Q88 Kate Hoey: It was very worrying when the can to ensure that they have the resources they need, Chief Constable came to speak to us, not just about but it is important for all of us to recognise that things the NCA, which is really serious, but also about the like the rioting after 12 July—or if we had a way in which policing in Northern Ireland and the rest recurrence of significant protests, such as the of the UK is being driven apart, because of this fact continuing protest camp on Twaddell Avenue—do that we are not part of the NCA. More importantly, have a bearing on the pressures on police. They have how often do you meet him to discuss resources to a bearing on resilience. It is always worth restating fund the fight against dissident republicans and those that not only do street protests and riots have an from the loyalist community? impact in terms of the human cost to the police who cobber Pack: U PL: COE1 [O] Processed: [23-12-2013 07:30] Job: 035313 Unit: PG01 Source: /MILES/PKU/INPUT/035313/035313_o001_MP Corrected transcript SofS 06.11.13.xml

Northern Ireland Committee: Evidence Ev 15

6 November 2013 Rt Hon Mrs Theresa Villiers MP, Julian King and Mark Larmour have been injured, I am afraid they have a very real recover the remains of the Disappeared? Can I have financial cost to the police, and make it tougher for that commitment? them to spend their time pursuing criminals Mrs Villiers: Yes, you certainly can. elsewhere. Q95 Lady Hermon: Could I also ask you, Q91 Kate Hoey: Could I ask one final question? Do Secretary of State, to please remember that, when we you have full confidence in the Victims’ are talking about the Disappeared, there is also the Commissioner? tragedy of Lisa Dorrian, who was murdered and Mrs Villiers: I do, yes. disappeared eight years ago—not yesterday, but eight years ago—by those with loyalist paramilitary Q92 Lady Hermon: This is a brief question, but I connections? Her remains have never been recovered. could not possibly let you leave today’s Committee It is an extraordinarily painful and harrowing situation session without asking you to address the very for all of the families of the disappeared. Can I have harrowing and painful issue of the Disappeared. I your assurance that, when we are looking at those who assume the answer is going to be yes, but let me have been disappeared by republicans and, indeed, by check: did you see Darragh MacIntyre’s documentary loyalists, the same vigour and rigour will be given to earlier this week? recovering Lisa Dorrian as with the other Mrs Villiers: I have not yet seen it, but I have seen a disappeared? summary of it. Mrs Villiers: Yes, I agree. We must give that the same effort and resources. It is very important that every Q93 Lady Hermon: In light of the documentary and effort is made to try to find answers for all of the in light of the fact that years and years have passed families of the disappeared. since many of the disappeared were murdered and disappeared in bogs, what additional measures are the Q96 Lady Hermon: Your message to the families of Irish Government—and, indeed, the all of the disappeared, including Lisa Dorrian, is that British Government—prepared to make to bring the no stone, literally, will be left unturned in terms of remains of those who have been disappeared home? resources. Mrs Villiers: We have had an appeal only this week Mrs Villiers: It is vitally important that those cases following the programme for anyone with further are properly investigated, along with the other names information to come forward. The reality is that the that are on the list of the Disappeared. investigations into the Disappeared have produced Chair: We will have to close this session now. I hope some results, but it is a continuing tragedy that there everybody in the public gallery—I understand there are so many families who still do not have answers are very many from Northern Ireland here—found it on what happened to their loved ones. very interesting, and I hope the new Irish Ambassador to London and his team found it very interesting. You Q94 Lady Hermon: Secretary of State, will you be are all very welcome. Secretary of State, thank you speaking to certain very senior members of Sinn Féin, very much for what has been a very useful and who have been identified in the documentary? Will interesting session. you be asking them to help in any way they can to

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