National Insurance Contributions Bill – in a Public Bill Committee at 10:00 am on 22nd June 2021.
Clause 5 confirms the Government’s commitment to provide a freeport NICs relief in Northern Ireland. It gives the Treasury the power to legislate for the detail of the freeport NICs relief in Northern Ireland in secondary legislation. The power is limited in so far as the relief must be similar to or correspond to that available in Great Britain.
In Northern Ireland, the specific design of the relief will have to comply with European Union rules on the provision of state aid, due to the requirements of the Northern Ireland protocol. It will be developed and agreed through a process of engagement with the Northern Ireland Executive on the detail of the wider freeports offer in Northern Ireland.
This Bill legislates for a power to allow the Government to set out the detail of the employer NICs relief in Northern Ireland in secondary legislation once engagement with the Northern Ireland Executive is complete. These regulations will be laid at the earliest possible opportunity once negotiations with the Northern Ireland Executive have given a clear indication of consensus on the tax offer.
Given the timing of the Bill, I trust Members will see that this approach is sensible, and ensures all stakeholders are fully engaged. I commend the clause to the Committee.
Clause 5 gives the Treasury a regulation-making power to provide for a freeport secondary class 1 NICs relief in Northern Ireland. On Second Reading, the Minister assured us that, although the measures in clauses 1 to 4 relate to Great Britain, it is the Government’s intention to legislate for this relief in Northern Ireland as soon as practicable. He drew attention to the fact the Bill provides the Government with the power to set out the detail of employer NIC relief in Northern Ireland in secondary legislation once engagement with the Northern Ireland Executive is complete.
I note that the House of Commons International Trade Committee’s recent report on UK freeports, published on
“under the Northern Ireland Protocol the EU state aid regime applies, certainly to Northern Ireland where there is an effect on trade between Northern Ireland and the rest of the EU. You should also bear in mind that the protocol is probably wide enough to catch any freeport legislation that applies throughout the United Kingdom.”
The Chief Secretary to the Treasury acknowledged to the Committee that the freeport offer would have to be adapted to comply with the UK’s obligations under the Northern Ireland protocol. Acknowledging that, the Committee’s report concluded that it is clear the Northern Ireland protocol will impact the terms under which a freeport can be established in Northern Ireland. It recommended that the Government should set out in their response to the report their view on how the freeports model will need to be adapted in Northern Ireland to comply with the terms of the protocol. I would be grateful if the Minister could give us an update on the Treasury’s thinking in that regard.
I would also like to clarify a comment in the memorandum from the Treasury to the Delegated Powers and Regulatory Reform Committee on this Bill. On clause 5, the memorandum says:
“The Government’s intention is that the employer NICs relief for Freeports employers is in place by
I would be grateful if the Minister could confirm whether that means it is the Government’s intention, as set out in the memorandum, for a freeport to be established in all four nations of the UK by
I thank the hon. Gentleman for his questions. He asked me to update the Committee on the detail of the discussions with the Northern Ireland Executive on a freeport and noted the comments made by the Select Committee. I am afraid I am not in a position to do that. These things are subject to current discussion and negotiation. It is a matter of some complexity and I do not think it would be appropriate to do so. I assure him that once matters have reached a conclusion and a consensus, Parliament will of course be given a full picture of what has taken place and I am sure colleagues will take a great interest.
He also asked a question about timing. For the reasons I have indicated, I do not think it would be prudent to specify a time by which a particular freeport, either one in process at the moment in England or one in the devolved Administrations, will be up and running. That is something for the Governments concerned and for the freeport operators and there will of course be processes of further designation that will need to be gone through. I assure him that it is certainly the UK Government’s intention that this should be done as rapidly and effectively as possible, across the whole of the UK.