SOCIAL SERVICES (NORTHERN IRELAND AGREEMENT) BILL (Hansard, 28 February 1949)

§ Mr. Osbert Peake (Leeds, North)
I rise to make an inquiry of the right hon. Gentleman in regard to a point which I should have raised, had I been in time, during the Committee stage. It is upon the interpretation of the Schedule to the Bill, to which I addressed myself during the Second Reading Debate. Paragraph 2 of the Schedule to the Bill tells us that if in respect of any financial year the total net Exchequer cost in Northern Ireland is less than 2½ per cent. of the total net Exchequer cost in Great Britain and Northern Ireland—that is, of the social services referred to in the Bill—then there is a transfer of 80 per cent. of that amount from the Northern Ireland Exchequer to the Imperial Exchequer, or, vice versa, if the proportion is something more than 2½ per cent. It appears from paragraph 2 (iii) that this proportion has been ascertained, not with regard to the insured population only, but with regard to two factors, one being the total population of Northern Ireland in its relation to the population of the United Kingdom as a whole, and the other factor being what is called the "taxable capacity."
Now, the right hon. Gentleman, in replying to the Second Reading Debate, rather indicated that the calculation of 64 these two factors was a matter which would not arise until the Agreement came to be revoked in three years' time, but in point of fact this paragraph 2 (iii) clearly indicates that these two factors have already been taken into account, because it speaks of the proportion which, at the date of this Agreement, the population and taxable capacity of Northern Ireland bore respectively to the total population and total taxable capacity of Great Britain and Northern Ireland. So it is clear that these two factors, which govern the whole of the financial provisions of this Agreement, have already been taken into consideration in drafting the Agreement set out in the Schedule. I hope the right hon. Gentleman will be able to explain to us how it is possible to relate the figure to two factors either of which may vary and both of which may vary, and may on occasions vary in opposite directions. Until the right hon. Gentleman has explained how it is possible for this to be done, I do not think that the House or the public can have a clear understanding of the financial basis of the Bill.

§ Professor Savory (Queen's University of Belfast)
I should like to point out what I think is extremely important—that this Bill was anticipated in full by the Unemployment and Family Allowances (Northern Ireland Agreement) Act, 1946, and I think that paragraph 7 (2) and the Schedule to that Act has a very relevant bearing upon this question. It says: This Agreement shall remain in operation until superseded by a further Agreement between the Commissioners of His Majesty's Treasury and the Ministry of Finance for Northern Ireland who shall consult together as to the extension of this Agreement to comprehend so far as is found to be practicable in the then existing conditions the services covered by the Family Allowances Act, 1945, the National Insurance Act, 1946, and the National Insurance (Industrial Injuries) Act, 1946, and the Bill at present before the Parliament of the United Kingdom and known as the National Health Service Bill. So this Bill only carries out what had been clearly anticipated in the previous Measure.
I think we should insist upon what was said during the Second Reading Debate, that this Bill is in no sense a subsidy to Northern Ireland. The net amount paid by Northern Ireland since the 65 Northern Ireland Government came into existence in 1922 is no less than £194 million sterling. That is the net payment paid by Northern Ireland as a contribution to the British Treasury. I feel obliged to emphasise this point because it was only this morning that I read in the Irish papers that a deputation had been received by the Congress of the United States insisting that subsidies are given to Northern Ireland which are derived from American money and imploring Congress to refuse to make any further grant to the British Government for so long as partition existed. I think that it is very important in this House to deny—

§ Mr. Deputy-Speaker (Mr. Bowles)
The hon. Gentleman is going very much too wide on Third Reading.

§ Professor Savory
I apologise. I felt that it was necessary to point out that we have made a net contribution of £194 million since 1922.

§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
May I first deal with the observations made by the right hon. Member for North Leeds (Mr. Peake)? I do not read into my winding-up speech in the Debate on the Second Reading the interpretation which the right hon. Gentleman has placed upon it. I then said: It is true that, in my very brief speech, I did not mention the fact that taxable capacity had also to be taken into account; but then I did not refer to the fact that a review would take place at the end of three years. I did not pretend to cover everything."—[OFFICIAL REPORT, 22nd February, 1949; Vol. 461, c. 1750.] I went on to say that, when such a review does take place, both factors would be taken into account. Both have been taken into account in fixing the figure which appears in the Agreement; the review in three years' time will be along the same lines.
As I said when we were discussing this matter on Second Reading, it is not intended, and indeed it would be, in fact, quite impossible, to derive an exact figure from this formula. As the right hon. Gentleman quite properly said, the variations may cut both ways. Even in arriving at the figure of 2.5 per cent., which is the one in the agreement in the Schedule to the Bill, the exact proportions 66 have not been taken. The figure is an approximate one and one which we think is just and fair; it has certainly been agreed to both by the Imperial Government and the Government of Northern Ireland. Therefore, it seems to me that when the Joint Exchequer Board and those responsible come to discuss this in three years' time, they should have no real difficulty in taking the two factors into account and yet arriving at a just and fair figure.
What the hon. Member for Queen's University of Belfast (Professor Savory) has said is correct. This year, the amount which Northern Ireland will pay by way of Imperial contribution is between £21 million and £22 million. Northern Ireland always has met her obligations to the full. I think that it is only fair that someone from this Box should acknowledge that and make it clear to the House, the country and the world that Northern Ireland is part of the United Kingdom and that, as part of the United Kingdom, it meets her obligations to the full.