HC Deb 04 August 1972 vol 842 cc1111-35

11.7 a.m.

The Minister of State for Northern Ireland (Mr. Paul Channon)

I beg to move, That the Finance (Northern Ireland) Order 1972 (S.I., 1972, No. 1100), dated 26th July, 1972, a copy of which was laid before this House on 28th July, be approved. The House will be aware that parity in taxation is a major principle governing the relationship between the United Kingdom and the Northern Ireland Exchequers, and the main purpose of this order is to effect changes in Northern Ireland transferred taxes which have already been enacted for Great Britain in the Finance Act, 1972. These concern estate duty, stamp duty, motor vehicle licence duty, selective employment tax and general betting duties. As the House knows, these have already been considered in great detail during the passage of the Finance Act, 1972.

The most important of the parity changes were proposed in the White Paper "Northern Ireland: Financial Arrangements and Legislation", which was presented to Parliament on 5th June, 1972. Hon. Members will recall that there was a debate in which this matter was referred to in some detail by my hon. Friend the Under-Secretary on 12th June. I think that I can confine myself to going through the order. The parity changes provide, with estate duty, for an increase in the exemption limit for estate duty from £12,500 to £15,000 and for a new scale of rates. In addition, property left to a surviving spouse up to a sum of £15,000, to charities up to £50,000 and to certain bodies concerned with preservation of the national heritage, including the Ulster Museum and the Ulster Folk Museum, is to be left out of account for the purposes of estate duty. As in Great Britain, these changes take effect from 21st March.

Under stamp duty, there is provision to increase to £10,000 and £15,000 respectively the limits for exemption from transfer duty and the reduced rate of transfer duty on transfers of property other than stocks and shares. The provisions concerning motor vehicles are necessary because of the introduction of car tax and value added tax and to amend the provisions exempting from licence duty vehicles used by certain classes of disabled persons to take account of revised arrangements for grant aiding the provision of such vehicles. There is also the provision to increase from 8 hundredweight to 10 hundredweight the weight limit for exemption from duty of invalid carriages.

The abolition of selective employment tax in the Finance Act, 1972, applied to the whole of the United Kingdom but the provisions for refund of SET are contained in Northern Ireland legislation. We therefore need to provide separately in the order for winding up the system of refunds by setting time limits of three months and six months respectively for Northern Ireland employers to apply for registration and submit claims for refunds.

In Part VI the order provides for general betting duty on on-course bets to be reduced from 5 per cent. to 4 per cent. The only point I ought to mention to the House in relation to the changes arising out of the Finance Act, 1972, in which we follow wholly the British pattern on this occasion, is that the order contains in Article 17 provisions to allow, with effect from 31st July, for the range of selective employment tax refunds to be extended for employers in Northern Ireland. This relief was part of the package of measures to assist the Northern Ireland economy announced by my right hon. Friend on 27th July.

Apart from that, there are provisions for making minor amendments of Northern Ireland legislation on estate duty and stamp duty which have already been enacted for Great Britain in previous Finance Acts. There are also administrative provisions relating to the Civil Contingencies Fund and the Road Fund. If the House would like, I can deal with this in a little more detail. I have covered the matters dealt with by the British financial legislation and I am not sure that there is any need for me to spell out in any detail any other matters unless hon. Members would like me to do so.

Article 20 seeks to increase from £1 million to £10 million the amount by which the Northern Ireland Civil Contingencies Fund may be temporarily increased in an emergency. The existing limit on a temporary increase was fixed at £1 million in 1950, since when there has been a more than ten-fold increase in the Supply Estimates.

Apart from that, there is a special reason why, in present circumstances, we need the additional flexibility which would be afforded by power to increase the Civil Contingencies Fund. The difficult situation in Northern Ireland can impose large and unexpected increases in expenditure and further increases may arise from new policies which my right hon. Friend the Secretary of State may adopt. A concrete example of this problem about which the House would be anxious to have no difficulty is the Vote for compensation on which expenditure is running well ahead of the estimate, partly because of the recent increase in the total of damage and partly because of a deliberate policy of speeding up the payment of compensation wherever possible.

I hope that we shall be able to make the payment of compensation even faster because I have had many representations from hon. Members and others in Northern Ireland that it is essential. I am sure that the House would not want any legislative bar to stop us from doing that. That is why it has been thought right to propose in Article 20 that the figure of £10 million should be substituted for £1 million.

I have not taken up much time because this order follows what has happened in the rest of the United Kingdom and it has been debated at considerable length in the House during the discussions on the Finance Act. The House will appreciate that the question of finance legislation is urgent in Northern Ireland, just as it is in England. I therefore hope that the House, before it rises, will feel able to pass the order, which gives final approval to the financial measures proposed in Northern Ireland this summer but which need the approval of this House and another place.

11.12 a.m.

Mr. Merlyn Rees (Leeds, South)

I, too, wish to be brief, but there are a number of general points which should he aired, particularly as there is to be a great deal of discussion in the approaching weeks about the political future of Northern Ireland. While there is a great deal of discussion about the form of government in Northern Ireland, there seems to be little thought about the question of financing in Northern Ireland. I do not think that even some prominent politicians in the North of Ireland have looked very carefully at the figures, and it would therefore be as well if, however briefly, we aired the matter today.

The order is based on the Government of Ireland Act. The question of the share of the reserve taxes—income tax, corporation tax, purchase tax, and so on—is determined at Westminster. I presume that what we are talking about are the transferred taxes, those which were under the control of Stormont—betting duties, motor vehicle duties and some aspects of selective employment tax, although when I first looked at the figures I assumed that the question of selective employment tax would be dealt with at Westminster.

In dealing with the order which raises the revenue, we should look at the figures in Cmnd. 4998—"Northern Ireland Financial Arrangements and Legislation". This shows the very small amount of revenue with which we are concerned in this order. The total revenue in the Budget Estimate of 1972–73 is nearly £442 million. The figure under the transferred tax revenue is £37 million. Thus about £40 million is in effect the budget of Northern Ireland.

Mr. Craig, in the North of Ireland, talks about UDI for Northern Ireland. Perhaps it is possible, but there would have to be a fairy godmother somewhere before it could happen in view of the figures. If people, having taken account of the figures, want UDI, then so be it. But, in terms of the standard of living in the North of Ireland, there would be a very great change—

Rev. Ian Paisley (Antrim, North)

Does the hon. Gentleman agree that no large section of the community in Northern Ireland advocates UDI and that it is total balderdash in view of the figures? Northern Ireland can survive as an economic entity only as part and parcel of the United Kingdom.

Mr. Rees

I take the hon. Gentleman's point. He can be firm about the views of politicians in Northern Ireland in a way in which perhaps I cannot. I referred to the figures in order to show the weakness of the argument about UDI. One of the basic reasons why politicians in the South are not very eager to take over the North is that they have had 50 years of government and they understand the figures. There would be a real problem for anybody running the North, in view of the figures.

Perhaps the Minister would help us on one point. The estimate of transferred tax revenue in the order is £37 million. Underneath it refers to transferred non-tax revenue of £48 million. The fact that the non-tax revenue which is transferred is greater than the tax revenue needs explanation. I am sure that there is a simple answer to it but it has escaped me.

I turn to the question of procedure. We run into trouble every time we have an order arising out of the Northern Ireland (Temporary Provisions) Act of a few months ago. When one considers that we are to have a Northern Ireland budget debate in the space of 1½ hours on a Friday morning, it makes one think. It may be that by this time next year the constitutional proposals and the changes which we want to see made in the North will be in effect. On the other hand, it may not be, and it is on this that I should like to say a few words.

We are thinking in terms of having a Committee which will consider orders before they come to the Floor of the House—something like the debate we had last week, but not in the House.

Mr. Speakers

I hesitate to interrupt the hon. Gentleman, but he said a moment ago that the debate could continue for 1½hours. In fact, it could go on until half-past five.

Mr. Rees

I was rather afraid of that, Mr. Speaker. I know that you must remind me of it, but I am sorry that you did.

I hope that if we are in a similar situation next year, discussions on Northern Ireland finance can be hooked on to the discussions on the Finance Bill. The debates on the Finance Bill in the House and in Committee upstairs attract Members who are expert and interested in financial affairs and it would be a good thing if the question of Northern Ireland finance could be dealt with by the Finance Bill procedure. It would not prevent Northern Ireland Members from contributing to the discussions. Indeed, all of us who have responsibility for Northern Ireland affairs would have to be involved. So I put the point to the Minister and I hope he thinks that it can be considered.

When one looks to the discussions of the next few weeks—I hope they will be quick—when the political discussions are taking place, having looked at some of the Stormont discussions—and the hon. Gentleman the Member for Antrim, North (Rev. Ian Paisley) is a Member of the Stormont Parliament and will have participated in debates there—I would ask this question. Was there enough detailed investigation in Stormont? When we have new procedures we ought to look at the procedures of the new constitution of the North to make sure that there is enough detailed investigation, and procedure for it.

It may be that to call this sum of money, in the context of £400 million, a Budget is a delusion of grandeur. It may be that while "Budget" is an appropriate expression in relation to this on one side of the water, it is not on the other, and if there is to be a Greater London Council approach it could well be that new procedures more appropriate to the needs of Northern Ireland finance need to be evolved.

There are one or two other general points. The Minister has inherited a Budget procedure from Stormont. I ask the Minister this, in the spirit of trying to see what we can do in the context of Northern Ireland in the new constitution. What was the purpose of the Northern Ireland Budget? Was it to talk in terms purely Gladstonian—to raise revenue and to make sure the revenue would be above expenditure and would break even, and that if there should be a surplus it should be small and only to take into account contingencies—a Budget which there has not been in this country since 1947 when the Keynesian analysis came into budgetary policy with an above the line surplus and that sort of thing, and we got involved in terms of inflation and deflation? Is this what was—and is —involved in the Budget of Northern Ireland?

That leads me to the next question. What is the function of the Joint Exchequer Board where the Northern Ireland Government are involved with the Treasury? I understand that it determines the amount of reserve revenue and that it looks at the cost of reserve services attributable to Northern Ireland, which, I presume, is deducted before payments are made, and it looks at the amount of the imperial contribution and other questions.

It is important that we get clear what the function of the Northern Ireland Budget is, given this small sum, because this is important for the weeks ahead. The Minister has explained and has therefore pre-empted detailed questions about estate duty, SET, betting duty and the abolition of the road fund. He has told us they are exactly the same as those at Westminster. It makes one wonder, when one has a separate Budget, because they are exactly the same thing, according to the Minister, and that reinforces the question I ask. What was the purpose of the Budget in Northern Ireland, if that is the case, except from the accountability point of view?

The Minister mentioned the Civil Contingencies Fund. He explained that it is out of this sum—and it is growing—that compensation is paid to people whose homes are bombed. I put a point of which one of my hon. Friends reminds me—about the Co-op in Belfast, which seems to be a favourite target, having been blown up, particularly with the bad bombing of a few months ago. I take it simply as an example; I am not picking it out as being different, for other people with other premises suffer in the same manner. The question is, are they to get compensation quickly enough to get on with rebuilding?

Would the Minister consider one other question put to me recently about these small sums of compensation which are paid to people? Sometimes, as a result of searches by troops, when they come in, doors are broken. I take that as an example of damage which may be done. People are, quite naturally, antagonised by this sort of thing. I think we would all be if the Salvation Army came into our homes, let alone any other, whatever its purpose might be. Is there not some way of speeding up payments so that people do not have to wait for months to get the smallest repairs done?

Surely this could be done with the normal Finance Bill procedure. There are many more questions about which Members, from Northern Ireland in particular, are concerned on the Civil Contingencies Fund side. I have raised only one or two detailed points. My general purpose is simply to raise the issue that in the weeks ahead—I hope no more than that—as the political parties and the Secretary of State and his Ministers are discussing the future of Northern Ireland they will be coming to on the financial side. The point is that if the political side is got wrong, that will be very bad; but if we get the right sort of constitution and the wrong financial backing, then, given the problems of Northern Ireland, that will be serious indeed, and I hope that the Minister can give us some general indications in that regard.

11.25 a.m.

Mr. Rafton Pounder (Belfast, South)

First of all I apologise to you, Mr. Speaker, and to the House and the Minister for having been a few minutes late this morning, and I apologise in advance should anything I shall say have already been covered by what has already been said.

At the outset let me welcome the contents of this order. Indeed, I go further and take this opportunity of expressing appreciation and gratitude for the very generous financial and economic assistance which has been given to Northern Ireland in recent weeks and months. With the economy as it is at the present time, this assistance is not only very urgently needed but most gratefully received and appreciated.

I would make one or two general comments on what the hon. Member for Leeds, South (Mr. Merlyn Rees) said, talking rather generally about this order, before I come down to details and specific points contained therein.

When one looks at the somewhat small section of the transferred taxes in relation to the total expenditure of Northern Ireland, one realises that it is a very small figure—the sum of £30 million-odd has been mentioned—but one finds that they are becoming more and more identical with similar taxation on this side of the Irish Sea and that we are in fact talking in the order in terms of legislation here and the Finance Bill passed by this House a few weeks ago.

I certainly welcome the opportunity which this order gives us to look, for the very first time, I think, at what would have been the Finance Bill at Stormont had there been a Northern Ireland Parliament in existence. Following the point made by the hon. Member for Leeds, South, I accept his argument that were it necessary next year—obviously I hope that it will not be—to have a Finance Bill and a Finance Bill vis-à-vis Stormont, one could consider the two together, because one sees from the order and the taxation changes contained in it that these provisions are almost identical to those which were included in the Finance Bill which this House has passed.

I think that there are, perhaps, two weaknesses in particular which this order reveals. First, if there are to be two or more regional assemblies in the United Kingdom, it is all-important that regional fiscal differentials be considered. I hold very strongly the view that any regional assembly, be it at Stormont or in Scotland, Wales or wherever, should be vested with some powers of fiscal differentiation where that would be appropriate, and it seems to be a little unfortunate, to say the least of it, to find oneself, as one does in the case of this order, in a situation where one is rubber stamping parallel or identical legislation. Worse still, had there been a Stormont, and had there, therefore, been a Northern Ireland Finance Bill as such, one would have seen Stormont spending its time enacting legislation which had already gone through this House. If one is to have a credible regional policy—and I for one have a passionate belief in it—there should be regional fiscal policies and differentials. That leads one to this thought: what about some form of regional taxation or, if necessary, negative regional taxation?

In this order one of the few differentials that existed has disappeared. It was normal practice in Stormont Finance Bills for changes in estate duty to come into effect from the date of the Stormont Budget, which is normally six to eight weeks subsequent to the Budget statement in this House. In the order the effective date for estate duty changes is the date of the Budget statement in the House and not the date of the presentation of the White Paper which was the Northern Ireland Budget this year. That change of date, which makes sense to me, further underscores the virtually identical nature of the Northern Ireland finances with those of the rest of the Kingdom.

Obviously, the increase in estate duty exemption level is welcome. According to the 1970–71 returns of estate duty, there were 7,290 estates in Northern Ireland under a net capital value of £15,000, which is the new exemption limit, and only 391 estates above the £15,000 figure. Therefore, the increase in the exemption to £15,000 will be very beneficial to farms and medium-sized family businesses in Northern Ireland. Anyone who is familiar with Northern Ireland will know the overwhelming extent to which farming and small family businesses dominate the economic life of the Province.

I notice that a substantial part of the order—Articles 6 to 12 inclusive—deals with the exemption from duty of Objects of national, scientific, historic or artistic interest. I do not recall similar provisions being included in this year's Westminster Finance Bill. I wonder whether Northern Ireland is being streamlined into previous British enactments or whether I missed the provision in this year's Finance Bill.

I am glad that there has been no change in relation to gifts inter vivos in Northern Ireland. That is one differential between the rules of this country and Northern Ireland that I hope will not be tampered with. I also note that the Road Fund is being wound up. Why is that being done, particularly at this time?

I respectfully make certain suggestions on Schedule 1. It appears to have been drafted much too narrowly. The Schedule lists the recipient bodies which can receive gifts free from estate duty. Only two recipient bodies are specifically named, the Ulster Museum and the Ulster Folk Museum. The second of those is inaccurately described. I am under the impression that it has changed its title to the Ulster Folk and Transport Museum.

There follows a general description of recipient bodies exempt from estate duty categorised under three broad headings. I wonder whether three organisations which come immediately to mind are covered by these general labels and descriptions and, if not, why not? I am thinking of the Armagh Observatory, which I understand periodically receives gifts, the Scotch-Irish Trust of Ulster, which has undertaken the useful renovation of some historical cottages, particularly in the West of the Province, and the Linen Hall Library in Belfast, which has the best collection of Belfast material anywhere in the United Kingdom and has been the recipient of many gifts in wills over the years. I hope that those three organisations are included under the three general descriptive categories contained in the Schedule. I should think that the Linen Hall Library has as good a case for exemption as the Ulster Museum.

Article 12 deals with the reduction of stamp duty on conveyances and leases. This provision is very welcome, and I hope that it will provide a stimulus to the property market which, particularly in Belfast, has been going through a lean period in recent times. I know that some houses have sold well and quickly but, generally speaking, prices have been depressed and the market has been sluggish. I hope that this small incentive will produce a fillip to the market.

The order contains no reference to value added tax. Does this mean that Northern Ireland will automatically follow suit, or will there be regional variations as there were with selective employment tax and selective employment payments? One case which comes to mind is the repair and maintenance of property about which there has been some correspondence recently, and papers have been sent to the Northern Ireland Office on the subject. I share the view that, until the Rent Restriction Acts in Northern Ireland are brought into line with those in the rest of the Kingdom, value added tax should not be levied on the cost of repairs and maintenance of property.

Speaking purely for myself, because I think that some of my hon. Friends do not agree with me, I am not the slightest bit sorry to see under Article 16(5) the termination next year of selective employment payments. That was a blunt instrument by which to give assistance. While undoubtedly it has been beneficial to some firms, to others it has been a bonus which has cushioned them from facing the realities of commercial life. By all means let assistance be given to firms which may be in temporary difficulties and which have reasonable long-term viability prospects but, speaking as an accountant who has seen SEP being treated in certain accounts as a below-the-line bonus to profits, I cannot help feeling that the Northern Ireland Government of the day was being overgenerous. SET and SEP were twin non-senses, and I am glad to see that they are both returned to the limbo from which they emerged six or seven years ago. Permanent interment in a mausoleum of fiscal folly is the fate they deserve.

With those few remarks I welcome the order.

11.37 a.m.

Rev. Ian Paisley (Antrim, North) Today the House is considering something of vital importance to the well being of Northern Ireland, that is to say, the financial arrangements between this House and Northern Ireland. I hope the Minister when he replies will deal with the questions which have been put to him, especially those which have been put by the hon. Member for Leeds, South (Mr. Merlyn Rees).

For far too long the financial arrangements between Northern Ireland and Great Britain have not been thoroughly scrutinised. As a Member of the Stormont Parliament my view is that the Budget statement made by the Minister of Finance in Stormont was to a large measure a rubber-stamping of what took place in this House. It was certainly not looked upon as a matter of great importance because the former Prime Minister, Mr. Terence O'Neill, on one Budget day went to a horse show. He did not think it important to take his seat on the Cabinet Bench when the Budget statement was being made.

The Minister in his reply will perhaps comment upon the fiscal powers which the Minister of Finance in Stormont had. I suspect that he had no powers whatsoever, or that any little power he might have had was in minor matters which enabled him to make variations but no substantial changes.

I wish to take up a point which was made by the hon. Member for Leeds, South. I emphasise that both Northern Ireland and Southern Ireland depend for their economic survival on Great Britain. Therefore, we see the reason for the Southern Ireland Government wishing to follow Great Britain's entry into the Common Market. Since Ireland as a whole depends on the prosperity of Great Britain, it follows that no part of Ireland can be prosperous if there is adversity and poverty on this side of the Irish Sea.

I entirely agree with the hon. Gentleman that anybody who puts forward the proposal that Northern Ireland can survive economically by going it alone should, to use an Ulsterism, have his head examined. There is no future for Northern Ireland in my opinion unless the link between Northern Ireland and this country is maintained. The maintenance of that link affects the political, economic and social future of the people of Northern Ireland, and this matter should be emphasised.

The House must not look on Northern Ireland as a Cinderella and should not regard any expenditure in Northern Ireland as a form of charity. Since Northern Ireland is a part of the United Kingdom, it has a right to look to this House for its support in its days of difficulty and adversity. This House has looked to other parts of the United Kingdom in its times of adversity and under its regional policies has been prepared to give help to areas which need it.

I associate myself with the comment by the hon. Member for Belfast, South (Mr. Pounder) that the people of Northern Ireland should be grateful for the financial support which they have been given by Her Majesty's Government, especially at this time of deep adversity in the face of attacks by subversive elements, mainly by the IRA and its wings, against the economy of Northern Ireland. Vicious attacks have been made on factories as well as on businesses. Attacks have also taken place in local areas in which great efforts had been made to get factories built and people to occupy them. It is a comment on the folly and madness of the IRA that it should set its hand to destroy those very factories and businesses which help to forward the best interests of all sections of the Northern Ireland community. This is what has happened.

I welcome the Minister's statement about the payment of compensation. It is not necessarily the large businesses that suffer most, because they have considerable assets and are able more or less to manage. Although I advocate immediate payment to large businesses as to anybody else, I wish to emphasise the difficulties of people in small businesses who have suffered a great deal. I can give an example in the Sandy Row area which suffered badly from bombing. The people who owned houses which were bombed were responsible for repairing them, and when the work was done many house-repairing agencies in Northern Ireland and Belfast demanded immediate payment. Those ordinary working-class people were not in a position to make immediate payment. Therefore they were not able to get the work done, and many of these houses are still in a bad state of repair.

I should like to impress upon the Minister the needs of those people. This is a vital matter and I would ask him to take a careful and close look at it. These people have suffered in their homes and are continuing to suffer because they are not in a position to say, "We can pay the bill, so go ahead and repair our house." It is essential that payments should be made quickly. There was a recent announcement that 70 per cent.— I am not quite sure of the percentage figure, but it was certainly a large one—was to be paid almost immediately when claims were passed. Could the Minister say how many firms have benefited by these payments? I made representations in the case of a business in York Street, a case in which I have taken a personal interest, where as yet no payment has been made. The proprietor of the business is in difficulty in re-establishing his business and in seeking to rehabilitate himself in the business life of the community.

I should like to mention the subject of value added tax which is not mentioned in the order but is relevant to this discussion. In any future governmental set-up in Northern Ireland will the fiscal arrangements made under VAT be similar to the arrangements for SET? Will it be controlled absolutely and totally from this country, or from Northern Ireland?

I agree with the hon. Member for Belfast, South that in certain circumstances there is an argument for a variation in VAT in Northern Ireland. The basic industry in Northern Ireland is agriculture and the farmers of Northern Ireland face great difficulties since they depend largely on imported feeding-stuffs. If these feeding-stuffs are to be subject to VAT to the extent that is envisaged, the farming community will suffer in great measure; as we go into the Common Market, they will find themselves more and more on the periphery of the whole set-up. I hope that the Minister will give this matter his careful attention.

Another matter which is of great importance to anybody concerned with politics in Northern Ireland is the accountability of the various departments over expenditure matters. As the House knows, there is now no Public Accounts Committee in Northern Ireland. The accounts of the Stormont Administration for the previous year are not scrutinised and the Comptroller and Auditor- General has no committee to report to. He cannot call the attention of elected representatives to any matters which he feels needs careful and close scrutiny. I press the Minister to do something about that matter in this House. If this House is asked to pass legislation which seeks to raise money, surely it has the responsibility to see how the money is spent.

Article 19, in Part VII of the order, says that it shall be the duty of the Comptroller and Auditor-General to certify and report on any accounts so transmitted to him".

Therefore, his responsibility is set out in the order. But to whom is he to report and what public representatives will have the opportunity to question the various departments on the way in which money is spent? This is an important matter. The Departments of Stormont have been let off the hook and there is no scrutiny whatever of public accounts even in respect of the previous year of administration.

The questions asked by the hon. Member for Leeds, South are very important. The financial arrangements between Northern Ireland and this country need to be looked into, and I think that the best solution to the problem would be to have one Budget for the whole country, giving hon. Members of this House, especially those from Northern Ireland, an opportunity to debate fully those aspects of the Finance Bill affecting the people of Northern Ireland. That would be a most suitable arrangement. It seems to me that the Minister of Finance has simply been the agent of the Chancellor of the Exchequer. From the Dispatch Box at Stormont he has merely parrotted matters already agreed in this House. Therefore the best arrangement would be to see that Northern Ireland is really treated as part of the United Kingdom and that one Budget should be applicable to the whole country.

11.50 a.m.

Mr. James Kilfedder (Down, North)

I too want to record my appreciation of the generous financial aid that Her Majesty's Government have given to our stricken Province. It is sad to contemplate that the millions of £s which have been and will be poured into Northern Ireland are the result of the policy of devastation pursued by the IRA which hopes to bomb Northern Ireland out of the United Kingdom. However the IRA has not destroyed the spirit of the Ulster people and, thanks to the financial support of this House, it will not destroy the economic life of the community.

It must not be forgotten, however, that if the Westminster Government had distributed financial aid to Northern Ireland in those terrible years between the wars when the Province suffered more harshly than any other part of the United Kingdom from the depression, the slums which deface Northern Ireland today would not exist. It is worth repeating that in some areas Protestants and Roman Catholics alike have to live in housing which is a disgrace to our Province.

At that time, unfortunately, the Westminster Government did not pour money into the Province, and I feel that if in those years Ulster Unionist Members had fought more fiercely on behalf of the people of Northern Ireland we should not be in the terrible situation that we have to endure today.

Article 20 of the Finance order deals with the Civil Contingencies Fund. As the hon. Member for Leeds, South (Mr. Merlyn Rees) said, that is the fund out of which compensation is paid to people whose premises are bombed. I too ask my hon. Friend the Minister of State to speed up the system whereby payments are made for repairs. I know of many cases in Belfast where people have not been given money for repairs to their houses necessitated by bomb attacks some considerable time ago.

I feel that help should also be given to those who have been forced out of their homes. I know of a family in Alliance Avenue, Belfast, whose home was destroyed as a result of a car bomb. They went to the Northern Ireland Housing Executive. They were offered a house in Castlereagh. When they got to the house, they found it occupied by squatters. They went back to the housing executive where they were told that they could not be helped any more. That is a disgraceful state of affairs.

We have heard a great deal about the emigration of Roman Catholic families from the Lenadoon Estate in Belfast. The IRA claimed that it had to defend these people against the actions of the British Army. However, we all know that the British Army was there to defend all the people and to protect them from intimidation. That flight was stage managed. However, there was nothing stage-managed about the flight of Protestants who were intimidated in the same area. Some of them fled to my constituency.

I mention this because it is a very important matter affecting the housing executive. No publicity was given to their flight. They were intimidated out of their homes in the Suffolk area of Dunmurry. Their children were spat upon in the streets by Republican supporters, their wives were abused, and they had to leave to seek safety. When they told the Housing Executive about it the reply was that they could not be helped with new homes immediately.

Mr. Speaker

I am sorry to interrupt the hon. Gentleman, but he is going rather wide of the order. This is purely a financial order. The hon. Gentleman must stick fairly strictly to the order.

Rev. Ian Paisley

On a point of order, Mr. Speaker. In the order there are references to the Civil Contingencies Fund from which, I understand, compensation is to be paid. I seek your ruling. Is not it in order for an hon. Member to discuss how this money should be spent when it is raised? I think that that is the kernel of the problem that my hon. Friend the Member for Down, North (Mr. Kilfedder) is discussing.

Mr. Speaker

There is considerable force in what the hon. Member for Antrim, North (Rev. Ian Paisley) has just said. However I did not recognise that portion of the speech of the hon. Member for Down, North (Mr. Kilfedder) as being related to the point just raised by the hon. Member for Antrim, North.

Mr. Kilfedder

It is my fault, Mr. Speaker. Unfortunately I have to preface my point by describing what has happened in order that I might discuss the possibility of compensation for these people. I hope that I might be allowed to continue for one minute more to elaborate the point, If I see signs that you are becoming irritable, I shall know that I have to stop.

I know that the hon. Member for Antrim, South (Mr. Molyneaux) agrees with what I am about to say. These people went to the housing executive. They were told that they could not be helped. On a Monday evening about three weeks ago they decided suddenly to leave their homes. The very next morning there were Republican supporters outside their homes brandishing rent books issued by the Northern Ireland Housing Executive's area manager of the estate, a Mr. Jarvis. How he issued those books I do not know. The Northern Ireland Housing Executive cannot have known that the occupiers of those houses intended to leave them that day. The new books could not have been issued legally. However, the people left their homes. Some had to leave their belongings behind. Will the Government help these people by giving them some compensation?

Mr. A. W. Stallard (St. Pancras, North)

Is the hon. Gentleman saying that these houses had been rightfully allocated to those who brandished rent books?

Mr. Kilfedder

That is a point that I hope my hon. Friend the Minister of State will pursue. However, in view of Mr. Speaker's intervention just now, I do not wish to pursue it too far. It is obvious that Mr. Jarvis could not have issued these books legally. What is more, one of the rent collectors, a Mrs. Maddon, went to one of these Protestant homes saying that she had been allocated it and that the Protestant family had to leave. I should like to know whether my hon. Friend the Minister of State condones a situation of that kind and, if so, whether he will compensate people for what they have lost.

Mr. Stanley Orme (Salford, West)

This problem of compensation is vital, and I am sure that the Minister of State has taken it on board. However, I am equally sure that the hon. Member for Down, North (Mr. Kilfedder) is not trying to mislead the House by saying that there are fake applications and that intimidation is stage managed only on one side whereas on the other side people are genuinely intimidated. I am sure that the hon. Gentleman recognises that there are problems on both sides. I hope that he will acknowledge them.

Mr. Kilfedder

I certainly agree that in one case in my constituency in an area which is not normally troubled a Roman Catholic family was intimidated out of their home. I publicly denounced that action at the time. But I am talking about the wholesale flight of Protestant tenants from the Twinbrook Estate in Suffolk.

Another important point concerns value added tax. This will cause additional hardship to farmers in Northern Ireland who spend considerable sums on the purchase of feeding-stuffs. However, they are not the only people who will suffer from the imposition of VAT. For example, in my constituency there is the world famous firm of horticulturists, seedsmen and nurserymen, Dicksons of Hawlmark, which has pointed out to me the grave difficulties which VAT will impose on the trade. I have had no satisfaction from the Treasury in response to the representations which I have made. I hope my hon. Friend will look into the difficulties which VAT will cause in Northern Ireland. Certainly there is a case, as my hon. Friend the Member for Belfast, South (Mr. Pounder) said, for making a distinction in the Province.

12.1 p.m.

Mr. Channon

The debate on the order has ranged a bit wide. I am not sure that I am wholly competent to deal with all the points raised by hon. Members. Indeed, I shall have difficulty in answering some of them. However, I will examine all the points which have been raised. If I cannot answer them now, I will do my best to provide some form of answer to hon. Members at a later date.

First, I should like to deal with the points raised by my hon. Friend the Member for Down, North (Mr. Kilfedder) as they are fresh in my mind. I am sure we all agree about the need to speed up compensation. We are doing our utmost to speed up the payment of compensation to those who have lost or suffered damage to property because of bombings. I accept the point raised by the hon. Member for Antrim, North (Rev. Ian Paisley) about the need to try to help the small businesses which often receive appalling blows because of bombings.

I think it would be unwise of me to be drawn into the housing question this morning. The Civil Contingencies Fund does not deal with the points my hon. Friend has in mind. I will examine what my hon. Friend said, although I cannot make any comment about the matter today.

The value added tax is a reserved, not a transferred matter. Therefore, it is entirely for my right hon. Friend the Chancellor of the Exchequer. Indeed, it has already been debated considerably in this House. Naturally, I will draw my right hon. Friend's attention to the remarks which have been made by hon. Members in dealing with the effects of value added tax in Northern Ireland. Though I cannot say I necessarily agree with what has been said, I will ensure my right hon. Friend is made aware of the views expressed by hon. Members aboue value added tax.

My right hon. Friend and I are grateful for what hon. Members have said about the financial support which Northern Ireland has received and will continue to receive from Her Majesty's Government. We all know of the enormous problems which will have to be tackled by economic and financial measures, and I know that both sides are determined to go on helping as much as possible. It was gratifying to hear from hon. Members their appreciation and gratitude which I will draw to my right hon. Friend's attention.

The hon. Member for Antrim, North, referred to the Comptroller and Auditor General. This is an important matter which my right hon. Friend is presently examining to try to evolve a satisfactory procedure so that the accounts of the Northern Ireland Departments can continue to be properly scrutinised by the Comptroller and Auditor General and to ensure adequate public control over their functions. I take note of the importance of what the hon. Gentleman said in that regard. I hope it will be possible to devise a satisfactory way of dealing with this difficult matter in the present situation.

My hon. Friend the Member for Belfast, South (Mr. Pounder) and the hon. Member for Leeds, South (Mr. Merlyn Rees) raised the whole question of the financial arrangements between Northern Ireland and the rest of the United Kingdom. I agree that this matter will have to be examined. Indeed, the whole struc- ture of the constitutional position in Northern Ireland is continually under scrutiny. I note the views expressed particularly by the hon. Member for Leeds, South on how we should deal with financial business in Northern Ireland in the event of the Northern Ireland (Temporary Provisions) Act being extended for a further year, should this House be prepared to grant such an extension I note what the hon. Gentleman said about the Budget and the financial effects and whether the matter could be dealt with in a United Kingdom Finance Bill. I am not sure whether that would meet with approval in all quarters in Northern Ireland, but it is a suggestion which is worth examining. It would enable Northern Ireland Members of Parliament to deal with the matter during the debates on the Finance Bill, and those who have a particular interest in financial matters in other parts of the United Kingdom would be able to scrutinise the effects in Northern Ireland as well.

My hon. Friend the Member for Belfast, South referred to estate duties. Estate duty provisions regarding objects of national, scientific, historic or artistic interest were dealt in a Great Britain Finance Act some years ago. This provision is designed for Northern Ireland to catch up on that aspect which had not previously been dealt with by Northern Ireland Finance Bills. The establishment of the Ulster Museum has focused more attention in Northern Ireland on objects of this kind, and it is right that there should be parity of estate duty treatment for those articles in future. The three bodies named for estate duty exemption were the obvious ones at the time. I will examine what my hon. Friend said about the Armagh Observatory and other bodies to see whether it will be possible to include them within the scope of some future Finance Bill or order to be put before the House.

My hon. Friend was right to raise the question of the abolition of the Road Fund. It is a slight anomaly that it still exists in Northern Ireland. With the reorganisation of local government, the Road Fund fulfils no useful purpose, because all the functions relating to roads are transferred to the central government structure. Therefore, there is no need for the Road Fund which, in the past, was used mainly for grant aiding local authority expenditure on roads. That will no longer be necessary. That is why the Road Fund has been abolished in the order.

The question of compensation for the Belfast Co-op has been raised by hon. Members. I understand that the Belfast Co-op has already received a substantial payment. I do not know whether there are any other claims outstanding. Naturally, we shall proceed as fast as possible with all claims.

The hon. Member for Leeds, South referred to the Joint Exchequer Board. I understand the Joint Exchequer Board determines the proper Northern Ireland share of reserve taxes which are mainly Inland Revenue and Customs and Excise taxes.

Regarding the functions of the Northern Ireland Budget, I cannot pretend to have studied all the Northern Ireland Budgets which have taken place in the last few years, but they presented the estimated receipts and expenditures of the Northern Ireland Exchequer. The Northern Ireland Parliament could announce changes in so far as they lay within its powers to do so. As the House knows, the Northern Ireland Parliament had certain duties in that regard because so many of the taxes were reserved rather than transferred matters.

I note what the hon. Gentleman said about the financial procedures and the need to look at them. I note, too, his wisewords about the importance of United Kingdom money to the whole future of Northern Ireland, and he was right to draw the attention of the House to the figure of £400 million in total, and the £37 million transferred revenue. The sum of £48 million in transferred revenue consists largely of receipts of interest on loans made to local authorities and similar bodies. That is largely the explanation of the transfer of the non-tax revenue.

Mr. Rees

I wonder whether I may put in the form of a question something which I ought to have raised earlier, because it fits in to this part of the Minister's reply. In looking through the order, and in trying to break down the moneys that are raised in Northern Ireland, and transferred revenues, the question that comes to mind relates to gun licences. Gun licensing is determined by the Northern Ireland Parliament, but perhaps I may put one suggestion to the hon. Gentleman. I do not, of course, expect a reply straight away, and perhaps it is even unfair to spring this question on him now. Nevertheless, whether the revenue is determined by the Northern Ireland Parliament or by the Imperial Parliament, would it not be a good idea to call in all licences, revoke them and issue fresh licences so that we know who legitimately has a gun? Doing that would clear the air and we should make certain why those who had gun licences had them. It would make clear those who had guns which were not licensed. I wonder whether the hon. Gentleman would at least consider that.

Mr. Channon

Naturally I shall consider anything which the hon. Gentleman suggests and discuss it with my right hon. Friend. The question having been sprung on me without notice, perhaps I may tell the House the position as I understand it. The charge for a firearm certificate is a matter for the Northern Ireland Government and Parliament. As I say, if I am wrong I shall get in touch with the hon. Gentleman and let him know the correct situation. I shall consider what he said about gun licences, but I think that it would be out of order to go into the merits of recalling gun licences and re-issuing them. My right hon. Friend the Secretary of State and, indeed, the Prime Minister, referred to this issue yesterday, and naturally what the hon. Gentleman said will be carefully noted.

Rev. Ian Paisley

In my speech I raised the question of compensation for the loss of private homes by working class people. My hon. Friend has not commented on that.

Mr. Channon

If I understood my hon. Friend aright, he was saying that there should be speedy compensation for small businesses in particular because these were often the ones which, in proportion, suffered the greatest loss as they had no great financial resources behind them. He was also saying that there should be speedy compensation for those whose houses were damaged by terrorist bombs or some other ghastly activity. I accept the importance of what my hon. Friend said. We are trying to do all that We can to speed up the grant of compensation, but I shall look into the question again. The payment of compensation is important, but there are difficulties, and we shall try to cut as much red tape as we can.

Mr. Stallard

It is my understanding that it is possible to have four or five guns on one licence, provided they are of different calibres. May I ask the hon. Gentleman to take that fact into consideration when he discusses the matter with his right hon. Friend? If it is possible for that to be done, it means that if, say, 105,000 licences are issued, there could be between 500,000 or 600,000 guns in private hands.

Mr. Channon

I could not answer that question off the cuff, but I shall examine what the hon. Gentleman said and discover the correct position. I note in relation to today's debate that the hon. Gentleman is anxious to increase the amount of money available to the revenue by making each weapon subject to a licence which requires a fee. In view of his anxiety to protect the revenue, I shall examine what he said.

I hope that the House will feel able to pass this order which is of fundamental importance to Northern Ireland.

Question put and agreed to.

Resolved, That the Finance (Northern Ireland) Order, 1972 (S.I., 1972, No. 1100), dated 26th July, 1972, a copy of which was laid before this House on 28th July, be approved.