HC Deb 13 November 1972 vol 846 cc160-70

9.58 p.m.

The Financial Secretary to the Treasury (Mr. Terence Higgins)

I beg to move, That the Northern Ireland Loans (Increase of Limit) (No. 2) Order 1972, a draft of which was laid before this House on 17th October, in the last Session of Parliament, be approved. This order increases by a further £50 million the amount which is available for lending from the National Loans Fund to the Northern Ireland Government. Section 35 of the Finance Act, 1970, specifies an initial limit of £50 million of this loan and also provides for that limit to be raised by the same amount up to three times by order. The limit has so far been increased twice, the last time being on 1st February of this year, and the Northern Ireland Government have now had another £50 million available to them under the second order. We, therefore, seek parliamentary approval for the third increase.

9.59 p.m.

Mr. Merlyn Rees (Leeds, South)

The Minister has explained that there have been three such increases of limit since the passage of the original Act. This is the one more bite of the cherry to which I referred when the matter was before the House earlier this year.

Because we are to consider on Friday a Bill which will raise the matter again when all the questions of principle underlying this kind of use of money from the National Loans Fund will be raised from this side of the House, we think it inappropriate to ask important but detailed questions that can well be subsumed in the wider discussion then. We hope, however, that the Minister can help us with the discussion on Friday by telling us—not necessarily tonight—what the extra money is required for. As I recall, money from the NLF must be for capital projects, and it would help us to know what the Government have in mind.

I have one other question. I believe that in the days of Stormont the use of the money was specified in a general fashion, and then the Stormont Government allocated it to its various uses. It would help us to know whether there has been any change in the method of specification.

As the matter is to be discussed on Friday, we on this side do not wish to take it any further than that.

10.1 p.m.

Mr. Rafton Pounder (Belfast, South)

I realise, as we all do, that there is, as the hon. Member for Leeds, South (Mr. Merlyn Rees) said, a close similarity between the subject of the order and the Northern Ireland (Financial Provisions) Bill, which is to have its Second Reading on Friday. The hon. Gentleman's speeches on such orders nearly always contain a vast catalogue of questions. My role tonight is to ask such questions, although, like the hon. Gentleman, I have no desire to have the answers now. It will be perfectly agreeable to me to receive them on Friday or at a subsequent time, because of the very close relationship between the order and the Bill.

May I say, not only for myself but also, I think, for my political colleagues from Northern Ireland, that we all unreservedly welcome the order, needless to say. We do so not as mendicants whose cap is always at the ready to catch whatever gratuity may be offered but, rather, as those who believe that there is an overwhelming case for the injection of finance into Northern Ireland, particularly at this time.

It is well known to every hon. Member that during the past three or four years the ravages of terrorism have resulted in an enormous financial bill, quite apart from the tragic loss of life and injury. But in addition to the sum that will necessarily be required to repair the physical damage to the economy of Northern Ireland there is the wider issue of the economy generally. I think not just of factories and the attraction of new industry but also of housing and infrastructural development in the Province.

On previous occasions when we have discussed similar loans orders the hon. Gentleman has been particularly diligent in seeking a breakdown of expenditure, which other hon. Members have also sought. As an accountant, I should be the last person to disagree with those who wish to have itemised and detailed accounts of expenditure. Perhaps the Financial Secretary can give us some guidance on that. I understand that the loan is part of the £75 million second five-year plan for Northern Ireland. If I am correct in that assumption, at least half the expenditure will be earmarked for housing, environmental services, education and roads.

But inevitably—the debate that has just precluded perhaps yet again underscored this point—there is a natural pre-occupation in Northern Ireland with terrorism and its ravages. Perhaps we are inclined, because of the immediacy of the problems confronting us, not to pay sufficient attention to the very important issue of the economic development of the Province, for which sums such as that envisaged in the order are essential.

It is easy to think only of the immediate present or immediate past and not to pay attention to the future. I digress to make a personal observation about an undertaking with which I am connected in Belfast. On Thursday afternoon, a 200-lb. bomb ripped it apart and caused about £200,000 worth of damage. Inevitably, if one is in the position of being involved in such an undertaking, as I am, one naturally thinks of the present rather than the future, but we must not allow ourselves to become preoccupied with the present.

When we last discussed the subject, certain Opposition Members—particularly one, whom I will not name, because he is not present—made the point that Northern Ireland had no more special problems of under-investment than other regions of the United Kingdom. In part that may be true, but the House has always recognised, never more so than in the last three or four years, that Northern Ireland has special problems requiring special financial assistance.

I turn to the benefit, if that is the right word, that the new Northern Ireland Finance Corporation will derive from the loan fund being made available to it under the order. As I understand it, the corporation is to be empowered to offer financial assistance to undertakings threatened with closure or contraction, but with reasonable prospects of solvency in the long run. It arises out of the report of Sir Alexander Cairncross, who argued that as a result of the civil disturbances firms which had suffered should receive special help.

While I realise that physical destruction is dealt with under the criminal injuries legislation of Northern Ireland and is outside the remit of the order, I should like to know the position of those firms, of which there are many, which may not have suffered physical damage but undoubtedly have suffered consequential loss, either because there has not been the previous level of economic activity, or, as is particularly the case with the retail trade, because, understandably, people have not been prepared to go to the centres of Belfast and other cities and towns in the Province.

I understand that the corporation may give assistance not merely to manufacturing industry, but to retail trades—but perhaps my hon. Friend will confirm that. I cite the centre of Belfast because I know it, and because as a student accountant I did a number of audits in the area, and, thirdly, because as Northern Ireland is a small area one's clients are not infrequently life-long personal friends. If one has seen the reports of the decline of the level of commercial activity in the centre of Belfast over the last two years, one has no doubt that many long-established and erstwhile prosperous organisations are in severe economic trouble. It would be a tragedy if its terms did not allow the corporation to help those firms going through a period of temporary difficulty.

Everyone appreciates the rate relief grant given to city centre traders in Londonderry and Newry, but it is the consequential loss of trade and profits that is so important. Whether one likes it or not, it is a fact of life that whereas retail firms were previously able to get credit when they placed orders from suppliers, it is now cash with order and not even cash on delivery. That presents a short-term liquidity problem, and it would be a tragedy if firms went to the wall purely because of a short-term shortage of funds.

I also have a question about the latest state of accountability of this money. This is the third tranche, the last one envisaged in the Finance Act, 1970. A rather complex report has been published which gives, in a sense, some of the answers, but certainly not in a clearly defined way. It is important that the House should know how the money is being spent. As I understand it, half is going on housing and allied subjects, and some will go to the finance corporation. I realise that the corporation has been in existence only since the beginning of August but I would like to know what sort of commitments have been entered into.

I have some specific questions, not necessarily for immediate answer. What is the latest Government thinking on the financial relationships between the United Kingdom and Northern Ireland, bearing in mind the conviction that there should be some form of Northern Ireland assembly in existence in the foreseeable future? What are the capital needs over the next six or 18 months, or whatever period may be convenient to give some idea of Northern Ireland's impending capital requirements? The last order provided that some of the money would be used "to relieve present disasters". How much has gone on this? Has there been a shortfall in the five-year programme on housing, industrial development and training, hospitals, education and so forth? If so, by how much, and when can we expect an interim report on the five-year development programme?

Although we have had many debates on various aspects of life in Northern Ireland and its problems over the last few months, can some time be given for a limited but entirely exclusive debate on the Northern Ireland economy, and its present and future prospects as the Government see them? Lastly—I know that the hon. Member for Antrim, North (Rev. Ian Paisley) is keen on this and I hope that I am not poaching—what is the position with expenditure in Northern Ireland? What provisions have been made for this to be studied and reported on by the Public Accounts Committee? As a former member of the Committee—I do not know whether I am at present—I feel it important that we should know this. Public money is being spent while Stormont is in abeyance. The hon. Member for Antrim, North is Chairman of the Finance Committee at Stormont and I know that he is as keen on this as I am. I hope that my hon. Friend can give some idea of the arrangements which will be made for the House to scrutinise expenditure, through the Public Accounts Committee or by some other means.

10.13 p.m.

Rev. Ian Paisley (Antrim, North)

As a representative from Northern Ireland I welcome the fact that the Government are being liberal towards us at this time of emergency. The people of Northern Ireland are aware of the essential value of the economic link that exists between us.

Can the Minister tell us what percentage of the money involved here will go directly to the Housing Executive? There are many publicly-owned houses without amenities in my constituency. In the village of Stranocum the people have been fighting for bathrooms for a long time. Now they are told that there is no money to instal them, that all they can have are showers. What use is a shower to a family with young children, especially just after they are born, when a bath is essential? It seems that some of the people in Stranocum have capitulated, because sadly two-thirds of them have said "A shower is better than to water at all, so we will settle for a shower." The remaining householders are holding out for a bath.

These may be mundane questions to this House, but they are very important to the individuals who are affected. Will the Housing Executive, which has taken on responsibility for these public houses, benefit from the loans and if so, by what percentage?

The evidence which I have is that the Finance Corporation has been very reticent about helping retail businesses and other businesses which are in trouble. For example, a very large building firm in the town of Ballymena, in my constituency, was building public houses which were being squatted in and vandalised. They had to be completed before the Belfast City Council would take them over. But, before the builder could complete them, they were vandalised, broken up and burnt. This large building contractor, who has built thousands of houses for various councils, found himself in a very difficult financial position through no fault of his own. When the case was taken to the Finance Corporation, it said, "Sorry, we cannot help you." The firm had to go into liquidation, although it had orders to a value of £80,000 still to carry out.

Another matter which I should like to draw to the Minister's attention is this. It is all very well to give a rate grant to the business men of Londonderry, Belfast and Newry, and I am happy that they are getting it. But what about the small rural districts where, because of the security precautions, businesses are going out of existence? Take the town of Dungannon, which was mentioned earlier today by the hon. Lady the Member for Mid-Ulster (Miss Devlin), and the town of Ballymena, in my constituency. The gates in Ballymena are shut. No motor cars travel through the town. Petrol filling stations which previously were selling hundreds and even thousands of gallons of petrol a week are selling none today.

Such businesses are in a terrible state and are in great trouble. Do the Government have their proprietors in mind? They are suffering simply because the security forces have closed the town. One cannot get into it without a special pass. The gates are locked after 7 o'clock for security reasons and they are not opened for anyone. This causes great difficulty. I do not think that the House is aware of the difficulties which certain businesses in Northern Ireland are facing.

I emphasise what my hon. Friend the Member for Belfast, South (Mr. Pounder) said about the question of accountability. What has happened about the scrutiny of those accounts which were before the Stormont Public Accounts Committee before Stormont was prorogued? An investigation was going on before that Committee, of which I was Chairman, into expenditure concerning the offices of the Ulster Agent in London. Many thousands of pounds were lost through the payment of rent for a property which was not being occupied. Who is looking into the relevant accounts and the spending of public money in connection with Northern Ireland? If this is to go before the Public Accounts Committee of this House, will the Minister see that at least someone from Northern Ireland who knows what is really happening in Northern Ireland is on that Committee?

I am not sure that the Minister can give us answers to all these points tonight. That would, perhaps, be too much to expect. But I trust that on Friday we shall have answers, because these are real problems which we must tackle, and questions to which we must get satisfactory answers.

10.21 p.m.

Mr. Higgins

If I may speak again I will endeavour to answer some of the points which have been raised in this debate.

The House will appreciate that, as the hon. Member for Leeds, South (Mr. Merlyn Rees) pointed out, we have legislation which has already received its First Reading, is due to be debated at the end of the week and covers much of the ground covered in the short debate that we have had this evening.

The House will also recognise that some of the points which have been raised by my hon. Friends are matters for Ministers other than myself. The question of a debate on the general economic situation in Northern Ireland, for example, is obviously a matter for the Leader of the House. Similarly, the point which the hon. Member for Antrim, North (Rev. Ian Paisley) has just raised, that of the membership of the Public Accounts Committee, is not a matter for me.

If I may seek to answer some of the specific points which have been raised it may possibly be helpful if I do so in anticipation, so to speak, of the debate to come. I know the House will not wish me to go into details.

As to the points raised by the hon. Member for Leeds, South, I have studied carefully the debates on similar orders previously, and I know his long-standing interest in these matters. Indeed, he referred to the last bite of the cherry in the debate which we had on the previous order. It is the case that we are now considering the final tranche of loans under the previous legislation.

I turn to the point about the actual use of the money, to which my hon. Member for Belfast, South (Mr. Pounder) referred a moment or two ago. The £50 million covered by this order will be barely sufficient to meet the Province's borrowing requirements in the latter part of the current year, but the legislation which is to come before the House for Second Reading on Friday will make further provision. The Finance Act. 1970, on which this order is based, did not define the purposes for which Northern Ireland may borrow from the National Loans Fund, but it says it is expenditure which in the opinion of the Treasury is of a capital nature". In reply to the previous debate my hon. Friend the then Financial Secretary, the present Chief Secretary, indicated the main areas in which the money was expected to be spent by the Northern Ireland Government. In practice—and I think that this answers the points raised by all three hon. Members who have spoken in this debate—it is very largely for public sector bodies; about half goes to housing, and one-quarter for electricity investment; and the rest between the Finance Corporation and other local authority services apart from housing. A similar breakdown is likely this time.

The hon. Member for Leeds, South will know that, as I pointed out, the purposes are of a capital nature under Section 35 of the Finance Act, 1970, and there will be no change in procedure in the actual mechanics. We have given the broad breakdown on previous occasions. It is contained in the Northern Ireland Financial Statement of 1972–73, the Statement of Revenue and Expenditure, published in June, 1972, and this gives the various loans and advances which are specified in Table II on page 4.

The hon. Member for Antrim, North will notice that for the Northern Ireland Housing Executive, to which he referred, at 31st March, 1971, the figure was £88,119,032—that is to say, approximately £88 million. At 31st March, 1972, it was £104 million approximately. So there was a substantial increase there. I do not think he would expect me on this occasion to go into precise details about the way in which the Housing Executive carries out its operations. That is a more detailed matter than is covered by the order.

In reply to the points raised by my hon. Friend the Member for Belfast, South, the money is not specifically related to any expenditure programme as such. It does not have implications for public expenditure; it will merely assist Northern Ireland to finance agreed expenditure. My hon. Friend referred to damage to property. He will have seen the Written Answer given by my hon. Friend the Minister of State to a Question about financial proposals to assist city centre traders in Belfast reported in HANSARD of 9th November in column 223. As to the operation of the arrangements, the order essentially increases the borrowing limit to enable various activities to be financed. I hope that what I have said, without anticipating the details of legislation, on the point raised by the hon. Member for Leeds, South, will indicate the broad categories which are financed by loans of this kind.

I am grateful to hon. Members for the welcome they have given to these proposals. We all appreciate in the present difficult situation that economic development and capital expenditure of the kind covered by the order are of great importance if we are to ensure the continued prosperity of the Province which I am sure we all wish to see.

Question put and agreed to.

Resolved, That the Northern Ireland Loans (Increase of Limit) (No. 2) Order, 1972, a draft of which was laid before this House on 17th October, in the last Session of Parliament, be approved.