§ 9.13 p.m.
§ The Minister of State, Northern Ireland Office (Mr. Roland Moyle)
I beg to move,That the Financial Provisions (Northern Ireland) Order 1976, a draft of which was laid before this House on 17th June, he approved.The Order deals with a number of miscellaneous financial matters, and such legislation is required from time to time, generally about every two years. It raises limits for borrowing and expenditure on certain aspects of public life in Northern Ireland, particularly for a number of important capital programmes and other financial transactions. On this occasion, the Order raises such limits to cover expected expenditure up to March 1978 or thereabouts. Existing limits on expenditure will be met during the present financial year and provision must be made for the future.
Most of the services affected by the Order are outside the area of supply services—those for which funds are released by Appropriation Orders in each financial year. In this category are loans for the Housing Executive and loans from the Government Loans Fund.
For certain other services Parliament not only sets an overall limit through Orders such as the one now before the House, but also provides for the release and appropriation of funds through Appropriation Orders. Examples are roads and industrial development. For such services the present Order sets new overall limits only. It does not provide for the actual release of the cash at this moment.
The purpose of the various articles in the Order is as follows: Article 3(1) and Schedules 1 and 2 increase the statutory limit on issues from the Northern Ireland Consolidated Fund for certain categories of capital expenditure. These categories are expenditure on roads, where the present limit of £150 million is to be increased to £200 million; expenditure for industrial development, where the present limit of £425 million is to be increased to £550 million; and loans for agricultural development, where it is proposed to increase the limit from £13 million to £18 million.
2420 Article 3(2) deals with a limit on issues from the Northern Ireland Consolidated Fund to the Department of the Environment for Northern Ireland to enable loans to be made to the Northern Ireland Housing Executive. The present limit of gross lending is £250 million. Additionally, there is a limit of £150 million which formerly applied to the Northern Ireland Housing Trust, which was superseded by the Housing Executive in October 1971.
Article 3(2) brings together these two limits, increases the combined limit to £550 million and applies it to the outstanding principal instead of the aggregate issues made from the Consolidated Fund. The change from a gross to a net limit gives a clearer impression of the true relation between the debtor and creditor and ensures that the situation is not distorted by borrowings that are only temporary. This change effectively increases by £245 million the borrowing powers of the Housing Executive.
Article 5 increases from £600 million to £700 million the limit on outstanding sums issued by way of Government loans. The Northern Ireland Government Loans Fund is the source provided by central Government for borrowing by district councils and by other public bodies in Northern Ireland. Loans are made from the fund at the same rate of interest as that charged by the Public Works Loan Board.
Article 6 enables the Department of Finance to borrow from the Northern Ireland Government Loans Fund for the purpose of operating loans pools transferred from former local authorities to the Department at the time of local government reorganisation. The Government Loans Fund was available to local authorities for the operation of the loans pools but under present legislation is not available to the Department for this purpose. Consequently the Department has to resort to borrowings in the outside market.
Article 7 deals with the borrowing powers of the Northern Ireland Electricity Service. A statutory limit of £350 million, which can be extended to £500 million by subordinate legislation, was set by the Electricity Supply (Northern Ireland) Order 1972. The effect of inflation and the financial needs of the capital programme at the new power station at Kilroot, County Antrim, now in course of 2421 erection, now make it necessary to increase these limits on borrowing to £650 million and £750 million respectively. It is estimated that the existing upper limit of £500 million will be exhausted by 1977–78.
There are a number of other miscellaneous articles dealing with financial arrangements. If hon. Gentleman have points to raise on them we can, of course, discuss them, but I commend the Order to the House.
§ 9.19 p.m.
§ Mr. John Biggs-Davison (Epping Forest)
It is regrettable that such important matters should be taken at this late hour on a Friday. It bears hard on those who serve so uncomplainingly in the House and it is inconvenient to hon. Members who take their constituency obligations seriously, particularly to our Northern Ireland colleagues who have a channel to cross, with all the vexations mentioned in the previous debate. That such business should, moreover, wait upon the debate upon the emoluments and finances of hon. Members might be thought to encourage some indifference, or even contempt, for the troubled Province, did we not know the almost frivolous incompetence with which the Lord President leads, if that is the word, the House of Commons. To be fair, the business managers have provided extra time, although the Leader of the House has not stayed to enjoy it.
The Minister of State complained earlier about the refusal of my hon. and right hon. Friends to pair. It is their right to pair or not to pair. If they refuse, as they have, it is the result of the behaviour of the Executive. Nevertheless, despite what the Minister of State said, the Opposition have made special arrangements for the pairing of Northern Ireland Ministers, and the hon. Gentleman should not ignore that to score a cheap point, as he thought, against my hon. Friend the Member for Abingdon (Mr. Neave), whose speech was wholly helpful and who was concerned, as I was, that the difficulties in the House between the main parties should not prevent a Minister's being on duty at Stormont. Or is it the case that the Secretary of State did not inform his hon. Friend the Minister of State of a position which I suppose Ministers would wish to continue and not put in jeopardy?
§ Mr. Moyle
I am perfectly well aware that the Secretary of State was paired for a night last week, but it is not just a question of one Minister being paired for a night in Stormont. There are five Ministers in the Northern Ireland Department all of whom have considerable departmental responsibilities and it is necessary for them to go out and help to govern the Province in that capacity. The problem is slightly wider than the one to which the hon. Gentleman draws attention.
§ Mr. Biggs-Davison
Of course, and the same argument applies to other Ministers who have responsibility at important international conferences, but we cannot go into that. The Minister of State was unfair in what he said about my hon. Friend—
§ Mr. Deputy Speaker (Mr. Oscar Murton)
Order. I hope that both hon. Gentlemen will leave the matter at that.
§ Mr. Biggs-Davison
I am obliged, Mr. Deputy Speaker, and I shall certainly leave the matter there.
I wanted to refer to the Housing Executive, but I shall not do so because we had a lengthy debate on that subject in the Northern Ireland Committee. I shall concentrate my few remarks on the Order on the Northern Ireland Electricity Service and consider its fortunes since 1973 when it took over the functions, assets and liabilities of four separate undertakings.
In a Written Answer I was informed that a financial loss to the Northern Ireland Electricity Service in 1971–72 of £1.4 million rose to £22 million in 1975–76, despite heavy percentage increases in the average price per unit of electricity sold. It is true that part of the losses incurred are attributable to the national prices policy and not to the conduct of the affairs of the Electricity Service, and that the service was subject to compensation payments by the Department of Commerce.
We must, moreover, recognise that the generation of electricity is more expensive in Northern Ireland than it is elsewhere in the United Kingdom. That is partly because a high proportion of generating plant in the Province is oil-fired. The new generating station at 2423 Kilroot, to which the hon. Gentleman referred, will be oil-fired.
I recall in passing that Mr. Brian Faulkner in his day interested himself in the possibility of a nuclear power station. There were arguments on that which went both ways. Formerly, oil fuel was much cheaper, and one cannot complain that the Northern Ireland Electricity Service went for oil fuel, but today it is very dear.
Another reason for the high cost of electricity is the growth of industry and therefore of demand at a higher rate than in Great Britain. In 1949 consumption was only 724 million units. In 1974 it was 5,136 million units. This has meant an increase in expensive capital investment to meet rising demand, and capital costs and interest charges have both to be met.
Nevertheless, the consumer, the taxpayer and the House are entitled to some assurances about the cost effectiveness with which the amalgamated Electricity Service is run and to have some prediction from the Minister of prospects. It is to be hoped that Northern Ireland will not continue to be a depressed Province, but is there any danger of over-capacity? In the previous debate the Minister of State referred to a report. We shall await that with interest. But if there is anything that he can tell us in the interim, we shall be very glad to hear it.
§ 9.25 p.m.
§ Mr. J. Enoch Powell (Down, South)
I believe that we are limited to an hour and a half in this debate, unlike the previous debate. It may be that the full time will not be required either on this Order or on the subsequent Orders, unless we particularly intend to breach the record, which I think has not been breached since the time of Suez in 1956, by sitting on a Saturday.
As the Minister of State pointed out, unlike the previous Order, that which is now before the House does not actually release money, but it nevertheless can provide a convenient peg to which to attach the scrutiny of capital developments in one direction or another. Following the statement of the Secretary of State on 2nd July, it is clear that we are to develop a series of new opportunities of investigating in Select Com- 2424 and otherwise the capital investment in the Province and, therefore, in future it will probably be wisest if, following the precedent of the previous order, by agreement we use this Order, whenever it comes up, for concentrating on and having a proper debate on one particular aspect of capital development, because clearly we shall have this Order not once a year but once every other year or so.
Incidentally, it is right that this should be the case, because although these Orders do not actually release money, it is proper that the amount of capital which is being authorised should be subjected to scrutiny at fairly frequent intervals. It used to be an old adage of the Treasury, which certainly is verified in domestic life, that there is an advantage in keeping a Department short of cash. I do not think that we should put it quite in that way in modern times. Nevertheless, it would be quite wrong that a period of years for which there was ample capital authorisation—an ample limit—should stretch before the various programmes. The period of one to two years which the successive extensions provide is probably the right period.
Consequently, I want to avail myself of the opportunity to ask the Minister of State to clear up only two detailed points in the parts of the Order to which he did not specifically refer. One is Article 9 and the immediately following articles, which enable a rate of interest to be determined by an Order made by the Department of Finance and for the Department of Commerce, with the approval of the Department of Finance, to waive additional interest in such cases as it thinks fit.
I take it that this Order would be an administrative Order and not even a statutory rule, still less a prayable Order. Nevertheless, it would be of interest if the Minister of State would indicate the nature of the Order by which the Department will determine the rate of interest. This is not merely technical, because clearly the rate of interest which is determined has an influence upon the operations of the recipients of the loan and it would be possible for the Department to prescribe either an unduly low or an unduly high rate of interest. Therefore, it is desirable to know whether the 2425 decisions embodied in such an Order would in any way be debatable.
My second query relates to Article 14 which concerns an increase in fees for registration under the arrangements of the Northern Ireland Tourist Board. The explanatory document which has been supplied to hon. Members states that the present fees were set in 1957 and that the proposed increase,although trebling the present fee",only achieves approximately half of the cost of the service.
My query relates to the statement that the proposed increase only trebles the present fee. The increase is from one-third of 1 per cent. to 1 per cent. of the net annual value of the premises. If it was one-third of 1 per cent. of the net annual value of the premises on the old valuation list, I should have thought that 1 per cent. on the new valuation list would be considerably more than three times the previous amount.
I do not think that my hon. Friends and I would think it right that the fee should do other than cover the full costs of the work of registration. That would appear to be reasonable. Perhaps, therefore, either now or subsequently the Minister of State could clear up the query which is raised by the explanatory note on Article 14.
§ 9.31 p.m.
§ Rev. Ian Paisley (Antrim, North)
I want to raise one point with the Minister on Article 12 concerning arrears of loans made to harbour authorities. We have heard from time to time—indeed, I heard at the beginning of the week—of a grant from the EEC towards certain harbours in Northern Ireland, two of which are in my constituency, one on Rathlin Island and another in Larne. Are these grants from the EEC in addition to the money allocated to various works in Northern Ireland? It seems to me that the principle of additionality might be called into question.
§ 9.32 p.m.
§ Mr. Moyle
Unfortunately, it is not sufficiently early in the day to do full justice to this Order.
The hon. Member for Epping Forest (Mr. Biggs-Davison) asked about Northern Ireland electricity services. Detailed discussion must await the publica- 2426 tion of the Shepherd Report, which I hope will not be too long delayed, and its preliminary consideration by the Economic Council.
The hon. Member touched on a number of pertinent points connected with the industry. It is essentially oil based, and oil prices have risen considerably. Some of the losses in the past have been due to deliberate Government policies to hold the cost of living in the aftermath of the 1973 war and the Middle East oil crisis.
The other point is that the electricity supply industry these days is above all an industry in which the economies of scale apply, and in international terms the Northern Ireland market is not very large. This also leads to problems. It is very easy either to over-provide or under-provide, and these are matters to which the Province will have to turn its mind in the immediate future, because power costs are an important ingredient in all forms of industrial activity these days. I mentioned in my earlier speech that the price of energy in Northern Ireland was one of those aspects of the situation that were giving the Government concern in relation to the future of the economy of the Province.
The right hon. Member for Down, South (Mr. Powell) put two questions to me. I can confirm his suspicion in respect of the Order. It is the sort of Order which would be laid before a Northern Ireland Assembly but not an Order such as would be laid before the House of Commons at Westminster. On his second question, I am afraid that the complexities are such that I must write to him to give a proper answer.
The hon. Member for Antrim, North (Rev. Ian Paisley) asked about EEC grants. EEC grants fall into two categories. Grants to support the less well off regions of the European Economic Community are paid into the central Treasury of the appropriate member country and serve to support that country's general regional policy in these matters. However, in the case of grants for infrastructure purposes, which would include harbours, money is made available directly from Brussels to the appropriate region of the member country. Therefore, in respect of harbours in Northern Ireland we shall have the direct benefit of EEC money for the 2427 improvement of those harbours. I hope that that clarifies the matter for the hon. Gentleman.
That deals with what hon. Members have said and I commend the Order to the House.
§ Question put and agreed to.
That the Financial Provisions (Northern Ireland) Order 1976, a draft of which was laid before this House on 17th June, be approved.