Northern Ireland (Industrial Development)

HC Deb 14 July 1982 vol 27 cc1127-44 10.26 pm

The Minister of State, Northern Ireland Office (Mr. Adam Butler)

I beg to move, That the draft Industrial Development (Northern Ireland) Order 1982, which was laid before this House on 17 June, be approved. If I needed extra confidence to commend this draft order to the House, I could take it from the fact that the proposals that it represents have been subjected to a high degree of outside scrutiny throughout most of their development. After the outline of the Industrial Development Board, which the order establishes, was put forward by the then Secretary of State, my right hon. Friend the Member for Spelthorne (Mr. Atkins), in August last year, as part of his proposals to streamline the machinery of government in Northern Ireland, it was first subjected under my chairmanship to the expert attentions of the steering group composed of Mr. Colin Anderson, Mr. Ken Bloomfield, Sir Charles Carter, Mr. Denis Faulkner and Mr. Eric McDowell, who elaborated the original plans into a detailed blueprint with great skill and judgment. I would like to thank them all again tonight.

While the group deliberated, there were numerous consultations with interested outside bodies, and then, in the form of a proposal for the present draft order, the design for the IDB was twice considered by the Northern Ireland Committee of the House. I think I may say that, in the Committee's debate, there was a large measure of agreement that we had put forward a plan for a new industrial development body that had all the characteristics sought for it by public opinion, consistent with the need for public and parliamentary accountability. The substance of the plan lies not only in the order; it is also to be found and amplified in the guidelines, to be issued by the Government to the board of the IDB elaborating the framework for the organisation's activities.

I dwelt in depth in our debates in the Northern Ireland Committee on the history and rationale of the present proposals, and I do not think that the House would want me to recapitulate them in great detail today. The proposals involve the creation of a new Department of Economic Development which will embrace and continue the functions of the present Departments of Commerce and Manpower Services, and of which the executive of the IDB will be an important arm.

The advantages of a unified industrial development organisation in place of the two existing institutions—the industrial development divisions of the Department of Commerce and the Northern Ireland Development Agency—were clear enough to us; but we have not sought to carry the principle of unification so far as to take in with the IDB the Local Enterprise Development Unit. LEDU is performing a most valuable role in the development of the small business sector and whilst it will co-operate closely with the IDB we believe that it will continue to meet best the special requirements of small business if it continues as a separate entity.

To set the IDB's executive arm within a Government Department was to recognise the realities of industrial development in Northern Ireland. The amounts of money involved, both in individual cases and as a proportion of the total Northern Ireland budget, would alone dictate close accountability to Parliament, the more so since it is often paid out in large, and sometimes controversial, packages of assistance which inevitably involve an element of risk. Moreover, consideration of industrial development cases so often hinges on social decisions of the type that only a Minister responsible to Parliament, or to an elected Assembly, can properly make. At the same time we were aware—indeed, we were constantly reminded—that a body with some independence from Government—independence both of action and of outlook—could have advantages. We were aware that it was likely to make case decisions on the foundations of hard-headed commercial judgment, that it would apply a consistent set of criteria in such decisions, that it could move more swiftly than a body encumbered by bureaucracy, and that generally it would behave in a businesslike way.

We therefore created the design that is set out in the order and is more fully defined in the draft of the detailed guidelines that we propose to issue to the board when it formally assumes office.

The executive arm of the IDB will be within the new Department. The board's statutory role will be to advise and oversee it. Both will operate within a framework of broad policy prescriptions set out by Ministers. The draft guidelines now circulated incorporate a clear statement of the policy under which they will operate. Of course the views offered by the board on policy issues will be a major determinant of any revision that Ministers decide upon. On the implementation of policy, and in its application to individual requests for industrial development assistance, the board will advise the executive, and oversee the executive's work. For the most part, as the guidelines make clear, the board's advice will be for action by the executive without Ministers having to pronounce on it.

The board and executive will operate as a single unit with its own distinct identity. Ministers' ultimate answerability for the actions of their Departments obviously rules out any guarantee of non-intervention, but we firmly intend to give all possible weight to the commercial expertise that we are assembling among the board members. It would make no sense to do otherwise. In practice, we shall be putting much responsibility on the chairman and the rest of the board members and the executive. In general, Ministers' active involvement will be limited to two sorts of cases—when the social factors that I mentioned earlier are to the fore, and when specified large sums are involved. In those cases, of course, the board will still make recommendations that will carry much authority, but Ministers will have to address wider questions that are outside the board's special competence. The financial limits that we have proposed have been welcomed by most observers as sensible and as permitting sufficient freedom of action. Without the prior approval of the Department of Finance and Personnel being sought, the IDB will be able to provide to any company up to £3 million in selective financial assistance for projects that create employment, plus possibly an equity stake of up to £2 million, the appropriate level of training assistance, and the lease of an advance factory. That will provide the organisation with considerable flexibility and effective autonomy over a wide range of cases.

The IDB is an organisation of novel design. It incorporates the best features of the private sector in a public sector organisation. The draft guidelines set out how Ministers expect the organisation to operate and make it clear that the board and executive of the IDB will work as a cohesive unit. While the executive will be an integral part of the Department of Economic Development, it will have its own clear executive responsibilities, for which the chief executive of the IDB will be accountable. We shall make clear the importance of co-operation in the areas of shared concern. The permanent secretary of the Department will provide resources and services that will take much of the time-consuming and bureaucratic work off the back of the IDB to free its energies for its main executive tasks. He will not be there to second-guess the judgment of the chief executive in commercial matters.

Some concern has been expressed about the possibility of duplication between the IDB and the rest of the Department and the possible trespassing of the permanent secretary on the domain of the chief executive, but their two roles are clear. The two parts of the Department have a mutual interest in improving the economic well-being of the Province and they will work closely together. The chief executive of the IDB, however, will have clear responsibility for industrial development and, significantly, will be accountable for expenditure of public moneys under certain Votes. On matters involving industrial development, Ministers—where they are brought in—will look directly to the executive for advice.

I hope that what I have told the House so far shows that our design for the new organisation is far more than a cosmetic rejigging of the present system. It is a thoroughgoing reconstruction—the product of much new thinking. This is particularly the case with the staffing of the organisation. We have not ignored the excellent staff resources that we already have, both in the Department of Commerce and in the Northern Ireland Development Agency.

They will be the backbone of the new organisation, but their wide-ranging experience will be supplemented by the appointment of high calibre staff from outside the central Government machine. Most of the new people will come in on secondment and I am glad to pay tribute to the generous way in which the private sector has offered us staff. Others will come in on short-term contracts.

Sir John Biggs-Davison (Epping Forest)

Does that mean that there will be an increase, and not a saving, in staff?

Mr. Butler

Taking the Northern Ireland Development Agency and the present divisions of the Department of Commerce involved in industrial development work—the two areas being brought together—I assure my hon. Friend that there will be an overall saving in staff, including those coming in from the private sector, whether on secondment or on short-term contracts.

The most crucial post, of course, will be that of the chief executive. In debates in Committee and elsewhere I did not hide the fact that I should have preferred the appointment to be made at an earlier stage, but I can now say that we were right to wait. As hon. Members may know, we announced late last last month the appointment of Mr. Saxon Tate as chief executive. From his most impressive background in industry he will bring to the IDB qualities that we may expect will greatly enhance its performance. He will undoubtedly want to impose his own stamp on the IDB, its organisation and its working methods. I believe that the structure so far drawn up will be sufficiently flexible to permit him to do so.

As for membership of the board, I have made it clear that the criteria of appointment will be experience and expertise. There will be no representatives of outside interests as such, but only private individuals, chosen for the personal contribution that they can make. We have been very pleased to secure the services of those so far designated as prospective board members. Already they are meeting under the chairmanship of Sir Desmond Lorimer to gear up the new organisation for its formal takeover—subject to the approval of Parliament—on 1 September.

In the debates in the Northern Ireland Committee I was impressed by the feeling of a number of hon. Members that trade union experience was sufficiently valuable to an organisation of this sort to require two such members for the board rather than the one that I had originally proposed. After discussing this and other issues with the Northern Ireland Committee of the Irish Congress, I have accepted that view and I am pleased to say that two trade unionists have now been appointed to the board—Mr. John Freeman and Mr. Pat McCartan. Like other board members, of course, they will serve as individuals and certainly will not be subject to any kind of mandate.

The guidelines are, as I have indicated, critical in setting the tone of the new body. We have circulated a draft for comments among a wide range of interested people, including hon. Members on the Northern Ireland Committee—copies are in the Vote Office—and have had many views on them, which we are still assessing. There was some feeling among respondents that the guidelines suggested that the board and executive were to be distinct entities, whereas our intention was, of course, just the reverse. They should be perceived as a unitary role. We shall be looking at the presentation of this in finalising the guidelines, which will still, of course, have to reflect the scheme of the order, where the distinction is necessarily made.

A number of people have also properly sought clarification about what we mean when we talk about the IDB acting "commercially". In a sense the word covers two separate points. First, it is intended to convey that the IDB will be run along businesslike lines and that it will be as free as possible from the constraints of bureaucracy. Secondly, it also refers to what we see as the need for the IDB to take "commercial" decisions about individual cases.

I accept that that is a dificult concept to be put into operation by a body which is providing grants—an act which, in itself, may be regarded by some as being the antithesis of commercial operation. Certainly the IDB cannot adopt the same criterion of commerciality in looking for a financial return on that grant as might, for example, a merchant bank in seeking a return on its investments.

The return on a grant cannot come in the form of a pecuniary dividend—it must be measured more in terms of the creation of lasting jobs in viable operations. It is that word "viable" which I regard as crucial and which, in this context, is the test of commerciality. It should be the aim of the IDB to provide assistance to companies only where it is satisfied that following the one-off injection of such assistance the company will be capable of standing on its own feet without further special subsidy. Put another way, it should be reasonable to suppose that the non-Government or private investment, reduced as it is by the provision of grant aid, will generate an adequate commercial return. When loans on equity are involved, again the IDB will need to apply the test of viability.

I accept that some judgment may be exercised in determining viability and it may be that the IDB would be justified, given the state of the Northern Ireland economy, in accepting a rather slower build-up to viability than might be expected by other commercial institutions.

I have set out the substance of our plans for the new organisation. I should like to turn for a few minutes to the detail of the draft order. Article 3 sets up the board, and in schedule 1 is prescribed its constitution. Article 4 provides for the ambit of the IDB to be set. The powers of selective assistance in part III obviously cover the mainstream of the IDB's work: but it will have many related activities, such as overseas promotion, provision of sites and factories, trade support and marketing assistance.

Article 5 sets out the functions of the board, and provides authority for the issue to the board of the directions which are the principal element in the guidelines. Article 6 deals with reports and accounts. Of particular note is article 6(2), which entitles the board, if it wishes, to a statement of reasons for publication in its annual report where its advice is not followed in a particular case. The article also makes clear the Comptroller and Auditor-General's role in the IDB's affairs.

As for the rest of the draft order, for the first time all the powers of industrial development, at present scattered among half a dozen or so statutes, have been brought together with amendments and repeals to produce a single, coherent and up-to-date code. They are vested in the Department of which the executive is an integral part.

Article 7 will be the main power under which the IDB will provide assistance to companies for creating and maintaining or safeguarding employment. It also embraces powers at present accorded to the Northern Ireland Development Agency to provide loans or loan guarantees and to make investments but, as in Great Britain, shares or stock will be provided only as a last resort, with the company's consent, and where no other form of assistance is appropriate. Article 8 includes the general industrial development powers of NIDA, which will enable the IDB to establish, carry on and develop industrial undertakings, to give advice to companies, and so on.

Article 9 amends existing powers to extend the range of circumstances in which assistance can be provided to encourage companies to undertake research and development work and in the marketing of their products. The article will also enable the IBA to assist appropriate scientific research and further the dissemination and practical application in industry of such research. We view that change as most helpful to the generation of research and development work in the Province, and hope that it will attract such work from outside.

Article 10 will give the IDB powers for acquiring and developing land and providing factories. There is a new provision to enable the IDB to make agreements with others to develop land for industrial use, thus encouraging greater private sector involvement in these functions, which I think can only be beneficial.

Article 11 requires the IDB to take account of the needs of different parts of Northern Ireland, for example enabling higher levels of assistance to be paid in areas of highest unemployment. It also contains an amendment, similar to one recently made in Great Britain, requiring the IDB to promote private ownership of interests in industrial undertakings, by disposing of its own interests.

Article 13 covers a miscellany of general powers by which the IDB will be able to publicise its activities, carry out research and assist visits to the Province by potential investors.

Mr. J. Enoch Powell (Down, South)

In outlining the articles, the Minister has in each case prefaced his statements with the words "the board". The order actually speaks of the Department. Is the board an integral part of the Department?

Mr. Butler

Where I have used the words "the board", I have done so to distinguish it. As the right hon. Gentleman is aware, this is an advisory board to the executive. It may be that on occasion I have used the IDB as a term that embraces both the board and the Executive. However, in the earlier part of my speech, I made a distinction between the two, and, where necessary, included reference to both the board and the executive.

Mr. Powell

I apologise for interrupting the Minister again. Article 8 deals with the carrying on or establishment of industrial undertakings, but in that case the Minister said "the board" instead of "the Department". Who will carry on these undertakings? Will it be the Department through the executive or the board? I think that the Minister said the board.

Mr. Butler

Obviously I would need to check back to see whether I said the board. In fact, the Department, of which the executive is an integral part, will have these powers, because the advisory board will not have powers by statute other than to advise and to oversee the work of the executive. I apologise to the right hon. Gentleman and the House if I made a slip, but he has allowed me to make it absolutely clear. He was right to read from the order and to draw attention to an important and vital feature of it.

Part IV of the order—articles 16 to 25—consolidates existing legislation on the standard capital grant scheme. A few useful amendments have been introduced, including a broadening of the definition of a computer, so that grants can be provided to qualifying industrial companies for such items as word processors and microcomputers, which were previously ineligible. This seems a most appropriate change, coming as it does in information technology year.

In future, the range of industrial activities qualifying for standard capital grants will be open to amendment by statutory rule in a manner similar to the regional development grant provisions in Great Britain.

Part V of the order, articles 26 to 29, re-enacts the existing provisions about the industrial enterprise fund. This fund has proved over many years to be a useful way of giving small amounts of assistance to deserving projects falling outside the criteria of the main assistance schemes set out in this order.

Part VI of the order is largely devoted to miscellaneous and supplementary provisions, but I might single out article 30, one of the purposes of which is to give authority for the continued funding of the Local Enterprise Development Unit.

One never knows on these occasions quite how much to put into a speech on a subject that has been debated in Committee, but I feel that it was appropriate to cover in some detail what the order provides, because some right hon. and hon. Members will not have been privy to our proceedings before. Therefore, I have spoken with some speed, but I hope that what I have said has been intelligible.

I have been talking about our proposals for the IDB. I should like to say again that they envisage an organisation which, although within the ultimate responsibility of Ministers, will have a clear identity of its own, and a high degree of commercial freedom in its day-to-day affairs. I am sure that these proposals represent a significant advance. The IDB's work, we all recognise, is of vital importance. There are no organisational panaceas for Northern Ireland's problems. It has a daunting task, but potentially a rewarding one. It is a formidable task and the IDB will need support from all quarters in Northern Ireland. Now that this organisation and our intentions as to how it will operate are more widely known, I am confident that it will receive that support. I commend the order to the House.

10.52 pm

Mr. J. D. Concannon (Mansfield)

This is a short debate and I shall not, after two sittings in Committee, follow through the lines of the order as we did then. Furthermore, we have the Appropriation debate on Friday and some of the things that we might have wanted to cover in a debate such as this can be forgone until Friday.

The Opposition welcome the idea of the IDB, and recognise the difficult and demanding job done by the board, the chief executive and the Minister. Whatever is in the draft order and the guidelines, I am satisfied that at the end of the day it is the Minister who has the most important part to play in putting the order into effect.

The Government have presided over the destruction of jobs to the extent that there is now unemployment of more than 20 per cent. overall in Northern Ireland, and 40 per cent. in the towns. The decimation of whole industries has created a lack of confidence in Northern Ireland that will be difficult to retrieve. The IDB will have to direct much of its energies into developing confidence again for some time.

I visited Northern Ireland last week and was expecting in my naive way that, after all our efforts in the House, I should be talking about devolved powers in Northern Ireland or about security. I found to my surprise that nobody wanted to talk about them, as they are "back numbers". The only topics of conversation were the unemployment rate and the lack of jobs.

I found a lack of will, because the commitment had gone, and an acceptance of what was happening. If an unemployment rate such as that existed in my constituency, I assure those hon. Gentlemen who were absent last night that I should have been here looking after my 40 per cent. unemployed to see that they got back the 5 per cent. abatement that was pinched off them by the Government. Many of the unemployed in Northern Ireland will want to know why their Members of Parliament were not here last night to look after their interests.

If the IDB is to work, and it must work, it will have to remove the air of gloom and despondency, not only from the people of Northern Ireland but from those who have the unenviable job of selling Northern Ireland abroad.

I met the chairman, Sir Desmond Lorimer, and other members of the board and I think that they know what has to be done. It seems that the Minister has brought together an excellent group of members. As we say in north Nottinghamshire, they are ready to give it a go.

I am particularly glad that the Minister agreed to our plea that two trade union representatives should be appointed to the board. I know that he has appointed them as individuals, but I think that they will be invaluable, just as they have been to NIDA. When the Minister is talking to industrialists and entrepreneurs around the world he will find that the help and assistance given by the trade union movement, through the board members, will be exemplary.

There does not seem to be much disagreement over the guidelines. I have received no representations against them. As I said in Committee, the financial limits are fairly generous and the Minister will be involved above the limits. I approve of that.

Many of us are worried about the phrase "commercial viability" which is a common thread in the order and the guidelines and was referred to by the Minister. We need an explanation of what those words mean in Northern Ireland. Commercial viability means one thing in the rest of the United Kingdom but something different in Northern Ireland, which starts a pace behind Britain. The Minister must define the phrase more clearly.

I asked the board whether it would be responsible for defining those words and whether the phrase would give it sufficient flexibility. If the board has to operate within the Government's monetarist policies, it cannot expect to achieve much success. As long as the Minister recognises that commercial viability has a different meaning in the Northern Ireland context and the board has the necessary flexibility, I shall be happy. I want the scheme to be successful and I shall measure success by whether the Government get back quickly to the circumstances that they inherited in May 1979.

Much will depend on the board and the energy and drive of the chairman and board members. I commend the Minister for bringing together such a board. I have not met the chief executive, but he has fine credentials and world-wide experience—and he will need all of that. In addition, the Minister will have to throw off some of the dogma of the Government's monetarist policies and think a little more about the people of Northern Ireland.

There must be no more slip-ups, such as occurred over Hyster, which the Minister of State and the Secretary of State referred to in Committee. It was a rather unfortunate episode. The Industrial Development Board, the Minister and other officials in the Department must gear themselves up and not make such a mistake again. It was a terrible knock to confidence in Northern Ireland. During my visit I found that there seems to be an acceptance that the Province will cease to be an industrial area and that the disappearing jobs are a sign of the times. That should not happen.

The Opposition wish the board and the Minister all success for the future not only of the board but of the work force. We shall allow the order to go through without opposition and we hope that the board will bring success and more jobs, which are desperately needed, to Northern Ireland.

11 pm

Mr. James Molyneaux (Antrim, South)

As the right hon. Member for Mansfield (Mr. Concannon) said, for certain reasons Ulster Members were not present last night in full strength. But if the Labour Party had had 20 per cent. of its members present and voting in the numerous Divisions on the Northern Ireland Bill, it would have a clean record and could look the people of Northern Ireland in the face. It may even select some candidates and test its policies at the polls.

Mr. Concannon

The difference is that we were not opposed to the Northern Ireland Bill. Is the hon. Gentleman saying that he supported the proposal to retain the 5 per cent. abatement?

Mr. Molyneaux

The right hon. Gentleman will recall that sometimes it was difficult for the Committee to discover whether the Labour Party were in favour of or opposed to the Northern Ireland Bill, because Labour Members said nothing. The right hon. Gentleman said that we spent much time on that Bill. That accusation could be levelled at the Government Front Bench, at my right hon. and hon. Friends and I and at other Ulster Members, but not at the right hon. Gentleman and his hon. Friend the Member for Hammersmith, North (Mr. Soley) because they spoke on only two issues.

In our first debate in Committee on the Northern Ireland Bill at the end of March, the Minister said that he had appointed six members to the board. I regret that he enlarged that figure, because it has been our experience that, where decision-making is the vital consideration, six would be much more efficient than 12. If the enlarged board is sluggish because of its size, the result will be that decisions will be taken by the Minister, the chairman and the chief executive. That may not be bad, because speed is essential and we are in favour of streamlining and efficiency rather than trying to win the battle against unemployment by committee.

Article 5 provides that the board's functions will be

1. "(a) to advise the Head of the Department…
2. (b) oversee the exercise by the Executive of its functions."

The first function need not be a great problem because Ministers are accustomed to listening to advice and are well-versed in the art of disregarding it. I exclude the Minister of State from that category.

The second function is more likely to cause trouble. Ideally, the board would support, encourage and inspire its chief executive. A good board could always provide a bank of experience and knowledge, from which the chief executive could draw. But I fear that it will not do that. As my right hon. Friend the Member for Down, South (Mr. Powell) said in an earlier debate, it is more likely to form a layer of fog through which elected representatives and entrepreneurs alike will grope in search of answers and decisons. With the best will in the world, it is bound to be so. We have all found from experience that any structure interposed in the machinery of government always becomes a buffer behind which incompetence, inefficiency and indecision rapidly multiply. I fear that it will be so in this case.

In the second function there is a disturbing phrase that the advice is to be given in relation to specific cases". As one would expect, the draftsmen hedge their bets when they say advise the Executive, both generally and in relation to specific cases". One would expect any well-bred board to advise generally. That is what boards are for. The advice may be sound or unsound, but that will not prevent or inhibit it from offering advice. So we can take that as read.

Nevertheless, what is meant by in relation to specific cases"? Does it mean that the executive will seek the board's advice on projects of a rather doubtful nature? We have had far too many of them in Northern Ireland. Does it mean that the board will meddle and attempt to decide by committee? I hope that it means that the board, and particularly its chairman, will keep a general watch on events to ensure that disasters are avoided but that the chief executive will be free of all shackles and allowed to get on with his job of making things happen.

I hope, too, that the chairman will be encouraged to sanction and approve important decisions without waiting for the stated meeting of his board. In a competitive world—one example was brought to our notice tonight by the right hon. Member for Mansfield—delay can cost contracts and new jobs.

In short, the chairman of the new board will have to become almost as full-time as his chief executive. At this stage, perhaps I might be permitted to pay a sincere tribute to the chairman of the Northern Ireland Development Agency, Mr. Denis Faulkner. Over the years, he has proved to be a man of sound judgment and the utmost integrity. He has inculcated those qualities in his NIDA staff who, with their new colleagues from the combined Department of Commerce—formerly the Departments of Commerce and Manpower Services—will form the backbone of the administrative base of the new board.

The new structure faces a daunting challenge, as the Minister said. With a forecast rise in national unemployment to 3½ million, there will be a proportionate increase in the Northern Ireland figure, and of course, that increase will take much longer to reverse than in the rest of the United Kingdom. It is admitted that the causes of that disastrous total are varied and complex, but it is important that the scale of the jobless in Northern Ireland should be placed firmly on the record now so that the structure created by this order tonight and any elected body in Northern Ireland in the future will not be saddled with blame for further failures.

In recent months, Ulster has not been untouched by the boost in national morale. This contradicts what the right hon. Member for Mansfield said. He seems to have spoken to people of a pessimistic turn of mind when he was in Northern Ireland, and I hope that my right hon. and hon. Friends who have been there recently will take the opposite view. People are now eager to get on with their jobs and utilise those talents that have been smothered for several years. I hope that the amalgamated Departments and the new board will match that mood and, above all, recognise that theirs is an opportunity that may never come again.

11.10 pm

Rev. Ian Paisley (Antrim, North)

I should like to make a brief comment on the speech of the right hon. Member for Mansfield (Mr. Concannon). I shall not be afraid to face the electorate of Northern Ireland on the question of unemployment. I do not think that he would suggest that his hon. Friend the Member for Belfast, West (Mr. Fitt), who was not here last night, was not interested in unemployment in Northern Ireland. The right hon. Gentleman knows the circumstances of Northern Ireland on 13 July.

I have consistently voted on the principle that a different employment policy should be pursued by the Government, as has my hon. Friend the Member for Down, North (Mr. Kilfedder). If the right hon. Gentleman checks the lists in the Lobby tonight he will find where my vote always lies in that regard. I am glad that the Government have promised that the 5 per cent. will be returned. I trust that that promise will be kept at the appropriate time.

We are discussing tonight the machinery under which jobs can be created, promoted and increased in Northern Ireland. To that end, Northern Ireland should have the best possible machinery. No hon. Member, and especially the unemployed and others in Northern Ireland, should be under any misapprehension that to have the proper machinery will suddenly resolve the cancer of unemployment in Northern Ireland. Northern Ireland has serious unemployment. It is a running sore in our community. However, I do not agree with the right hon. Member for Mansfield that people in Northern Ireland are not concerned about terrorism. The right to live is the most important right of all. If one does not have the right to live, the benefits of a job cannot be enjoyed.

I regret that the right hon. Gentleman did not visit the Unionist side of the fence on his visit to Northern Ireland. Had he done so, he might have had a more balanced view of events in Northern Ireland. Despite the dark and difficult days that people in Northern Ireland have undergone, there is a buoyant spirit there—the spirit of the Ulster-Scots that has been the foundation of Northern Ireland from its plantation. That spirit has always conquered and I am confident that it will conquer now.

I congratulate the Minister on his agreement on flexibility. It is important that there should be flexibility in the working of the new board and the executive. Without that, there will be more sad stories about job promoters who would have come, but who have gone elsewhere because of the difficulties and the insufficient flexibility. The House should face up to the fact that the Irish Republic is our competitor in this field. It will offer everything that it can to those in the United Kingdom who are interested in promoting new jobs. If they intend to choose Northern Ireland, there will be a play-off. Those who intend to come to Northern Ireland go to the Department to find what it can give them. They then go straight to Dublin to ask how much it will give them, and make their decision accordingly. I want the board to be flexible so that it can take decisions quickly.

The hon. Member for Antrim, South (Mr. Molyneaux) put his finger on it when he said that the decisions must be taken quickly. That is at the heart of our case. Industrialists who are keen to promote jobs and to set up manufacturing industries in Northern Ireland want a quick decision. Can the chairman and the executive make decisions without waiting for a regular board meeting? If there is to be a delay before a regular board meeting is held, we shall often miss the boat.

Has the Minister completed his nominations to the board? Is the board now complete? I am glad that the hon. Gentleman listened to the representations made by the Opposition, by my party's representatives and, particularly, in Committee by my hon. Friend the Member for Belfast, East (Mr. Robinson). They requested that there should be two representatives from the trade union side. I am glad that the Minister conceded that point. I am also glad that they have not been appointed from the Irish Congress and that they are independent men with trade union experience. Indeed, Mr. John Freeman has already done signal service in this area. Those of us involved in job promotion know of his energy, dedication and commitment to bringing employment to Northern Ireland. I am sure that Mr. Freeman's colleague will share the same spirit. All who are appointed to the board will no doubt be dedicated and I trust that that dedication will show.

We stressed to the Minister that there should be a place on the board for Sir Charles Carter, chairman of the Northern Ireland Economic Council. I do not know whether he has yet reached a decision. Unfortunately, I was unable to attend the last meeting, but I read the report of it. I believe that the Minister talked to Sir Charles Carter about that. Therefore, I hope that the Minister will say whether he has completed his nominations to the board and whether Sir Charles Carter is to be a member.

Indeed, I pay tribute to Sir Charles Carter and to the way in which he has chaired the Northern Ireland Economic Council. His independence has encouraged those of us who want to hear that independent voice I trust that the Minister will make a full statement about that. I understood the Minister to say that the Executive will be able to give grants of up to £5 million, excluding factory accommodation. That shows the Minister's liberality. Is the Minister to suggest a ceiling on job costs? That is an important point. Indeed, I think that the right hon. Member for Mansfield raised it in Committee. I do not want the Minister to tell us that that is the limit and that that is that, but perhaps he will comment on it and confirm that there will be some flexibility and that the board will be able to deal realistically with job costs.

There are many factors that tell against job promotion and the solution of the unemployment problem in Northern Ireland. Northern Ireland is short of natural resources. It has difficulty with transport and high energy costs. At the heart of the problem lies terrorism. Terrorists who burn buses in Londonderry, make railway lines unusable and destroy property, tell against the injection of money and investment in the Province. There is a world recession and the Government's monetary policy has been detrimental to Northern Ireland.

The Minister has to face up to the fact that, if we are to obtain outside investment, the Government must put their money where their mouth is. They have to invest in Northern Ireland. That is important. I trust that the Minister will be able to push the Treasury on those matters, and that we shall have news of Government investment in Northern Ireland. That is of the utmost importance.

There is no doubt that the credentials of Mr. Tate, the new executive member, are very fine. I listened to the first broadcast he made in Northern Ireland, and I believe that he struck the right note when he talked about the importance of promoting indigenous industry. The indigenous firms which have borne the brunt of the trouble should be encouraged to expand their work forces. In that way vital progress will be made.

Many employers say to the representatives of the public "If we had a southern American drawl and a large cowboy hat we might get more money from the Department. Because we are Ulstermen we do not get the encouragement that we should." Whether the Minister likes it or not, that is the opinion of people in Northern Ireland. The right hon. Member for Mansfield knows that that opinion is held. It should be made obvious immediately that this new board will encourage indigenous industry. Encouragement must be given to local firms and men to keep them in business. Some of the speeches made in Committee underlined that important fact. I trust that the Minister will take that on board.

I find it difficult to decide where the responsibility of the board and the executive end and where the Minister's responsibility takes over. Is the Minister in overall control? To whom is the board accountable? Will the Minister elighten us on that, or does he find it difficult to decide where the board's responsibility begins and ends? I hope that the board, the executive and its chairman will be able to make some impression on unemployment in Northern Ireland. They have the good wishes of the people. There is plenty of good will. I trust that it will do a good job.

I associate myself with the remarks of the hon. Member for Antrim, South about Mr. Faulkner and the work that he did with the Northern Ireland Development Agency. Some of us had differences with NIDA, naturally, but we did not impugn the integrity of those who managed it and worked with it. I trust that some progress will be made and that the Minister will be able to announce that jobs are coming to Northern Ireland. I trust that firms that are bearing the burden and heat of the day will advance and strengthen their hold on the Northern Ireland economy.

11.25 pm

Mr. J. Enoch Powell (Down, South)

Some remarks by the right hon. Member for Mansfield (Mr. Concannon) had the effect of ruffling feelings in the House, As one of those who, with my hon. Friend the Member for Londonderry (Mr. Ross), was in the Lobby—and the right Lobby—last night, I did not take that part of the right hon. Gentleman's observation too personally and was not wounded by it. But I was distressed by something else that he said, which appeared to show that he had gathered the impression of a atmoshpere of apathy and resignation in the Province.

I join hon. Members from both Antrim constituencies in repudiating that. The right hon. Gentleman must have been in very strange company indeed. It was untypical company. I have had the good fortune in the last three days to attend no fewer than two conferments of the Queen's award for industry involving major productive units in the Province and in a town in my constituency. There was no doubt whatsoever that the vigour and resilience of those who worked and managed the firms had made a decisive contribution to the export success of the two undertakings.

It is a travesty to present the people of Northern Ireland as apathetic and not vigorous and enterprising in their outlook. With all the heavy unemployment, a striking feature, which all—except the right hon. Gentleman—who visit Northern Ireland recognise, is that there remains a sense of enterprise and hopefulness.

I should not like any remarks by the hon. Member for Antrim, North (Rev. Ian Paisley) to induce hon. Members less well acquainted than they should be with Northern Ireland history to equate Ulster and its beginnings with the plantation. There was an Ulster—and a distinctive Ulster—clearly continuous with the one that we know today, long before the plantation. The effect of the plantation has been grossly exaggerated, numerically and in other respects.

Of course, the Scottish dimension about which my hon. Friend the Member for Antrim, South (Mr. Molyneaux), much to the irritation of the Northern Ireland Office, talks from time to time, is a reality. As one who represents Down, South I am in the position to understand that many more elements than the Scottish element have entered into the unique personality of Ulster.

I assure the House that Ulster's personality is one not only of determination, but of hopefulness and enterprise, even in adversity. I am sorry that the right hon. Member for Mansfield was unable to find it when so many others find it so evident.

It would be unfortunate if we did not realise, in approving the order, what a constitutional chimera is being created by this decision. The Minister was frank and helpful this evening in his analysis of the constitutional position that will be created. He said that the whole will be within the ultimate responsibility of Ministers. I do not think that that can be faulted. He said that there would be two sections of the new Department—one would be the executive and the other would be the rest of the Department—and that the board, statutorily speaking, in so far as statutory responsibilities are concerned, would be largely of an advisory character.

I think that that is a correct statement of the position, as I understand it in the terms of the order, but it leaves us with a potential difficulty in the future because the Minister proposes to devolve—if I may dare to use that word—certain functions which are functions of his Department to the executive working for that purpose under the oversight of the board. The fact that he does so and takes that decision does not, however, alter his financial and his political responsibilities to the House. For all the decisions that get taken, even for the smallest decision within the guidelines which is taken by the executive, even in the matters where he intends to be substantially guided by the advice of the board, the decision in the end and the action will be ministerial. It will be action for which he is responsible.

I do not regard that, as I have said in previous debates upon this subject, as being a defect. On the contrary, there are great advantages in ministerial responsibility being undivided and clear. The danger that I see is that too much will be expected of the quasi-independence—the Minister went so far as to use the words "effective autonomy" in his speech—which will attach to the executive and to the board. We are not creating a new Heaven and a new earth. We have not discovered a method whereby the autonomy of a part of a Department or the autonomous advice of the board can be combined with the overall ministerial responsibility.

There will be least misunderstanding if it is grasped at the outset that this board, for all that we say about it, will be advisory, hortatory and encouraging in its activities. It will not be executive. It will not be a board that will take its own line. It cannot be a board that will strike out a new policy or a policy of its own in the financing of employment and industrial development in the Province. That responsibility will lie in the proper place, where the money is answered for. It will lie with the Minister.

I am not sure that the effect of dressing up that reality—an advisory board on the one hand and ministerial responsibility on the other—by the device of the executive and the oversight of the board will not cause more misunderstanding and perhaps, at a later stage, more heartburning than the effort was worth.

It is all very well for us to make speeches now before the organisation comes into existence, but it is when mistakes are made and are seen retrospectively to have been made in industrial development, when projects that people believe should have come to Northern Ireland do not come to Northern Ireland, and when opportunities that people believe should have been taken appear to have been neglected that the criticism will start and the pressure will begin to be exerted. It will be futile in those circumstances to suppose that the board or the executive will be able to take the responsibility. They will not. They will say "We gave this or that advice" and the executive will say "This executive is a part of the Department."

If there were any doubt about that relationship, it is made clear enough in the wording of article 6(6)(a), which relates to cases where the board has given advice to the executive and the executive has not taken it or has done the other thing. In those circumstances the board is given the right to demand a public explanation. It is the head of the Department—in present circumstances the Minister—who furnishes the explanation and takes that responsibility. So the true relationship is revealed.

One hopes that the board will contribute something by its advice and encouragement and by the information and experience of its members. However, in the end we are relying upon the finance which is provided by the House—indirectly, perhaps, but still by the House and under the authority of the House—and the judgment and the administration of the Department to do whatever can be done for employment and enterprise in the Province on the lines of the order. It is just as well at the outset that that should not be open to misunderstanding.

11.37 pm

Mr. Adam Butler

It is pleasant to have had such a general welcome for the order. It is equally pleasant, despite the late hour, to have had it analysed, not least by the right hon. Member for Down, South (Mr. Powell). I have a sufficient number of minutes left to try to deal with most of the matters that have been raised. I shall not enter into the little argument, which is not entirely related to our affairs tonight, which seems to have hung over from 13 July. I was in the Province on that day enjoying myself, but I returned for the vote in question.

The way in which the executive and the board will interrelate and the way in which decisions will be taken go to the crux of the order. The appointment of two trade unionists brought the number on the board to 10, which leaves two places below the maximum of 12. Those two places will be filled as and when we find the appropriate persons to fill them.

As I said in Committee, Sir Charles Carter would have made a considerable contribution to the affairs of the board. I discussed with him the possibility of his serving on it. However, I put it to him that as chairman of the economic council, which is essentially an independent body, it would be probably best if he were to retain that independence entirely by remaining as its chairman and not involving himself immediately in the affairs of the board. Reference has been made to that independence, and I believe that Sir Charles and I saw very much eye to eye.

The hon. Member for Antrim, North (Rev. Ian Paisley) said that he was glad to learn of the £5 million in grants towards projects that created employment. That was probably a slight slip of the tongue because £5 million is a total possible figure made up of £3 million of grant and, where appropriate, up to £2 million-worth of equity investment, plus—again where appropriate—training grants and the provision of a lease of a factory. Those are fairly substantial sums. They are the right ones in the circumstances.

The cost per job figures operate at the moment and will continue to do so. For obvious reasons, they will remain confidential, but they will operate according to the various zones that represent the different degrees of need in the Province.

I am always pleased to repeat, although I should not have to do so so often, that under Government policy and, according to the right hon. Member for Mansfield (Mr. Concannon), Labour Party policy, there is always support for indigenous industry. The same grants are available to indigenous companies as are available to others that might wish to invest in Northern Ireland. Sometimes selective assistance to companies coming in to Northern Ireland works out higher as such investment tends to be mobile—there is not much of it about at the moment—and one must pay fairly highly for it.

The hon. Member for Antrim, South (Mr. Molyneaux) said that the board should be smaller. If we were discussing an executive board, I might agree. The proposed one, however, is advisory by statute. It will need to draw on a great breadth of experience and undertake committee work. A board of the type that the hon. Gentleman suggested, therefore, might be too small. I refute his suggestion that such a board would provide a layer of fog or a buffer behind which incompetence could flourish. That is not in the nature of the beast or of the individuals who will serve on the board. Perhaps that will emerge when I deal with the two crucial points of the debate.

I gave my description of what we mean by commercial viability with some care. We shall amplify as appropriate in the guidelines. The projects about which the Industrial Development Board advises on financial support must, with the benefit of that financial support, be expected to succeed and prosper. They must be expected to be viable. The board will not be expected to put public money into hopeless causes. To that extent, I may fall out with the right hon. Member for Mansfield, but I believe not.

Cases that should be supported for social reasons would not be a matter for the processes that I have described. Although the board will give its advice, the decision will rest firmly with the Minister. There may be circumstances when the Minister judges that for social reasons the test of commercial viability should not apply. With regard to the Industrial Development Board, however, that test must apply. That is desirable to ensure the proper use of public money.

Mr. Concannon

The Minister is getting on to the same plane in suggesting that there may be a political input in some of the decisions because the social background is a political input. If he is saying that that is part of commercial viability, that is fine with me. That is part and parcel of the package in Northern Ireland. The social package is involved in the political decisions. Only the Minister can make those decisions, and in doing so he will sometimes have to overrule the board.

Mr. Butler

I think that that is a fair assessment, although one should perhaps also point out that the extent of grant aid and financial support that the board and the executive may have at their disposal will take into account the social needs of particular areas of the Province. For instance, the availability of the higher rates of assistance will itself reflect the social needs of areas of particularly high unemployment. Having applied the maximum grant to a project, the board and the executive must then assess whether the project can succeed with the benefit of that grant. That is the test of commercial viability—whether the project will be able to stand on its own feet once that money has been put behind it.

The relationship between the board and the executive and the Minister has been debated at length. We have tried to find and, I believe, have succeeded in finding, the best solution. In Northern Ireland, inevitably, large sums of money are spent generally and specifically on industrial development and it is right that there should be full accountability for such expenditure. Equally, decisions in regard to that expenditure need to be taken with the full benefit of commercial experience. As has been emphasised again today, the decisions should be taken swiftly and as far as possible without the contraints of what I would describe as excessive bureaucracy.

Therefore, we have tried to find a way in which to use all the advantages of the private sector in taking such decisions while still clearly providing for proper accountability. I do not believe that there is any contradiction in what we propose, although I acknowledge that we shall have to see how the relationships work out in practice. All those concerned—including myself, but particularly the chief executive, who will come new to his job, and the chairman of the board who will also be taking on a job that is in a sense new to him—will have to feel their way and discover how best to work together.

Mr. John Dunlop (Mid-Ulster)

Will the Minister or his colleagues make it their business to direct the activities of this new organisation to those parts of Northern Ireland in which unemployment is of stupendous proportions? I refer, of course, to places such as Strabane and Cookstown. Will they come in for special attention to relieve the very high unemployment there? The Minister hinted earlier that ministerial activity would be somewhat limited but that the people appointed would be acting strongly to bring about some relief of unemployment in the Province. Will the Minister, with his knowledge of those areas, undertake that that will be done?

Mr. Butler

The brief answer is that in the same way that the Department and I have not made it our practice to direct investment to any particular part of the Province, the Industrial Development Board will not do so either. If its members are not aware of the needs of certain parts of the Province—it should be remembered that they are all Ulstermen—no doubt they will become aware of them very quickly and will seek in the same way as Ministers and officials, and the Northern Ireland Development Agency as appropriate, have sought in the past to encourage investment in those areas in which the need is so great. Moreover, they will have available the higher rates of grant that apply in such areas.

I come back to the relationship that the right hon. Member for Down, South explored with his usual thoroughness. I do not find it difficult to envisage that decisions on individual cases of a certain size can be left, in effect, to a board to advise on and an executive to act on. The reason for leaving such decisions to the board and the executive is exactly to meet the point made on previous occasions, and again tonight, that decisions should be taken swiftly and with speed, but also taken on the best commercial judgment.

There are three important safeguards. The first is the financial limits. Although we refer to these as being comparatively generous, they are still, in each individual case, strictly limited. The second safeguard is the position of the chief executive, acting in his capacity as an accounting officer. I refer to a sentence in the draft guidelines which states: Where the Chief Executive considers that for him to proceed on the advice of the Board would be inconsistent with his role as Accounting Officer, he shall report the matter to the Minister". This means that the chief executive, as a civil servant and as an accounting officer in the Department, will have the same responsibilities as he would have if that board did not exist. The third safeguard concerns the position of the Minister. I do not feel that I am putting myself at risk by giving this effective freedom to the board and the executive to operate. I have, in that cohesive unity of the board and the executive, a man who is an accounting officer in the Department and who also will be charged with one responsibility—to draw to the Minister's attention such cases where he believes that there may be a doubt and where the Minister should have the opportunity to comment before the cases go to the board. That, too, is written in the guidelines and was referred to in committee.

The procedures that we have laid down can meet the points made by the right hon. Gentleman, particularly on accountability and ultimate rsponsibility, but equally give the swiftness and commercial nature that we want for the operations of the board.

The right hon. Member for Mansfield said that he wished, with the best will in the world, to see the new Industrial Development Board succeed. I cannot ask for more than that from the right hon. Gentleman in his capacity, leading for the Opposition. His feelings have been expressed by others who have spoken in the debate. With that good spirit behind it, I commend the board and executive to the Province and I commend the order to the House.

Question put and agreed to.

Resolved, That the draft Industrial Development (Northern Ireland) Order 1982, which was laid before this House on 17 June, be approved.