Northern Ireland Departments

HC Deb 21 June 1982 vol 26 cc113-30 10.15 pm

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

I beg to move, That the draft Departments (No. 2) (Northern Ireland) Order 1982, which was laid before this House on 20th May, be approved. Whatever the form of government in Northern Ireland, whether devolved or direct, it is clearly essential that its administration should be as efficient and effective as possible. Her Majesty's Government have always been convinced of their responsibilities in this respect. One method through which we concluded this should be pursued was the reorganisation of the Northern Ireland Departments. Therefore, this short, straightforward order seeks to reorganise those Departments most closely concerned with industrial and economic development, other than in agriculture, to enable us to tackle the stubborn problems of the Northern Ireland economy more effectively. It is, however, only one among a number of initiatives undertaken by the present Administration.

The Departments (Northern Ireland) Order 1982, which came into operation on 1 April 1982, permitted the merging of the control functions of the Departments of Finance and the Civil Service into a new Department of Finance and Personnel, and the transference of certain administrative functions from those Departments to other Northern Ireland Departments. The next step was to create a new unified Department of Economic Development, amalgamating the present functions of the Departments of Commerce and Manpower Services, with one "arm"—the new industrial development board for Northern Ireland.

For technical reasons, we have had to use two orders to achieve this step and reorganise these two Departments. Already, the Northern Ireland Committee has debated on two occasions the draft Industrial Development (Northern Ireland) Order, and in particular its proposals for the industrial development board. There will be an opportunity for the House to debate that order in the near future, together with relevant matters, such as the all-important guidelines.

This order will make possible the bringing together of all the functions carried out at the moment by the Departments of Manpower Services and Commerce. Articles 3 and 4 are the relevant parts and, through the established legal method, permit this merger. As a result, responsibility for the direction of the Government's effort in various economic areas will be brought under one management structure. For instance, responsibility for the promotion of industrial development, for the Government's relationship with existing manufacturing industry and commerce, for tourism, the energy industries and mineral exploitation, for manpower questions, including industrial training, the employment and careers services and the new youth training programme will be brought under one management structure.

My experience over the past 18 months as the Minister concerned with both the existing Departments has convinced me that this will permit a more effective use of resources and a better co-ordination of policies and will be in the best interests of most efficient administration.

Within the new unified Department will be the executive of the new industrial development board, headed by the chief executive and advised by the new board, with clear responsibilities for industrial development functions. Its distinct, commercial role, is essential, and in the new structure this has been ensured. The rest of the Department, directly under the permanent secretary, will be responsible for the remaining industrial and manpower functions, and for the development of economic and industrial development policies. Common personnel and financial services will be used by the whole Department. This will allow savings of at least 15 posts. Throughout this exercise there have been discussions with the staff representatives about the implications of changes, and their attitude has been constructive, as has the attitude and action of all the staff involved in the exercise.

I conclude by stressing once again that reorganisation in itself will not solve the harsh economic problems of Northern Ireland. However, it is essential that, in meeting that challenge, we have the best possible institutions through which to work. The order will permit us to create such institutions. I commend the order to the House.

10.20 pm

Mr. Clive Soley (Hammersmith, North)

It is not new to us to be starting another debate on Northern Ireland at this time of night, but fortunately we shall finish a little earlier, which makes a change.

The Labour Party has no objection to the order. It brings together two Departments into the Department of Economic Development. We hope that it will not be just a renaming of Departments but something more—a serious attempt to deal with the appalling crisis in the Northern Ireland economy, whether it is the collapsing economic base or the consequent unemployment.

The explanatory document says of the order that This new Department would allow a more effective organisation of the Government's involvement in industrial, commercial and manpower affairs. It is curious how the Government are much more willing to intervene in the economy of Northern Ireland than in the economy of the United Kingdom. The previous Secretary of State, the right hon. Member for Spelthorne (Mr. Atkins), said: I have decided to establish as soon as possible a new unified department of economic development. This will be responsible for the direction of Government's efforts to promote industrial development; for Government's relationship with existing manufacturing industry and commerce, tourism, the energy industries and mineral exploration; and for manpower questions including industrial training, the employment and careers services and schemes for the underpinning of youth and other employment. I should like to think that the same emphasis could be given to intervention in the economy by the present Secretary of State for Industry in the rest of the United Kingdom. I cannot help feeling that the seriousness of the economic crisis in Northern Ireland is forcing the Government to give up their monetary policies in that part of the United Kingdom while they continue to experiment with them in England, Scotland and Wales.

Output has continued to decline in almost all sectors of Northern Ireland industry. Where there has been a revival, the figures show that the most we can say is that we are bouncing along the bottom of the recession. There is no serious sign of the pick-up in the economy about which the Chancellor of the Exchequer constantly tells us. Ministers say inside and outside the House that the economy is beginning to revive. There is no sign of that in Northern Ireland and little sign of it in this country.

The need for Government intervention is great. I hope that the new Department of Economic Development will be used for that purpose. I note with trepidation that the Government have decided to close the small engineering firms investment scheme. The reasoning is incredible. Apparently, there have been so many applications that the amount of cash available has been too small. What a reason for closing an investment scheme. If we want small engineering companies or others to make a contribution to the economy, we should keep open that scheme. Why are we not including that—

Mr. Speaker

Order. I must tell the hon. Gentleman that it will not be possible to have a wide discussion of the economy of Northern Ireland. The debate is solely on the desirability of the administrative changes that are proposed.

Mr. Soley

You anticipated me, Mr. Speaker, by about five seconds. I was going to say that there was a strong case for keeping the investment scheme alive and putting it under the new Department that is referred to in the order. There is a case for including the investment scheme under that Department, otherwise we shall fear that this is yet another attempt to change names without changing functions.

I hope that it will be possible for the new Department to join in the talks between the Northern Ireland Economic Council and the National Economic and Social Council, which met in Dublin recently. There is a strong case for recognising the complimentary and competitive areas of the two economies. The new Department of Economic Development should be able to incorporate such thinking in its management and its responses to the economic problems of Northern Ireland. I hope that it will not be just a change of name but a serious effort by the Government to have the necessary State intervention, which practically every political party in the Province—as well as the CBI—accepts as necessary if the economy is to be saved from total collapse. We welcome the order.

10.24 pm

Mr. J. Enoch Powell (Down, South)

Before I come to major matters, may I put two technical questions to the Minister of State? The first relates to article 1, which is the commencement of the order. In the explanatory document on the proposals for the order, which was circulated, it was expected that the date would be entered at the time of the laying of the order. I wonder why the specific date has not been included in the draft order before the House. The order which we shall take later and to which the Minister of State referred, the development order, commences on 1 September. I imagine that it is intended that this order should take effect on or before that date. It is difficult to see why at this stage it still has to be left to be appointed by the head of the Department. I wonder whether the Minister of State could say a word about that.

The second technical point is the manner in which the amalgamation of the two Departments has been carried out. It has been carried out by renaming the Department of Manpower Services and dissolving the Department of Commerce. No doubt there are good technical reasons for that. Perhaps in due course the Minister of State will come to explain them. But it seems paradoxical, when one is creating a new Department, which as to the greater part of its functions will correspond much more with the Department of Commerce than with the Department of Manpower Services, that it should be the Department of Commerce that is selected for the chop and the Department of Manpower Services for renaming. Perhaps the latter has better premises or something of that sort which earned it the preferential treatment. Anyhow, that is a legitimate point of curiosity.

In itself the amalgamation of two Departments is neither good nor bad but only according to its results. The amalgamation of Manpower Services with Commerce is not self-evidently a logical move, as the interests of the Department of Manpower Services gain something by being specialised and by separate concentration. Indeed, the old United Kingdom Ministry of Labour was specialised out of the Board of Trade because it was thought—I do not believe that that was a mistake—that the interests of the Department of Labour would be met better by a separate Department than under the umbrella of the Board of Trade.

In itself there is no obvious merit in the amalgamation of the two Departments and nor is the amalgamation necessary for the purposes of the order that is to follow—the industrial development order. It may be convenient to conduct the two operations simultaneously but I do not believe that it could be argued that we could not set up the Industrial Development Board unless we had already amalgamated the Department of Manpower Services with the Department of Commerce.

There is also the point to be borne in mind that to that extent the change that we are making differentiates rather than assimilates the departmental structure in Northern Ireland from that in England and Wales, but no doubt the argument won the day that it would be more efficient to have those two Departments amalgamated into one. Those of us who correspond, alas perhaps too frequently, with the Minister of State sometimes say to ourselves that it must be a hardship for him to be commuting, if not actually vibrating, among the Departments of Agriculture, Commerce and Manpower Services. There will be only two poles between which, in future, he must fluctuate. Will it conduce to economy for the two Departments to be merged? It was with some disappointment that one read in the explanatory document at paragraph 9: This order will not necessitate the employment of additional staff in the public service nor increase expenditure. One would have hoped not indeed. One was glad to hear—if I caught the Minister correctly—that, far from involving additional staff, there will be some saving. I think that the Minister mentioned that 15 posts would be saved. To that extent and in a way that the explanatory memorandum did not foreshadow, one may hope for some economies from the amalgamation.

Those of us who have studied in the Northern Ireland Committee the proposed industrial development board that will operate under the new Department of Economic Development, are likely to come to the conclusion that so far from there being a diminution of staff, there is likely, if anything, to be an increase. We are not debating the industrial development order or the guidelines of the industrial development board that will operate under it, but since we are creating the Department of Economic Development perhaps it is permissible to point out to what great extent that Department will have to shadow all of the activities, or almost all of the activities, of the industrial development board. Any idea that the industrial development board and its executive will diminish the effort inside the new Department of Economic Development would be misguided.

I shall take up a couple of matters to illustrate my point. I shall take them from the guidelines with which the Northern Ireland Committee was provided. It says that it is the business of the board to incorporate those priorities into a coherent industrial development strategy". That is all right. It continues: to be prepared in consultation with the Policy Unit of the Department. So there will be a policy unit in the Department beavering away at industrial strategy, and when the new board has come to its conclusions or is coming to its conclusions the two of them will compare notes. I doubt whether that duplication will conduce to economy of staff or effort.

In guideline 10, when one comes to specific cases, which is the practical heart of the activity of the new Department of Economic Development, the guidelines stress over and again the ultimate continuing responsibility of the Department. It says: In respect of individual cases the Board's Statutory role is an advisory one, and the ultimate responsibility for action taken as a result will rest with the Minister … The Minister should therefore be given reasonable notice by the Executive of all case papers going to the Board, in order that he may have sufficient opportunity to express his views. We all know what lies behind those words—that views expressed by the Minister upon proposals advanced by the industrial development executive to the industrial development board will, quite rightly, not be views that the Minister forms by glancing through the proposals and jottings in the margin. It means that a parallel study of the individual cases will have to be carried out by the Department. Otherwise how can it validly advise the Minister what view he ought to take on them and otherwise how can he validly take the ultimate responsibility for action on the individual cases?

Again, therefore, one fears that, so far from a net reduction in the staff of the two Departments to be combined, the monitoring of the work of the new industrial development board will lead to expansion rather than to contraction. Indeed, even where there seems to be an area of licence—I use the word in no pejorative sense—for the board to use its own discretion within financial limits, guideline No. 12 contains the following ominous sentence: The consent of DFP may not be assumed in accordance with the foregoing if certain limits on cost per job (to be communicated on a confidential basis to the Board and the Executive) would be exceeded. Again, the reality that anyone tinctured with administration senses behind those terms is that a very close financial watch will be kept by the Department upon the operations of the board and the executive. Otherwise, it is not easy to understand how it will be able rationally to fix the cost limits or to watch their effect upon the operations of the board. Thus, even though there appear to be limits of financial discretion, one fears that in the end the result will be a duplication rather than a simplification and that the net result will be an increase in the total staff at present employed by the Department of Commerce and the Department of Manpower Services.

Those rather gloomy reflections lead me to repeat certain remarks that I made in the Northern Ireland Committee on the whole project of the creation of a board and executive in gremio, as it were, of the Department of Economic Development. In the end, as one studies the structure, it is perfectly clear that responsibility in individual cases, the responsibility for the success of the operation and responsibility for the outcome will be with the Minister and the Government. I make no quarrel with that, because that is where that kind of responsibility should be lodged. If the responsibility is to be with the Government and the Minister, however, I cannot help wondering whether there is really any advantage in interposing a merely conventionally commercial entity between the econonmy itself and would-be enterprise and on the other hand the Department and the Minister.

As a constituency Member, if any development problem or snag arose in my constituency and I had the choice of going direct to the Department and the Minister or going either in the first instance or alternatively to the board and the executive, I know which I would choose. I would choose to go to the Minister and the Department as the place in which ultimate discretion lies and where there is also a greater political sense of flexibility and adjustment of judgment to the circumstances than one could reasonably expect to meet with from what will essentially be a subordinate Department.

I do not think that my experience in dealing with the Department of Commerce under the Minister of State will have been very different from that of my colleagues in the representation of Northern Ireland constituencies. I repeat what I said in Committee. One is impressed by the sense of personal commitment that comes through the handling of the problems submitted to the Minister and to his Department. My sense is that that personal commitment is not restricted to the cases that happen to go through a Member of Parliament but is typical of the attitude and mood that inspire the Department under the Minister of State. I cannot believe that that will be improved and I fear that in the end it will be diminished if, instead of a Department, we have an ultimately responsible Department, with a board and executive working in tandem with it.

Although this experiment—I regard it as an experiment—is to go ahead, it would be a mistake for the Province or for any of us to cherish exaggerated expectations that it will make all things new, that development projects that have been held up in the past will now go ahead and that there will be a greater openness of mind towards economic prospects in the Province. If there is to be a change in those respects, it will come from the Government, and the hon. Member for Hammersmith, North (Mr. Soley) was right to imply that. In personal terms, that change will come from the Minister.

Although no one in the House will wish to deny the Government the right, by the order, to amalgamate the two Departments and thus to create the Department within which the new industrial development executive and board will operate, I doubt whether at the end of the day a great net saving economically or a great net advantage promotionally will result from what we are doing.

10.42 pm

Mr. James Kilfedder (Down, North)

The House should be in a sombre mood as we debate this order. As the hon. Member for Hammersmith, North (Mr. Soley) said, the situation in the Province is appalling. There is a sad and steady decline in the Ulster economy, and the only increase has been in the number of people unemployed. The agony of the situation is truly conveyed by the fact that one in five people are now out of work in Northern Ireland. Therefore, I welcome anything that might resolve the problems in the Province.

I welcome the order, because it brings the two important Departments of Commerce and Manpower Services together and into the forefront of the attack on the main causes of Ulster's industrial decline. The order recognises that the training, retraining and job-finding techniques that were developed by the Department of Manpower Services over the years are vital components of such an attack. It also recognises the central position that the Government occupy in the attack on the erosion of the industrial base in Northern Ireland. At the same time, it allows for the transfer of the industrial development functions of the Department of Commerce to the new industrial development board.

Although we all regret the collapse of De Lorean and of the great experiment of trying to establish a thriving motor car industry in Northern Ireland, we must not forget the size of the Government action that helped to transform the green fields outside Belfast into a modern manufacturing plant in under two years. Although we recognise that £88 million of public money was put into it, the creation of the enterprise was a remarkable achievement, and I regret that it has come to naught.

The Departments of Commerce and Manpower Services worked closely together over the entire spectrum of manpower recruitment, training and management to bring the venture to fruition. As we know, in the end the enterprise passed into the hands of the receiver, although there is still hope that a consortium will take it over. We can learn, and I hope that the new Department and the industrial development board will learn from that experiment.

If this great venture ends in failure it will not be the fault of the Government or the Departments of Commerce and Manpower Services, though a criticism can be made of the lack of proper surveillance and financial control. I hope that the new amalgamated Department will be able to rectify the mistakes of the past, and I hope, too, that the De Lorean experiment will provide a salutary lesson for the new Department.

Civil servants have in recent years come in for much criticism in Northern Ireland. Some people feel that they do not have the expertise to deal with the erosion of Northern Ireland's industrial base. It is said that they lack imagination and possess a nine-to-five mentality that destroys the initiative that is required, undermines resolution and produces the bureaucratic machine mentality that is more concerned with self-preservation than with collective achievement.

However, many of the staff of these two Departments have shown that, given a clear aim, they can work as well as any private enterprise. People should not knock those civil servants who are trying to attract industry to Northern Ireland and to deal with the unemployed. We should pay tribute to them for what they have achieved and for the risks that they have taken.

Some years ago the Department of Economic Affairs in Great Britain left its mark on regional development policies long after it ceased to exist. Part of the success that attended the efforts of the Department of Economic Affairs was no doubt due to the hard work and personality of Lord George-Brown. However, the machine of which he was the head possessed all the rights and powers necessary to achieve the renewal of regional development and the economic revival of industrial wastelands. Unless the head of the new Department—the Minister concerned—has the rights and powers that he needs to surmount the real difficulty that he will encounter, no amount of good will, resolution or determination will enable him to function effectively or to deal with the terrible unemployment problem that Northern Ireland faces.

I confess to some disappointment over the order. I have certain fears, which have been expressed admirably by the right hon. Member for Down, South (Mr. Powell). The Minister ought to consult the Ulster Members of Parliament to see how this new Department can deal with the problems. The Department of Commerce is to be dissolved and the Department of Manpower Services is to remain in being. Does that mean that the emphasis will be on manpower, management and training rather than on going into the world's markets to attract new investment and industry to Northern Ireland? With 20 per cent. unemployment, Ulster has an unused reservoir of trained and willing men, women and young people anxious and eager for work.

I recognise the importance of training and retraining in modern work processes, but I wonder whether at present the emphasis should not be on attracting the industrial plant and investments that are needed in Northern Ireland.

Our people are crying out for work, particularly those who are not long out of school and who are desperate to become wage earners instead of being on the dole, with all the disillusionment and misery that that causes.

I hope that the Government will make use of Ulster's elected representatives, so that they can join the fight for jobs and industry. Having amalgamated these two Departments and set new machinery in motion, I hope that the Minister will call in aid Ulster's Members of Parliament and elected representatives. The elected representatives are often accused of dividing the community in Northern Ireland. Perhaps some of them do so when putting their policies to the people, but in trying to save Ulster's industrial base, and in dealing with unemploymemt, we should be united. I hope that the Minister will use the elected representatives in this worthy battle.

Although I welcome the order, because it sharpens the Government's organisation of industry and manpower, I am a little worried that the enlarged Departments may become bogged down in problems of political and financial accountability. We all remember the De Lorean disaster and the associated loss of taxpayers' money. It is understandable that there should be some caution, but Departments such as commerce and manpower services are in a high-risk business. Their decisions will not always be right. There will be failures as well as successes, and with more than 100,000 people unemployed in Ulster—a frightening 20 per. cent.—an enlarged Department of Economic Development will have failed before it has tried if caution in the search for certainty replaces adventure and risk-taking.

I wish the Department and those involved in the industrial training board well. We in Ulster need almost a miracle.

10.51 pm

Mr. Neville Sandelson (Hayes and Harlington)

The order seems to my right hon. and hon. Friends to be eminently necessary and sensible. It is no exaggeration to say that Northern Ireland is deteriorating into an industrial wasteland. The proposals in the order will not halt, let alone reverse, the economic decline, but they will unite the various agencies and Departments engaged in the fight to rejuvenate the economy.

The measures take account of the inter-relationship between job creation and industrial support. The Government cannot be accused of turning a blind eye to the endemic unemployment in the Province, although their policies have not helped the industrial climate there. The link in the measures between job creation and industrial support reveals a commendable interventionist approach to a critical situation. My right hon. and hon. Friends welcome that and hope that the industrial impetus envisaged by the order will produce the desired new employment.

I trust that it will not be thought that such a merger of the Departments of Commerce and of Manpower Services will become the pattern for Great Britain. I hope that it is not irrelevant for me to mention that aspect of the matter, because such an extension would create an administrative leviathan. It would be a nightmare for the multitude of companies that have dealings with the Departments of Industry and of Employment. That would not be desirable. Perhaps the Minister will confirm that that is also his view.

Sir John Biggs-Davison (Epping Forest)

The hon. Gentleman said that he speaks for his colleagues in the SDP. Is he authorised to speak for the other part of the Alliance?

Mr. Sandelson

I wish that I could answer in the affirmative, because I believe that we are an Alliance or we are nothing. I hope that that comment will go beyond the Chamber.

The order proposes organisational changes, but there is a limit to what they can achieve and to what we should expect of them. The substance of the problem will remain the same—how best to attract foreign investment and industry. The Government, through the new structure, should examine, for example, why the Irish Development Agency has been so much more successful than the Northern Ireland Development Agency in attracting foreign industry and investment.

The IDA is structurally more unified, but the main reason must be that the Irish regime offers far greater tax advantages and that has paid off in the creation of many new jobs in the South. The lesson is that success is more likely to be achieved through tax reliefs and remissions than through a system of capital grants, which attracts capital-intensive industry, but few jobs.

The SDP supports the order, as we support the Secretary of State in all his present endeavours to put Northern Ireland back on the road to sanity and health in political and economic matters.

10.57 pm

Rev. Ian Paisley (Antrim, North)

Those of us who represent constituencies in Northern Ireland are, no less than the Minister of State, who represents commerce in Northern Ireland, all too tragically aware of the terrible situation facing the Province.

Young people are leaving school and going to Government training centres, only to be told at the end of their training that there is no hope of their getting a job.

That is a tremendous tragedy. In addition, if a person is over 50 he will probably never be employed again. Those are sad and tragic facts.

It is good for the Government to take the advice that they give to many businesses—that they should streamline and seek in every way to establish a proper business or commercial machine. The order proposes to unite two Departments, but I am not optimistic that the formation of the new Department of Economic Development will give us an advantage in battling with the plague of unemployment. We have the worst unemployment in the United Kingdom and in the Common Market.

I agree with the hon. Member for Hammersmith, North (Mr. Soley) that, if we are to have an efficient Government machine, we must have the wherewithal to get that machine to go. That machine will not go unless the Government do what they tell outside interests to do—invest in Northern Ireland. The Government will have to make available vast sums of money to invest in Northern Ireland.

I agree to a large extent with the hon. Member for Down, North (Mr. Kilfedder). Hon. Members representing Northern Ireland are well aware that the shadow of the failure of De Lorean colours a good deal of the Government's thinking in other areas. I know that many hon. Members feel strongly about decisions taken by the Department of Commerce on the De Lorean enterprise. I hope and pray that what was a miracle in terms of getting a car factory off the ground so speedily will be preserved. I do not know where those at present employed in the enterprise will find work if the receiver is not successful.

There has been a reference to the fact that the industrial development board will be working under the Department of Economic Development. As the right hon. Member for Down, South (Mr. Powell) said, there is the possibility that two organisations will be carrying out the same task. The Northern Ireland industrial development board will be probing and dealing with applications at the beginning, with the Minister making the final decision, while another brain tank will be looking over the shoulders of the industrial development board and giving the Minister advice when recommendations from the board come before him. Instead of streamlining the whole project, there will be duplication and unnecessary expenditure. The Minister, who has promised a debate on the industrial development board, can perhaps explain the situation.

I am not so optimistic as the hon. Member for Hayes and Harlington (Mr. Sandelson), who has been speaking for his absent friends and for others about whose presence or absence he was not sure.

Sir John Biggs-Davison

Does the hon. Gentleman think that the hon. Member for Hayes and Harlington (Mr. Sandelson) spoke for the Social Democratic Party in Northern Ireland as well as for the Social Democratic Party on this side of the water?

Rev. Ian Paisley

The hon. Member for Epping Forest (Sir J. Biggs-Davison) cannot speak for the Conservative Party in Northern Ireland, because that does not exist. The hon. Gentleman finds himself in the same position as the hon. Member for Hayes and Harlington.

Mr. Ivor Stanbrook (Orpington)

We are working on it.

Rev. Ian Paisley

I am glad to hear it. Some deposits will be forfeited if Conservative Members keep working on it, especially in the Assembly elections. I believe that coming days will prove that the economy of the South of Ireland is not as rosy as some people think and that one cannot buy oneself out of inflation, as is being attempted there.

The Minister should make it clear to the House that the offer that his Department and the Department of Economic Development can make is in many ways in advance of what can be offered in the South of Ireland. The tax holiday that is offered is all right for someone who is going to make money from day one, but it is no good for a firm that will have to wait some years before seeing a return from a good financial investment.

Therefore, there are two sides to the story. I should like the Minister's terms of reference to be flexible so that he can offer firms good incentives. The Government will have to make money available. When the Department of Economic Development gets going, I hope that there will be economic development in Northern Ireland. I do not know how we shall create 100,000 jobs or how we shall tackle the situation that is now developing in Northern Ireland. As has been said, we need a miracle. I trust that the Government will help to bring about that miracle by showing that they believe that Northern Ireland has a future by making money available to it. When they have made money available, they can encourage others to do likewise. In that way, the terrible cancer of unemployment that has bedevilled our Province for far too long may be alleviated.

11.6 pm

Mr. James Molyneaux (Antrim, South)

Some have made the mistake of equating this order with the order that we dealt with some months ago. That order also sought to amalgamate Departments, but in that case the Departments involved dealt with a much narrower area than that covered by the two Departments tonight and, I hope, by the unified Department and its industrial development board.

One glance at the explanatory notes accompanying the order will put matters right and put the order into perspective. Paragraph 2 states: The order will bring together the functions of the Department of Manpower Services and the Department of Commerce into the new Department of Economic Development, which will have responsibility, among other things"— that is important as it shows that certain other matters will be included in addition to the following list— for the direction of Government's efforts to promote industrial development; for Government's relationship with existing manufacturing industry and commerce, tourism, the energy industries and mineral exploration; and for manpower questions including industrial training, the employment and careers services and schemes for the underpinning of youth and other employment. One could hardly wish for a wider remit. The debate centres on setting up a structure that will be seen as a make or break experiment. Tonight, fears have been expressed that delays may result from the structure that is being set up. It is thought that there is a recipe for confusion, and a certain degree of tension. In addition, it is felt that there may be a wait-and-see attitude among the various elements in the new unified structure. I largely share those fears, but I am also concerned about the immediate present and about the other wait-and-see mentality that is evident, not perhaps in the Department of Commerce, but in certain other organisations. When questioned, those other organisations will say "Of course we are not being held up. Of course we are getting every co-operation from the Minister"—I fully accept that—"and of course we are getting every co-operation from the Department". But in the minds of those who are to be dissolved and completely abolished there is a question mark as to whether they ought to deal with the problem confronting them in the next two or three weeks or months, or whether it is something that they can conveniently pigeon-hole and wait for the new structure to deal with. I know that the Minister is fully alive to the dangers of that kind of situation, and that he will already have taken steps to guard against any unreasonable delay, any tendency or any temptation to shelve projects, or to discourage people who want to take the initiative, particularly in small industries.

I am sure that the Minister will do what he can to ensure that there is a smooth transition, because that is vitally important. If a small company is under pressure from its creditors or its bankers, it is very important that there should not be a delay for the vital three or four weeks, which could mean its slipping into bankruptcy.

The Minister of State has presented his order in the crisp and business-like fashion that we have come to expect and appreciate from him. His object and that of the order, as the explanatory notes have said, is to provide a workable and stable structure of which the new industrial development board will be a part. We on the Official Unionist Bench share the Minister's belief that stability is the essential foundation for economic advance. The supreme irony is that another section of the Northern Ireland Office is going in the opposite direction and perpetuating what it has been engaged on for many years—particularly in the past three years. I refer to the political uncertainty caused by endless initiatives, which the Conservative Party has called high-powered initiatives.

What have the high-powered initiatives been designed to do? The Conservative Party supplies the answer in the notes that have been quoted in other debates not related to this matter, and I shall not go down that road tonight. They are intended to pave the way for a federal constitution linking Ulster to the Irish Republic. If that is the aim of that other dreaded initiative—of which, Mr. Deputy Speaker, I fear you will hear more in days to come—nothing could be more disastrous, in the economic sense, for Northern Ireland.

No investor in his senses would commit his financial resources if he were not certain about the constitutional future of Northern Ireland, or if the thought were planted in his mind that an investment that he made in good faith, in the belief that it was placed within the United Kingdom, would in a few years be transferred to a foreign State.

There is another aspect of the proposed linkage which, in the absence of any disavowal, we have to assume is the aim of the other political initiative. As has already been said, the economy of the Irish Republic is not in a flourishing condition. That is putting it very mildly. It is steadily slipping downhill, despite all the bombastic talk, all the outbidding for American investment and the rest. The reality is that it is an economy that is rapidly going on the rocks. Any belief that was put in the minds of external investors that that linkage was likely to take place would compel them to have second thoughts. The high-powered initiative is still, unfortunately, rolling towards that stated objective and, while it continues, the task of the Minister in setting up the structure that he seeks will be difficult.

I turn now to the economy. The Minister is not receiving much help from those who have, or should have, a vested interest in economic recovery. I wish to draw the attention of the House to one notable statement in the Belfast Telegraph of 16 June by Mr. Noel Stewart of management consultants Cooper and Lybrand. He said: The economic situation and the lack of political progress, rather than the troubles,"— that is a most extraordinary statement— are being given as the main reasons for their decision. He was referring to the decision of competent executives and experts to leave the Province. He went on to say something which is an economic lesson for all Members. He went on to chide politicians for their unwillingness to get together. He used a phrase later in his remarks that is not unfamiliar and for which he would receive no marks for originality. The same phrase has been used in the debate. He said that one must recognise that our economy is still bumping along the bottom". He is referring to the United Kingdom economy.

Mr. Deputy Speaker (Mr. Paul Dean)

Order. I am sorry to interrupt the hon. Gentleman, but he is going a little wide now. We are dealing with the advisability of the administrative changes in the order.

Mr. Molyneaux

I shall endeavour to act on your advice, Mr. Deputy Speaker.

It has already been established that while we are part of the United Kingdom we cannot ignore the state of the national economy because of its effects on that part of the United Kingdom that we represent. It has been said truthfully over and over again that Northern Ireland always suffers to a far greater extent from even a fairly mild depression. The backwash in Northern Ireland is always far more severe. That is what the Minister, his new Department and his industrial development board will find before we go much further along the road.

The task of the Minister and the new board is daunting. Attention has already been drawn to the scope of the responsibility of the new structure. All that must be weighed against the scale of the challenge confronting them. The unprecedentedly high level of unemployment in the Province is due not to any single factor. Another factor—I know the Minister and his Department have been greatly concerned about this—is the relatively high—relative to Great Britain—natural rate of increase in population, which is the major factor in the supply of labour. There is also the decline in the Province of industries that were attracted there in the 1960s. It is difficult to see how the new structure will make any sizeable impact on that factor. There is also the relative inability, compared with the 1960s to attract external investment. It has been said that the difficulty and failure is due mainly to the effects of terrorism. I am not so certain that that is correct. In addition, there is the impact, particularly since 1979, of the severe recession throughout the international economy.

There is another factor that lies perhaps more in the Province than on this island—the impact of labour replacing technology. As the man-made fibre factories and industries in Northern Ireland have collapsed one by one, their replacement by new high technology industries will not necessarily mean a job-for-job replacement. Indeed, far fewer jobs will be provided in comparison with the scale of investment required for the new factories.

The latest figures show clearly that the contraction of employment in the four major Northern Ireland manufacturing industries is part of a national trend, which has significantly occurred since the early 1970s, especially within the textile industries at both local and national levels. I suppose that critics of the Minister's proposals will take the view that the proper economic function of the Government is to remove obstacles to the effective exploitation of market forces subject, of course, to a regard for the welfare of labour and environmental preservation. That is something that we could profitably debate on another occasion.

The Deputy Speaker

Order. I am finding it difficult to relate the hon. Gentleman's remarks to the order.

Mr. Molyneaux

The explanatory notes refer to energy industries and mineral exploitation. The shattering reduction in employment opportunities in Northern Ireland could be remedied under that heading, which is definitely dealt with in the order. It will be the responsibility of the new Department, as it has been the responsibility of the Department of Commerce. The development of energy has been clearly set out and thoroughly explored by the Northern Ireland Economic Council. That must lead us to hope that the new structure will throw its weight behind the recommendation and policy outlined by the council.

It makes sense that the combined resources and capacity of the two Departments—the Department of Commerce and the Department of Manpower Services—should be concentrated in one unit. My right hon. and hon. Friends undertake to give all possible support to the Minister in his continuing endeavours.

11.23 pm

Mr. Adam Butler

Of the remarks made during the debate one must distinguish between those which related directly to the order, those which touched more on the industrial development order which we have debated in Committee and will debate in the House, those of a more general nature, the understandable references to the economic difficulties in the Province and the gravity of the unemployment situation. Some remarks taxed the boundaries of order themselves.

Mr. Molyneaux

When drawing up future explanatory notes that are to be circulated with orders—they are made available to the Whips Office, but I am not sure whether they are made available to all right hon. and hon. Members—would it be possible to enter into consultations on what might be regarded as being within the terms of order and omit all headings that are included in the explanatory notes before us, for example, which are apparently outside the scope of the order? Should they not have been omitted before they were circulated and attached by the Treasury tag to the order that was circulated by the Department?

Mr. Butler

I am not sure whether the hon. Gentleman has been in the House longer than I have, but I am certain that he is wiser in the ways of it. I am sure that he can distinguish very well between what is within the rules of order and what is not. In the ultimate, this is a matter for the discretion of the Chair. The explanatory notes are self-evidently, by definition, an attempt to explain what is in the document. The fact that there are references in the explanatory notes to a range of subjects does not necessarily mean that an outright or free-ranging discussion on those subjects is within the scope of the order or is in order in the debate.

I never object to comments that draw attention in the House, and therefore in the nation at large, to the problems in Northern Ireland. They can be all too easily forgotten. Many of those who have contributed to the debate have drawn attention to the one in five people out of work and related matters, which emphasises the seriousness of the situation and the need not only for Government action but for an understanding by the taxpayer of the difficulties and of the need for encouragement to be given to him to be ready to support what the Government may choose to do.

I shall pick up the points that have the greatest relevance to the order. The hon. Member for Hammersmith, North (Mr. Soley) expressed the hope that the draft order was not an exercise in changing names only and not functions. I must disappoint him. The functions of the Department of Manpower Services and of the Department of Commerce will be carried on within the Department of Economic Development. The order does not lend itself to any greater intervention by the Government. The hon. Gentleman suggested that it did and that intervention replaced monetary policy. The success of the Government's so-called monetary policy is providing the first real prospects of national economic recovery for some time. That will have an immense benefit for the economy of Northern Ireland, which is so dependent on the national economy.

Mr. Soley

Will the Minister give us one or two examples of the signs of that recovery in Northern Ireland?

Mr. Butler

If the hon. Gentleman had seen, as I do, not official documents, but reported surveys in the local press recently, he would have found one or two swallows telling of an impending summer. Admittedly there are storm clouds as well, but there are signs in the engineering industry of improvement. There is also an improvement in the construction industry. Those are some small improvements.

The right hon. Member for Down, South (Mr. Powell) also ranged a little wide and admitted that perhaps his remarks had greater relevance to the Northern Ireland industrial development order. I shall answer some of his points. The right hon. Gentleman asked why no specific date was entered in the draft document. My advice is that there is a need to co-ordinate the two orders, which requires one to be brought into operation by a commencement order, as in this case, and the other to carry on the face of it a commencement date.

The Northern Ireland industrial development order will come into operation on 1 September, if it is approved by the House. It is technically wise to leave the second order subject to a commencement order at the discretion of the Minister. It is planned at the moment that it should come into effect on 6 September. That is a technical necessity, in order to co-ordinate the two orders.

The right hon. Gentleman asked a second technical question. We have renamed the Department of Manpower Services and abolished the Department of Commerce because the former had about three times as many staff.

The right hon. Gentleman pointed kindly to the fact that I might have only two offices to go to in future. He emphasised the fact that I shall not have an office in the industrial development board. I have forsworn that, as the board should be as independent of the Government as possible. The right hon. Gentleman said in Committee that he did not see the necessity for a commercially oriented body to come between the Minister and the object of industrial development policy, but the Government have put the proposal to Parliament and it has generally received a welcome. Equally, the demand is for as great an independence as possible. Although I shall not have an office there, I am certain that I shall spend time in the headquarters in what is now Chichester House. It will be renamed IDB House and will have a face-lift to make it more appropriate for a commercially minded body. The headquarters of the Department of Economic Development will be at Netherleigh, which will be within the complex of Northern Ireland Departments.

I dealt with staff savings in my opening speech, but the right hon. Gentleman suggested that with the establishment of the IDB there might be staff increases. We should take into account the staff of the Northern Ireland Development Agency, who are, effectively, public servants. The greatest number of staff will be brought into the new IDB executive, but even there there will be savings through the merger of the industrial development arm of the Department of Commerce and the development agency. Further, there are savings by the merger of the two Departments.

The hon. Member for Down, North (Mr. Kilfedder) welcomed the order but made a special plea that I should be ready to consult Northern Ireland Members about the Department's operation. Primarily, it would be a matter for the Northern Ireland Committee if it chose to examine it. It will also become a matter for the new Assembly with its Select Committee, but that would not necessarily include hon. Members of this House. I am ready to consider with Northern Ireland Members the working of the new Department and other economic matters. Towards the end of last year my right hon. Friend suggested such a meeting, which was attended by a number of hon. Members of this House and MEPs.

We are dealing with an order with a limited purpose. The most important question that has been raised is whether the merger should take place. Nearly everyone who has spoken has seen the necessity for it and the benefits that will accrue, apart from the right hon. Member for Down, South. He said that there was no obvious merit in bringing the two together.

The hon. Gentleman rightly said that the industrial development board could have been established without delay. That was the bringing together of the development agency and the division of the Department of Commerce that deals with industrial development matters. It would have been possible to leave the remainder of the Department of Commerce on its own, but because the industrial development board has largely been split off, it makes sense to bring together the residue of the Departments of Commerce and Manpower Services.

That in itself is not the main reason for the change. There are two main ones. The first is the comparative smallness of the Northern Ireland economy. That lends itself to a combination of functions in one Department which in Whitehall would account for two or three. The Department of Commerce combines the functions of the Departments of Industry, Trade and Energy. It may make sense in such a relatively small political economy to combine functions to a still greater extent. Under the common direction of one Minister, one head of Department and one permanent secretary, there is more likely to be a rationalised and effective approach.

An even more important reason for combining the functions of the two Departments is that their objectives are common. They both aim to strengthen and broaden the economic base, which leads to the creation of more, and more stable, jobs. Examples of that can be found in the Department of Manpower Services now.

For example, what body could be more appropriate than the employment service to create jobs and establish a strong economic base by matching the right workers to the right jobs? Similarly, to what purpose is the training activity of the Department of Manpower Services devoted if not to provide skilled workers to strengthen the economic base and eventually to create more employment?

I speak from personal experience. There is a need for the merger and harmonisation of policies. Although the order does not deal with the industrial development board, its creation should be viewed with that of the new Department, which is designed to, and I believe will, bring to industrial development matters a new sense of urgency, a commercial orientation and speed of implementation. To pick up the pleasant phrase that the hon. Member for Antrim, South (Mr. Molyneaux) used about myself, it will have a crisp and business-like approach. We can return to that matter.

The hon. Member for Antrim, North (Rev Ian Paisley) spoke about the future. I assure him that the Government believe in the future of Northern Ireland. We intend to do everything that we can to achieve a prosperous and profitable future. We intend, among other things, to establish the best arrangements to assist—in the way that it is proper for the Government to assist—in economic development and the creation of jobs. I therefore commend the draft order to the House.

Question put and agreed to.

Resolved, That the draft Departments (No. 2) (Northern Ireland) Order 1982, which was laid before this House on 20th May, be approved.