Financial Provisions (Northern Ireland)

HC Deb 10 July 1984 vol 63 cc999-1008 11.40 pm

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

I beg to move, That the draft Financial Provisions (Northern Ireland) Order 1984, which was laid before this House on 29th June, be approved. The order is one of a series required at intervals of one or two years. The previous one was passed in 1983. It deals with a small number of financial matters, none of which involves the appropriation of cash for public services. I shall describe briefly the purpose of the four main articles in the order, three of which deal with proposals to raise statutory limits.

Article 3 provides for an increase in the statutory limit on issues from the Consolidated Fund to the Department of the Environment, Northern Ireland, for the purpose of making advances to the Northern Ireland Housing Executive for capital expenditure purposes. Capital expenditure includes such items as new building, rehabilitation and improvement, land acquisition, home loans and office accommodation. I should make it clear, because occasionally questions are raised on this point, that the funds available can be, and, indeed, very much are, augmented by house and land sales and, for instance, by mortgage redemption. The limit was increased last year to £1.3 billion. Although it is envisaged that this will last until mid-1985, another financial provisions order is not anticipated until mid-1986 at the earliest. Hence, it is proposed to raise the limit to £1.6 billion to provide adequate cover for this period.

Article 4 increases from £25 million to £30 million the limit on the amount of loans and grants that may be made by the Departments of Economic Development and Agriculture to harbour authorities for the execution of harbour works. The present limit should be sufficient to accommodate expenditure as currently projected until spring, 1986, but, for the same reason that I gave a moment ago, it is prudent to seek a revision now that will carry us some way beyond that date.

As to article 5, hon. Members taking an interest in the debate will know that the Department of Finance and Personnel guarantees the repayment of principal and payment of interest on loans raised by the Northern Ireland health and social services boards for the purpose of on-lending to general medical practitioners to assist them in providing, equipping and improving the premises in which they practise. Due to a sustained uptake of these loans over the past few years, the statutory limit upon the Department of Finance and Personnel is likely to be reached in the current financial year. It is therefore proposed to raise the limit from £1.2 million to £2.5 million, which restores to its original value in real terms the £600,000 limit set in 1972 when the scheme was first introduced.

Article 6 seeks to bring about parity with Great Britain in the matter of Government loans to local authorities. Currently all Government loans made to local authorities by the Northern Ireland Government are at fixed rates of interest, whereas in Great Britain the Public Works Loan Board also has powers to charge variable rates of interest. The provisions of the article will make a similar facility available to Northern Ireland local authorities.

This is a relatively simple draft order, raising the limits as I have described. Article 6 puts Northern Ireland on a par with Great Britain in the types of loans which can be made available to local authorities.

I commend the draft order to the House.

11.45 pm

Mr. Clive Soley (Hammersmith)

I do not intend to delay the House very long. The Opposition have no detailed comments on the proposals. We note that the increase is greatest for housing. Given loans to buy, that is not surprising. Our main regret is that the order does not go further. The Minister has said that, none of the provisions will increase public expenditure on services. In many respects I regret that because although the Government are doing more in terms of public expenditure in Northern Ireland than elsewhere, in view of the current appalling state of the economy it is difficult to see how it could survive, let alone get back on its feet, without a significant contribution from the Exchequer. We are still far from convinced that the Government are doing all they could in that respect.

I acknowledge that little more need be said about the order before us. We note that the provision for variable loans is being brought into line with that for the rest of the United Kingdom. That is fair enough in the circumstances. Without further ado I accept the order as it stands.

11.46 pm

Mr. J. Enoch Powell (South Down)

This is perhaps the last occasion before the House gets up for the summer recess on which hon. Members, both those present in the Chamber and that much larger number who are detained more or less against their will outside the Chamber, have the opportunity of savouring the Dead sea fruit of the policy of successive Administrations in isolating Northern Ireland legislatively from the rest of the United Kingdom, for this is one of those orders which would not need to exist at all if this Parliament had legislated for that part of the United Kingdom as it legislates for the other parts.

There are, of course, corresponding pieces of legislation which raise the limits to which the Government are authorised to lend. But they are Acts of Parliament and each of them provides a welcome opportunity for a debate in the House, usually on Second Reading, upon the specific circumstances in that industry or that area of public policy in which an increase in financial provision is being made. Tonight in this order and in the compass of one and a half hours we do it through an Order in Council. Therefore, it is not surprising that the contents of the Order in Council are of varying nature, all of them to a degree interesting. I trust that I shall be more successful in rendering them fascinating to those who are present than was the hon. Member for Hammersmith (Mr. Soley) in his somewhat half-hearted attempt.

I should like to start with that which comes last, the extension to Northern Ireland of the benefits of loans at variable interest, which I must confess I did not know—and perhaps my hon. Friends did not know—was denied hitherto to Northern Ireland, though granted to local authorities on the mainland. I think it is high time that this was put right and I am glad that it is taking place in the scope of the order. It is timely that it should happen now because, although the newspapers are all a-flutter with rumours of increases in the rates of interest at which such loans would be made by the Public Works Loan Board, it is my conviction—I am prepared to go upon the record inside the House as I have done outside the House—that the trend of interest rates in this country for the next few years will be inexorably downwards. By their financial and monetary policy the Government have laid the foundation for that welcome development.

I look for the day when at last the stage of normality will be reached which my old friend Lord Rhyl used to say was the condition for civilised living in any country—that one should be able to borrow upon Government account at not more than 3 per cent. That may be a little way off at the moment; nevertheless, I am sure that on balance over the next few years, downward is going to be the direction of interest rates, and therefore of the rates charged upon loans issued by the central Government to local authorities on both sides of the Irish sea.

It will, therefore, be a good bargain for the local authorities in Northern Ireland, generally speaking, over the coming months and years, that the interest rates on the loans which tatty will henceforward obtain from the central Government will be subject to revision every three months. It was certainly an anomaly which needed to be removed, and my hon. Friend's and I are grateful to the Government for having taken the opportunity to do so within the framework of the order.

I now come to the three specific subjects which are raised by the three borrowing limits which the order increases. It is interesting, by the way, that apparently only one of them actually needed to be increased in this Session; two of the others would not be reached until the next Session or the Session after. Still, it is nice to get this type of legislation out of the way, and that no doubt was the thought in. the mind of the right hon. Gentleman when, at a much earlier stage, he promoted the preparation of this legislation, for I am sure that the plant has not grown without his watering and tendering it.

By far the most important of the elements in the Bill is the extension of the capital limit for loans to the Northern Ireland Housing Executive. There are two types of monetary infusion into the Housing Executive which take place from central Government through the Northern Ireland Office, through the Government of Northern Ireland, and through the Northern Ireland Consolidated Fund. The first is that the deficit, or the running costs, of the Housing Executive are made good from central Government funds. One might say that on current account there is a continual infusion of resources into the work of the Housing Executive in Northern Ireland, but —probably wisely—a distinction has been drawn between the infusion of resources for current purposes and for capital purposes. That leads us to consider where the boundary is drawn between current and capital for the purposes of these transfers and therefore for the purposes of the scope of the loans to which the order refers.

The capital purposes of the Housing Executive are defined as new building and modernisation of existing houses". But, of course, modernisation can be of very varied scope, from little more than mere repairs at one end of the scale to extensive modernisation and extension at the other end of the scale. The attempt is made to draw a line somewhere between capital and current along that spectrum by saying that if it is a long-term modernisation, presumably a modernisation which will enable the accommodation to remain in use for a substantial period—I do not know what period is taken for this purpose, perhaps 10 or 15 years; the right hon. Gentleman will perhaps tell us when he replies—then it would fall within the scope of those capital advances to which the order applies.

I want to say to the Government — this w ill not entirely be news to them—that, as between the two aspects of the capital expenditure of the Northern.Ireland Housing Executive, new building and modernisation of existing building, my hon. Friends and I have no doubt whatever where the emphasis ought to be placed, is being increasingly placed and ought to be increasingly placed.

Of course, it would be pedantic to say that there is no longer any scope for new building; indeed, there are circumstances in which the transfer and turnover of tenancies cannot take place without new building in the areas concerned. That is probably more true in Northern Ireland than in any other part of the United Kingdom because of the extraordinary attachment of the people of Northern Ireland to a local area from which they are extremely reluctant to move.

It is often the experience of a constituency Member that the desire of his constituents to be rehoused, either in a new house or through transfer to an existing Housing Executive property, is frustrated by the determination of the applicant not to move—I am tempted to say, more than a few hundred yards—from where he is currently living. There is intense reluctance to move over distances which, in this part of the United Kingdom, would be regarded as perfectly trivial by those employed and seeking accommodation.

That means that a continual trickle of new houses throughout the Province is necessary to keep the channels free and to keep the interchange of tenancies working readily. It is probably also true, as I am sure my hon. Friend the Member for Belfast, South (Rev, Martin Smyth) will confirm, that in Belfast a good deal of new building must be done if the transformation that is at the heart of the wishes of the executive and the Belfast city council is to take place.

After all those concessions have been made, it is upon modernisation of the existing stock, both Housing Executive and privately owned, that the future improvement of housing in Northern Ireland must overwhelmingly depend. Any stranger coming to Northern Ireland — there cannot be too many visitors to our Province from the remainder of the United Kingdom—who keeps his eyes open would be struck by the evidences everywhere of modernised houses. How often the typical Ulsterman dearly prefers the modernisation and improvement of an old house to moving into a new house, despite the attractive new housing being provided by private enterprise.

I do not know whether the House is familiar with that remarkable movement which took place under Conservative Administrations at the end of the last century and the beginning of this century, which is known as the provision of labourers' cottages. Standard cottages—one window, the door, two windows — and recognisable throughout the Province, were built in enormous numbers in the last decade of the last century and the first decade of this. The improvement that that must have brought about in the housing conditions of the workers, especially the agricultural workers, in Northern Ireland is incalculable.

It will probably surprise hon. Members from Great Britain to know what a high proportion of those essentially two-roomed cottages have been the subject of extensive modernisation, extension and improvement, and how anxious are tenants and others to get hold of sometimes derelict labourers' cottages, built 80 or 90 years ago, to improve and transform them into what, only on closer examination, are disclosed not to be newly built houses. The improvement of existing stock by modernisation, the providing of extra rooms and the full range of services, is where the emphasis should be laid.

My hon. Friends and I hope, therefore, that with whatever total amounts the Treasury allows them to operate in this respect, the Government will ecourage the Housing Executive to devote at least as much and preferably more effort to the improvement of the housing stock through maintenance schemes.

As the Minister explained, the order increases the upper limit of outstanding loans to the Housing Executive from central Government, but the increase is net of receipts from properties of which the Housing Executive disposes. Long before it was possible for a Conservative Administration to launch a programme for council house sales throughout the United Kingdom, a Labour administration in Northern Ireland urged, encouraged and enabled the Housing Executive to engage in a major scheme for the sale of its houses to tenants. The scheme has been a tremendous success. Indeed, I imagine that a considerable proportion of my hon. Friends' constituency correspondence is from constituents in the process of acquiring Housing Executive houses of which they have previously been tenants but whose transactions have been delayed for one reason or another.

In that context, I take this opportunity to put in a word in the case of the Minister of State—it will have to go in one ear and out of the other because it will have to go to his colleagues before it can fall upon fruitful ground —to suggest that the Department of the Environment could do more to encourage the Housing Executive to be a little less sticky and pedantic in dealing with would-be purchasers of tenanted houses.

The largest cause of difficulty is the fact that the Housing Executive stock was inherited from a great multiplicity of preceding or predecessor housing authorities which, I grieve to say, were not always absolutely scrupulous in ensuring that they had a perfect title to the land on which they built their houses. The unfortunate consequence of that is that, for many tenants who have already made contracts with building societies and entered into financial commitments, the whole transaction is suddently held up until the defect in title can be made good. I know that I am not alone in having dealt with the Housing Executive about a number of such cases and I am not at all convinced that the Housing Executive is using as promptly as it could the legal devices available to get round defects of previous title. We believe—I hope that the Minister of State will pass this on—that the capital moneys could be taken up more rapidly and to general satisfaction if a little legal oil were infused into the wheels of that part of the Housing Executive which deals with the sale of Housing Executive properties to tenants.

Mr. Butler

I think that the right hon. Gentleman means that the moneys available under the increased limit would be taken up less quickly because of the greater availability of funds from the sale of Housing Executive houses.

Mr. Powell

I am grateful to the Minister. The relation is, of course, inverse in that the sale of properties is a source of capital to the Housing Executive and netted off against the total capital borrowing. Between £30 million and £40 million has accrued to the Housing Executive in this way in the past 12 months. That gives some idea of the scale on which the sale of existing houses contributes to the building and modernisation work carried out by the Housing Executive. There is an important third party to this, and that is the building society movement, because a large part of these transactions are financed by the building societies. Thus, in the first place, it is building society capital which is infused into the Northern Ireland Housing Executive via the sale by that executive of its tenanted properties.

That is the point at which it is perhaps worth mentioning—it is an encouraging point for the Province—that, whatever may be true in other directions, there is no doubt about the direction of the flow of capital for housing purposes, because the inflow into the Province from the rest of the United Kingdom via building societies amounts to no less than £100 million. Whoever else is not investing in Northern Ireland, the building societies are investing. I hope that a large part of that is accruing to the benefit of the operations of the Northern Ireland Housing Executive.

That leaves me with the remaining two subjects—harbours and the equipment of general practitioners. I am sure that the Minister, of all people, will find it possible to forgive me for referring in this context to an important harbour project in my constituency. I am pleased to be able to do that because it gives me the opportunity to thank him for the great personal interest and impetus which he gave to the matter over two or three years. Those of us who have to deal professionally—if I may say so—with the Minister know that under that superficial scepticism with which he greets any proposal that we have to put to him, there is a real and warm interest which in the end commonly results in the attainment of something approaching the aim which is in the mind of the Northern Ireland Member who has approached him. So it was in the case of the institution of a time-tabled 24-hour roll-on, roll-off ferry service between Great Britain and Northern Ireland at the point of entry of Warrenpoint.

That depends upon the considerable capital outlay on the improvement of the channel. The Minister may not be aware—if not, it will probably be pleasing news to him—that that operation is in train at this moment, that work is in progress at present in providing Warrenpoint and Carlingford Lough with a channel along which a 24-hour timetabled ferry, an additional link between the mainland and Northern Ireland, can be provided.

The observation of a practical nature which I have to make about that is that it will be foolish financially if, having after so much hesitation and study decided to sink that capital effort into that improvement, we cannot promptly bring it into use by the institution of the ferry service.

I know that that is a matter to which attention is being devoted by the Minister in the Department of the Environment, but I take the opportunity to state that, having undertaken that capital improvement, we must, as soon as possible, bring it into productive use. I know that, insofar as it lies with the Minister or the Government of Northern Ireland, they will use all the influence at their disposal to secure a firm or line which will bring into productive use capital which has been laid out upon that harbour.

It has for some years been a harbour of which the capital equipment had outstripped the current use which was being made of it. Amongst that equipment was the full equipment for a roll-on, roll-off service. It is not just the investment of capital but the rapid utilisation of the capital which is invested which is called for under the heading of harbours in the order.

My final remarks relate to the improvement of the facilities for general practitioners in the Province by loans extended to them by the health and social services boards. I hope that the Minister will be able to give some indication of the stage which has been reached in this programme.

I suppose that there cannot be a finite programme for the improvement of the facilities for the general practitioners in the Province. However, this work has been going on apace for several years, and there must be some estimate which can be offered to the House of the stage which has been reached towards what would be regarded, if not as finality, as a desirable provision throughout the Province for the surgeries and so on of general practice.

In this respect, we are at a disadvantage. Whereas in the other matters which we have been discussing the Government have had a direct responsibility, in the case of health and social services responsibility is devolved, in a mariner which is often baffling, to boards which are not elected but are appointed and yet behind which it seems so often Ministers take refuge rather than defend or argue matters of policy which ought surely to be policy common to the Province as a whole and not decided by the individual boards. I hope at any rate that this interposition of the boards will not prevent the Minister from giving information to the House on the progress which has been made on this purpose for which the third of the three substantive provisions is made by the order.

12.12 am

Rev. William McCrea (Mid-Ulster)

Previous debates on draft Financial Provisions (Northern Ireland) Orders have a reputation for brevity. On the last occasion when there was a similar debate the Minister reminded the House that in 1980 the Minister introducing the debate spoke for thee minutes and the Opposition spokesman spoke for two minutes. The House will be delighted to learn that I have no intention of extending this debate by making a long contribution.

I recognise the tremendously detailed input from the Northern Ireland Assembly's Finance and Personnel Committee on all matters relevant to public expenditure priorities and limits affecting the Province. I appreciate that there are right hon. and hon. Members who despise that contribution and view it as unnecessary interference. However, I welcome the fact that elected representatives of the people of Northern Ireland can express the needs and wishes of their constituents in a detailed fashion in prime debating time rather than around midnight when other hon. Members have retired to other pursuits.

I welcome the fact that Ministers and Departments are facing elected representatives for in-depth public scrutiny, but I trust that soon decisions affecting the lives of the people of Northern Ireland will be left in the hands of faithful Ulster men and women.

Having said that, I comment briefly on matters strictly related to the order. Article 3 increases from £1,300 million to £1,600 million the limit on outstanding advances from the Consolidated Fund to the Department of the Environment for the Northern Ireland Housing Executive. The limit applies to the net amount that may be issued from the Consolidated Fund to enable the Department of the Environment for Northern Ireland to make loans to the executive for its task. I appreciate that that is a substantial increase.

I trust that all moneys owed to the Northern Ireland Housing Executive will be properly recouped and that there will be an end to the continuous writing-off of bad debts. No other public authority in control of public housing in any other part of the United Kingdom would have been treated so courteously by the Government or by any Government Department. The privileged position of the Northern Ireland Housing Executive carries with it a tremendous responsibility. I speak as an ex-member of the Housing Executive board.

Every pound wisely used for public housing in Northern Ireland helps to relieve a great human and social problem. Vast sums of money will still be needed to meet the ever-increasing need for capital expenditure on housing in Northern Ireland, and an increase in that amount is to be welcomed.

Article 4 increases the limits on loans and grants for harbour works from £25 million to £30 million. I appreciate the recognition by the Government of the importance of the harbour works in Northern Ireland. Those works are essential to efficient communication and transport between our Province and the mainland. I could list a number of good reasons why such improvements are essential, but it might suffice for me to point to the relevance of such works to the economic development of our Province. At times, too, there is a feeling of isolation from the rest of the United Kingdom, and every measure which encourages closer links with our brethren and sisters in the rest of the United Kingdom is to be cheerfully welcomed.

Article 5 is about guarantees for loans to general medical practitioners for their premises and equipment. Not everyone is happy with the development of group practices or the move to health centres. It is also true that nowadays it would be absolutely impossible to find the committed family doctor who would accept the hours of work experienced by general practitioners in the past. However, the fact that many premises have been unproved is to be welcomed, as is the fact that information about health and general welfare is more generally available to all our constituents. I hope that, now that we have centres housing a number of general practitioners, more adequate cover will be provided for our constituents, especially at the weekends.

It is doubtful whether any elected representative will ever state in this House that his constituents have received sufficient financial provision, but I shall support the order. I shall encourage the provision of more financial support in the future in recognition of the Province's special needs.

12.17 am

Mr. Butler

How nice it is that one of our debates should be pervaded by so much sweetness and light, and how exceptional that I should spring to the defence of the hon. Member for Hammersmith (Mr. Soley). I did not object at all to his brevity. Far from being lackluster— as the right hon. Member for South Down (Mr. Powell) suggested—I thought that the hon. Gentleman's speech was one of his best ever. Apart from some passing reference to more public expenditure, he appeared to be in total support of the Government. He will even have gained some popularity with those of my right hon. and hon. Friends who have quite properly remained in their places to see the business through.

The order deals with some important points, and my own brevity was not intended in any way to belittle its importance.

The right hon. Member for South Down and the hon. Member for Mid-Ulster (Rev. William McCrea) examined the articles in varying detail. I am glad that the introduction of variable rates of interest were welcomed. It is a necessary move. Although we know that the role of local authorities in Northern Ireland is relatively small in financial terms, if they can gain from variable rates of interest, so much the better. I especially welcomed support for the Government's policy, which the right hon. Gentleman foresaw resulting in a further reduction in interest rates.

Mr. J. Enoch Powell

The Minister has had it from me before.

Mr. Butler

Indeed, I have had the right hon. Gentleman's support before.

Mr. Powell

The policy is the policy I taught.

Mr. Butler

I hope that he is right, as there are certain strains in that area of economic activity.

Those hon. Members who spoke stressed the importance of expenditure on housing. The right hon. Gentleman asked if I would define precisely the distinction between capital and revenue—or current—expenditure. I deliberately included in my opening speech the main items that fall under the definition of capital expenditure. I shall write to the right hon. Gentleman in regard to the exact period of time, if it is so defined, that separates capital from revenue expenditure.

I welcomed the right hon. Gentleman's support for what the Government are doing in regard to the change of emphasis from housebuilding to modernisation and renovation. That does not suggest, however, that we are not continuing with a programme of new housebuilding. It will continue, but at a reduced rate. I should like to emphasise the benefit that flows from the sale of houses. Tribute was paid to the Labour party. I was not aware of its stance, but wisdom can prevail in all parts of the House from time to time. Until the end of the last financial year about £140 million was realised from the sale of houses. It has been dedicated to capital spending and has enabled capital spending to be increased but not at the expense of the taxpayer or as a result of borrowing. In the current year, it is estimated that about £40 million will be raised through the sale of houses. The money will be devoted to the same purpose.

Mr. Soley

I should not like the Minister to run away in his enthusiasm about there being agreement in all quarters on this matter. He must bear it in mind that the Housing Executive in Northern Ireland functions much as the Housing Corporation does here. There have been many sales in mainland Britain by Labour-controlled authorities where there is no housing waiting list of any great significance. The Labour party's objection to sales arises from the Government forcing local authorities to sell and the enforcement of sales in areas of housing stress.

Mr. Butler

My impression was that the Labour party utterly opposed the sale of council houses in Great Britain until it found that such a policy was not a great winner, whereupon it changed its attitude.

I shall readily pass on the acknowledgement of the right hon. Member for South Down of the contribution that my hon. Friend and his predecessor have made. No doubt they will read the right hon. Gentleman's speech, especially in regard to matters of title, of which I was not aware. Anything that speeds up the sale of houses in Northern Ireland is to be welcomed for the reasons that I have outlined.

I am again indebted to the right hon. Gentleman for something that he said about me in regard to my attitude towards projects involving public money. I can only hope that the Committee of Public Accounts will note that apparently I have always had some scepticism about projects that are brought before me. I hope that that will hold me in good stead in days to come.

I congratulate the right hon. Gentleman on his pertinacity, if that is the right word, in the way in which he has continued to press the point in regard to deepening the channel to Warren point, down the length of Carlingford Lough. He has much credit to come to him personally. Let us hope that the scheme proceeds. There is a grant offer under the port modernisation scheme at the standard rate that is available to the harbour authority. Tenders have been sought. Let us hope that the work proceeds. It will be for the harbour authority to ensure that the introduction of a 24-hour service coincides with the completion of the work.

Both the hon. Member for Mid-Ulster and the right hon. Member for South Down raised the matter of the scheme for helping general practitioners. There is no question but that it is a useful scheme. It is difficult to be precise about exactly how far the scheme has progressed. About 60 per cent. of practising general practitioners in Northern Ireland are practising from health centres and 70 health centres have been built since the late 1960s. The scheme is expensive and there are even now an accelerating number of applications. Building costs are also accelerating. We are examining the arrangements for funding of the scheme to ensure that it does not run away with itself, so to speak. Having said that, it is important to emphasise that we are not talking about grants of public money but about guarantees of loans, which are subject to repayment. In front of me I have a schedule for the repayment of those loans—I shall not bore the House with it. The money will go basically to a good purpose, but it will be recouped by the lenders and the Government guarantee will lapse in respect of those loans as the repayments of principal and interest are made.

I have dealt comprehensively with the points raised, possibly for the first time in the House. I appreciate the fact that the House has given the order a welcome and I once more commend it to right hon. and hon. Members.

Question put and agreed to.

Resolved, That the draft Financial Provisions (Northern Ireland) Order 1984, which was laid before this House on 29th June, be approved.