Northern Ireland (Loans) (Hansard, 28 November 1984)

§ The Minister of State, Northern Ireland Office (Dr.Rhodes Boyson)
I beg to move, That the draft Northern Ireland Loans (Increase of Limit Order 1984, which was laid before this House on 7th November, be approved. I shall be brief because this is a relatively simple issue, and it would be difficult to introduce morality into this debate, although, I know how, in the House, issues of morality can be introduced into almost any debate.

§ Mr. J. Enoch Powell (South Down)
I shall introduce them.

§ Dr. Boyson
I shall leave that to the right hon. Gentleman.
The order increases by £200 million the amount available for lending from the National Loans Fund to the Consolidated Fund of Northern Ireland.
The present order is concerned solely with Northern Ireland's level of borrowing from the National Loans Fund. The Northern Ireland (Loans) Act 1975 provided that a total of £800 million could be lent from the National Loans Fund to Northern Ireland and also made provision for the Secretary of State, with the approval of the Treasury, to increase this amount, on one occasion only, by a sum not exceeding £200 million, to £1,000 million. It is this £200 million which is the subject of the present order.
Northern Ireland borrowing has not yet reached the existing limit of £800 million. I believe that in March this year, when another tranche was taken, it reached £798 million, so only £2 million was left for any further borrowing. That is why it is expected that before the end of the current financial year, the £200 million extra will be required.
The new limit of £1,000 million authorised by this order is unlikely to be sufficient to meet the borrowing needs of Northern Ireland for very long. I intend therefore to bring forward further legislation during the 1985–86 parliamentary Session to enable the limit of £1,000 million to be increased.
I commend the order to the House.

§ Mr. J. Enoch Powell (South Down)
It was perhaps because he had family law still so much on his mind that the Minister hardly did justice to what is a remarkable and curious financial mechanism. I hope that I shall not pose to him propositions that are too deep for understanding, whether at this time of night or at any other time, but I assure him that, if not issues of family morality, issues of financial morality are potentially raised by what has been laid before us in so apparently simple and innocent a form.
One is somewhat reassured by the Minister's indication that, as the power of increasing the limit by order is exhausted by the present order, it will be necessary to legislate if borrowing in this form is to continue, which I hope that it will not, for reasons that I shall explain. When that happens, we shall have the whole panoply and mechanism of a Bill that will enable us to scrutinise both the principles and the details and to be fully informed as to the witchcraft that is to be practised.
Under the principal Act, sums are advanced by the Secretary of State to the Consolidated Fund of Northern 1057 Ireland. I interpose here a fact of which the Minister will become aware before long, although this is his first opportunity to learn it. Hon. Members on this Bench are bitterly opposed to the existence of the Consolidated Fund for Northern Ireland, which they regard as one of those many artificial devices that are maintained solely for the purpose of insulating and isolating the affairs of the Province from those of the rest of the United Kingdom and preventing them from being seen as an integral part of the financial administration of the rest of the United Kingdom.
I return after that excursus to my quotation: the Secretary of State may with the approval of the Treasury advance to the Consolidated Fund of Northern Ireland by way of any sum"— I come to the words of importance— for the purpose of any expenditure which, in the opinion of the Secretary of State, is of a capital nature. It is to enable the Secretary of State to make advances to the Consolidated Fund of Northern Ireland that this Act and this order tap the National Loans Fund.
Our inquisitiveness is immediately stimulated as to what may be the expenditure which, in the opinion of the Secretary of State, is of a capital nature. I hoped that my inquisitiveness might be satisfied by the fact that under the principal Act it is necessary for an account to be rendered annually of the sums which have been advanced under the principal Act and there has to be a report upon it from the Comptroller and Auditor-General.
I sought from the Vote Office the most recent account and report, and was served with House of Commons paper 159, Accounts relating to Issues from the National Loans Fund 1982–83 which, I must admit, I returned to the Vote Office with indignation, saying that it did not contain the very documents for which I was searching. With customary diligence and curiosity, the Vote Office researched and drew my attention to the last two pages of that paper. Looking at those pages, I ascertained the presence of the annual accounts for the sums advanced during the financial year 1982–83. I said, "There is something missing. We are also due for the report of the Comptroller and Auditor-General." In the financial scrutiny which Northern Ireland Members endeavour to give to Appropriation orders and such like instruments, we rely upon the assistance that we obtain from the Comptroller and Auditor-General for Northern Ireland. So I said, "Where is the report of the Comptroller and Auditor-General for Northern Ireland?" After an interval, my attention was drawn to the small print at the foot of the very last page—almost a flyleaf of the report. It stated: I certify that I have examined the above Account. In my opinion the Account properly presents the receipts and payments of the Secretary of State for Northern Ireland under section 3(1) of the Northern Ireland (Loans) Act 1975 for the year ended 31 March 1983. I have no observations to make upon it. This is the first occasion when I have seriously quarrelled with the Comptroller and Auditor-General for Northern Ireland, for, indeed, I do have observations to make upon the account. The accounts are entirely uninformative. Surely, when the House asked to have accounts showing the loans which had been made by the Secretary of State, it was entitled to be told the expenditure which, in the opinion of the Secretary of State is of a "capital nature" for which loans have been advanced by him out of moneys obtained by him from the National 1058 Loans Fund. What are the expenditures "of a capital nature" so different from the other expenditures incurred in the government of Northern Ireland that they can be contained within the narrow compass of an outstanding total which has not yet exceeded £800 million, to which an addition of no more than £200 million is necessary to tide the Government over for another two years?
We know the purposes for which advances are made from the National Loans Fund in other circumstances. Those who examine the table of contents of House of Commons paper 159 will be enlightened upon them. They are conveniently classified under various heads which will enable me to make the point of principle at which the Minister and the House will eventually, I hope, discover I am driving. The heads are: Accounts of Loans to Nationalised Industries. They are loans to nationalised industries from the National Loans Fund. Then Loans to Other Public Corporations"— yes— Loans to Local and Harbour Authorities…Loans to Private Sector. Those are all loans to non-governmental bodies, to bodies other than Departments of State, made by the National Loans Fund; for the National Loans Fund is the avatar of the old Public Works Loans Funds which was set up to enable local authorities to borrow for capital purposes—for their capital expenditure, easily distinguished from their current expenditures—at what was then thought would be more advantageous conditions than they could obtain in the open market.
After all those categories of capital expenditure to which the National Loans Fund contributes directly in the rest of the United Kingdom, we find the final heading: Accounts of Loans within Central Government under: Northern Ireland (Loans) Act 1975. There is here a splendid spoof. All the expenditure which is incurred by the Government of Ireland, of whatever nature, is granted by the House out of the Consolidated Fund of Northern Ireland. It is a curious arrangement whereby a small infusion into that Consolidated Fund of Northern Ireland is made from the National Loans Fund instead of any of the other sources from which the Consolidated Fund for Northern Ireland is topped up.
Of course, the Consolidated Fund for Northern Ireland is a fictional system; it is a system by which money enters from the United Kingdom Consolidated Fund and is poured out again into the expenditure in Northern Ireland, thereby preventing the House from dealing with the expenditures and Estimates for Northern Ireland in the manner in which it deals with other issues out of the Consolidated Fund.
Yet here is this curious little trickle, as it were, this extra pipe of a thin bore, which leads—I suppose by the principle of the siphon—out of the National Loans Fund into the Consolidated Fund of Northern Ireland to meet expenditures, not distinguished, not named, not identified, which, in the opinion of the Secretary of State, are "of a capital nature", expenditure so exiguous that, as I say, another £200 million will see them through the next two years. It is nonsense.
To meet the expenditure of Her Majesty's Government in the United Kingdom, the Government borrow at the margin—the jolly old central Government borrowing requirement—whatever they do not feel inclined to find by tax or obtain by other revenues. There is no 1059 identification or relationship between the total of central Government borrowing in any given financial year and any section of the Government's expenditure in that financial year—no means of connecting the two. Indeed, thanks to the wise dispensation of our predecessors at the end of the 18th and the early years of the 19th centuries, it is impossible to distinguish them. We have eliminated the notion of assigned revenues by the principle of a Consolidated Fund. Thus the borrowings of Her Majesty's Government in the United Kingdom to which ultimately this little trickle is attributable, are by way of a marginal financing of the grand total of Government expenditure. They have nothing to do with the sort of purposes for which persons and corporations inside the economy, inside the realm, are allowed to or prudently may borrow. They are not secured upon any particular revenues; they are not related to the profitability or unprofitability, efficiency or inefficiency of any of the activities financed by central Government. It is just a margin—that part of the sums to be expended which the Government do not care to meet by taxation.
That is of necessity also true of that sham Consolidated Fund—the Consolidated Fund of Northern Ireland. There is a grand total of expenditure for which the Secretary of State for Northern Ireland is answerable to the House. Of that grand total an undefinable quantity may be attributed to the central Government borrowing requirement of the United Kingdom. The matter cannot be expressed more definitely than that. Yet we have this pantomime of purporting to borrow sums from the National Loans Fund for the Consolidated Fund of Northern Ireland in order that they may be spent on undisclosed expenditure which, in the opinion of the Secretary of State, is "of a capital nature".
It is all humbug. Whether it is capital expenditure—on any economic analysis—or not capital expenditure, these sums do not go any way to meet it. They are not assigned to it. The returns on those investments are not related to these sums. We have no accounts which make any sense of them, and the Comptroller and Auditor-General, finally defeated, had to sink back into being an ordinary auditor and certify the uninformative accounts.
I will make a suggestion to the Government. Clearly what lay behind this practice in its earlier days was that once upon a time the Government of Northern Ireland found it convenient—and Her Majesty's Government in the United Kingdom were agreeable—rather than borrowing at their margin in the market, to borrow from the National Loans Fund. Some such loans were still outstanding when that Government was abolished and superseded by direct rule. Instead, however, of acknowledging that thereby public expenditure in Northern Ireland was merged in the public expenditure of the United Kingdom, a fiction of borrowing from the National Loans Fund for capital purposes in Northern Ireland was continued, and that is what we have before us in the order.
It is an order which—I make no complaint about the Minister himself—insults the House by withholding information as to. the nature of the expenditure. Though, of course, we understand very well why that information is not given, we understand very well why the Secretary of State has not published a list of the sums "of a capital nature" on which these moneys have been laid out. If he 1060 attempted to do so, it would be seen to be a perfectly artificial and random selection, in no way differentiated from many other much larger expenditures for which he was responsible.
I ask the Minister, rather than putting the parliamentary draftsmen to work upon a new edition of the Northern Ireland (Loans) Act 1978, not to do anything at all. There will be no difference, no disadvantage or loss whatever suffered by any interest in Northern Ireland, if he does that. Indeed, there will be no alteration in the financing of those expenditures in any real economic sense. Their impact on the general level of inflation will be quite unaltered. So, I say, let it lapse.
I will tell the Minister from what quarter he will encounter opposition when he makes that perfectly simple suggestion. A suggestion which will put him in favour with the Whips who are not a class of men who go around looking for reasons for additional legislation, particularly Northern Ireland legislation, which is apt at untimely hours to stir the loquacity of those representing seats in Northern Ireland. It will also endear him to his colleagues in the Cabinet, his rivals for parliamentary time. His absence from the Legislation Committee will be but a blessing upon his head. No, it is not from those quarters that the Minister has anything to apprehend; it is from a different quarter altogether. I shall tell him where the opposition will come from. It will come from much nearer at hand—from the Northern Ireland Office.
Of course, it will not tell him the full reason for its opposition. He will find that it will be opposed to the legislation lapsing, because it will perceive in that the seeds of the eventual demise of the Consolidated Fund for Northern Ireland; and he may wonder why it is that the Northern Ireland Office, or those whom the Minister will find confronting him, should be so dedicated to the continued existence of that venerable survival.
It is because they are implicated in an agreement with the Government of the Irish Republic that no alteration will be made in the arrangements for the government of Northern Ireland which in any way tends to consolidate the Union or make it more difficult for Northern Ireland to be hived off into some form of combination with the Irish Republic. That is why those very people regard it as almost the ultimate disaster that had fallen upon their heads when our Province received full representation in this House. That is why they mugged the then Prime Minister the following day when they discovered what he had given away.
It is for that reason that we shall be supporting the Minister, cheer him on, and wish him success, when he makes his attempt, and because we wish him success, I am offering him this warning as to where opposition will come from. He will encounter opposition when he goes back to officials and says, "You know, I was listening to the debate; and a very lively debate it was". The House of Commons has been at its best at 2 o'clock in the morning, as it so often has been in the greatest days of the House of Commons, which are not exactly these days. So the hon. Gentleman says, "I have been listening to a most entertaining and instructive debate in the House of Commons on that order, and I have discovered that it is not necessary for me to have renewal at all of the Northern Ireland (Loans) Act." It will be quite amusing, when the Minister imparts that discovery to his officials, to be a fly on the wall and hear what they have to say. Nevertheless, let the hon. Gentleman harden his heart, for he knows what 1061 nonsense it is to ladle out sums into the Consolidated Fund for Northern Ireland for alleged capital purposes which nobody can ascertain, let alone disclose.
Perhaps it was a good thing that the extra £200 million was needed. If it had not been needed, or needed so soon, it might not have been possible to put the Minister in the way of questioning the necessity for this whole apparatus. I hope that he has found the debate helpful—which is not what one can always say when expecting the return to the Dispatch Box of the Minister in charge of a Northern Ireland Order in Council.

§ Dr. Rhodes Boyson
I listened with great interest to the analysis given by the right hon. Member for South Down (Mr. Powell). As always, he made a great parliamentary speech. I shall have to study it and look into the points that he made. In the meantime, I should like my order today so that at least we can last until March, which will give me time to read the small print and consider where we are.
It is part of the greatness of this House that a Member can challenge the whole of what is being done in any part of our society and raise questions in people's minds. That is what the right hon. Gentleman has done tonight. I do not know that I shall agree with him in the morning. I certainly shall not be calling any early morning meetings about the matter. Nevertheless, there is no doubt that many people besides myself, other hon. Members and the officials to whom the right hon. Gentleman referred, will be taking microscopes and magnifying glasses to what has been said today.
Clearly no one wishes to intervene after the speech of the right hon. Gentleman. We wish to hurry away so as to be fresh to read it in Hansard tomorrow.

§ Mr. J. Enoch Powell
On Friday.

§ Dr. Boyson
I shall be able to read it in Northern Ireland at the weekend with the feeling of the Province upon me. In the meantime, rather humbly after the right hon. Gentleman's contribution, I commend the order to the House.