SOCIAL SERVICES (NORTHERN IRELAND AGREEMENT) BILL (Hansard, 10 March 1949)

§ LORD SHEPHERD

My Lords, this Bill is very largely an agreed measure, and therefore it will not require a lengthy speech from these Benches in support of its Second Reading. There are, however, one or two points about it which it seems to us desirable to mention, first to meet certain criticisms that we have heard and, secondly, by way of explanation of the Agreement itself. This measure does not propose a subsidy to Northern Ireland, nor is it an attempt on the part of the Northern Ireland Government to "sponge" on the finances of this country. The best way to illustrate what I have said is to tell your Lordships that never since there has been a Government in Northern Ireland have that Government failed to make a contribution to Imperial purposes. Even in the worst days of trade, the Northern Ireland Government saved something out of the money raised in that country which found its way to the Exchequer. More recently, the contribution of Northern Ireland has been substantial, and with your Lordships' permission I should like to give two figures which will prove it.

In 1939–40 the amount of revenue raised from United Kingdom taxes in Northern Ireland was over £15,000,000. Of that sum, after paying the way of the Government in Northern Ireland, 297 £3,000,000, or 20 per cent. of the total, came to Westminster, to help with the government of this country. In the current year, it is believed, taxation will amount to no less than £51,000,000, a very considerable increase. After paying for everything in Northern Ireland, including the social services, the share a that £51,000,000 which will come to the Exchequer of this country will be £21,000,000, or over 40 per cent. Your Lordships will agree that what I have said in respect of the finances is proof that this is not a subsidy, because a subsidy is not required; it is not a case of the Northern Ireland people "sponging" upon the people of this land.

It is true, however, that this Bill proposes that, in certain circumstances, monies not now the property of the Northern Ireland Government should be made available for that Government in payment of certain social services. In respect of old age pensions (that is, noncontributory old age pensions), the sum would be £758,000; for National Assistance, £540,000; for the National Health Service, £292,000; for extended unemployment benefits, £144,000—making a total for about tell months of £2,392,000. Those payments are required from the Exchequer in this country to the Minister of Finance in Northern Ireland, because the cost of social insurance in Northern Ireland is rather higher than it is in Great Britain itself. It has been suggested, and this is a point of criticism I want to meet, that if there had been no Government of Northern Ireland, and if these services had been administered direct by Departments in this country, these extra payments would not have been required. It would be wrong to make a claim of that kind.

We know what is the global cost of social services for the whole of the United Kingdom and we know, because budgetary estimates have to be made; that in Northern Ireland the cost is Slightly above the average cost in this country. But if we were to divide Great Britain into spheres and find out the cost of social services in each of those spheres, we should probably find that the cost of social services in some of them would be even higher than that in Northern Ireland. The increased cost in some areas is due to local circumstances, either to the poverty of the population or to 298 the kind of employment the mass of the population follow, or because of housing and sanitary conditions which affect the health. I mention these points because I want it to be known to your Lordships, and, if possible, outside, that we in this country recognise the circumstances in Northern Ireland which render these extra payments necessary. We make the payments because we know that they are not due to faults but to the circumstances in which the people live.

Having said so much, in order to reply to the criticisms that have been raised, let me say a few words about the Agreement itself. The expenditure upon the social services is not a matter only for the Budget in this country; it is also a matter for the Budget in the Northern Ireland Parliament. Therefore, estimates of coming expenditure have to be made, so that they can be dealt with in the ordinary way and met. For the purposes of the Budgets of Northern Ireland and of this country, an estimate takes the form of a percentage; that is to say, in the case of Northern Ireland the population of that area and its taxable capacity are compared with similar areas in Great Britain.

It has been discovered to the satisfaction of the finance officers of the respective countries that the share of Northern Ireland is about 2½ per cent. I admit straight away that 2½ per cent. is not a firm figure. Indeed, there will need to be adjustments from time to time when payments have to be finally settled. But this Agreement provides for that. If, for instance, in a given year the expenditure of the North of Ireland Government on the social services is more than this figure of 2½ per cent., then the Exchequer in this country will make a payment of 80 per cent. of the difference between 2½ per cent. and the actual figure. If in a particular year the expenditure in Northern Ireland is less than 2½ per cent., then the reverse procedure will occur—the North of Ireland Government will make a contribution of 80 per cent. towards the difference. I should, however, not hide from your Lordships the fact that there has not been a repayment to Great Britain; because of the circumstances, that payment has always had to be made the other way. The Agreement with which this Bill deals will run for 299 three years, as provided in Paragraph 2 (iii) of the Schedule. At the end of that period it will be reviewed, and this figure of 2½ per cent. may, if necessary, be changed to meet the circumstances of the time.

The Agreement, on confirmation by Parliament in this country and in Northern Ireland, will be deemed to have started on July 5, 1948. We believe that in that period, and in the period ahead, the Agreement will not need serious alteration, but can be adjusted administratively, subject to final agreement by Parliament. With those few words about the measure, and in reply to some of the criticisms that have been raised against it, beg to move the Second Reading of this Bill. I can assure your Lordships that, within the Agreement and within the arrangements between the two countries, there is ample protection, not merely for the Exchequer in England but for the Ministry of Finance in Belfast, to ensure that the administration of social insurance shall not become so seriously disarranged that trouble will arise therefrom.