§ 2.53 p.m.
§ The PARLIAMENTARY UNDER-SECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge)
My Lords, I beg to move that this Bill be now read a second time, This is a technical, financial measure which has already been debated in detail in another place. I will not detain the House with more than a brief description. The purpose of the Bill is to provide for further loans from the National Loans Fund to the Northern Ireland Consolidated Fund for approved capital expenditure. The loans will be used for on-lending to public bodies outside central Government, mainly the Northern Ireland Housing Executive and the Northern Ireland Electricity Service.
1212 Loans to Northern Ireland from the National Loans Fund are currently made under the Finance Act 1970 as amended by the Northern Ireland (Financial Provisions) Act 1972. The maximum gross total which can be lent under the 1970 Act is £450 million, and it is necessary to make provision for further loans before this limit is reached, which will probably happen soon after the end of the current financial year. So far, £361 million is outstanding under the 1970 Act. In addition £164 million is still outstanding under the Miscellaneous Financial Provisions Act 1950, so that the total sum outstanding in loans from the National Loans Fund to the Northern Ireland Consolidated Fund is now £525 million. This Bill would allow this total to be raised to £800 million, increasable by Order to not more than £1,000 million.
The Bill has three clauses, excluding the Short Title. Clause 1 sets the limit of £800 million on the total sums outstanding in loans from the National Loans Fund to the Northern Ireland Consolidated Fund, including those made under all previous enactments. It also provides that the limit can be raised once by Order subject to Affirmative Resolution of another place to not more than £1,000 million. The Secretary of State will make the loans under the Bill with the approval of the Treasury. This is a departure from previous legislation, which was enacted before the Office of the Secretary of State for Northern Ireland had been created. Clause 2 ensures for the sake of administrative simplicity that interest and principal on loans made under previous legislation, as well as under the Bill, will in future be paid to the Secretary of State. Clause 3 makes routine provision for the keeping, examination and publication of accounts.
My Lords, I will add only two points. The loans to Northern Ireland with which the Bill is concerned are not part of any subvention to Northern Ireland, since a full rate of interest is paid on them. Moreover, the people of Northern Ireland have lent to the National Loans Fund over the years through National Savings—for instance, the National Savings Bank, the Save As You Earn Scheme and by Premium Bonds—and by investing in United Kingdom Government Stock. The flow of funds between the National Loans Fund and Northern Ireland is therefore 1213 by no means one way. Secondly, I should emphasise that the Bill does not itself authorise any expenditure. It merely provides the machinery to ensure that funds can be made available for certain capital expenditure which has already been approved by the usual procedures. I commend the Bill to the House. My Lords, I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Donaldson of Kingsbridge.)
§ 2.57 p.m.
§ Lord BELSTEAD
My Lords, as the noble Lord has explained, this Bill makes available money for certain capital programmes in Northern Ireland. I understand that the greater part of that money goes to the Northern Ireland Housing Executive and to the Northern Ireland Electricity Service. As I believe it will be possible to have a slightly wider debate than normal on the Northern Ireland economy under the forthcoming Appropriation Order, I should not wish to pursue any of the details of this Bill, but there is one question I would ask the noble Lord about its general effect.
The amount which can be lent to the Northern Ireland Consolidated Fund is increased, as the noble Lord has explained, by £275 million and by a further £200 million, if necessary, by Order subject to the Affirmative Resolution procedure. The Explanatory Memorandum to this Bill says:At the rate of lending now envisaged these additional funds would provide enough for Northern Ireland's requirements for approximately two years",and then it says,…for a further period of approximately eighteen months",referring to the Order-making power. Is that lending rate any higher in real terms than the rate at which money has been lent under this same power to the Northern Ireland Consolidated Fund during recent years?
One of the recipients of these loans is the Northern Ireland Finance Corporation, which does admirable work. But I think it is fair for me to remind the noble Lord that the Government now intend to widen the scale of the NIFC's powers and if it, or indeed any of the other claimants on the finance which this Bill makes available, is increasing the growth in pub- 1214 lic expenditure in Northern Ireland in real terms then I simply say that Parliament ought to be aware of it. My Lords, with that one question I certainly support the Second Reading of this Bill.
§ Lord DONALDSON of KINGS-BRIDGE
My Lords, I am grateful for the noble Lord's support. I think the answer to his question can be given very quickly. These loans are for continued development and they represent partly the increase required due to inflation and partly real development. I do not think one can put it more clearly than that. For example, in the case of the Northern Ireland Housing Executive, not only are its costs rising but the work it is doing is increasing, and these loans cover the two elements. I hope that that answers the noble Lord's question.
§ On Question, Bill read 2a: Committee negatived.