APPROPRIATION (NORTHERN IRELAND) ORDER 1976

HL Deb 09 March 1976 vol 368 cc1235-44

4.16 p.m.

Lord DONALDSON of KINGS-BRIDGE rose to move, That the draft Appropriation (Northern Ireland) Order 1976, laid before the House on 25th February, be approved. The noble Lord said: As your Lordships will remember, the procedure for Northern Ireland's supply legislation under direct rule arrangements is that the Main Estimate of Northern Ireland Departments is published in the early summer and appropriated just before the Recess in July; the Autumn Supplementary Estimate is published in November and appropriated in December; and the Spring Supplementary Estimate and Further Spring Supplementary Estimate published in February, are appropriated in March, together with a sum on account of the following financial year. The Appro- priation Order for the Main Estimate provides an opportunity for a full debate, and your Lordships may recall that we also had a wide-ranging debate last December (which lasted, I think, 1½ hours) on the order to appropriate the Autumn Supplementary Estimate for the current year. I can of course consider questions on the wide range of subjects covered by the Estimates we are now considering, but I hope that on this occasion we can have a more limited discussion and concentrate in the main on the financial technicalities.

This order has two purposes. In the first place, it appropriates the published Spring Supplementary Estimate and Further Spring Supplementary Estimate for the current year. Secondly, it appropriates the sum required on account of 1976–77 to put Northern Ireland Departments in funds until such time as the Main Estimate has been published and Parliament has approved the appropriation of the balance of the funds required. The additional provision sought for Spring Supplementary Estimate and Further Spring Supplementary Estimate is some £54 million which brings the total Estimates provision for 1975–76 to some £1,028 million, and £32 million of the increase, or some 60 per cent. has come about as a result of pay and price increases. Real increases in public expenditure amount to some £18 million; the most important of these are the additional £14 million contributed to the Northern Ireland Housing Executive and some £2½ million required to write off housing deficits remaining on the accounts of the former New Town Commissions. I would emphasise, however, that these real increases are consistent with Northern Ireland's approved allocation of public expenditure for this year. The balance of the £54 million—some £4 million—is for miscellaneous financial transactions which do not count as public expenditure, including a payment from the Northern Ireland Consolidated Fund into the National Insurance Fund resulting from an adjustment in the actuarial calculations.

What this order does is to appropriate not only the Spring Supplementary Estimate and Further Spring Supplementary Estimate already referred to, but also a sum of £464 million on account of 1976–77, which is 45 per cent. of the total estimates for the current financial year. This is the normal way of providing funds to Government Departments in advance of the Main Estimates. I should, however, like to draw attention to the fact that, as has been agreed by the Public Accounts Committee and the Expenditure Committee, the Northern Ireland Estimates, as from 1976–77, will be presented in a revised form in which expenditure will be set out by programme rather than by Department. This will bring the Northern Ireland Estimates into line with the United Kingdom Supply Estimates, which underwent a similar revision in 1974–75. It does however mean that the grouping of services in the Vote on Account is different from that in the Supplementary Estimate for 1975–76. I commend the order to the House.

Moved, That the draft Appropriation (Northern Ireland) Order 1976, laid before the House on 25th February, beapproved.—(Lord Donaldson of Kings-bridge.)

4.21 p.m.

Lord BELSTEAD

My Lords, I should like to thank the noble Lord, Lord Donaldson of Kingsbridge, for his explanation of this order which in Part II of the Schedule lists the sums granted for several services, sums on account for the next financial year. It is not always entirely easy to discover exactly what services are being either included or omitted from these Appropriation Orders, and the situation is made a little more complicated, as the noble Lord himself said in his closing words, by the fact that the classes of expenditure have altered as between this year and the previous similar order of a year ago. Therefore, I must apologise to the noble Lord if I do not compare like with like.

May I first raise a question about the relation of this order to the recent White Paper on Public Expenditure, Cmnd. 6393. The White Paper on Public Expenditure shows that between the current financial year and the year 1979–80 total expenditure for Northern Ireland, as it is listed in the White Paper, is planned to be reduced from £1,321 million to £1,258 million, a reduction of some £63 million. However, initially this reduction is not going to "bite" on Northern Ireland; savings are going to be made from 1977 onwards. The noble Lord will recall that the White Paper on Public Expenditure of last month makes it clear that the increase in total expenditure in Northern Ireland from this year to next year is to be contained to an increase of only £16 million. All that is set out in Table 2.15 of the February White Paper.

My Lords, what is troubling me is that the increase of sums granted on account by this order compared to the equivalent order of a year ago is nearly £150 million. The first Appropriation Order of last year granting sums on account was approximately £316 million for 1975–76; and this year it is granting over £463 million. Although I take the point that this is money being granted on account and is only a part of what will be the total expenditure for the next financial year, I should be grateful for an explanation of how this tallies with the restrictions of the White Paper on Public Expenditure which, after all, was published only last month. May I specifically ask about Class I of this order which relates to agriculture? The appalling weakness of the pound at present brings home to us as never before how we in the United Kingdom need to produce as much food as possible for home consumption. In this work, Northern Ireland could help very effectively if farmers in Ulster are fairly certain that they will get a fair return for their work. May I ask the noble Lord what the situation is concerning the remoteness grant, which is some compensation for the heavy transport costs to and from Northern Ireland. The noble Lord was good enough to refer to this last December in a debate on a previous Appropriation Order. What I am really asking for is a renewal of the assurance he gave at that time.

My Lords, I see that in heading No. 3 of Class I there is a grant of £3,885,000, and I quote: For expenditure on agricultural assistance schemes, food processing and marketing". I understood last year that the processing of meat in Northern Ireland was being carried on at a very much reduced level. In a country where 14 per cent. of the working population is employed in agriculture or associated industries, it really is a tragedy if the rearing of livestock has declined.

May I ask the noble Lord, Lord Donaldson, whether he has any up-to-date census figures for the beef and pig herds in Northern Ireland as compared to, let us say, a year previously. What effect on breeding and rearing does he think that last week's EEC agricultural decisions are going to have so far as Northern Ireland is concerned? Thirdly, may I ask the noble Lord whether the Government are concerned that the Green Pound for the Republic has now been devalued by 2 per cent.?—so there is bound to be renewed incentive for cross-border smuggling. If that is the case, then I can only conclude that the meat processing business in Northern Ireland is liable to be endangered further.

May I ask about the work of the housing executive which would be related to Class V of this order? I was very glad to read in the White Paper on Public Expenditure that priority will continue to be given to housing in Northern Ireland. Do the Government have any figures for the number of houses completed last year? Are the housing executive being unduly hampered by the size of the public debt, which I understand still assumes considerable proportions so far as the non-payment of rent and rates is concerned? What has been done to recover the money thus owed?

On this occasion, I have only one question to ask the noble Lord, Lord Donaldson, about the vital subject of job promotion in Northern Ireland. I realise that things are very difficult in this respect at the present time, and acknowledge that the Government continue to do everything they possibly can to maintain and, indeed, to promote jobs. I see that under Class II, over £44 million is being granted to the Department of Commerce for selective assistance to industry and shipbuilding. It would appear that in the order of a year ago, the equivalent entry was some £31 million for the industrial development services, but on that occasion there was no mention of shipbuilding. Can the noble Lord tell us whether the £44 million mentioned in this order is an increase in real terms? Or has assistance for Harland and Wolff perhaps been imported into this Bill, which was possibly previously covered in some other way? As an entirely separate question, I should like to ask the noble Lord whether, in these difficult times, there has been any sign of dropping off in the take-up of grants to industry and commerce in recent months.

In conclusion, may I make one small criticism. I know that times are anything but easy for the Government, and I make this criticism tentatively. I would put to the noble Lord that what I feel is missing from statements which come from the Government about industry and commerce in Northern Ireland is any indication of an overall plan. It is the hope of all of us that before long the world trade revival will bring an upturn in the British economy. It has been said again and again that when this occurs we must be ready to take advantage of it. I hope that the Government may use the forthcoming months of direct rule to plan their overall strategy for the Northern Ireland economy in rather more detail than they have so far revealed, so that the Province will be ready to make the best use of the opportunities which we hope will come its way.

4.29 p.m.

Lord DONALDSON of KINGS-BRIDGE

My Lords, I am grateful to the noble Lord, Lord Belstead, for his support of this order. I will try to deal with all the points he has made, but if I fail to deal with any of them, I shall write to the noble Lord, because he asked me a fairly long and elaborate list of questions. I should like to begin by trying to relate the figures which he was querying. This is really a job for an accountant, and is something for neither the noble Lord nor myself.

The sum on account which is sought for in this order is greater than the equivalent sum on account sought a year ago, because the fact is that the sum on account is 45 per cent. of the total estimates and in the current year the total estimates are higher. The sum on account is thus bound to be bigger for 1976–77 because the total estimates for 1975–76 are much larger than those for 1974–75. The difference the noble Lord was asking about is contained entirely in that, and is really not worth pursuing; I do not think it represents a reality which means anything to any of us. The sum on account is only an advance instalment. It does not affect the total of the estimate which will later be sought, nor the sums which will be spent at the end of the day. The important sum in PESC terms is the total which will be spent, not the sum on account. I hope that goes some way to explaining that, I always think, particularly awkward piece of mathematics for those who are not accountants.

The noble Lord asked about the public expenditure cuts. These cuts have been necessary, as I think everybody in your Lordships' House will agree, to make room for the investment and exports which are essential to our prosperity in years ahead and to help in the battle against inflation. I think nobody doubts that this is the most important battle in front of us. This has meant a searching review of our priorities, and in order to preserve what we regard as the most important we have inevitably been obliged to cut some of the others. On the brighter side, as I think the noble Lord mentioned, housing expenditure is to rise from £110.8 million in 1975–76 to £141 million in 1979–80. Expenditure on social security, education and health will also rise over the next five years.

Within the trade, industry and employment programme the expenditure on industrial development and tourism is to rise by 20 per cent. in the same period, and the momentum of the Northern Ireland sophisticated trading programme, which we often boast of in this House, will be maintained. Moreover, sadly but inevitably, the law and order programme will require more resources than were allocated to it a year or so ago. I do not think anybody really thinks this could be withheld.

To protect these priorities we have naturally had to curtail some other plans. Even in some of the programmes I have mentioned we have had to forgo some of the projects we had previously hoped to carry out for example, capital spending on the health services and on education will be less than we had previously planned and the roads programme will be substantially reduced from the levels we anticipated last year. So provision is stabilised at about the level of the last two or three years. This has involved the postponement and curtailment of a number of projects, the most painful of which is perhaps the Madam's Bank Bridge in Londonderry, which will now not be started before 1980–81 Certain noble Lords will be pleased to hear that we have managed to fit in provision to improve and extend Aldergrove airport, and work will start in about a year's time.

With regard to the remoteness grant the position it not very different from the position when I last referred to it, because no decisions have been made. It will end on 31st March 1977, and the factors which gave rise to the remoteness grant will be considered during the coming year with a view to deciding whether or not it will be continued, and if so at what rate. It is worth noticing that the remoteness grant is £1,900,000, and the United Kingdom Government have produced for Northern Ireland the figure to which the noble Lord referred over the feed price, which is £3½ million, roughly speaking, towards the equalisation of the cost of feed in Belfast as opposed to the cost of feed in Liverpool. This is an extremely constructive form of subsidy and Northern Ireland Ministers we are grateful to the Treasury of the United Kingdom Government for letting us have that. Clearly they will have something of an argument about the remoteness grant in the fact that they have given us well over twice as much in another field.

Viscount AMORY

My Lords, can the noble Lord tell me whether the remoteness grant is receivable in full from the EEC?

Lord DONALDSON of KINGS-BRIDGE

No, my Lords; I do not think it is receivable at all from the EEC. The situation of EEC aid to remote areas is covered, I think, in an entirely different way. If I am wrong I will write to the noble Viscount, but I am pretty sure I am right about that

The noble Lord, Lord Belstead, asked about the farming situation. The recent package which has just been brought out is generally welcomed by the Northern Ireland farmer. We in Northern Ireland produce mainly livestock and livestock products, beef, milk and sheep, based largely on grassland, and pigs, eggs and poultry on imported feeding stuffs. The latter have not really been affected by Mr. Peart's package. The awards on milk and sheep will help very much to retain confidence among the milk and lamb producers. The beef producers are pleased that the system of variable premiums has been maintained, but are conscious of the fact that because of the limitation on premiums which Mr. Peart had to agree to their total returns will depend on firm market prices not falling too far below the level of prices in Great Britain. I should like at this point to say that I think we owe the greatest thanks to my right honourable friend the Minister, who fought a bitter battle to keep these beef premiums which are even more important from the point of view of Northern Ireland than from that of the English farmer.

As regards the Irish and United Kingdom Green Pounds, the increased differential between the values of the United Kingdom and Irish Green Pounds means that monetary compensation amounts will apply to trade across the border between Northern Ireland and the Republic. The noble Lord will remember that they have been cancelled recently because the two values got so close. In particular, of course, this produces, as the noble Lord said, an incentive to the smuggling of fat cattle and pigs, and this is something we shall have to deal with. It is not a new problem, but it is a problem which will inevitably arise here. We are looking at the possibility of taking countervailing action under the Meat Industry Employment Scheme, but it is fairly elaborate and I think I would rather not go into it now. There will be MCAs of something like £9 on a 600 lb. beef carcase and about £1 per pig, so they are quite large sums. This is something we have to look at very carefully. The noble Lord asked for the dairy herd and beef figures. The dairy herd is about 239,000 and the beef herd is about 328,000, about a 2 per cent. Fall; pigs are 645,000, 23 per cent. down on 1974.

To turn to housing, in the public sector the Northern Ireland Housing Executive completed a total of 4,885 new houses and in addition brought back into use 780 houses which were bricked up, vacant or derelict. This is not a very brilliant figure; it is in fact the lowest we have had since 1962. As the noble Lord will know, there are a number of reasons for this. One of the major ones has, of course, been the effect of the civil disturbances on the building programme. In the last few years some 25,000 houses have been damaged by bombs, fire and vandalism. Something like 60,000 people have moved from home because of the violence or threat of violence. Over 10,000 houses have been abandoned or bricked up. There has been widespread squatting and housing schemes have been delayed because of the paramilitaries' intimidation of contractors.

We take the view that, in all the circumstances, the Housing Executive is doing a sterling job, and there is no intention of reverting to local government control of housing in Northern Ireland. It would be a retrograde step to move away from the concept of a single, impartial housing authority. The future outlook is one of improvement and an upturn in completions is to be expected this year. A realistic indication of the total building programme up to 1980–81 would be 35,000 to 40,000 houses. My Lords, the only other point I see on my paper is that the noble Lord asked whether there was any sign of a decline in the taking up of grants. I shall make inquiry about this but off the cuff the answer is, No. However, I should like to verify this. I think I have answered most of the noble Lord's questions, and if not I will reply by letter.

On Question, Motion agreed to.