§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Elton) rose to move, That the draft order laid before the House on 26th November be approved.
§ The noble Lord said: My Lords, this order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. The draft order provides for the appropriation of the autumn Supplementary Estimates of Northern Ireland Departments. I shall indicate some of the general features of the Estimates before drawing the attention of the House to one or two of the major items which they contain. Further information can be found in the Estimates volume itself, copies of which have been placed in the Library, and in the explanatory memorandum which has been circulated to noble Lords who have participated in recent appropriation order debates. The circulation of an explanatory memorandum on draft appropriation orders is a new arrangement which I hope will assist noble Lords in preparing for these debates.
§ The first general objective of the draft order is to provide additional cash to offset the effects of inflation on those votes which are exempt from cash limits control. This, as noble Lords will be aware, is one of the main purposes of Supplementary Estimates. The draft order also includes provision for the main 1980–81 Civil Service pay awards, for which no provision was made in the main Estimates. Thirdly, the draft order provides for the normal process of reallocation, both within and between Votes, which departments find necessary as the year progresses.
§ Noble Lords will be aware that the reallocation of Northern Ireland's public expenditure resources which was announced on the 6th August last entailed some very difficult decisions. I can only emphasise what has been said on previous occasions, that the spending plans of the public sector have to take account of the overriding need for the nation to live within its means. With limited resources, decisions on priorities are inevitable, and even with the addition of £48 million to Northern Ireland's allocation, it would have been quite impossible to respond to the greater demands which arose on the industrial and energy fronts without incurring some reductions on other programmes. It is the Government's view that the considerations which dictated the reallocation of resources earlier this year, essentially the need to create and sustain employment in the productive sector of the Northern Ireland economy, both explain and justify the action taken.
§ There are a number of points on the figures quoted in the autumn Supplementary Estimates, and in the schedule to the draft order, which it might be helpful 826 to mention at this stage. A simple addition of the net totals of the 1980–81 main Estimates and the autumn Supplementary Estimates would overstate the total amount of cash Northern Ireland Departments will actually spend this year on voted services. This is because the conventions which govern the presentation of Estimates to the House do not always permit savings or reductions to be shown. The explanatory memorandum lists the services on which such savings are expected to arise. Northern Ireland departments will, of course, take account of these planned savings in the day-to-day management of their voted expenditure.
§ It is also important to note that not all the public expenditure additions and reallocations announced during the summer are reflected in the Estimates. The principal reasons for this are that some of the services concerned are not borne on Vote, some cannot be dealt with until the spring Supplementary Estimates stage arrives and, some are undertaken by the Northern Ireland Office and, as such, are outside the scope of this draft appropriation order, which applies to the NICS.
§ Passing on to more particular aspects of the draft order now before the House, I should like to direct the attention of your Lordships to the additional provision sought for services administered by the Department of Commerce. As the department with primary responsibility for the maintenance and creation of jobs in Northern Ireland, its Votes are the main destinations of the resources which were made available from the Contingency Reserve and from other Northern Ireland programmes in the reallocation I referred to.
§ In Class II, Vote 2, subhead A1, provision is sought for an additional £13.1 million to enable a loan of £14 million to be made to De Lorean Motor Cars Limited in respect of their project at Dunmurry, which could employ up to 2,000 people. This loan is necessary due to increases in costs which have arisen since the project began.
§ Under subhead A4 of Class II, Vote 2, the increase in the provision for industrial development grants again reflects the decision taken during the summer to reallocate funds in favour of Northern Ireland's economic programme. The intention in this case is to enable the Department of Commerce to sustain its commitments to firms under existing agreements and to enable it to enter into new agreements aimed at maintaining employment. Noble Lords will appreciate the crucial importance of putting the Department of Commerce in a position to accommodate the higherthan-anticipated level of demand which has arisen for these grants. Under subhead B2 of Class I, Vote 2, there is provision for a further £8.2 million for Harland & Wolff Limited, which at present employs over 7,000 people. The yard simply could not continue to function without Government support.
§ I now turn to energy. Under Class II, Vote 3, provision is sought for a grant of £20 million to the electricity service. Noble Lords will be aware that the service depends heavily on oil for electricity generation. The rises in world oil prices in the last year or two have caused major financial difficulties for the electricity service and, without Government intervention, would have necessitated tariff increases well in excess of those in the rest of the United Kingdom. The additional 827 provision now sought will compensate the electricity service for limiting its tariff increases in the current year to the levels of increase applied in the rest of the United Kingdom.
§ Still in the energy field, under Class III, Vote 1, provision totalling some £9 million is sought for funds to facilitate the orderly run-down of the gas industry. Noble Lords will recall that the Government's Energy Statement on 23rd July 1979 indicated that financial support would be made available to assist the orderly run-down of those gas undertakings which decided to close, and that the position of consumers needing to convert their appliances would also be taken into account.
§ I have confined my remarks to those aspects of the draft order which relate to the industrial and energy sectors, as these are the main features of the autumn Supplementary Estimates to which the draft order relates. I am sure, however, that noble Lords will wish to raise other matters as well, and I am grateful to those who have given me advance notice of their intention to do so. I shall attempt to answer as many questions as possible at the end of this debate, and of course those which remain unanswered will be dealt with in correspondence later. I commend the draft order to the House.
§ Moved, That the draft order laid before the House on 26th November be approved.—(Lord Elton.)
§ 4.56 p.m.
§ Lord Blease
My Lords, I should like to thank the noble Lord, Lord Elton, for his detailed breakdown of the financial elements in this appropriation order. I should also like to say that I am grateful for the arrangements making available the explanatory memorandum. I found it most helpful. While this is the third order in the annual cycle of orders to appropriate funds for services which are supplied to Northern Ireland and administered by Northern Ireland departments, it gives this House an opportunity to deal with the wider economic and social aspects of life in the Province.
If I may use art analogy, it enables us to ask those at the helm whether we in Northern Ireland who follow in the wake of the United Kingdom ship of state are on a set economic course, whether we are drifting, or whether indeed we are not slowly sinking as an industrial community. To help find whether we are on a set course, I would refer to words spoken by the Secretary of State for Northern Ireland, Mr. Humphrey Atkins, on the 8th June last year, when he declared:Our basic objective will be to put life back into the economy by creating a climate which is conducive to growth. I fully realise that the Northern Ireland economy has special problems. The significantly higher level of unemployment is one. This will be taken into account when framing new policies. On the public expenditure front, preference will be given to cuts which do not create unemployment".This was, as I understand it, a set course to bring life back into the economy. For some indicators along the way, we have the statement made by Mr. Rossi, the Northern Ireland Minister of State who on 22nd July 1980 declared:The Government remains committed to its economic strategy, which is designed to create the basis for real national growth and prosperity. We are, of course, sensitive to the particular problems of Northern Ireland and this has been shown by the considerable 828 success in creating both new manufacturing jobs and also protecting employment"."Considerable success"—I am afraid that few in Northern Ireland recognise this as a success story.
The noble Lord, Lord Elton, speaking at the Fermanagh College of Further Education on 29th November, said:Unemployment is at a figure which gives very great concern to us all and must loom very large in the lives of some young people".The noble Lord went on to declare that the indications were that:…the tide of economic depression was beginning to turn".Again, the noble Lord, speaking at Magherafelt High School on 3rd December, just two or three days ago, referring to industrial incentives, said this:We have made a good start in this connection in that some 5,460 new job promotions have been achieved in the first nine months of this year".In passing, I should like to say that we have to be very careful when people mention jobs negotiated or jobs promoted. These are not at all new jobs created and therefore I look askance when the noble Lord refers to 5,460 new jobs promoted.
We are aware that only yesterday this order was debated at some length in another place, when many aspects of the Government's economic strategy were questioned. During a debate on the Queen's Speech on Thursday, 27th November, I made known my views on the degree of concern publicly expressed by many of us in Northern Ireland about the current economic and social deprivation in relation to jobs, housing and social conditions. I am compelled to ask: Is there any real evidence that the Government's policies are succeeding in creating economic growth and prosperity?
I do not wish to impute wrong motives to the noble Lord, nor do I wish to imply that he is deliberately misleading in his pronouncements. Indeed, I have the greatest sympathy with the Minister and with the Secretary of State, and his ministerial team, in tackling the difficult and deep-seated problems of Northern Ireland. But the fact is that we have over 16 per cent. unemployed, and one in every five of the male working population is looking for jobs. It is certainly not in accord with the facts of life in Northern Ireland even to whisper, in words of hope or encouragement, that the tide of economic depression is on the turn.
I would ask, in trying to see whether we are on course: is life being put back into the economy? Is a climate conducive to economic growth being created? Have the public expenditure cuts been given preference, so as not to create unemployment? Can we claim that the sum total of 5,460 new jobs promoted in nine months is a considerable success? It is with these declared objectives, and with the stated indicators in mind, that I approach this Appropriation (No. 3) Order and inquire just where we are. Are we on course or, at worst, is our economic and industrial base, as some would suggest, slowly sinking?
May I now turn to Schedule 1 to the order? As I understand it, and as I think the Minister has indicated, the six headings in Class I are all for pay awards. There is no new money requested to promote public works in the rural areas. So may I ask the Minister what is the present position and policy concerning the Urban and Rural Improvement Campaign—commonly known 829 as URIC? In the Estimates for Services, published in June 1980, the vote was for an amount of £2,570,000, which was a reduction of some £½ million compared with the 1979–80 expenditure on this proven, very useful rural improvement and employment scheme. Could the Minister indicate how many are now employed under this URIC scheme? Are there any plans to revitalise this campaign to undertake much of the necessary drainage work and useful improvements in rural amenities, as well as providing urgent employment outlets in the more remote areas of the Province?
In Class II Vote 2, under the heading of General Support to Industry, an amount of £39 million is required. I should like to indicate to the House that I warmly welcome and support monies that are considered helpful in conserving existing productive employment and in creating new jobs. But can the noble Lord indicate what amounts of this £39 million are earmarked for existing approved projects that are coming on stream, and what are the amounts designated to reinforce the Department of Commerce's industrial development efforts?
In this connection, it appears from recent statements by Ministers, especially during their visits abroad to stimulate investment in Northern Ireland, that the Department of Commerce has a clear and difficult role to attract suitable productive overseas investment. This calls for the strengthening of the DOC's industrial promotions division, especially in North America, Germany, Japan and the Middle East. Could the Minister indicate what measures are proposed to develop this important industrial promotional work? What are the numbers of officials and staff in the industrial branches of the industrial promotions division?
Some concern has been expressed about the developing administrative role of the Invest in Britain Bureau—commonly known as the IBB. It has been mooted that United Kingdom regional development organisations are being subordinated, perhaps unduly, in their oversea initiatives by the directive approval machinery of the IBB. Can the Minister indicate that the terms of reference, or the remit, of the IBB include Northern Ireland? Can we be assured that the Department of Commerce will be encouraged independently to seek out suitable projects for Northern Ireland anywhere, at home or abroad, and, if and when, necessary will be appropriately assisted by the IBB?
Under Class II Vote 2, there are a couple of points which I should be grateful if the noble Lord could explain. The points arise under Section A, Selective Assistance to Industry, and Section C, Other Support Services. Monies for loans and grants for industrial modernisation and reorganisation have been severely cut in this appropriation order. Loans and grants for firms in the inner urban area have been seriously curtailed. Support services, including market research, the energy enterprise scheme, the mineral exploration programme and the provision for factory buildings have been cut, decreased, curtailed or postponed. There has been a decrease of over £6½ million in these various industrial regeneration schemes. I respectfully ask the Minister: Do the Government consider that this is consistent with "creating a climate conducive to economic growth"?
I am pleased to note from recent press statements 830 that the Department of the Environment for Northern Ireland is seeking to amend the Planning (General Development) Order of 1973. This should enable the use of suitable premises of up to 2,500 square feet for small industrial and warehousing enterprises. May I ask the Minister what factory buildings—above this small premises facility—suitable for immediate occupation by a modern manufacturing enterprise, are available in the Province? Could the noble Lord also indicate what is the Government's present advance factory building programme in respect of new buildings, factory warehouses and factory refurbishing?
On page 13 of the autumn supplementary estimate, there is an item under Section B2, headed Assistance to the Shipbuilding Industry and Item 3, is Legal and Professional Fees. The amount voted in the June estimates was £22,000. The supplementary requirement is an additional £50,000, making a total of £72,000. The amount in the 1979–80 appropriation was a mere £10. As I understand it, this vote is in connection with the Governments appointment of an independent review team to investigate the possible additional uses of the skills and facilities available in Queen's Island. These proposed uses may be either in the form of joint ventures with Harland and Wolff, or completely separate enterprises.
If I am correct in assuming that the vote is for this review and the consultancy work involved, may I ask whether the report and recommendations will be available by next April as publicly indicated? Have the consultants been appointed and will there be an opportunity given to the trade unions and to others directly concerned to be acquainted with the general terms of the report and recommendations? I should add that I welcome the fact that Mr. Alex Cooke, the acting chairman of Harland and Wolff, is a member of this review team and, certainly, I know that he has support from this side of the House in the difficult task that he has with the shipbuilding enterprise of Harland and Wolff.
On Class II-3 and Class III-1, to which the Minister has already referred dealing with electricity and gas supplies, the question of energy supplies is, perhaps, the most long drawn-out saga in Northern Ireland's economic history. In my view, the monies requested in this appropriation order for electricity and gas do nothing to indicate that we are "on course" and putting life back into the Community. The Government's history of involvement in fuel in Northern Ireland is not a happy one. The investment in enormous oil-fired over-capacity generation of electricity at Kilroot power station has, in a small and isolated energy system, imposed a severe burden on the Northern Ireland public. The failures some years ago to connect the Province to supplies of electricity and natural gas is an instance of poor decision-making in both economic and political terms. Of course, I support the vote for £20 million to enable the Northern Ireland electricity service to avoid tariff increases, which are at present 25 per cent. greater than the highest rates in Britain. I find it difficult to understand that again we are waiting for the completion of a major review of future electricity arrangements in Northern Ireland. I understand that a major review took place five years ago.
In connection with Class III, Vote 1, an additional £9 million is asked for to facilitate the orderly running 831 down of the gas industry. We learned on 5th December that Mr. Giles Shore, the Minister for Commerce in Northern Ireland, had new information about gas supplies which may enable him to call a halt to the proposed further dismantling of the gas industry. I hope that the noble Lord, Lord Elton, may be able to indicate when there will be definite and specific decisions about the future of electricity and gas supplies in Northern Ireland. I hope he will be able to indicate when the review will be completed, and what arrangements are likely to be made suitably to inform and consult the public about the way ahead for energy.
I should like to refer to the absence from Schedule 1 of any reference to Class IX Votes. There must be good reasons for this, but I find it difficult to understand why the Votes under Class IX for health and personal social services are not required in the Supplementary Estimates. Class IX is the largest element of public expenditure in the Northern Ireland Estimates for Services, entailing an amount of over £450 million. The programme covers Vote-borne expenditure on hospitals, community health, personal social services and family practitioner services administered by the four health and social services boards. The Department of Health and Social Services was required to surrender some £10 million during the internal reallocation of resources in Northern Ireland carried out by the Government in August of this year. This meant a decrease, by over £6 million for current expenditure, by health and social services boards and a decrease of over £3½ million for capital expenditure.
In my opinion, this draft appropriation order does not reflect the publicly expressed views of members of the health and social services boards, nor of the trade unions in the personal and hospital services. I will mention only two aspects where I believe that Government policy is widely off course. The first relates to the abysmal conditions under which the mentally handicapped in Northern Ireland are compelled to exist and which they are required to accept. There is an urgent need for improvement and for the allocation of funds. Secondly, there is the utter waste of resources, apart from the human hardship and suffering created by the Government's decision not to use for the present the new and fully operational maternity hospital at Downpatrick. I hope that the noble Lord will be able to answer this point, if the information is available to him, this evening or, if not, at a later stage.
I will refer only briefly to the Vote under Class X.4. A request is made for £500,000 to cover the increased volume of printing and stationery. May I ask whether this is a side effect of the changed administrative arrangements arising from the transfer of the functions of the Supplementary Benefits Commission?
I should like to compliment the department upon their timely issue of the new guide to social security benefits. This is an excellent document and comes at a time when a great amount of information is required. In connection with the heading International Subscription, may I ask the noble Lord why the amount is not stated? While I welcome the voice of Northern Ireland being heard in international fora, it would be useful to know the full implications of this international subscription. The cuts relating to the Linen Hall 832 Library is a matter which I have raised on a previous occasion. May I ask for the Minister's sympathetic understanding of this worthy institution which is part of Ulster's life.
I should like to ask the Minister about publicity, which is dealt with under Class XI.7, Section B. It is with a twinge of regret that I note that the Northern Ireland Government's information magazine, Ulster Commentary, is to cease publication this month. It has been in existence since 1946 and over the years I have found it very useful, particularly when I was in full-time trade union work. The new format is, I understand, designed to reach a wider public and to be more effective. I hope that this publication will not be prevented from doing a necessary and important job because of cheeseparing financial constraints over production and distribution.
From this side of the House I wish to indicate support for the Appropriation (No. 3) (Northern Ireland) Order. I hope that the first issue of the new information publication will provide us with real evidence that Northern Ireland is on course for economic growth and general prosperity.
§ 5.17 p.m.
§ Lord Hampton
My Lords, I, too, should like to thank the noble Lord, Lord Elton, for the way in which he introduced the order. I listened with great interest to the critical questioning by the noble Lord, Lord Blease, and I was surprised that at the end of his speech he said he supported the order. I thought he was on the other side.
May I put just a few questions to the noble Lord, Lord Elton. The first relates to Class II Vote 2, subhead B.2: assistance to the shipbuilding industry of £8.2 million, to which the noble Lord, Lord Blease, has referred. This does not seem to be a great deal of money. I realise that it is only a subsidiary appropriation, but is this sufficient to keep Harland and Wolff going in the present difficult economic climate?
My second question relates to Class II, Vote 3, subsidies to the electricity tariffs. The noble Lord, Lord Blease, mentioned the problems over the way ahead for energy. I understand that at present consumers are unable to pay their way and that we are having to subsidise them. I think we might be given some credit for this by those people on the other side of the water who say they have seen enough of us. This subsidy may be essential. However, I should be grateful if the noble Lord could give further information about the tariffs for electricity and gas, and about how he sees the way ahead for energy and how the problem can successfully be solved.
Turning to Class VI, Vote 2, the improvement of the environment, there is total expenditure of only £1,000, compared with expected economies of £2.9 million. I realise that things are difficult. However, may I make the point that I made on a previous occasion when I was contradicted by the noble Lord, Lord Vaizey, who I am sorry is not here today. I said then that the improvement of the environment was a very important matter. A great deal is happening in Northern Ireland but there are still many areas which could be improved. I accept that this economy may be essential, but it is very sad if we cannot do all 833 we possibly can to improve the less satisfactory parts of the environment.
There seem to be two economies which will be of very short-term advantage and which may lead to more necessary expenditure in future. Class I, Vote 2, shows that the provision for expenditure upon the eradication of brucellosis is being reduced by £1.3 million. I tried to check what exactly brucellosis is, and I was very surprised to find that the Oxford dictionary did not give it. However, I believe it is a disease from which cattle suffer and as a result of which they either die or have to be exterminated. If the disease is allowed to carry on, one will be faced in the future with continued compensatory expenditure. The second economy which I question relates to Class II, Vote 1, road services. This speaks of a reduction of £6.7 million on the operation and maintenance of roads. This may be inevitable, but I know that in my home county the roads are deteriorating extremely fast and that if there is a hard winter they will be in quite a bad condition. To put them right will be very costly. Following on the noble Lord, Lord Blease, and his extensive questioning, those are the few questions which I wish to put.
§ 5.20 p.m.
§ Viscount Brookeborough
My Lords, I should like to start by thanking my noble friend for his explanatory document, which I found here when I arrived. It is a very readable document and I have been able to read and understand it between the time that I arrived and now, and I thank him for its very good description.
I should like to deal with only one subject. I find these appropriation orders difficult because there are so many things that one wants to say, but it takes too long to develop the argument and therefore I am inclined to stick to one particular subject. The noble Lord, Lord Blease, raised the question of the course of the economy in Northern Ireland. Whatever my support may be for the financial policy of the United Kingdom as a whole, I have to make it absolutely clear that for Northern Ireland the high rate of interest and the high value of the pound is leading to a totally disastrous situation. That view is supported by industrialists and by everybody else. Nobody should think anything else but that so far as Northern Ireland is concerned, isolated as it is with a water barrier, this is an appalling situation. Our textile industry was the largest concentration of artificial fibres in the United Kingdom—probably in Europe. It is being destroyed and it can never be resuscitated. To resuscitate it would cost an enormous sum. I feel that it is necessary to make that point.
I am a supporter of the general policy that we must live within our means, but when it comes to Northern Ireland, we are told that we must share and share alike with the rest of the United Kingdom. Let us share 6 per cent. unemployed; let us not share anything more than that. Let that be the basis of our sharing because that is our problem—unemployment, bad housing, and so on.
Having said all that, I must welcome this appropriation order. Unfortunately, it does not show us that there are other parts of the United Kingdom which, if they were isolated and separately accounted 834 for, would be costing every bit as much per head as Northern Ireland. Therefore, so far as I am concerned I do not feel that we are accepting charity.
I should like to deal with agriculture because that is in an exceptionally difficult situation. In the new account for use in negotiation in the price review it will be found that the net income of farmers is down by 70 per cent. That is a catastrophic figure for our greatest industry and, if I may particularise, it is on the pig industry that I wish to fasten attention. This industry is efficient by any terms, it is enterprising, it has been revolutionary, it has led Europe. Its marketing has been—not beyond criticism, but certainly quite excellent so far as its past history is concerned. Its plight today is not due to inefficiency.
The whole point has been that the weaker industries must fall by the wayside. But this is an efficient industry. Its plight is due to two separate decisions. The first was a failure to negotiate properly to protect the industry when we went into the EEC; and the second, by the Government of the other side and by our Government, was a failure to renegotiate and save our industry. Those are the decisions of Government, not the failure of our industry. The basic fact is that the industry was built up on cheap grain from America. The granaries were efficient, the industry was efficient. The whole thing was tied up on that, and it enabled our small farmers to extend their acreage and made it a viable business. As I have said before in this House, the position today is that grain is £15 a ton more expensive in Northern Ireland because of duty and because of transport problems. If we were to sell to Japan, for instance—and there is a market for us in Japan—in fact there are further handicaps which act against us as the bacon leaves our country, because duty is charged on the incoming grain to keep the EEC price up. We would normally expect to get what is called a restitution, as the whisky manufacturers get a restitution for the extra cost of their grain; but the method of calculating the restitution grant for our bacon is not realistic as compared with the extra cost. So the Government should renegotiate the method of calculating restitution.
Today in the press we see that there are large exports of food to Poland. These stocks are being sold from intervention. Before grain goes into intervention the transport of that grain is paid for by the EEC until it gets to the stores. What about the Government arranging for intervention stores to be in Northern Ireland if it is illegal for us to pay subsidies on the price of grain, because that is where it has got to be? If that is illegal under the CAP, why not have intervention silos in Belfast and Londonderry? That would overcome the problem and I believe that there would be great sympathy for it in the EEC.
The Government are in fact paying a feed grant at the moment, but in the 1980 price review there was an undertaking that the processing industry would receive a large injection of capital. This was to happen in June; then it was to happen this month; it is now not to happen until 1981, and we know that the price review in the EEC never finishes until about June or July, and then probably we shall be off again. In the meantime, confidence is diminishing and the industry is becoming much smaller. Ways and means must be found to save this very important industry of ours.
835 It is far cheaper to preserve the 5,000 jobs which are at stake in the bacon pig industry and to have independent people than it is to spend £28,000 on one job with De Lorean. I maintain that there is real discrimination. When the £48 million was redistributed, surely some of it could have been taken for the pig processing industry, which is part of the industry of Northern Ireland. So I hope that the Government will find some method of saving our pig industry.
§ 5.28 p.m.
My Lords, following what the noble Viscount, Lord Brookeborough, has said, I should like to add my thanks to the noble Lord on the Front Bench for having given us in advance an explanatory memorandum on this order. I entirely agree with what the noble Viscount, Lord Brookeborough, has said about agriculture. It occurs to me to wonder why in fact in Class 1, Vote 6 there is an increase of over £1 million for expenditure by the department on administration, in view of the fact that the service to farmers seems to be in the process of being curtailed—and I thought that was with a view to staff reductions, but it may be an inflation factor.
None the less, dealing not just with agriculture but with the situation as a whole, I have a nasty feeling that tile Government cutbacks in public expenditure and the squeeze on credit are tending to hit the soft targets rather than the hard ones. By the "soft targets" I mean people like the farmers, people like the small industrialists who perhaps employ 20 to 30 people and also people like those voluntary organisations such as Women's Aid, Age Concern, the handicapped, and so on.
The soft targets are not able to hit back. The farmer will not go on strike, nor will the man who runs a small industry in a rural area. When times get tough that man has his entire stake in his farm or his industry and therefore he will not let it go. He will forgo his holiday; even if his car is five years old he will put off changing it for another couple of years. He will work a 15-hour day, if necessary, to tide his farm or his firm over the rough period. And the chances are that his labour force, such as it may be, will be with him on that, because they realise that his job is their job, and that if his business goes to the wall that is their job lost, and there is no one going to bale them out. That farmer or small industrialist cannot clear off to America; there is no one going to bale him out.
My Lords, not for a moment do I wish to say that I in any way begrudge the money that has been pumped into the Belfast shipyard or into De Lorean, or the money that was pumped in to start up big multinational branches such as Courtaulds, or indeed the firm of which I am chairman, Carreras Rothman (Northern Ireland). No, I do not begrudge this at all. But it would seem that, in view of the fact that it would be a very difficult political decision and would create an international uproar if the hard targets were allowed to go, therefore the soft targets are suffering.
I do hope that Her Majesty's Government will take due note of that, and make sure that such people as a neighbour of mine, for whom I have been fighting for two years to get a small factory—he has been working 836 from a corrugated iron ex-gospel hall and would provide more jobs if he had decent premises—will get more consideration, because they are the salt of the earth in Northern Ireland; they are going to be the people who will stick with it through thick and thin, and no boardroom decision in Detroit or in London or in Amsterdam is going to make these people pull out until they have really reached the end of the line. Furthermore, their workforce is going to pull out every available stop to help them to make a go of it.
My Lords, it has already been mentioned that our industries in Northern Ireland are at a disadvantage on account of the higher energy costs, and, as the noble Lord, Lord Blease, said, this is something with which we have all had to live for a very long time indeed. But why, when we have surplus capacity for generating electricity in the North and it looks as though in the Republic of Ireland there is going to be a surplus of gas available, cannot we sell them electricity and let them sell us gas. I agree that the inter-connector has been blown up three times. Is this the sort of stuff that we are made of? Who rules in Crossmaglen and that area? Do Her Majesty's Government rule on one side of the Border? Do the Republican Government rule on the other side of the Border? Or is this no-man's-land, bandit country, where a few unfortunate electricity workers sent to repair the interconnector are chased away by gunmen and told not to come back? Could we not put the line underground? Could we not even put it under the sea? This would be a tremendous saving to both countries. Quite irrespective of politics, Ireland is geographically an island and the British Isles are geographically an entity.
I would further ask why, in the light of the Cooper and Lybrand Report, in the light of a report presented by civil servants some time ago, both of which supported the gas link between Scotland and Northern Ireland, Her Majesty's Government continue to propose spending large sums of money on the rundown of the gas industry, which is not only going to cost money directly but also is going to cost money as a result of the amount of jobs that will be lost by those workers in the gas industry. Is it not absolutely plain that it is far better to save jobs than to create them? Is it not clear that the expenditure on maintaining the gas industry and providing the electricity link would be money much better spent in paying unemployment benefit or compensating people for having to change their heating appliances?
The same really applies to the housing situation. It is much cheaper to save jobs than to create them. Economising on construction of houses for the Housing Executive and on the maintenance of houses, I respectfully submit, is false economy. Unemployment in the construction industry is, I think, as high as, if not higher than, anywhere else. Furthermore, the Housing Executive's stock of houses in need of repair but whose repairs are being postponed will either have to be repaired or replaced one of these days, and then it is going to cost even more. Similarly, as I think the chairman of the Housing Executive made clear, if finance available to the Northern Ireland Housing Executive is not increased at this stage, the housing stock in general is going to deteriorate and more money still will have to be found in the future.
There is, further, the matter that from a social point 837 of view bad housing, together with unemployment, is a very real factor indeed. It could well be that the violence which has been so much deplored and regretted by us all in Northern Ireland in recent years may be as much a protest against bad housing, bad environment and unemployment, frustration, boredom and the destruction of the human spirit, as a political protest. Therefore, I sincerely suggest to Her Majesty's Government that, in view of the fact that one in four houses in Northern Ireland is statutorily classified as being unfit, and whereas it would take £154 per capita of the population to bring the housing stock up to the Great Britain level, the present expenditure is £135 per capita, this is something that Her Majesty's Government should look at very closely indeed next year, because I appreciate that it is probably too late to do anything about it this year.
§ Lord Elton
My Lords, if the noble Lord will allow me to intervene, I might be able to deal with this point better at the end of the debate if he told me where he got these comparative figures from, because they do not agree with mine.
I thank the noble Lord for his intervention. I was given those figures by my political research unit, who perhaps were in error. I accept it if the noble Lord has authentic figures which I do not have.
I will check that anyway, my Lords. If I may say a brief word on education, a proposal has been made in the Chilver Report that the teacher training colleges should be amalgamated. This, I think, would be a useful economy as well as a valuable step towards social fusion in Northern Ireland, as indeed I think integration of schools, a subject about which I have spoken before in your Lordships' House, would not only be socially valuable but would also save money.
Generally, to wind up, your Lordships will be aware that Northern Ireland is a special case because it is disadvantaged, first, by its previous dependence on traditional industries, agriculture, shipbuilding and textiles. When the late Lord Faulkner saw the rundown of the linen industry taking place, I think he was absolutely right to encourage man-made fibres, and no one at that time, in the mid-1950s early 1960s, could have told that man-made fibres would run into the difficulties that they have all over the United Kingdom today.
That is one of our problems. Another is the higher fuel costs, to which reference has already been made. Another is remoteness from the markets of the products that we manufacture, and the cost of travel which is a very substantial factor indeed for representatives of firms who have to go to London, Manchester and even across to the Continent. The extra journey from Northern Ireland is a very significant factor.
Therefore, we are more dependent on public sector employment and, perhaps, the service industries, than the rest of Great Britain. And I cannot help feeling slightly anxious that too high a proportion of those 838 working in Northern Ireland are engaged in the service industries rather than in the manufacturing industries which are wealth-generating. Even so, it must be recognised that there is bound to be a greater dependence on public sector employment. Indeed, it was said to me by someone the other day: "It is more socialist policies that we require in Northern Ireland than Conservative ones". I hope that the noble Lord will not take offence. Also, there is the social danger of mass unemployment. I think that it is extremely risky to allow the situation to reach a stage where there is long-term unemployment. People can become completely dispirited, their morale is shattered and the will to work eventually becomes eroded. That is another reason, I think, why Northern Ireland is a special case.
So I sincerely hope that Her Majesty's Government will do all in their power to attract what assistance they can from the EEC. There has been some confusion about that, and I think that the noble Lord recently clarified the position. If he has anything to add today I should be glad to hear it. However, I hope that the Government will attract the maximum assistance from the EEC for stimulation of the economy and of jobs in Northern Ireland, and also to give as much incentive as they can for private enterprise—whether it be tax incentives or whatever. However, it is the generation of wealth and the provision of jobs which are needed, and I am sure that Her Majesty's Government will not be unaware of those two priorities.
§ 5.43 p.m.
The Duke of Abercorn
My Lords, in this time of financial stringency I welcome this order and, in particular, the £20 million subsidy for electricity tariffs, which will be of undoubted assistance to industry, commerce, agriculture and, in particular, the housewife. In regard to the provision for a further loan for the De Lorean car company, I should like just to remind the constant critics of this project that in America there is widespread interest, indeed enthusiasm, for this project. Furthermore, this House should remember that the market place for this car is in America, not in this country.
As the Government's political initiative in regard to devolved government has duly run its course, I believe that it is not only opportune but essential for the Government, and in particular the Northern Ireland Office, to focus maximum attention on the rapidly deteriorating economic situation in Northern Ireland which in itself is a grave cause for concern. In fact, it is no exaggeration to say that this deteriorating situation represents a severe threat to the stability of the country. That viewpoint was expressed forcefully recently on television by the chairman of the Economic Council, Sir Charles Carter. Therefore, an economic initiative is not only opportune but, I believe, vital. In the context of the prevailing economic situation in the United Kingdom, it would, of course, be irresponsible and inequitable to suggest any further significant public expenditure for Northern Ireland, but the deteriorating situation calls for the implementation of original and radical policies.
Before putting forward suggestions for consideration by the Government, I would say that it is essential to remember that successive energy crises have resulted 839 in spiralling freight rates across the Irish Sea which, as a result, have reduced the consumer market for Northern Ireland goods to a localised market of £5 million within the island of Ireland. Furthermore, as a result of the strength of sterling and the dwindling value of the punt Northern Ireland trade to the Irish Republic has become complex, difficult and disadvantageous, particularly affecting the Border areas—areas of traditionally high unemployment.
Secondly, let us briefly examine the success story of the Irish Republic Industrial Development Authority who, in this extremely difficult year of worldwide recession, have promoted some 40,000 new jobs. Although Northern Ireland has undoubtedly an image problem in regard to industrial promotion, the Industrial Development Authority continues to enjoy significant advantages over Northern Ireland in the promotion of industrial development. First, as previously stated in your Lordships' House on two occasions, the IDA can offer incoming industry a tax-free holiday on all manufacturing exports, and now, as from next month, a stabilised rate of corporation tax at 10 per cent. until 1990. If Northern Ireland shares the same geographical peripheral disadvantages as the Irish Republic, then surely Northern Ireland should be entitled to have parity with the Irish Republic in regard to fiscal incentives and the removal of unnecessary red tape. As it is vital to attract long-term viable industry to Northern Ireland, I believe that fiscal incentives are just as important as grant inducements.
I understand that the Community regulations in themselves do not preclude the possibility of regionally differential levels of taxation. Perhaps my noble friend Lord Elton, when replying to this debate, could indicate if and when the Government intend to make representations to Brussels in regard to a corporation tax concession for Northern Ireland.
Secondly, the IDA in the Irish Republic, enjoys a track record of minimum red tape. One of the few disadvantages of direct rule is that it has resulted in a dramatic increase in bureaucratic red tape. In fact, a local businessman deciding to start up a new enterprise has literally to navigate a minefield of bureaucratic red tape prior to launching his project. Apart from the urgent need to roll back recent bureaucratic encroachment, the Government should seriously consider how the philosophy of encouraging able young people to make a career in industry can be converted into reality by creating and providing the right structure to improve the links between education and industry, since Northern Ireland desperately needs to attract its best talent into industry. I believe that if the Northern Ireland Office could take the lead in this direction, Northern Ireland could lead the rest of the United Kingdom in this vitally important concept.
Again, the links between industry and universities could be closer in the development of high technology. One can foresee the need in Northern Ireland for a Sanford University type of industrial enterprise on one of the university sites. I believe that the new University of Coleraine has just started a highly successful industrial unit. It really is essential for every vestige of talent in Northern Ireland to be encouraged and exploited to the maximum.
840 To encourage entrepreneurial development in Northern Ireland involves high risk investment, and I believe that the Government should encourage and allow private individuals to invest part of their income, free of income tax, in developments and ventures of this type. In this critical economic climate I hope that the Government will review yet again the right structure for the job promotion agencies in Northern Ireland. Northern Ireland has a population of only 1½ million, yet there is a proliferation of job-creating agencies; namely, the Department of Commerce, the Local Enterprise Development Unit and the Northern Ireland Development Agency, with back-up support from the Economic Council, the Low Cost Automation Centre, the Wolfson Signal Processing Unit, Manpower Services and several other excellent organisations. Surely this proliferation must result in a duplication of time, effort and talent which will inevitably obstruct the most effective and efficient method of job-creation in Northern Ireland, as this country must be equipped with the most efficient job-creation agency in Europe. If this deficiency is the considered opinion of many in industry, and I believe the trade union movement and the Economic Council, then surely the Northern Ireland Office should review once again the current situation.
In recent weeks the Ulster Farmers' Union has, as always, articulated the problems and concerns of the agricultural industry, as farming is in deep depression. As is the custom of this House, I should like to declare a vested interest for I am involved in farming and also in a wood-processing industry which supplies material to the farming community. I believe that the time is opportune to reassess the significance of agriculture to our economy, and how and where production could be improved, thus providing direct and downstrean employment; in other words, further employment in the food processing industry.
In counties Tyrone, Fermanagh and Londonderry there are literally thousands of acres of unproductive land requiring reclamation. Surely the Northern Ireland Office should encourage the reclamation of this land by acting as a vehicle for the European Investment Bank to lend long-term loans at fixed rates of interest to progressive farmers who want either to increase their existing acreage or to purchase these run-down farms, which have a viable potential, for their families. A European Investment Bank loan, currently at 11 per cent. including exchange risk cover, would assist farmers to plan reclamation expenditure without having to contend with fluctuations in the MLR. Perhaps, naively, I am attempting to persuade, if not cajole, the Northern Ireland Office to adopt a more initiating role to assist our economy. But as competition in Europe for new job-creating investments has become so severe—in fact, it has become a vicious, competitive, international battle—drastic action in a drastic situation must be taken.
§ 5.55 p.m.
§ Lord Elton
My Lords, it is always easier to open a debate of this nature than it is to wind it up. I shall endeavour not to fall between the two stools by speaking too long to secure your Lordships' attention or by speaking so briefly that I do not answer your Lordships' questions. I hope that your Lordships will bear with 841 me. I have endeavoured to pick up most of the gauntlets thrown before me in some profusion, and occasionally some confusion. I shall try to set matters to rights.
The noble Lord, Lord Blease, who gallantly welcomed the order at the end of his very unwelcoming speech, raised a number of matters and set the debate in a somewhat sombre context. He reminded us of the acute social and economic difficulties of the Province. I would not want to belittle those difficulties; nor would I wish to leave us with an exaggerated impression of them, or a diminished impression of what Her Majesty's Government are doing to alleviate them.
I should like to start with the reference to 5,460 new jobs. I may say that I am deeply flattered that the noble Lord has read the speeches which I made at two of the many educational institutions which I have attended in the last few months, and in future as I draft those speeches I shall always consider not only the shining faces of the young at the front, but also the wise and critical eye of the noble Lord at the back, as if he were there. He referred to 5,460 new jobs, to which I referred in my earlier speech, as having been promoted in the first nine months of this year, and asked whether, in fact, they were real jobs. These are the result of an orchestrated effort carried out by the Department of Commerce, the Northern Ireland Development Agency and the Local Enterprise Development Unit. It includes a number of enterprises entirely new to Northern Ireland, such as the Learfan project, which will provide 1,250 jobs; the C.P. Trim Company, which will provide over 400 jobs; in addition, it includes new Northern Ireland projects and expansions of existing Northern Ireland enterprises, such as Glen Electric at Newry—about which, again, the noble Lord will have read in the same paper as he read my speech—which will provide a further 150 jobs. These are events that would not otherwise have happened.
I believe that the tide is turning because it is possible to bring them in. There is an outflow, but we are combating a process that has gone on for a number of years and which has accelerated and gained momentum over a number of years. It takes time to turn the tide, but I think that it is slackening in one direction, and I remain confident that, in fact, it will rise again.
The noble Lord, Lord Blease, went on to pick up a number of points in which I shall try to follow him. He was anxious about the absence of the DHSS Class IX Vote in the Estimates. The reason for this—and it may not allay his alarm or anxiety—is that the effect of the summer reallocations was to reduce provision in Class IX below the main Estimate level. As I explained at the beginning of the debate, there is no machinery for showing reductions in the Estimates. Therefore, the reference to them appears in the Explanatory Memorandum, and I am grateful to noble Lords for welcoming this. I thought that it would give me fewer questions to answer, but, quite clearly, it has given me a great many more.
The noble Lord referred, as did a number of noble Lords, to Harland and Wolff—which is something of a monument in the middle of Belfast—and to the difficulties of that company. Like him, I give the best wishes to the new chairman of that company. The review which is at present under consideration is not quite the statutory affair that he seems to think it is, but what is under consideration is any means of diversifying 842 the operations of the shipyards so that they are not tied to a single type of product. Indeed, some of that has already been evidenced.
The noble Lord turned to the urban and rural improvement campaign and expressed some concern about this. This is a campaign of the Department of Agriculture in Northern Ireland. Some 1,300 jobs provided by the department in minor drainage works and forestry and fishing amenities under this campaign will be phased out by March 1981. But these are temporary jobs, as I believe the noble Lord is aware. Arrangements to implement this policy decision have been agreed upon with the trade unions concerned through the mechanism of the department's Joint Industrial Councils. The need for further reductions in public expenditure continues, and additional reductions in the size of the DANI industrial labour force may therefore be expected.
The noble Lord then quoted a number of votes and classes in the matter of reallocation, starting with extra provision in Class II, Vote 2, sub-heads A1, A4 and B2, and asking whether this was financed from new money. The increases in these three sub-heads form part of the extra £48 million which was allocated to Northern Ireland during the summer, and the £50 million internal reallocation process. He asked whether the £98 million referred to in the 6th August announcement was used for new industrial investment projects. That is really to quantify in terms of money what I have just given in terms of jobs. The Department of Commerce's share of the £98 million is being used mainly to hold down electricity tariffs and for industrial support. Some £7 million is earmarked for Harland and Wolff and about £14 million for De Lorean. I am grateful to the noble Duke, the Duke of Abercorn, for reminding us that the motor car which is sometimes looked at rather lightly on this side of the Atlantic is the subject of great interest on the other side of the Atlantic, and dollars are very welcome. The remainder of the provisions for industrial support will mainly be used to enable the Department of Commerce to accommodate the higher level of expenditure required for industrial development grants.
The planning and formulation of certain projects for which provision has been made under loans and grants under A2 and A3 are not being taken up by industry for the reason that the projects are not coming on and being completed as quickly as anticipated. Some of the projects are now under way and will involve payment of the same grant in later financial years. Therefore, this is a question of timing and not of totality. The postponement of the ecological survey programme and the delay in introducing the mineral exploration programme, to which the noble Lord referred when talking to the provision for mineral exploration and grants, is a necessary consequence of the Department of Commerce's contribution to the reallocation of resources to which I have referred. It is not thought to have affected seriously the mineral exploration programme of companies already prospecting in the Province, but the matter is being kept under review.
The noble Lord referred to the market research grant scheme. The main purpose of this scheme, which was introduced in October 1979, is to assist in raising the standard of marketing by encouraging Northern 843 Ireland firms to engage in well planned market research programmes. There has been no cutback as such in the scope of the scheme, or the rates of grant paid. The reduction reflects an ability to predict more accurately the cash requirements of the scheme in the current financial year as a result of the experience of claims received to date. To put that in plain English, we thought it would get taken up quicker than it has.
The noble Lord asked whether the provision for energy saving interest relief grant has been reduced. The scheme is demand related and the provision again reflects the anticipated uptake by industry and commerce. No change of policy is reflected in the figures. As to the provision of energy enterprise schemes, the noble Lord asked whether that has been reduced. Energy conservation is receiving and will continue to receive high priority and we are moving forward on a number of fronts. We recognise the importance of this. We are continuing to exert ourselves to achieve savings, but our overriding aim is to reverse the trend in unemployment, the tide to which the noble Lord referred. That has to be the priority for expenditure, and it has to some extent to get its money from this source. It is a small indication of a change of emphasis in the Government's programme.
Several noble Lords are interested in gas and electricity. In regard to electricity, the whole matter of electricity supply is currently under review. The implications, both for industry and for domestic consumers, of the high cost of electricity in Northern Ireland compared with that in Great Britain are important factors in the deliberations of the review team. The work has a high priority, but the team has to consider complex matters and I cannot say when the outcome of the review will be known. It will, however, be completed as quickly as possible and there will be appropriate arrangements for public consultation and discussion.
In the case of the gas industry, its future has been the subject of a number of close studies which took account of a number of options, including the supply of natural gas by pipeline from Scotland. I have to tell the noble Lord, Lord Dunleath, that the recommendation of the Civil Service review was not that this should proceed. On the basis of that and other studies, the Government have concluded that this is not a viable option and that the continuation of subsidies for the industry could not be justified. It is, however, prepared to assist those undertakings who have decided to run down as a result of this decision.
I should mention, and noble Lords have raised it already, the recent talks which Mr. Shore had with Mr. Colley on the possibilities of the supply of natural gas from the Republic of Ireland. These covered the proposals for developing gas extraction from the Kinsale field. It has been agreed that the next step is for the South to provide more detailed information on such matters as price, quality and of any supply which might be on offer to Northern Ireland so that an evaluation can be made. I must make two points on this matter. First, the information from Mr. Colley is new and it would be wrong to adduce a firm prospect of supply until it has been fully evaluated. Secondly, such supplies, if they do materialise, will not provide alternatives to the existing operation of all 13 gas 844 undertakings in Northern Ireland, and would not therefore avoid closure in all cases. Work on the preparation of rundown plans must therefore continue. A further statement will be made as soon as a clearer picture of the way forward emerges.
My Lords, would the noble Lord permit me to interrupt just for a moment, when he is dealing with that subject? In the event of worthwhile quantities of gas being found off Rathlin Island, would it alter the noble Lord's attitude towards that? Or even if there were a likelihood of gas flowing in the other direction, would it alter his view towards having a link between Northern Ireland and Scotland?
§ Lord Elton
My Lords, if circumstances change judgments change, and I could not tell what the circumstances would be if the noble Lord's hopes turn to be fact; but they certainly would be considered.
In order not to delay too long, I will note what the noble Lord, Lord Blease, said about the Linen Hall Library, without giving a résumé of the case of this interesting and ancient but independent body. Miscellaneous expenses increased under Class X, Vote 4, by £460,000. This provision reflects the costs of the reform of the supplementary benefits scheme amounting to £413,000 and needs the printing of new codes of operational instructions, leaflets, and forms. I think your Lordships were content with the proposals. This is what their contentment costs. I think those are the noble Lord's principal points.
May I now turn to the noble Lord, Lord Hampton, who spoke next? I should like first to thank him for welcoming this order, and secondly to reply to the points he raised. On the question of brucellosis eradication, the noble Lord is right to say that it is a disease of cattle and a damaging one. The reason why the Class I Vote 2 reduction is there is largely because the campaign has succeeded better than expected and the result is that there are fewer cases to treat.
§ Lord Kilbracken
My Lords, the Minister spoke of a programme for the eradication of the disease and then spoke about treatment.
§ Lord Elton
The noble Lord is quite right, my Lords, and perhaps I was tempted to go too fast; "treatment" is perhaps a rather Orwellian word for "elimination". The noble Lord also spoke about support for electricity and the necessity for it. I would point out that domestic tariffs are currently 22 per cent. and not, as the noble Lord, Lord Dunleath, said, 25 per cent. higher than the average comparable tariff in England and Wales. I doubt if the noble Lord would wish the Government to have permitted a further rise without careful consideration; it is a very considerable difference and constitutes one of the special features of the predicament of the Province which the Government recognise in making their allocations of funds.
§ Lord Hampton
While not disagreeing with that policy, my Lords, is the noble Lord aware that all I am saying that we should give credit where credit is due?
§ Lord Elton
My Lords, I was about to say that a great deal of credit is due for what the Government are trying to do to alleviate this special condition. The noble Lord referred to the housing grant. Revenue expenditure by the Northern Ireland Housing Executive on salaries and management costs, maintenance of the housing stocks and loan charges on borrowing to finance capital programmes exceeds the income it receives from rents. This deficit is met by housing grant paid to the executive and it is anticipated that this will amount to £102.2 million in 1980–81; I shall return to housing later.
The noble Viscount, Lord Brookeborough, told us—it is tempting to coin a phrase—first that small is beautiful and then that pig is beautiful. I accept his points. Having failed to get agreement in Brussels to a feed price allowance scheme or to the extension of the Italian levy abatement scheme to Northern Ireland, the Government are attempting to secure a European Community scheme under which approximately £8 million is to be made available over a four-year period to help relieve the difficulties facing the pigs, poultry and feedingstuff industries in Northern Ireland.
My noble friend the Duke of Abercorn asked whether the Northern Ireland job promotion organisation was adequate to cope with the present situation and whether it ought to be reviewed again. I would remind my noble friend of the review the Government undertook earlier this year of the main industrial development institutions in Northern Ireland; that is to say, the Department of Commerce, the Northern Ireland Development Agency, the Local Enterprise Development Unit and the industrial training responsibilities of the Department of Manpower Services. Following that review, it was decided that the Department of Commerce, NIDA and LEDU should continue to contribute to the industrial development effort in Northern Ireland but that new and improved coordination arrangements between these institutions should be developed at both policy and operational levels.
That has been affected through the setting up of a consultative forum chaired by my honourable friend Giles Shaw, who has responsibility for the Department of Commerce, and by regular meetings of the chief executive officers of the industrial development organisations. The forum comprises representatives of the Northern Ireland Economic Council and the heads of the industrial development bodies and provides Government with the benefit of the views of representatives of a variety of business and community interests on different aspects of industrial development policy. I am pleased to say that these new arrangements are working effectively. I recognise however, as does my noble friend, that the arrangements for industrial promotion are a vital instrument of Government economic policy in Northern Ireland and I reassure him that their effectiveness will be the subject of continuous monitoring to ensure that they are fully appropriate to the task.
That brings me directly to the question of the promotion of interest in, and connection between, schools and industry. I am very conscious of the need for strong links in this area and that young people should be made aware of the full range of opportunities open to them when they leave school. I believe there 846 is a false tradition that we must combat; namely, that there is something dishonourable in professions which do not have a brass plate screwed to the door and somebody with clean hands behind them. We must defeat that if we are to become a wealthy nation again.
My department has approved additional teaching posts in post-primary schools to strengthen the provision of careers education; in-service courses for careers teachers have been organised; each of the five boards has appointed a careers adviser; and as part of the careers education programme and in co-operation with local employers, most schools organise visits by pupils to places of employment, and pupils from over half the schools in the Province are now participating in work experience schemes. In addition this year some teachers from all board areas have benefited from a two-weeks' secondment to industry. In June, the new Northern Ireland Science and Technology Regional Organisation, SATRO, was established in the Northern Ireland Polytechnic and this will provide a further vehicle for active co-operation between schools and industry.
Another new development which I warmly welcome is the initiative by the main Northern Ireland business organisations in setting up an education co-ordinating group. This group is bringing together the heads of Northern Ireland industry and commerce, schools principals and education and library board officials, and initially it is concentrating on the Belfast area. The institutions of higher education in Northern Ireland are also well aware of the importance of links with industry and have taken steps to develop and formalise these links in many areas of work, including the low cost automation centre and materials testing station at Queen's University, the teaching company and the innovation and resource centre of the Ulster Polytechnic, and pollution management and translation and interpreting services of the New University of Ulster. I am not painting a picture of an ivory tower separated from industry. Does my noble friend wish to intervene to tell me I am? I have a rule that I give way once to each noble Lord and I think I see my noble friend wishing to intervene.
The Duke of Abercorn
I am obliged to my noble friend, my Lords, and I wish to refer back to the question of the job creation agency. When the Government decided not to restructure the job creating agency in Northern Ireland there was widespread criticism among industry, I believe I am right in saying among the trade union movement, and from the Economic Council. I urge my noble friend to reconsider who is right and who is wrong. Can the Northern Ireland Office be right when industry, trade unions and the Economic Council all criticised this decision?
§ Lord Elton
My Lords, I take note of my noble friend's feelings and will convey them to my honourable friend who has responsibility for these matters. I will not repeat what I said; my noble friend will read it in tomorrow's Hansard, but I will also see that my honourable friend reads what my noble friend said.
§ Lord Elton
I have spoken for 22 minutes, my Lords, and have already given way. Familiar faces opposite are beginning to look a shade impatient and I must get on, referring finally to another point raised by my noble friend the Duke of Abercorn, who wanted us to consider making arrangements for the Department of Agriculture to administer European Investment Bank funds or to set up a public sector body for a similar purpose. Facilities are available through the Department of Commerce already for the provisions of EIB loans to processing projects in the agricultural sector. No parallel arrangements have been made and none are at present being considered for agricultural production projects, which are normally on a much smaller scale than industrial projects.
Projects involving the manufacture or processing or agricultural products can qualify for loan on the same basis as other manufacturing projects from the EIB Exchange Risk Guarantee Scheme. The scheme does not, however, extent to loans for farm development and improvement projects, where I should remind my noble friend that generous rates of capital grant, up to 70 per cent., are available from existing agricultural schemes for land reclamation and drainage.
The criteria for obtaining an exchange risk guarantee is as follows. The scheme is primarily for manufacturing industry, but service industry projects may also be considered. All projects assisted under the scheme must involve either the creation of new jobs, or the safeguarding of existing ones, and meet the criteria for selective financial assistance. The scheme has recently been extended to tourism projects. The EIB has excluded certain difficult industrial sectors, particularly those suffering from over-capacity within the European Community, such as man-made fibres, and has indicated that projects in other sectors would require special attention.
I shall weary your Lordships too much if I go on longer. I repeat what I said at the beginning, and I repeat what I said in the school in the speech to which the noble Lord refers. I recognise that these are difficult waters. I realise that there is a tide that we have to turn. I think that that tide is slackening in the one direction. The noble Lord has 2 per cent. off interest rates since I last spoke to this House. There are many other factors, some against and some for, but I believe that what the Government are doing will bear fruit. What we need now is a steady nerve and as much compassion as we can afford. If we drown in compassion, if we do not put our money into new jobs, but spend it on helping even more those who are not in jobs, the fact is that there will be no jobs for anyone in the long run. We depend on our wit, our muscle, and our resources. It is the Government's intention to see that, using those, we come again to the proud and secure place in the world economy to which we have been accustomed for so many generations.
§ On Question, Motion agreed to.