§ 3.28 p.m.
§ Lord Elton rose to move, That the draft order laid before the House on 3rd March be approved.
§ The noble Lord said: My Lords, the provisions of the proposed order provide the framework for the introduction of enterprise zones to Northern Ireland. They shadow similar provisions already fully considered in a most interesting debate in this House on 15th October last and enacted in Schedule 32 to the Local Government, Planning and Land Act 1980 which apply to the remainder of the United Kingdom. The proposed order covers the non-fiscal aspects of the enterprise zone experiment and more generally deals with the designation procedure for establishing enterprise zones in Northern Ireland, the procedure for making modifications, the new planning powers which will be available in enterprise zones, and exemption from rates on industrial and commercial properties within designated areas.
§ The fiscal provisions applying to enterprise zones have already been enacted in the Finance (No. 2) Act 1980 and will apply to Northern Ireland. The provisions of the proposed order therefore tie up the loose ends in ensuring that Northern Ireland may have the opportunity of participating in the national experiment.
§ The provisions of the order follow closely the provisions already in operation in the rest of the United Kingdom. There are inevitably some differences arising through the different structures of central and local government in Northern Ireland. The major difference is that the Department of the Environment for Northern Ireland is designated the enterprise zone authority, unlike Great Britain where district authorities, among others, can be invited to prepare schemes. This is because the department is the planning authority for the Province. To ensure that district councils nevertheless have some statutory say in any enterprise zone which might be proposed for its area, the department is required to consult that council before preparing a scheme. I am glad to say that Belfast City Council, within whose area Northern Ireland's first zone is 307 located, fully support the enterprise zone proposals for Belfast and have been closely involved from the outset.
§ I will deal now with some of the more detailed provisions of the order. Part II provides for the preparation of an enterprise zone scheme and for the subsequent designation of the zone. It also provides powers for an enterprise zone scheme to be modified. An opportunity is given to the public to object to any developments which would be permitted by the scheme if it were brought into effect. Objections must be given full consideration and the department may modify the scheme to take account of representations made.
§ Opportunity is provided to challenge the validity of an adopted scheme in the High Court. Providing no challenge has been sustained, the department may designate the area as an enterprise zone by order subject to the Negative Resolution procedure. Following designation the fiscal and rating concessions will take effect and the proposals set out in the enterprise zone scheme will take on the force of a planning permission. These measures will last for a specified period—usually 10 years—as the intention is to give an effective boost to the redevelopment and improvement prospects of run-down areas, rather than a permanently favourable tax régime. So that investors can be assured of the continuance of an enterprise zone for the full 10-year period it will not be possible to revoke the designation order.
§ Part III of the proposed order provides for the effect of the scheme in granting planning permission. Permission may be subject to any conditions or limitations specified in the scheme and the approval of the department where this is specifically required by the scheme. In practice, conditions or limitations will be used to enforce the necessary controls over polluting or hazardous developments. These provisions pave the way for private initiative to carry out development with the minimum of control and interference in the form of planning restrictions but without encroaching on any existing rights under general planning legislation.
§ Part IV of the proposed order provides for industrial and commercial premises in an enterprise zone to be exempt from rates. The Department of the Environment is required to give full compensation to district councils for the revenue thus lost to them. The draft order seeks generally to bring Northern Ireland into line with Great Britain. I commend the order to the House.
§ Moved, That the draft order laid before the House on 3rd March be approved.—(Lord Elton.)
§ 3.33 p.m.
§ Lord Blease
My Lords, I am grateful to the noble Lord for his explanation of this order. The provisions and the general scope of the order have been the subject of debate for almost 12 months. The measures contained in the order were considered by two meetings of the Parliamentary Northern Ireland Committee, and the order was debated for one and a half hours last Thursday, 26th March, in another place. I also understand, as the Minister has stated, that the Belfast City Council, within whose area the first Northern Ireland 308 enterprise zone is to be located, has been fully consulted along with industrial, commercial and other interests in Northern Ireland.
From these debates and consultations the noble Lord the Minister will be aware that there is a considerable doubt and scepticism about the overall effectiveness of the proposals to generate genuine industrial redevelopment and to promote real prospects for additional paid competitive employment. I wish to add that these doubts and criticisms are not confined to Northern Ireland alone. Other areas of the United Kingdom are even more sceptical in their pronouncements about the policy for enterprise zones.
So far as Northern Ireland is concerned, I feel that the proposals would have been much more readily accepted had the order been more appropriately called, or titled, the Northern Ireland Experimental Zones for Enterprise and Urban Regeneration. That kind of label, I believe, better describes the declared objectives of the proposed measures. Along with others in Northern Ireland, I share the view that it is wrong and divisive to have selected one area only in Northern Ireland for this experiment. Why was it not possible to initiate at the same time as the Belfast enterprise zone a proposal for Newry, Strabane, or Omagh, or another such area? For as one of our top and perhaps more imaginative Northern Ireland civil servants has firmly and publicly stated,More for Belfast will inevitably mean less for some other places".That sums up a form of divisiveness that can accumulate in putting forward a scheme in this sort of one area concept.
As an experiment in the ability to attract private capital for development surely much more is to be gleaned from the experience and knowledge of operating such a scheme if the measures in two distinct regions of the Province—that is, the Lagan region and the West of the Bann region—were fully monitored and operating. However, whatever may be the reservations about the enterprise zones policy, perhaps it may be helpful if I invited the Minister to give some encouragement to those who wish to approach it in a more positive manner.
Here I cite a few questions that have been raised in connection with the enterprise zone proposals. I understand that the Department of the Environment for Northern Ireland is to set up a monitoring committee to oversee the work, and periodically report on the outcome of the enterprise zone for Belfast. May I ask the Minister: Will the Department of Commerce and the Department of Manpower Services, which must be totally involved in this sort of concept, be part of that monitoring arrangement? Will the department have an office or a physical presence in the particular zone? There are many day-to-day things that must occur that would require on-the-spot decision-making. Will the periodic review reports be made available to both Houses of this Parliament? Will the department invite other Northern Ireland district councils to put forward proposals for an enterprise zone in their respective areas, or must it be left to the Department of the Environment to initiate the proposal in the first instance?
The Under-Secretary of State for Northern Ireland, Mr. David Mitchell, stated in another place on 309 26th March, at Vol. 1, No. 77, column 1178, that he proposes to set up an advisory committee consisting of—and he listed a number of appropriate interests, which included the CBI and trade union representatives. I should like to ask the Minister whether it is intended that this advisory committee should be for the Belfast zone only, or will it have a remit for the whole of Northern Ireland? May I also ask when we are to expect invitations for the nominations for this advisory committee?
Could the Minister explain in more detail precise financial arrangements for the enterprise zone? As I understand it, the 10-year period that the measure is proposed to cover will be financed out of public funds. Is it intended that the full operating costs of enterprise zones—that is, including compensation to district councils for loss of rate revenue—will, or will not, be taken from the Northern Ireland Vote? To be more precise, will the total operation of these things in any way be included in the Northern Ireland Vote? Naturally from this side we wish to encourage and support any positive measures which will mean development and the provision of competitive employment, and with the reservations I have outlined we will give approval to the order.
§ 3.40 p.m.
§ Viscount Brookeborough
My Lords, I thank my noble friend for his clear explanation of the order, which I welcome and wish every success. Like the noble Lord, Lord Blease, I have certain reservations about its limitations and there are certainly other areas of Northern Ireland that I know where there is an urgent case for a review and for enterprise zones to be set up. However, I feel that the whole business is far too timid because at present an economic holocaust is driving its way through Northern Ireland. I do not feel qualified to discuss the effects of Government policy in Great Britain, but I can say with absolute authority that the destruction of the industrial base of Northern Ireland is rapidly reaching completion, so much so that when eventual recovery occurs in Great Britain, the industrial base of Northern Ireland will have been destroyed.
Our textile and other industries are rapidly going to the wall. We face the horrifying prospect that very shortly more people will be on the dole than in manufacturing industry. To me, that is a really horrifying spectacle. I can remember only too well when going to school on the boat from Belfast to Liverpool witnessing the silence of the shipyards and the long queues of men in misery in Belfast. Today, because of supplementary and other welfare benefits, the misery is nowhere near as great, but the demoralising effects of unemployment are appalling.
We in Ulster have always been prepared to make sacrifices as part of the United Kingdom, be it in peace or war, and to play our part. However, in the operation which is going on at present we do not stand on the same starting line. We start with unemployment at twice the level of that in Great Britain. It is therefore vital, in the special situation that exists, that emphasis is given to retaining whatever industrial base there is now in Northern Ireland. I do not believe that sufficient emphasis is being given to the retention of that industrial base. I can give an example of where failure to 310 give Government aid will cost the Government more than actually giving the aid, and the example is that of the pig industry. At one time in this enterprise zone there was a pig curing industry, so my example is not just hypothetical.
Because of the distortions of the CAP and the entry of the United Kingdom into the EEC, it would cost the Government £5 million a year to subsidise the feedingstuffs of the farming industry to enable that industry, which is efficient, to compete. If that is not provided, it will cost the Government 5,000 jobs and £25 million a year. Nothing could better demonstrate the dilemma which faces the Government. As to the legality of such a payment within the CAP, one need only see what the French are doing. They have just put in £410 million, which payment they are allowing to be challenged in the European Court. By the time the court has passed its verdict the money will all have been spent and it will be too late to do anything about it.
The problems which faced the Stormont Government when it managed completely to restructure the industrial base of Ulster seem largely to have been forgotten. We must remember that virtually no investment will come to Northern Ireland voluntarily until the level of unemployment in Great Britain as a whole drops below 1 million. I am talking about it from a voluntary point of view and I am aware of the enormous and generous grants that exist. Nevertheless, one must talk in terms of the voluntary movement of investment. It costs £20,000 to create a job in Northern Ireland. Thus, if we have nearly 3 million unemployed in Great Britain by, say, September, then before we get the migration of a single job to Northern Ireland, industry in this country will have spent £40 billion. That is the size of the problem, so every effort should be committed to retaining what is left. Do I see my noble friend Lord Elton looking puzzled? Does he think my calculation is wrong?
§ Viscount Brookeborough
My Lords, it was £20,000 per job multiplied by 2 million people. I think that is right.
§ Lord Elton
I do not think it is, my Lords, and I should tell the House that I do not intend to follow my noble friend into an economic debate on the whole of the Northern Ireland economy. Neither do I propose to follow him into the courts of Europe, concerning French or other matters, nor to dispute the courts of the Common Market. I shall make a few comments but I hope your Lordships will not think I am being churlish or wishing to gag your Lordships when I say that we seem to be straying rather beyond the very tolerant bounds of our own rules of order.
§ Viscount Brookeborough
My Lords, I stand corrected, if my noble friend was correcting me, but I think I have said enough to demonstrate the measure of the problem facing the Government. Indeed, the effort of the experimental enterprise zones, as they have been called, is really very small compared with the very large problem facing the Government. That 311 is what I was demonstrating. I welcome the order, I hope there will be a rapid expansion and that the Northern Ireland unemployment level will eventually drop.
§ 3.47 p.m.
§ Lord Elton
My Lords, I am grateful to the noble Lord, Lord Blease, for his reception of the order. He doubted whether it would be effective, as did my noble friend Lord Brookeborough. That is why it is an experiment, and I am sorry the word "experiment" is not written into the title of the order. It is an experiment and it has always been heralded as such, and one expects such things to be carried out, if they are carried out properly, in an atmosphere of critical doubt.
The noble Lord, Lord Blease, suggested that it was divisive to have only one such area in Northern Ireland. I would point out to him that in this matter we have exact parity with Scotland and Wales, although our population is smaller. I think he will agree that Belfast is central to the economy, that it has a dominant industrial tradition and that it would be better to go ahead with that than not to go ahead at all. This is an experiment and it would be chancing our arm to go further.
The noble Lord then asked specific questions about the monitoring committee. Detailed arrangements have yet to be made for monitoring the enterprise zone experiment in Northern Ireland. The principal function of the committee will be to evaluate how successful the incentives have been in stimulating economic activity. As to proposals for more, and the chances of setting up others, I repeat that this is an experiment and that we shall have to see where it gets to before we decide whether we wish to go further.
Regarding the advisory council, the noble Lord referred to a speech in another place by my honourable friend the Minister responsible and asked whether the remit of the advisory council, which is distinct from the monitoring committee, would be for only the one zone. The answer is that for so long as there is only one zone, it will be; if the experiment succeeds, then we shall see whether it is necessary to go further. Invitations to sit on the advisory body will issue within the next few weeks.
As to the financial arrangements, the central Government will reimburse the district councils for the lost revenue—as I explained earlier, the revenue which will be lost from the rates—and that will be additional to the Northern Ireland programme expenditure. On the other hand, the costs of predevelopment and infrastructure works, which will be carried out by Government departments, will have to be met from within existing programme allocations. The experiment when it is running will not cost the rates, but the preparatory work, such as there is, will cost the existing programme allocations.
I have already, I think, answered my noble friend Lord Brookeborough. However, I should like to say that so often, and from so many quarters, we hear that the application of monetarism is not enough and that the application of massive grants has been tried before. Well, here is something new, and since the noble Viscount has recognised how vast are the pro- 312 blems that we face, I feel that he should welcome this proposal. I dare say that it is small at the start; experiments usually are. I think that the Spitfire was small when it was started. I do not despair that this might prove to be a very worthwhile enterprise, and I hope that your Lordships will favour this order.
§ Lord Blease
My Lords, with the leave of the House, may I ask the Minister whether after a year of operation of similar schemes there is not more detail of how this particular experiment is to work? With regard to the financing aspect, may I ask the Minister whether to go ahead with this particular single scheme will not entail extra work on the Department of the Environment when so much work is necessary in connection with other areas of Northern Ireland? Is this not in itself a divisive matter which will have to be contended with in Northern Ireland?
§ Lord Elton
My Lords, I do not think that I can go along with the noble Lord in that respect. I consider that this is a proper use of resources. I do not think it is a disproportionate use of resources. I believe that it will bring benefit not only to Belfast, but to the whole of the Province; and that is what government is about.
§ On Question, Motion agreed to.