Northern Ireland Economy

HL Deb 07 May 1981 vol 420 cc300-23

9.30 p.m.

The Duke of Abercorn rose to ask Her Majesty's Government whether they will introduce special and innovatory measures to assist the Northern Ireland economy.

The noble Duke said: My Lords, although this short debate is held against the all too familiar backcloth of community tension and uncertainty in Northern Ireland, I believe that the will and determination to solve our grave economic problems must continue unabated and not be sidetracked. Indeed, it is a fact, and a sad fact, that our political, economic and social problems are inter-related. I am delighted that the noble Baroness, Lady Airey of Abingdon, is also participating in this debate this evening.

I believe there is a grave danger that the Government and the people of Northern Ireland are getting too locked into existing problems and therefore failing to identify economic potential, for any society which insists on sticking to traditional economic methods and systems, instead of exploring new ideas, new technologies and new structures, will remain a static society and be left behind. Therefore, when reading the Hansard report of a recent economic debate on the Northern Ireland economic situation I became more and more depressed since the Government's response to a grave economic situation was indeed unimaginative, almost lethargic. In fact, there was no semblance of a radical approach to counteract a deteriorating situation resulting in a continuous narrowing of the Northern Ireland economic base and further losses in employment.

The gravity of this economic situation is confirmed by the Government's own unemployment assumptions, which imply that the total number of unemployed will soon exceed the numbers employed in manufacturing. Surely the extent of a reversal of this grave trend and then any economic recovery in the future will directly depend on the Government's imaginativeness and the response both by investor and entrepreneur. I am convinced that these two ingredients are inter-related, for during my association with the Local Enterprise Development Unit one witnessed time and again the response of local businessmen to the range of incentives provided by this organisation. Therefore, clearly there is the strongest necessity for the Government to widen and update the initiatives offered to business talent, and in fact establish a commercial economic platform to encourage practically, develop and literally launch every vestige of talent within Northern Ireland.

So often debates and discussions on the Northern Ireland economy have itemised existing problems but rarely pinpointed areas of potential growth and initiative. On this occasion I will attempt not only to itemise these problems but also to recommend a prescription for the cure to some of our problems. Of course, it would be irresponsible to suggest any further significant public expenditure for Northern Ireland, due to the prevailing economic climate in the United Kingdom. But much could be achieved at modest cost if only the Government and their advisers would adopt a more inspiring and less mundane approach.

Apart from the high cost of living, in stark contrast to low income per capita, there are the all too familiar problems of high energy and transport costs which impose on the economy a severe competitive disadvantage. Again, the rate of exchange for sterling, particularly in relation to the punt, has yet further increased this competitive disadvantage. Also the declining ability of Northern Ireland to attract new investment is due not only to years of political strife and violence, but also to the scarcity of mobile investment and inequitable fiscal incentive competition from the Irish Republic.

During the last decade there has been considerable emigration from Northern Ireland which, in the short term, has naturally alleviated the unemployment problem but at very considerable cost to the country in terms of skilled, qualified and management talent since emigrants tend to be drawn from the more able, better qualified sections of the population. Therefore, Northern Ireland is losing some of its best talent and potential who are desperately needed now and in the future to tackle our economic problems.

How can the Government assist in the counter-drift of that talent? I believe that the Government should appoint one of the existing agencies to carry out systematic detective work to find out where this expatriate management talent has emigrated to, then make contact and encourage a reverse brain-drain movement so that these expatriate managers can develop further their talents in Northern Ireland. Research work of universities and technical colleges could provide considerable assistance. In other words the LEDU dragnet has successfully contacted the local businessmen and now the Government dragnet should be trawled further afield. Are the Government in agreement with that proposal?

Since incentive financing is now a major moving force in both British and American industry, and probably one of the most encouraging developments in industry during the last 12 months, surely the Government should maximise the encouragement of expatriate managers to become entrepreneur owners of manufacturing firms in Northern Ireland by offering really generous incentives and opportunities which could result in considerable benefits to the Northern Ireland economy in the 1980s? To quote but one example, the recent announcement of Sperrin Textiles at Coleraine is, indeed, an encouraging move in this direction.

I am concerned that successive Northern Ireland Administrations have failed to take advantage of European Investment Banks Loans for public and private sector projects. As regards public sector projects, since 1973 EIB finance has been sought for only five infrastructure projects in Northern Ireland amounting to only £115 million. In other comparable, less-favoured regions of the Community, the authorities seek EIB assistance for most of their respective infrastructure developments, including water supplies, land drainage, railways, ports, and advance factories, in addition to roads and telecommunications. As regards loans to private sector projects, the bank has made only two direct loans for industrial projects and five indirect loans for smaller projects. That contrasts most unfavourably with the hundreds of such loans made to other comparable regions.

As regards loans for land drainage and reclamation, I received confirmation last December that, in principle, the EIB would provide loans for land improvements up to half the involved cost. Although a loan, as of today's date, would offer only a marginal advantage over bank borrowing, I believe that this opportunity should definitely be offered to the farming community since there are thousands of acres, particularly in the West of Northern Ireland, which could he reclaimed, thus providng not only increased production, but also further employment.

As the Northern Ireland Development Agency is, of course, actively involved in offering loans to viable projects, would it not be more practical for this agency to take over the role of the EIB agency for all commercial and industrial projects in Northern Ireland? Is it not ironical that it takes the worst economic depression in Europe since the war to re-emphasise the importance of agriculture to our economy? The severe effect of the current recession in farming has hit—and hit hard—every sector of the rural community, for in Northern Ireland farming is, and will always remain, our biggest and most important industry, providing the only source of economic stability in rural areas.

When the country moves out of the recession, many factories and businesses will remain closed. However, our land will remain intact. Therefore, it is essential that in order to achieve the vital economic recovery, agriculture is given a prominent role to play. I believe that my noble friend Lord Elton was in Brussels last week communicating the problems of Northern Ireland's agriculture to the Commission. I look forward to him informing the House about the progress of these negotiations and in particular about an announcement on the less favoured areas, which I believe should take place either this year or in 1982.

Again, the time is right to examine how and where production can be improved, thus providing direct and downstream employment; in other words, further employment in the food-processing industry; for further manufacturing of our large supplies of beef and dairly produce would, of course, narrow the gap between the animal and the shopping basket and help create additional revenue and additional jobs. Are the Government in agreement with this viewpoint?

I recently tabled a Question asking the Government what benefits, in both additional revenue and employment, could he generated through increased processing and more sophisticated marketing of Northern Ireland's food products. I was appalled by the hollow reply, stating that it was not possible to quantify any such benefits that might arise, as the Community market of 260 million consumers offers a whole new marketing opportunity which must be exploited through increased processing and more sophisticated marketing. Surely the Northern Ireland Office should be carrying out detailed research into these opportunities in order to maximise the advantage of our indigenous products which could result in much needed further employment in rural areas. Are the Government in agreement that such research is urgently required?

How can the Government apply more incentive and impact in attracting mobile investment to Northern Ireland? In 1978 the consultancy organisation, Plant Location, carried out a study of financial inducements to attract mobile investment, and concluded that the Northern Ireland range of financial inducements available to industry was more beneficial than and superior to that offered by any other European countries. However, the salient fact remains that since 1972 Northern Ireland has only promoted more than 2,000 jobs from inward investment in one single year, namely, 1978. Clearly, the impact of the available range of financial inducements is more than counteracted by the Northern Ireland image problem. Again, there is a feeling that the current Government policy towards attracting new industry results in investments of high cost and high risks that are over-reliant on subsidy and too capital intensive, and has failed to attract the highly profitable firms in the process of expansion. Since it is vital to attract long-term viable investment to Northern Ireland I believe that fiscal incentives are just as important as grant inducements in this context. Therefore, I urge the Government once again to introduce a stabilised rate of corporation tax, say at 10 per cent., until 1990 which would provide Northern Ireland with fiscal incentive parity to the Irish Republic.

The Government must also appreciate that a fiscal incentive to attract mobile industry would have maximum psychological impact with minimum cost to the Treasury. When this House discussed the Appropriation Order last December I asked the Government to review once again the right structure for job promotion agencies in Northern Ireland. Since then, many prominent business men, trade unionists, and academics have constructively criticised the present structure.

In April 1980 the Northern Ireland Economic Council recommended the establishment of a single economic development authority in order to take over responsibility for all forms of job creation and job maintenance in both large and small businesses. Northern Ireland has a population of only one and a half million, yet there is a proliferation of job creating agencies; namely, the Department of Commerce, the Northern Ireland Development Agency, and the Local Enterprise Development Unit. Since all these agencies are interrelated I am of the firm opinion that the current structure is sheer madness and at times creates a bureaucratic jungle which cannot possibly maximise effectiveness. One promotion agency avoids duplication of talent, time and effort, and removes inevitable contention between agencies. Again, and of equal importance, a sole vertical organisation consisting of sites acquisition, factory building, internal and external promotion, including a sophisticated marketing service, which is of crucial importance, and equity participation would result in a concerted, nationalistic, if not missionary zeal, which Northern Ireland so desperately needs to generate.

I also support the Economic Council's view that this single agency should be an independent body located outside government and staffed by personnel of the highest calibre available. As this House is aware, the innovation which creates and generates economic growth comes from individuals and not institutions. I should like to confirm this viewpoint by quoting from the 1979–80 Annual Report of the Economic Council: We find it equally difficult to see how leadership drive and entrepreneurial flair, which a successful job creation agency so obviously requires, could be exercised within the Civil Service". Therefore, although civil servants have succeeded in job promotion, particularly prior to 1968, I believe that this crucial role should now be undertaken by businessmen who can speak the same language as successful industrialists. However, the success and impact of LEDU should be preserved by the formation of a small industries division within an economic authority.

Are the Government still determined to maintain the status quo? I believe that the Northern Ireland economic problems highlight a fundamental weakness in the United Kingdom economy; namely, too few producers. How can the Government counteract the alarming decline in Northern Ireland manufacturing employment of 22.5 per cent. between 1969 and 1979, and at the same time adopt a policy of minimising transport costs across the Irish Sea—in other words, encouraging the manufacture of high added value products? I believe the answer lies in concentrating on the development of advanced technology which would result in taking full advantage of the high quality of existing school education; and of course the higher educational institutions there are quite outstanding. Therefore, I read the Economic Council's report on advanced technology opportunities for Northern Ireland with great interest, and I quote this highly relevant paragraph: Advanced technology is very suitable to those countries which have little or no natural resources other than the innate skills of their people. Switzerland and Japan are but two examples of such economies and there is no basic reason why the Northern Ireland economy should not be developed along similar lines". Do the Government agree with that assessment? Do they plan to implement the recommendation of that report? If so, to what extent? Surely it is important initially to harness together all existing high technological talent and energy within Northern Ireland.

Northern Ireland suffers not only in geographical remoteness but also in remoteness from international developments in terms of products, processing and new markets. Therefore, more than most countries we must adopt a more effective form of importing knowledge and innovations; for instance, plugging into developing American technology. Surely the Government should seriously consider encouraging an American institute of technology to establish a research innovation centre on one of the university campuses, which would not only provide vital employment for Northern Ireland brain power, but also provide an excellent launching pad for the further development of Northern Ireland advanced technology. Do the Government agree with that proposal?

Probably our greatest national asset is the excellent and reliable labour force, of keen trained and educated men and women, while the most effective shop window to display this factor in America lies in the success of the De Lorean motor car project and the Lear fan jet enterprise. There is no doubt that if those highly-publicised and innovatory enterprises succeed, the spin-off effect in new American investment for Northern Ireland could be considerable, if not immense. Success will prove that Northern Ireland not only has a highly effective labour force, but can also create large new business enterprises in minimum time. Again, let the constant critics of the De Lorean car project remember that Northern Ireland has all too often witnessed the withdrawal fever of branch factories by the parent company when there is the first whiff of a recession. In this instance, De Lorean stands or falls by the success of its management and labour force at Dunmurry.

Having discussed the urgent need for Government to implement a short-term startegy to avoid further de-industrialisation, I wish now to stress the need for an intensive long-term strategy to attract more talent and ability into industry. I believe that the Government could achieve this objective by studying the promotional success of the combined cadet force which has resulted in excellent recruitment of the highest possible calibre of all ranks; in other words, an industrial cadet force established on the same enterprising basis with, say, an annual camp being spent not under canvas, but with a LEDU-sponsored firm. Again, each school could be twinned with a sponsoring industrial firm. The analogy between the proven success of a combined cadet force and the potential in an industrial cadet force requires urgent consideration by the Government. I am fully confident that my noble friend Lord Elton, who so far has achieved a great deal in encouraging closer liaison between education and industry, will react favourably to this concept.

9.56 p.m.

Lord Blease

My Lords, I wish to thank the noble Duke for tabling this important Question and to indicate support from these Benches that special and innovatory measures should be vigorously and urgently tackled by the Government to assist the Northern Ireland economy. I believe that my remarks might follow closely the theme which the noble Duke has put forward. I am pleased to note that in addition to the Minister two other noble Lords and the noble Baroness, Lady Airey of Abingdon, are to speak in this short debate. As the hour is late, I shall try to keep my remarks brief. Therefore if I do not make and argue my points in accordance with the relevance that I think they merit it will be because I am trying to be as brief as possible.

Like the noble Duke, the Duke of Abercorn, I find it difficult to speak about the Northern Ireland economy without mentioning the acutely fractious and sensitive nature of the present community tensions in the Province. There can be no doubt that the continuous political instability and violence weigh heavily against new productive investment and employment. At the same time I consider that the debate is timely for I believe that there is a greater need than ever for all sections of the Northern Ireland community to take suitable measures to surmount the present sad, difficult and tense political situation

The determination of management and workers, of industrialists and trade unionists, to carry on with their respective daily business and jobs in the face of ideological terrorism and divisive provocation is a great tribute to the commonsense and diligence of the vast majority of people in all parts of the Northern Ireland community. There is every reason to believe that these qualities of steadfastness and courage in adversity are potent forces for good in all aspects of civilised living. However, there can be no doubt that persistent heavy unemployment has serious social effects in any society. In a community divided as politically and culturally as is Northern Ireland these effects are exacerbated. Members in this House will know of the chronic levels of unemployment and social deprivation in the Province. It is not my intention tonight to recite a litany of the proven need for employment, housing, health, educational and social amenities in Northern Ireland.

While it is unlikely that employment and social developments alone would solve Northern Ireland's political and cultural conflicts, there can be no doubt that improvements in economic measures and outlook would remove some of the feelings of alienation and antipathy towards the system of the society that we have in the Province. I am sure that all your Lordships would agree that self-respect is usually an early casualty among the unemployed. Many young people feel rejected, useless, and without a purpose in life. I suggest that as a Government and as responsible citizens we must together earnestly search to find possible ways to overcome this sense of rejection which unemployment encourages. We must give hope to the people, in particular to the young adults. They must feel that they have a real share in our Province and that they can help to build for their present prosperity and their future wellbeing.

There are strong economic arguments to support jobs rather than dole, and I stress here the humanitarian aspects as well as the political aspects. Certainly there is little within the economy of Northern Ireland today to inspire and encourage hope. We have the highest level of unemployment since the 1930s and the biggest ever rise in unemployment in a single year. We have suffered the biggest fall in output in many years and the greatest collapse in industrial production since the pre-war depression.

The noble Duke, the Duke of Abercorn, has referred to the European Investment Bank and it might be appropriate for me to mention the outlook as seen by a number of banks in Northern Ireland. In his annual report, published on the 26th March this year, the Chairman of the Northern Bank, Mr. Newland, stated: Since the incorporation of Northern Bank in 1824 no year as proved as financially unsatisfactory as 1980. In the past it has been reported that industry in the Province was in a depressed state and no alleviation of this condition occurred in 1980. As a result, many businesses have been forced to cease trading, often with considerable loss of employment. Of our very substantial total of bad debt provisions, the greater proportion has been incurred in Northern Ireland in lending to industrial customers, either to broaden their activities or to introduce new products. Our disappointment with the outcome of our endeavours is tempered by the knowledge that we have tried to play our part in stimulating and sustaining the economy of Northern Ireland and that in certain directions we have achieved a measure of success". Mr. Newland goes on to comment: Apart from the immediate effects of closures and redundancies the overall decline in manufacturing is of great concern as and further shrinkage of the industrial base could have a serious effect on the Province's ability to participate in any improvement in trading conditions". Speaking at the annual general meeting of the Ulster Bank on the 9th April 1980, Sir Robin Kinahan stated: A very troublesome year lies ahead. In the north, inflation is coming down but unemployment is rising fast. Many businesses are in trouble and, as previously mentioned, the farming community is having a difficult and unprofitable time. They are struggling against rising costs and static prices". The banks and finance houses have made efforts to stimulate and sustain the economy in Northern Ireland and measures have also been promoted by such bodies as the Northern Ireland Chamber of Commerce, the Northern Ireland Region of the Confederation of British Industry, and the Northern Ireland Committee of the Irish Congress of Trade Unions. There have also been published recently studies by the Northern Ireland Economic Council mentioned by the noble Duke, the Duke of Abercorn, the well-researched quarterly reports published by two firms of industrial consultants, namely, Cooper and Lybrand and P. A. International. Both these industrial consultancies have a high degree of experience, expertise and knowledge concerning the Northern Ireland economy.

Another praiseworthy effort to promote action and commitment was taken recently by a group of Ulster businessmen under the chairmanship of Mr. Stanley Silcock of the Engineering Industries Association, who presented the Industry Minister for Northern Ireland, Mr. Adam Butler, with a plan to rebuild and rejuvenate Northern Ireland industry.

Whatever else they do, these reports, statements, studies and proposed plans reveal a deep and growing concern about the present Government policies and the lack of suitable administrative machinery for dealing with industrial problems and the promotion of jobs. I join the noble Duke in asking this. Is it not a tragedy in the small industrial community, with a labour force in the region of around 600,000 people, that we have in Northern Ireland we have failed to devise and accept suitable measures to promote a dynamic industrial strategy backed with a sense of commitment and common purpose.

It is important to realise that we have a small, open economy, and that we have to compete effectively in a world in which practically every Government seek to help their industry by working in partnership with it. There is therefore no way that the Government can stand aside and leave industry to its own fate. Equally, the Government should not be seen to do industry's job. The only way forward is a partnership, in which the Government play a strategic role while leaving to management and trade unions the responsibility for specific decisions involved in running the enterprises. A new industrial strategy is urgently required if we are to face up to the difficulties about suitable energy supplies, the fast-changing world market forces, the increasing technological innovations and the problems created by structural changes within the Northern Ireland economy.

I would wish to ask the Minister a number of questions. Do the Government accept that they have a responsibility, an obligation, a role to play, in rebuilding and reshaping the Northern Ireland industrial base? Have the Government a co-ordinated strategy to help both sides of industry to innovate and to adopt to the needs for change? In this connection, I would emphasise that any economic strategy and policy for industry must be more than a series of ad hoc initiatives, however well-intentioned these initiatives may be. May I ask: what practical measures have the Government taken genuinely to tackle the problems of Northern Ireland industry? What has been done to exploit to the full new markets for our competitive goods and services? What has been done in the search for new products suitable for manufacture in the Province? What has been done to establish firm links with research and development organisations, especially in the field of engineering, electronics, textiles and food technology? And what has been done to give guidance to our overseas representatives in their search for modern growth products?

My Lords, this debate is timely in that I understand from a letter of reply that I have had from the noble Lord, Lord Elton, the Minister, and from the Secretary of State's announcement on 19th March last, that the Secretary of State was setting in hand studies of the departmental organisation required to deal more vigorously and effectively with economic affairs in the Province. It has been stated that the studies will necessarily include the organisation structure for promoting employment and industry in Northern Ireland, which primarily involves the Department of Commerce, the Northern Ireland Development Agency and the Local Enterprise Development Unit.

I join with the noble Duke in his main theme, though perhaps not in the detail. I am convinced, along with others, that the study should be much wider and should at least include the Northern Ireland Industrial Council, the Industrial Development Consultative Forum and a group of businessmen led by Mr. Stanley Silcock. It could be that the Ulster Farmers' Union could also make a valuable contribution by way of involvement in such a study. If they are to be really tackled, the industrial problems, along with productive investment and job promotion, demand much more than departmental reorganisation. There requires to be a co-ordinated and unifying approach, involving all the interested bodies concerned, if the aim of the Government is really to create a new strategy with a new, imaginative outlook, and with a new commitment to innovation and decision. I have pleasure in supporting the noble Duke's call for a new approach and for Government action concerning industry in Northern Ireland.

10.4 p.m.

Lord Hampton

My Lords, I will speak only briefly among a list of speakers who have a much more intimate knowledge of the scene in Northern Ireland than I. I support the view that the economy in the Province is affected by three main factors: first, by the economic state of the United Kingdom as a whole; secondly, by the cost of transport and the lack of indigenous energy—the problem otherwise termed that of "remoteness", which was mentioned by the noble Duke—and, thirdly, by civil disturbance, so sadly to the forefront today, with all that it involves by way of terrorism, rioting, bombing and destruction, which was mentioned by the noble Lord, Lord Blease. All points, it seems to me, are influenced by one vital question which is whether the people of Ulster wish to remain a part of the United Kingdom. The answer is taken as read that the majority does.

I believe that it might be of value to put it to the test by means of a referendum asking two straight questions. One, do you wish Northern Ireland to remain part of the United Kingdom? Two, are you prepared to accept the freely declared wishes of a majority of the electorate? There could be two possible results. In the quite unexpected majority decision to leave the United Kingdom, we could then say, "We were very willing to help but we accept your wishes and will withdraw from the running of the Province's affairs". We point out that British involvement to the tune of so many million pounds per annum will no longer be forthcoming. "Thank you at least for saving us this burden on the taxpayer". In the much more expected majority vote to stay in the United Kingdom, we could say to our critics across the world, "This is the clear decision of the people of the Province, democratically expressed. We stay and shall continue to help where we can. We shall continue to do all possible to see that the substantial (if that were the case) minority of voters has no reasonable grounds for grievance".

To return to the three factors affecting the economy, Ulster would then have to accept that it cannot isolate itself from the economic state of the United Kingdom as a whole but would, hopefully, receive urgent consideration of its problems of transport and energy. Liberals for some time have been advocating the setting up of an advisory council of 18 to 20 members elected from the whole Province by proportional representation. May I emphasise that this idea was supported to me by a Tory Member of the other place who has considerable experience of Northern Ireland.

The third factor seriously affecting the economy of Northern Ireland is the civil disturbances there. This is the factor over which the people have the possible answer in their own hands. As an informant has written to me, "I cannot imagine any businessman looking for a factory location being favourably inclined after seeing the media coverage of the Sands affair". Here, I should like to put a question to the noble Lord the Minister when he comes to reply. Does he consider that press coverage gives a fair view of the scene in Northern Ireland or does he consider that it exaggerates the impact of current violence?—for those who live there seem to take a calmer view than those of us on this side of the water where a not infrequent comment I here is, "There is no answer". There seems a tendency to suggest that the clock is being put right back to where it was 10 years or so ago but I cannot accept that as the truth.

My heart warmed to the father, whose son was killed a few days ago, who made a clear statement that he did not want this to be taken as an excuse for further violence. "Do not let them use you", he exclaimed. By "them", he clearly meant the men of evil who deal in terrorism and fear. The position today may not be as critical as it seems to an outsider but I suggest the position is this. It will need great courage by many good people to decide not to be "used"; but to replace hatred by compassion. It will need courage and, I fear, still sometimes sacrifice, before old wounds begin to heal. It will need a miracle, it seems, to solve the problems of the Province and for compromise and compassion to replace rigidity and hate—but I happen to believe in miracles. I came across a proverb the other day which I believe comes from Ireland. It reads: "Two thirds of help is to give courage". The message should go out from this country: So long as you need us, we will help as best we can.

10.15 p.m.

Lord Dunleath

My Lords, I join in thanking the noble Duke for having introduced this not only important but extremely urgent topic in this House this evening. I think that one of those things to which he referred is particularly pertinent; and that is the state of unemployment which is an index of the economy. The overall figure in Northern Ireland of 17.2 per cent. Is appalling; but when on considers some of the worst areas, the worst one of all is the town of Strabane where total unemployment is 34.4 per cent. and unemployment of all male workers is 44 per cent. This is not just appalling, it is disgraceful, disgusting, shocking and shattering—words are inadequate to describe it.

Ironically and sadly I can remember the time when Strabane was a busy, bustling and thriving country town. I can remember that the noble Duke very kindly had me to stay at his home. It must be nearly 30 years ago. He took me to a shirt factory in Strabane which made up shirts for him. He persuaded me to buy some shirts there because they were good value. Looking back on it, I think that he probably received a commission on the sale! None the less, I say, "Well done" to him because he was promoting industry in that small town which was exporting its textiles all over the world. He has done much since to promote industry in his position on the local enterprise development unit and in many other ways.

Now, sadly, Strabane is by comparison a depressing and derelict place. It is not alone in that in Northern Ireland. Northern Ireland's employment is much more dependent on the public sector than the rest of the United Kingdom. In 1979 61 per cent. of the total workforce was in the service industry and of those two-thirds were in the public sector. While it is recognised that cuts in public expenditure are necessary in the interests of Her Majesty's Government's efforts to bring about recovery of our economy it must also be recognised that such cuts have much more swingeing and drastic effects in Northern Ireland than elsewhere in the United Kingdom. What is more disturbing—and I do not want to be cruel—is the fact that Her Majesty's Government seem to have achieved—I am sure unconsciously—the technique of placing an extermination order on the geese that lay golden eggs but a preservation order on white elephants. Indeed, if one were to be cruel one could suggest that there is a game reserve for white elephants.

The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Elton)

My Lords, I wonder whether the noble Lord would be kind enough to name some of the white elephants?

Lord Dunleath

My Lords, I thank the noble Lord for his intervention which I fully expected and for which I have prepared. I am about to go on to do that. If the noble Lord will bear with me, I shall, if I may, pursue the sequence of my notes.

First of all I shall speak about the geese which have been trying to lay golden eggs. Enterprise Ulster is one of them. In my view, it has turned out to be a remarkable success in view of the adverse conditions which have obtained since it was established. It has given employment to more than 10,000 people. More significant than that, 54 per cent. of those to whom it has given employment have gone directly into regular employment having previously been in the category of long-term unemployed. The cost per annum per man in the year 1979–80 of providing employment, was according to my figures—I am sure the noble Lord will have some different figures—pound;5,780, whereas it was stated in answer to a Question in your Lordships' House recently that to keep unemployed, with social security, a man with a wife and children, on average earnings, would cost £6,000. Therefore it was more expensive for that man to be unemployed than to be employed by Enterprise Ulster.

Her Majesty's Government have now decided to give an effective reduction—and by that I mean inflation-indexed—of some £5,750,000, I think, which means that the target for cost per man-year of employment in Enterprise Ulster is going down to £5,300, which does not seem to be viable. I am aware that there is the proposed ACE scheme, whereby employers such as local councils will have 90 per cent. of the salary paid of those whom they employ who are on the register of unemployed, but I fear this will not achieve what Enterprise Ulster has achieved in providing a bridge between long-term unemployment and regular employment. Indeed, an independent European survey of the projects in Northern Ireland to cope with the unemployment situation suggested that: Enterprise Ulster is enabling men to use their talents and as such must be fulfilling its rehabilitative function in building up self-confidence and self-awareness'. Thus it is not just a question of taking men off the dole to give them temporary employment, but of getting them rehabilitated and giving them self-confidence so that they will become regularly employed thereafter.

The next goose that lays golden eggs is, I suggest, in the area of housing. The Housing Executive, in some cases understandably, have to block up houses which have become vacant. I understand this is because those houses have to wait for time and money to become available so that they can be modernised and made fit for occupancy. That means there are houses which are not available while, parallel with that, there is a long waiting list for housing all over the country. I thought I had a good idea. I thought we might form a housing association and try to obtain those houses from the Housing Executive, rehabilitate them and make them available for people. But having looked into it I discovered that, despite what one reads in the papers, Government finance has been reduced to such an extent that the formation of housing associations in Northern Ireland is no longer feasible. This removes an area where private enterprise can operate and where extremely good value for money can be obtained, with people using their own talents, skill and energies and, to a certain extent, their own money in bringing houses which are not by any means beyond repair back into the useable housing stock.

Thirdly, I would mention agriculture, which is by far the largest employer of labour in Northern Ireland. Ten per cent. of the entire workforce is still employed in agriculture and a further 4 per cent. is indirectly employed in the industries servicing agriculture. Up till the time when the common agricultural policy began to take effect, the remoteness of Northern Ireland, being as it is on the fringe of Europe, was recognised and we used to receive a remoteness grant. Since then, that is no longer the case and, for the most part, we, at the very tip of the Community, receive the same treatment as, for instance, the county of Kent which is, on a clear day, within sight of the mainland of Europe.

The result is that, despite the fact that the efficiency of farming in Northern Ireland is right at the top of the league throughout Europe—our margins are well above those of Great Britain in terms of grass production, and certainly in a totally different league table from some of the farms that I saw when I went to France last autumn—the prices that we receive for our produce are well below those in Great Britain, and the prices that we have to pay for our supplies are well above those in Great Britain.

So it means that however hard we work, however well we do, however efficient we are, we cannot win and, with the textile industry having declined, with the shipbuilding industry having declined, we see our largest single employer of labour in jeopardy. Quoting my own small example, my farming company used to employ 22 people. It now employs 16. But to do that we are having to live off reserves, and neither I nor any of my colleagues in farming who has to employ labour is confident as to how long we are going to be able to continue on that basis.

Turning now to the white elephants, I would quote, first, the Portaferry sewerage scheme. Portaferry is a lochside town in my own constituency. It was clear that a new sewerage works was required and when it was announced we were all pleased. Then we discovered that three things were going to happen. First, there was going to be a pumping station erected which would stand 9 metres high, right in the middle of the seafront of the town, spoiling one of the best views in Northern Ireland. Secondly, in an imaginative way, the sewage was going to be pumped almost half a mile upstream, so that the tide would bring it back past the town on its way to the sea. Thirdly, the sewage was not going to be processed, but comminuted, which means churned up by the pumps.

All the people who knew Portaferry, such as the boatmen who have had a lifetime's experience of the tides and winds there, said that this would not work. We all said that the pumping station would be a disaster and an eyesore. But, no. The experts knew better. In the event, the pumping station went up and it was a disaster. After a few weeks, the pumping station was demolished. If it was not to the noble Lord that I wrote it was to his predecessor, asking whether he really felt that it was the best way of deploying public funds for buildings to be erected and then demolished in a matter of weeks. I did not receive an answer to my satisfaction.

The people who knew the waters around Portaferry said that the new outfall upstream would not work, because the shingle and the sand underneath it would be washed away by the tide. But, no. The experts knew better. In the event, the new outfall is still not working, because the shingle and the sand have been washed away from under the pipes. The sewerage system has been connected to the old outfall where it is going out in the centre of the town and the contract is, at the moment, £136,000 over and above the original estimate. The sum of £136,000 will not make or break the economy of Northern Ireland, but it is an example of one of the white elephants.

Another example is education. Rationalisation is of course necessary, but is it good expenditure of public money that so large a proportion, £842,838 out of £7 million, should be spent upon transporting pupils by bus to schools so far away from where they live because our segregated education system persists? I entirely agree, and have said so throughout, that it would be a disaster to impose integrated education on Northern Ireland, but I am sorry to have to say that I think Her Majesty's Government lost a valuable opportunity in failing to adopt more fully Professor Astin's recommendations which, in removing the Church's representatives' majorities from the management committees of schools, would have brought the integration of education a stage closer.

I shall not continue to quote examples, though there are others which I could quote. May I say, however, that what we are asking for in Northern Ireland is not favours but fairness. Household expenditure on average, per head, is 11.7 per cent. above that in Great Britain. Household expenditure on energy—heat, light, fuel, power—is 51.3per cent. above the national average. But the average household income is only 82 per cent. of the national average. So all we ask for is fairness.

I will not stray into the field of security or violence other than to say that I hope your Lordships will accept my assurance that on the evening when television news was giving the impression that the whole of Belfast was in a state of rioting, chaos, fire and violence, I and some of my colleagues went through the city. You would not have known that anything was happening at all. These instances were confined to very small areas. I am afraid that it would be difficult for those who had not seen it personally to realise the extent to which those undesirable activities were confined.

I speak on behalf of the vast majority of peaceable and industrious people in Northern Ireland who are not spongers. They are people whose outlook on life and whose self-respect would preclude them from being spongers. They are not seeking charity. That is not their outlook. All they are saying and all I am saying is, "Please, give us a chance".

10.33 p.m.

Baroness Airey of Abingdon

My Lords, I think we should all be very grateful to the noble Duke for asking this Unstarred Question this evening, for giving us such an explicit and first hand description of the country which he knows so well and for telling us of the difficulties which have to be overcome. We have also been told this by the other noble Lords who have spoken so eloquently this evening.

I happen to believe—perhaps this is a feminine trait—that nothing succeeds like success. So may I be permitted for a few minutes this evening to speak about why I think that Northern Ireland has great attractions for industry. I think that we should spell this out loud and strong. There are great difficulties in Northern Ireland. We must not underestimate these difficulties, in particular unemployment. It is with unemployment in mind that I say that I believe we need most urgently to attract industry to that country. There are very great advantages. I think that every possible encouragement must be given to those who are working in danger. But we must remember that this Government have given more than that. They have actually given grants for building factories, which started at 30 per cent. and went up to 50 per cent., and that compares with grants given in this country of 22 per cent., even in the bad development areas.

Then, of course, there is the question—and I remember this so well from when I used to go there—of the difficulty of the expense of electricity and power. This has recently been mentioned by the Prime Minister in a speech in Northern Ireland, in which she said—and I quote: It is planned to bring electricity tariffs more closely into line with those in England and Wales, and keep them there". I think that would make a great deal of difference to industry in the Province.

My experience in Northern Ireland, which at times was very happy, was of the courage and strength and vitality of the people and I believe that they have this strength and vitality—given encouragement—to create jobs and that it is our duty to help them and to carry on those already well-established firms which still exist.

I was particularly interested in the suggestion of advanced technology because, having for so long lived in the shadow of Harwell, I happen to have met a lot of scientists, and I believe that this country, like Northern Ireland, has a great talent for brain work and it may be that we should turn our minds from the old ideas of heavy industry to different ones, both for this country and for Northern Ireland.

I also remember with particular affection going to a small factory—I can hardly call it a factory because it was a place of such artistic talent and those noble Lords who come from Northern Ireland will surely know it well. It is the small factory where they make Belleek—that lovely china. Some of your Lordships may have seen Arthur Negus on television a short time ago, examining treasures which were brought by people and he was telling them exactly what they were. One lady had brought a beautiful antique Belleek vase and I shall never forget the appreciation with which he touched the beautiful glaze and explained how the flowers were all put on by hand. I can assure your Lordships that it is exactly the same today and I know that many of the shops here in London who are supplying this beautiful ware cannot get enough of it for visiting tourists. This may be exactly the opposite end from advanced technology but I believe that something in between these two sorts of industry would be of great advantage to Northern Ireland.

There are to my mind several other attractions, and one is good industrial relations. Over a period of 10 years industrial relations in Northern Ireland have been 14 per cent. better than those in Great Britain. A large number of firms have in fact gone there. I believe that 37 American firms have gone there, and within the last three years no fewer than 13 American firms have done so, so that has been continuing despite the problems. There have been German firms and some French ones.

There are attractions for those who bring their families with them, because there are undoubtedly very good schools with dedicated teachers; there are also splendid hospitals where dedicated doctors and nurses tend without fear or favour the wounded and sick, and do not go on strike. So I think I should like to mention one more point, which has been mentioned this evening. I would ask those who have influence with people who are involved with television and the press to urge them to spare us past stories of troubled history and accounts of present violence. While we salute the bravery of those who have to face the danger, I pray that their children, with all the help we can give them, may be famous for creating peace and prosperity in their country.

10.41 p.m.

Lord Elton

My Lords, it is a real pleasure to follow a speech in such striking contrast with the normal catalogue of difficulties and obstructions with which we are apt to involve ourselves when we look at the problems of Northern Ireland. I say this with no disrespect to other noble Lords; I am constantly concentrating on the difficulties myself. It is a good thing to look at the positive side of the problem as well as the negative.

None the less, the House will be grateful to my noble friend the Duke of Abercorn for this opportunity to discuss the difficulties as well as the opportunities with which we are faced in the economic affairs of Northern Ireland. It is a subject which is too little considered in responsible circles outside Government and outside Northern Ireland. The Government have brought forward and implemented a whole range of measures, and a very significant sum of cash, in response to it. My noble friend, I know, fears that we have been so closely concerned with the day-to-day conduct of this process and perhaps so deeply inbued with traditional responses to standard problems that we have lost sight of the full scope of the problem.

As a distinguished member of the timber industry, and one who lives among some of the most agreeable forests in the United Kingdom—as perhaps even the noble Lord, Lord Dunleath, will remember, and perhaps he has visited them again since that distant time 30 years ago—my noble friend may feel that we cannot see the wood for the trees. In fact I think he is wrong, and I hope that your Lordships will agree with me at the end of this rather late debate.

First, let me assure him that the Government are aware, acutely aware, of the impact which the present recession has had and which it continues to have in Northern Ireland. No one in Government, or in Northern Ireland, needs to be reminded that the Province, with its heavy dependence upon traditional manufacturing industries and upon an agriculture sited on the very outer edge of the European Common Market, is especially vulnerable to any downturn in the economy. No one in Government, or in Northern Ireland, can fail to be anxious to reverse such a trend and to reduce the present deeply unsatisfactory level of unemployment. That has to be said, although it goes almost without saying.

The cost of the depression, in terms of personal unhappiness, in careers ended early and youthful ambitions frustrated and soured, cannot be counted in terms of money and it cannot be counted without regrets. But I do have to tell the House that any facile attempt to change this by suddenly multiplying Government expenditure without regard to the effect that it would have upon inflation would lead to disaster—the cure, my Lords, would be infinitely worse than the disease. The symptoms would be the same but they would probably be fatal. We all know the critical importance that limitation of public expenditure has in present circumstances. That is familiar ground. Not all your Lordships may agree with the economic policies of the Government, but I think they are at least well aware of them. My purpose, therefore, is not to re-state those policies yet again: it is merely to place the problem of Northern Ireland—to which my noble friend has very properly directed our attention this evening—into that context.

The United Kingdom was, when we came to Government, over-borrowed and heading for hyper-inflation. Northern Ireland is part of the United Kingdom and shares its difficulties. We have instituted measures that have staved off hyper-inflation and which will result in the eventual—I believe the not too distant—re-emergence of a soundly structured economy for the whole of the United Kingdom, and Northern Ireland, again is part of that United Kingdom. Having shared in its decline and its problems it will share in its recovery.

No special measures for the Province, therefore, that will militate against that general recovery can, in the end, bring the Province any long-term benefit at all. All proposals have, therefore, to be examined in the light of that fact. From that your Lordships might suppose that Her Majesty's Government had entirely ignored the special circumstances of the Province and meted out to it treatment the same as for tile rest of the United Kingdom, but that is far from the case. Let us look at the record. Let us consider first schemes that apply to the whole of the United Kingdom, but which could bring most benefit where the need is greatest.

I would point first to the 2 per cent. cut in the minimum lending rate and then to the new measures introduced to encourage the growth of small firms—well and eloquently praised by my noble friend Lady Airey—included in these last is a loan guarantee scheme; tax relief for individuals starting up new businesses; an increase in the VAT threshold; and measures to ease the impact of corporation tax on small firms. In all this the Government have introduced more than 50 aids to help small firms since they came into office and in so doing they have done much to encourage, as my noble friend put it, the management talent that we have in the Province and to help small enterprises such as those of which we have just been talking.

I believe that small firms will provide the real engine for growth, and the lasting flexibility needed to strengthen the whole of the United Kingdom economy and expecially that of Northern Ireland. The Province, therefore, will benefit, at least proportionately, from the new measures introduced in this field by the Government. In addition to them, we have the efforts of the Local Enterprise Development Unit which has made a very significant contribution to job creation in the Province since its establishment in 1971 and has been favourably mentioned already this evening. I am convinced that we can look to the small firms sector to provide real growth in employment opportunities over the next decade.

I recognise, of course, that it will take that sort of timescale, and that is why we shall continue to provide encouragement to existing industry in Northern Ireland; and why we have made such vigorous and successful efforts to attract inward investment. I promised my noble friend to consider our special treatment of Northern Ireland as well as our general measures. In that context I have to say that we have available in the Province the most generous range of financial incentives of any region in the United Kingdom. These include grants towards capital investment of up to 50 per cent.—as the noble Baroness has rightly said—compared with a maximum in Great Britain of only 22 per cent. Some noble Lords will wish to compare these not with Great Britain but with the tax incentives available in the Irish Republic and would call for the introduction of similar measures to theirs in Northern Ireland. But these incentives that we have in Northern Ireland are additional to the normal tax system of the United Kingdom and that system is itself already geared to helping companies in the early years of a project. It does so by capital allowances and by stock relief. The Department of Commerce has recently produced a leaflet explaining these measures for the benefit of potential investors.

In continuing to make efforts to attract new inward investment to Northern Ireland, we do recognise that competition throughout the world for it is intense. It can be expected to increase as more of the newly industrialising countries seek to attract inward investment. Their low labour costs will give them a competitive edge over European producers. There is thus lively competition for internationally mobile investment, and jobs so generated can be very expensive. This calls for measured and selective judgment of the projects which are most worth supporting and encouraging.

We shall be concentrating our efforts in areas where success is most likely to be achieved. We shall be looking for high growth, high technology sectors offering high value added, and jobs that last, and for companies which have characteristics likely to give them a secure future operating from a Northern Ireland base. In every case, however, we shall wish to apply stringent standards of investment appraisal, so as to ensure that the taxpayer is satisfied that Government funds are being sensibly deployed on his behalf; because, of course, he provides them. Although 1980 was a difficult year, over 7,000 new jobs were promoted, so I would not entirely accept the noble Duke's assumption that Northern Ireland is decreasingly able to attract investment from abroad.

The Government do give special responses to special circumstances. A good example, and one being introduced into Northern Ireland at this very time is the enterprise zone. This concept is an exciting one. I think that it is also innovatory. It could well lead to a real regeneration of employment opportunities in rundown city areas. The enterprise zone in Belfast, in particular, will, I believe, be suitable both for the development of small firms and for the introduction and attraction of new inward investment.

Regional economic development depends in large measure for its success upon the success which is achieved by its businessmen in selling their goods and services. We are at present in a buyer's market worldwide, and selling is no very easy job. But in a buyer's market, of course, selling, becomes a function of critical importance. Selling is the job of managements. Government departments cannot do it for them. But on the other hand, Government can give them constructive support. This is recognised at the national level in the facilities which are offered for the encouragement of United Kingdom exporters, and which are fully available to firms in Northern Ireland.

In addition, in Northern Ireland the Department of Commerce is developing a series of initiatives which are especially geared to Northern Ireland's regional needs. This programme has been agreed with industry and with representatives of industrial organisations. It is geared mainly to helping Northern Ireland firms to maintain and develop effective trading relationships within Great Britain, and to maximising the trade opportunities which are available in the markets of Western Europe. That answers queries given to me this evening by a number of noble Lords. Through this combination of regional initiatives and of national facilities, the Government have provided for industry in Northern Ireland a comprehensive service of trade support.

I have already voiced the profound concern of Her Majesty's Government for the level of unemployment. That brings me to the third element of our response to Northern Ireland's economic difficulties: specific measures to alleviate unemployment, which are of great interest to the noble Lord, Lord Blease.

As I recently told the House in answer to a Question by the noble Lord, Lord Blease, an additional £9.4 million has been provided for this purpose in the current financial year. This will increase training under the Youth Opportunities Programme by 3,000 places and means that now 10,000 young persons can avail themselves of a wide range of opportunities. This additional expenditure is also intended to prolong the life of the Job Release Scheme and the Temporary Short-Time Working Compensation Scheme. A completely new scheme already mentioned this evening the Action for Community Employment Scheme, was introduced on 1st April to enable suitable sponsors to promote projects of community value.

All in all the Department of Manpower Services in Northern Ireland is responsible for employment and training schemes benefiting over 32,000 adults and young persons. None the less we recognise that real permanent full-time employment must be our prime objective, and that is what—within existing financial constraints—we are seeking to create. I welcome the support of the noble Lord, Lord Blease, because he will recognise that we have here a judgment of priorities: how much to spend on palliative measures and how much to spend on the cure.

Manufacturing is not the only industry in the Province. We also have an agricultural industry that employs 10 per cent. of our workforce directly and a further 3½ per cent. indirectly. I noted what the noble Lord, Lord Dunleath, said about the level of employment in his own agricultural enterprise, and would only mention in passing, in reference to that case, with which I am not familiar, that while, of course, there has been a marked decline in employment there, he and the rest of this House will be aware of the steady drift from the land which has resulted from changing economic circumstances, mechanisation and an increase in the size of units of farm holdings, which has affected the United Kingdom for a very long time.

The noble Duke, the Duke of Abercorn, has a close interest in agriculture—as, indeed, do I. He will be aware that as a result of an approach by my right honourable friend the Secretary of State for Agriculture, the European Community Council of Ministers approved a number of special measures to help Northern Ireland: a development programme for the less favoured areas worth up to an additional £4 million per annum over the next 10 years; additional grant aid for improving the handling of feedingstuffs worth £1 million per annum over the next 4 years; and a package of measures to aid development of the beef industry worth approximately £4,300,000 per annum over the next two years. These measures include payment from FEOGA which will double the existing suckler cow subsidy and a 50 per cent. FEOGA grant to aid beef performance testing, artificial insemination, liming the pasture and first time silage makers.

Beyond that and to honour his undertaking to the farmers to provide up to £10 million of extra aid, my right honourable friend the Secretary of State is planning to make a further £5,700,000 available in 1981–82 to aid the milk, pig, egg and poultry industries. The allocation of this money is currently under consideration. These measures are once again special to Northern Ireland. But noble Lords should not forget that Northern Ireland farmers will of course also benefit from the 9.5 per cent. average increase in European Community prices agreed by the European Community Council of Ministers for the year 1981–82.

My noble friend has called for us to examine further ways and means of processing Northern Ireland's agricultural produce. I think the phrase he used was to add greater value to it. He and I are at one in that matter. I can tell him that the Departments of Agriculture and Commerce in conjunction with the Northern Ireland Development Agency are in the course of mounting a campaign designed to encourage joint ventures between Northern Ireland food processing companies and partner companies abroad.

We have in mind in particular the creation of partnerships with major food marketing companies in Europe, who will be seeking sophisticated products for distribution through their established networks. These products can be produced in Northern Ireland; they will undoubtedly be capable of adding value to the Province's basic agricultural output. And their addition to the existing product range of the Northern Ireland food processing sector should be a valuable means of securing employment.

I have catalogued the means by which Her Majesty's Government are supporting the economy of Northern Ireland. Some of these means are common to the United Kingdom; others—and the list is impressive—are special to the Province's needs. Not all of them are entirely conventional, but my noble friend, I know, would have us go further. He would have us, I believe, introduce special fiscal measures, and I listened with deep interest to what he had to say on this subject.

He will, I know, appreciate that the question of tax concessions is not a matter for Northern Ireland alone. Taxation matters must be looked at in the context of the United Kingdom as a whole. There is the question of regional policy, and the proposal for tax incentives special to Northern Ireland would certainly not escape the covetous notice of the other regions of the United Kingdom. But we do not have to consider only the regional policies of the United Kingdom. There is also the regional policy of the European Community,

My noble friend will realise that the path he proposes we should tread is fraught with difficulty. While I would not reject his suggestion out of hand I can give him no encouragement to expect anything in the immediate future. He will however recall, and perhaps be encouraged by, the undertaking of my right honourable friend the Chancellor of the Exchequer to review the structure of corporation tax more generally, and this review is now in hand.

The noble Lord, Lord Blease, and the noble Lord, Lord Hampton, are both anxious, understandably, about the image of the Province abroad, and reference has been made to the media as well. I share the experience of the noble Lord, Lord Dunleath, of having been in an apparently peaceable city when the media would have us suppose that it was in a state of complete riot. It is of course a fact of reporting that the reporters and the cameras report only the action and not the inaction. The photographers frame the bodies of people in the streets without including the edges, so that one has an idea of an infinite mass of people infinitely engaged in infinite damage. The situation is not like that.

Lord Dunleath

I am grateful to the Minister for saying that, my Lords; but may I ask him, as he seems to have moved on from the area of job creation, why he is running down Enterprise Ulster?

Lord Elton

My Lords, the noble Lord replied most courteously to my intervention by saying that if I bided my time he would reach that point. I echo his reply. To revert to the question of the exaggeration of the difficulties of the Province which take place through the lens and typewriter, noble Lords should know that the Department of Commerce maintains 17 industrial development representatives abroad, who visit selected companies to explain at first hand what conditions in the Province really are, and in the past year alone these representatives have interviewed no fewer than 1,500 companies.

I would not deny that the image of Northern Ireland abroad has taken its toll in terms of potential job promotion. However, the situation has been improving, since increasing numbers of foreign industrialists are one again visiting Northern Ireland to ascertain for themselves the true facts. The worldwide publicity associated with recent deaths will not have helped Northern Ireland's image as a possible location for mobile industrial development, but I believe that the spirit, resilience and level-headedness to which my noble friend Lady Airey referred will prove itself superior to this disadvantage.

The noble Lord, Lord Blease, is anxious for a coherent Northern Ireland industrial strategy and for and end to what he sees as the exclusion of many non-Government agencies from the sacred circle of Government industrial planning. To direct your Lordships' attention to the second point first, my right honourable friend the Secretary of State has already announced a decision in principle to amalgamate the Department of Finance and the Department of the Civil Service in order to secure a more effective control over resources.

In addition, other studies are in progress concerning the responsibilities of other Northern Ireland departments. It was announced as recently as April 1980 that the existing arrangements for industrial developments were being retained. It is inevitable that these new studies—and I invite close attention to this—must embrace the Department of Commerce, the Northern Ireland Development Agency and the Local Enterprise Development Unit, and I hope that noble Lords who feel we have become fossilised in a particular attitude on this will be reassured.

As to the industrial strategy, I have already shown that the Province cannot have an industrial strategy which is different from that of the United Kingdom as a whole. It is self-evident that the opportunities of Northern Ireland to prosper will depend more than anything else on the restoration of the national economy. However, my honourable friend the Minister of State for Commerce, Mr. Butler, has, I know, been engaged in very useful discussions with the Northern Ireland Economic Council, the Northern Ireland Development Agency and LEDU in the Industrial Development Consultative Forum. Those discussions have included consideration of the framework within which industrial development can best be pursued, and I think that body and the consultations in which it is engaged must at least be a partial answer—probably a quite substantial one in the event—to the noble Lord's wish for a coherent strategy.

If your Lordships will forgive me, I shall reply in writing to a number of points that have been made. I would say in passing what an interesting idea my noble friend the Duke of Abercorn had in a sort of international Pinkertons to trace émigré Ulster talent, and I shall certainly consider his ingenious idea of reversing the brain drain, as he called it, by establishing an American research faculty on an Ulster campus, which was a slight change in emphasis of the proposal he mentioned earlier of a light industrial research unit in a similar place. I will of course have to draw the attention of my right honourable friend the Minister of State for Commerce to his equally innovative idea for a sort of combined industrial cadet force.

The noble Lord, Lord Dunleath, rebuked Her Majesty's Government for the reduction in money available to housing associations. I want to spend a little time rebutting charges, and I would refer the noble Lord to the answer given by my honourable friend the Parliamentary Under-Secretary of State for the Environment on 3rd March (col. 995 of the Official Report) in which he showed that the money for housing associations was in fact being increased from £13 million to £19 million—not a substantial reduction, my Lords. On a smaller scale we have the Portaferry sewage treatment plant. I do not intend to look at this in detail—not even in theory—but I should not wish to leave the House with the impression that the noble Lord's letter was not answered, although I cannot tell the House why he found it so unsatisfactory and I do not think he will find the time to do so either.

As to the Astin Report, that requires another debate but I will simply say, with the greatest respect, that I feel it is rather facile to imagine that there is an economic motive for adopting the recommendations of the Astin Committee because it would save transport; in fact, if the noble Lord works it out he will see that the children would have to travel further.

Lord Dunleath

The noble Lord has missed the point, my Lords.

Lord Elton

My Lords, I believe that the noble Lord, Lord Dunleath, has missed the point.

As to Enterprise Ulster, jobs which depend on continued public expenditure year after year are not secure jobs. The Government's aim is to create the conditions in which enterprise can flourish and where, often with a very modest one-off public sector contribution, new, permanent and secure jobs can be brought into being in the private sector. We should not in any case be comparing the cost of Enterprise Ulster jobs with that of unemployment but rather with the cost of bringing into being jobs in profitable enterprises. A number of such enterprises have been mentioned already this evening. It is a question of priorities, and I believe I have the support of at least some of your Lordships' House in feeling that it is more important to deal with a cure than with a palliative.

On the question of electricity, the noble Baroness, Lady Airey of Abingdon, reminded us that on 5th March the Prime Minister clearly recognised the importance of energy costs and made a commitment. My right honourable friend the Secretary of State for Northern Irleand is expected to make a statement tomorrow on the detailed arrangements to achieve this.

I believe that I shall weary your Lordships if I do more than conclude. My noble friend asked me whether Her Majesty's Government would introduce special and innovatory measures to aid the Northern Ireland economy. I have catalogued—perhaps not briefly enough—the measures which we have introduced already, and I believe the list is not insignificant. Indeed, many of the measures are special to the Province; I have reason to know because quite a proportion relate to one of my own departments. Some of them are indeed innovatory. They do not include the fiscal devices which my noble friend recommended; but certainly I will read, as I have listened, with close attention all that he and other noble Lords have said on this and other subjects, and I will draw their remarks to the attention of the Secretary of State.

The Government are never deaf to new ideas and I hope that I have said enough to show both my noble friend and your Lordships' House that this Government are committed not only in words but also in deed to the economic recovery of Northern Ireland. That commitment is urgent to the future of the United Kingdom.