Industrial Development (Northern Ireland) Order 1982 (Hansard, 22 July 1982)

The Earl of Gowrie

My Lords, I beg to move that the Industrial Development (Northern Ireland) Order 1982, a draft of which was laid before the House on 17th June, be approved.

This order establishes, and furnishes with a comprehensive code of powers, the new Industrial Development Board for Northern Ireland. It is the third and last of the orders implementing the outcome of the studies, commissioned early last year, by the then Secretary of State, aimed at ensuring for the future the best and most efficient pattern of government and administration in Northern Ireland. Your Lordships have already approved a measure setting up the Department of Finance and Personnel, and a second establishing the Department of Economic Development, under whose aegis this Industrial Development Board will be constituted.

The encouragement of industrial development is widely regarded both within and outside Northern Ireland as being crucial to the Province's economic future. And I could use the words "inward investment" almost interchangeably with the phrase "industrial development" in this context. The proposals embodied in the order have been the subject of extensive discussion in Northern Ireland itself and more recently in the Northern Ireland Committee in another place. The order is a complicated document, and its meaning will be amplified in parts by guidelines issued to the board under the authority of Ministers. Drafts of the guidelines have been circulated to interested organisations and persons and made available at the Printed Paper Office.

The new unified organisation will take the place of the Northern Ireland Development Agency, and those parts of the Department of Commerce concerned 1029 with the industrial development. I think there has been agreement that the setting up of a unified organisation is an important advance. Anomalous though its exclusion may seem in principle, however, there are good reasons for not taking in the third body in the industrial development field, that is, the Local Enterprise Development Unit. That agency has had a record of success in providing specialist services to businesses employing fewer than 50 people, and the borderline between it and other institutions has not proved problematic. The importance of close cooperation between the IDB and what is known in Northern Ireland as LEDU is, of course, well recognised.

The IDB will comprise a board, set up under Article3, and an executive, a part of the Department of Economic Development, set up under Article 4. The Government concluded, after exhaustive consideration, that the new organisation had to be one for which Ministers were directly accountable. Industrial development decisions in Northern Ireland, to a far greater extent than those elsewhere in the United Kingdom, are at times profoundly influenced by social considerations. They often involve very large sums of money, and the total industrial development budget is very substantial indeed. Constitutionally, these then are decisions whose makers Parliament, or an Assembly, should be able to call to account. It is for this reason that the executive is part of the Department of Economic Development and the chief executive will be accountable for the DED votes covering the IDB's expenditure. This is also the reason why the boards' formal powers comprise the giving of advice and maintenance of oversight set out in Article 5(1).

In proferring its advice the board will be able to reflect the comprehensive array of powers to encourage and assist industry available to the executive. These include the provision of selective financial assistance, the power to take equity and the ability to make available a range of other grants under Part III of the order. In addition the executive will maintain a stock of industrial sites and advance factories; be able to offer trade support and marketing advice and promote Northern Ireland as an industrial location on a worldwide basis. For the present, the affairs of Harland and Wolff, and Short Brothers, will not fall within the IDB's ambit; its work will be demanding enough without adding it to the complexities of those matters.

However, we entirely recognise the advantages that a distinct, tightly-knit, agency, under expert direction, has in the indusrtial development field. Without sacrificing ministerial responsibility, we believe that these advantages can be realised in the IDB. So the guidelines that I referred to earlier set out that Ministers, though in receipt of the information which they need to account to Parliament for the IDB's activities, will generally respect the board's judgment in decisions where the predominant considerations are commercial; unless Ministers intervene, indeed, the board's advice will be for action by the executive as a matter of course. There will, of course, be areas of active ministerial involvement. One of these will be making decisions of the sort I have referred to, where social considerations are particularly significant; the board will be able to make recommendations in this field, but the decision, properly, will lie with Ministers.

1030 Another is sanctioning very large expenditures—ones so large that consent from elsewhere within the Government is needed. The guidelines will set a generous degree of freedom in this connection: where job-creating employment is concerned, the IDB will be able to give companies selective financial assistance of up to £3 million without consent from the Department of Finance and Personnel; where job-maintenance is involved the limit will be £1,500,000. On top of that, it will be able to take equity holdings of £2 million; provide advances factories and help with training grants.

Ministers must always retain a right to intervene; but within these limits the view of the IDB board will generally be accepted. The board and executive will operate as one, and indeed I note that they are already being referred to in Northern Ireland as "the IDB" without any distinction being drawn. The organisation will have its own headquarters, away from the Department of Economic Development, its own style, and its own working methods. Its staff will be from a wide range of backgrounds: some from existing institutions; some on secondment from industry and commerce; some on short-term contracts.

They will be under the direction of a chief executive. I think your Lordships will have been delighted to learn of the appointment to this exceptionally important post of Mr. Saxon Tate, who was previously vice-chairman of Tate and Lyle. From his time there, and his previous posts, Mr. Tate brings to the job a whole array of talents and experience that will enormously benefit the IDB. He will be working with a board, under the chairmanship of Sir Desmond Lorimer, that will bring to bear acute commercial judgment over the whole sphere of the IDB's activities. Most of the board's appointees will be from Northern Ireland: bankers, accountants, industrialists, trade unionists, and so on. We hope also to secure one or two prominent businessmen from Great Britain.

As to the rest of the order, Article 6 relates to reports and accounts, and in particular includes the further safeguard for the board's position that if its advice is net taken about a particular case, it can require a statement of the reasons and publish it. The remainder of the order represents consolidation, with some amendments, of the powers that have previously been available to the Department of Commerce and the Northern Ireland Development Agency. In Part III, Article 7 will enable it to make grants, loans and investments for the purpose of creating, maintaining or safeguarding employment. Article 8 will enable it to establish, carry on and develop industrial undertakings. Article 9 enhances the existing powers of assisting research and development, and marketing, and Article 10 renews the authority for providing sites and factories for business, with an amendment to permit private sector involvement. Part IV of the order largely recapitulates existing provisions on the Standard Capital Grants Scheme, and Part V of the order re-enacts those on the Industrial Enterprise Fund, a useful source of finance for small projects.

My Lords, that is the order in broad outline. It is a complex and technical measure in some respects but its aims are simple: to improve the inward investment and internal development of industry and commerce in Northern Ireland. This is a very important task which, given propitious circumstances, can make a 1031 substantial impact on the lives of the people of the Province, and I commend the order to your Lordships. I beg to move.