Rates (Amendment No. 2) (Northern Ireland) Order 1983 (Hansard, 5 May 1983)

The Earl of Gowrie

My Lords, I beg to move that the Rates (Amendment No. 2) (Northern Ireland) Order 1983, a draft of which was laid before your Lordships on 19th April 1983, be approved.

The order is both short and simple. It sets out to do just one thing: to extend industrial de-rating in Northern Ireland from the present level of 75 per cent. to 100 per cent. Your Lordships will recall that my noble friend Lord Ferrers announced in this House on 23rd March a new and integrated package of industrial incentives to stimulate industrial growth and maintain industrial employment in the unique situation of severe economic and social problems which besets Northern Ireland. The present order provides for the legislative adjustment needed to give effect to the rating element of the new economic initiative.

The effect of the order is limited to that sector which already benefits from industrial de-rating in Northern Ireland; it is not concerned with the service sector, with shops, offices and so on, or with any other sector. The Government are still considering these and other aspects of rating in the United Kingdom as a whole in the context of the very extensive consultations which took place on the proposals of the Green Paper on Alternatives to Domestic Rates, which was published in December 1981. The House will wish to be assured that industrial de-rating, whether at the present or at the proposed higher level, does not mean bigger rate bills for other ratepayers. The cost of 100 per cent. de-rating, estimated at £7 million in the 1983ߝ84 rating year, in addition to the estimated £21 million which would accrue from de-rating at the existing level of 75 per cent., will in fact continue to be met from within existing Exchequer allocations to Northern Ireland services. The change does not, therefore, have the effect of increasing public spending in Northern Ireland. The local authorities will continue to be paid 238 compensatory grant in respect of deprivation of national rate revenue which would accrue to them if industrial de-rating did not exist.

I apologise to your Lordships that the order is presented without the usual period for consultation. The contents of the new industrial incentives package were made final only in late March, and if the impact of the new de-rating concession is to be maximised it is essential that it should be available as soon as possible. The new rating year has already started, and I am therefore seeking the approval of your Lordships for retrospection of the effect of the order to 1st April this year. Your Lordships will, I hope, acknowledge that the order is modest enough in length and in content. Its single purpose is to enhance the rating inducement to existing industry to stay and to new industry to establish itself in Northern Ireland. I commend the order to your Lordships.

§ Lord Underhill

My Lords, once again I thank the noble Earl for explaining the order. I note that this again was one of the recommendations from the Assembly when they considered the whole question of industrial development incentives. When the noble Earl, Lord Ferrers, repeated a Statement in your Lordships' House I said that there was need to consider whether the proposals for de-rating and corporation tax were the right ones. What there is general agreement upon is that there is a pressing need, and I recall that on that occasion I drew the attention of your Lordships to the fact that there are more persons unemployed in Northern Ireland than there are at present engaged in manufacturing industry. Since then I have noted in a Written Answer to a Question in another place that male unemployment has reached 25.4 per cent., and of course we know that in some areas it is about 50 per cent. Therefore, undoubtedly something needs to be done.

We on these Benches would have wished to see some action on the lines proposed by the Northern Ireland Committee of the Irish Congress of Trades Unions, but if this proposal to give industrial de-rating up to 100 per cent. will help to bring in new investment, if it will assist existing concerns to maintain their position, then we give that a qualified welcome, and we readily understand the point made by the noble Earl regarding retrospection.

I hope the noble Earl can give an assurance that this provision for 100 per cent. industrial de-rating will not be taken as a precedent for any extension of de-rating to England and Wales. Northern Ireland has had the special facility up till now of 75 per cent. de-rating. The only other de-rating that is applicable in the United Kingdom is that in Scotland, where it is 50 per cent.; but there is no de-rating for industrial premises in England and Wales, and we would hope that this will in no way prejudice the position and create a precedent to introduce that sort of de-rating into England and Wales without full consideration of the whole rating situation.