Northern Ireland (Loans) Bill (Hansard, 19 December 1985)

§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)
My Lords, I beg to move that this Bill be now read a second time.
Your Lordships may see that this is a straightforward financial measure of a technical nature which simply increases the limit of £1,000 million on the total amount of loans which may be outstanding from the National Loans Fund to the Northern Ireland Consolidated Fund. The money borrowed is for on-lending to public bodies outside central Government for authorised capital expenditure, and the principal recipients are the Northern Ireland Housing Executive, the Northern Ireland electricity service, district councils and voluntary schools.
It is normal practice for a ceiling to be imposed on loans from the National Loans Fund, with the intention that Parliament should have periodic opportunities for debates. This practice differs from that in respect of many loans from Votes, where the annual Estimates procedure provides control. The Northern Ireland (Loans) Act 1975 is amended by the Bill to set a new limit of £1,700 million on the total sums which may be outstanding in loans, and this limit may be raised by order, subject to affirmative resolution in another place, by £300 million.
The Bill has already been debated in another place, and your Lordships will see that it has been certified by the Speaker as a money Bill. Clearly that will register to the cognoscenti in your Lordships' House. It may be helpful if I make the point that it does not authorise any expenditure but merely enables funds to be made available for capital expenditure which has already been approved. I have stated that we see the Bill as fairly simple and uncomplicated. In that spirit, I commend it to your Lordships.

§ Lord Prys-Davies
My Lords, I thank the noble Lord the Minister for his explanation of the Bill, which amends the 1975 Act. The Minister described it as a technical financial measure; but it is also of the greatest importance to the economy and the life of Northern Ireland. The increased borrowing limit of the Northern Ireland Consolidated Fund will be used for on-lending to the beneficiaries named by the Minister. I should like to refer briefly to two or three of the beneficiaries.
907 We are constantly and rightly referred to the important role which the housing executive plays in the life of the Province. Although the number of unfit and substandard houses is decreasing, such housing is still substantial. The Simon Community has again reminded us that the homeless figures are high and that they are sobering. Many people should therefore benefit from the additional borrowings by the housing executive to finance new housing development.
Another recipient of the money to be borrowed will be the electricity service in Northern Ireland. Electricity charges in Northern Ireland are very high. There is a need for cheaper electricity to meet the requirements of industrial and rural Ulster. Expenditure on new plant and electrification schemes which help to develop the economy is obviously a policy of which we approve wholeheartedly. The Province requires increased investment in manufacturing industry. The noble Lord the Minister was silent on this issue. The Minister told the House that another beneficiary of this Bill would be the district councils. Regrettably there is every reason to suppose that the relations between central Government and the district councils will become increasingly difficult in the short term.
We have read in the newspapers that some district councils propose to adjourn business generally; and some have adjourned their business in protest against the Anglo-Irish Agreement. In addition, according to the Belfast Telegraph of 16th December the Unionists will on 1st January next resign their seats on a range of Northern Ireland bodies, including the Northern Ireland Housing Executive which has a key role to play in the life of the people in Northern Ireland.
Given the threat of non-co-operation, we hope that the Minister can assure the House that even if the district councils effectively stand adjourned generally during the forthcoming year, and even if such a body as the housing executive is without a quorum, nevertheless their capital programmes will not be retarded or put at risk. Can the Minister give that assurance to the House? It would indeed be an odd consequence if a policy of non-co-operation by councillors and others were to lead to the postponement or cancellation of capital works which are designed for the people of the Province, councillors own electors.
I have one final comment, or expression of hope. The noble Lord explained that the loan will be drawn on the Northern Ireland Consolidated Fund. On the threshold of a new year our hope must surely be that before too long it will be possible to transfer the Consolidated Fund to a Northern Ireland Assembly operating within the framework of the Government of the United Kingdom. After all, the Consolidated Fund belongs naturally to such an assembly.
With that one question, and those few comments, we are pleased to welcome the Bill.

§ Lord Hampton
My Lords, the right honourable gentleman Mr. Enoch Powell spoke earlier during the Committee stage of this Bill in another place. He referred with no great compliment to those Members 908 who were then in their places as flotsam on the beach, cast up accidentally, he implied, after a major Division shortly beforehand. We are perhaps luckier in your Lordships' House that this business comes up early in the day, but Christmas looms before us. This is a money Bill which we are powerless to amend, and I shall therefore be brief.
I thank the noble Lord the Minister for his introduction and I shall avoid the temptation to go off at a tangent and re-examine the merits or otherwise of the Anglo-Irish Agreement recently signed. I see no reason to object to the aims of this Bill which, as we have been told, raise the limit on loans which will be made from the national loans fund, the Consolidated Fund of Northern Ireland, from a present £1,000 million to a maximum of £1,700 million, with a possible further booster to £2,000 million at a later date. I should have thought that the proposals in this Bill which look forward to continuing the loans procedure at present in force for some years to come should do something to convince the Unionists in Northern Ireland that the Government are definitely not working for a united Ireland at an early date, or even at any date at all. I understand that the principal recipients will be the Northern Ireland Housing Executive, the Northern Ireland electricity service, the district councils, and voluntary schools. This prompts me to support the noble Lord, Lord Prys-Davies, when he asks what will be the procedure if the Unionists are successful in disrupting the work of the district councils, as they threaten to do.
We are told that loans under the Bill are not in any way a subvention, since a full rate of interest is paid on them. My second question is therefore to ask what is that rate of interest.
We agree that this Bill is part of the procedure through which essential investment in Northern Ireland is financed. We have no hesitation in supporting this.

§ Lord Lyell
My Lords, I am most grateful to the noble Lords, Lord Prys-Davies and Lord Hampton, for their welcome and very constructive remarks on the Bill before your Lordships. Both of them have noted my comments and the points which I brought out. Indeed, the noble Lord, Lord Prys-Davies, raised three points with which I shall attempt to deal.
The noble Lord raised, quite rightly, the question of investment in manufacturing industry. I shall take his points in reverse order, if the noble Lord will bear with me. The industrial development programme continues to be given the first priority in allocating public expenditure in Northern Ireland after law and order, which I am sure the noble Lord and your Lordships would agree is the correct priority. But I am able to tell him that industrial development is funded from votes. Industrial development does not arise from lending from the Consolidated Fund for capital purposes, which is the matter before us today.
The noble Lord also asked about the Northern Ireland Housing Executive. He will know that the expenditure of the housing executive is supported by income from rents and capital receipts from the sale of both land and dwellings and mortgage redemption. Indeed, the balance of the expenditure is funded 909 through a combination of grants which are paid by the Northern Ireland Department of Environment and borrowing from the Northern Ireland Consolidated Fund. The noble Lord will be interested to note that the executive borrows from the Consolidated Fund to finance the balance of its capital expenditure on new building, rehabilitation and improvement, land acquisition, home loans, office accommodation and the like, after applying receipts which are mainly from the sale of dwellings. This is therefore a net figure which is balanced from the Consolidated Fund.
The noble Lord also raised a question about the Northern Ireland electricity service. As he is aware, there is a valuable subsidy to ensure that the charges of electricity and power in Northern Ireland are not higher than those on the mainland. That is a separate point, but I am sure he will be aware of it.
I note the comments of the noble Lord on the Assembly and will certainly pass them on to my right honourable friend. I am very grateful for them.
The noble Lord, Lord Hampton, for whose remarks I am particularly grateful, struck the correct note when he said that the increase, from £1,000 million to £1,700 million would cover a number of years. I am assured that that is the time scale which we have in mind.
The noble Lord, Lord Hampton asked about the interest rates. The noble Lord will be glad to know that in practice money which is borrowed from the national loans fund is lent to the Northern Ireland funds at the current Government lending rates. These are struck each week by Her Majesty's Treasury and published in the London Gazette. The Consolidated Fund in Northern Ireland uses the same rate for its on-lending to Northern Ireland bodies.
I am afraid that I missed one point made by the noble Lord, Lord Prys-Davies. He wished to be assured, with regard to the capital programme, about the housing executive and, above all, the district councils. I cannot give a categoric assurance. I do not think that the noble Lord would expect me to foresee what course non-co-operation might take. However, I want to assure him and the noble Lord, Lord Hampton, that services are being maintained, and the situation will be monitored very closely at regular, very brief, intervals. The noble Lord, Lord Prys-Davies, will also be interested to know that executive responsibility for the continuation of services which are relevant to district councils, which in the main are burials, recreations, and disposal of waste, together with a number of other functions which apparently cross my desk, such as dealing with dogs—a matter which arouses considerable emotion—has been left with the chief executives of the district councils. I do not think that your Lordships' would expect me to speculate further than that.
I hope that I have given satisfactory answers to the two noble Lords, and indeed to your Lordships, in relation to this Bill. The noble Lord, Lord Prys-Davies, is quite right—it is an important Bill. I am very grateful for the noble Lord's attention and scrutiny and indeed for that of the noble Lord, Lord Hampton. I commend the Bill to the House.