§ 1.34 p.m.
§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)
My Lords, I beg to move that the draft Gas (Northern Ireland) Order 1985, which was laid before you on 11th July, be approved. Before referring to the order itself, it may be helpful to review briefly the recent history of the Northern Ireland gas industry. The industry has been in relentless decline since the mid-1970s when its 1498 dependence on oil-based feedstock for the manufacture of towns gas first became a major problem as the price of oil began to soar. Added to this difficulty were the drawbacks that derive from the industry's fragmented structure, comprising as it does 13 separate gas undertakings, nine of which are owned and operated by local authorities and four by private companies. The economic frailty of the industry is emphasised by the fact that it now accounts for less than 3 per cent. of the Province's energy supply to final users, and is utterly dependent on an escalating level of Government support currently amounting to £12 million per year—and that is an average of 70p a therm.
In July 1979, the then Under-Secretary of State in another place with responsibility for energy matters in Northen Ireland set out the basic framework within which the Government's policy towards energy in Northern Ireland in general, and the gas industry in particular, would evolve. The Under-Secretary pointed out that natural gas from the British mainland could not be provided at a competitive price in Northern Ireland without massive support from public funds, and that the Government had concluded that for the foreseeable future public expenditure of the order required could not be justified in terms of additional security of energy supply, the price at which natural gas could be economically provided or the total number of consumers who might hope to benefit. In the circumstances, there could be no jusitification for supporting the loss-making town gas undertakings in the Province on a continuing basis.
In December 1980, however, the industry's closure programme was effectively suspended when it became known that a supply of natural gas might be available from the Kinsale gas field in the Republic of Ireland. Over the next three years discussions with the authorities in the Republic were aimed at determining whether this source of supply could provide prospects of financial viability for the gas industry in Northern Ireland. These discussions culminated in an announcement by Government in October 1983 that agreement, in principle, had been reached for the construction of a natural gas pipeline from the Republic to the Province. This agreement was contained in a memorandum of understanding between the United Kingdom and Republic of Ireland Governments and was followed by detailed negotiations on a legally-binding contract for supply.
While negotiations on this contract were proceeding, factors developed which rendered the project economically unviable for Northern Ireland. These factors included a marked increase in the price of gas from the Republic over the original projected price; this was calculated to add almost one-fifth to the gas purchase price throughout the life of the project. The prospects for the project were further diminished by the results of surveys on consumer demand, carried out for planning and operational purposes, which estimated total demand about one-third less than the previous forecast.
Despite further discussions with the Republic, it was not possible to secure agreement on a revised purchase price, and in September 1984 the Government reluctantly concluded that the project could not proceed. It is a matter of regret to the Government that 1499 circumstances did not permit the continuation of this enterprise. We must of course respect the judgment of the Irish Government regarding the minimum price at which it can afford to sell natural gas. At the same time, Her Majesty's Government did not feel able to proceed with a project which would, far from being a commercial success, make heavy calls on public expenditure resources at the expense of other priorities in Northern Ireland.
In announcing the abandonment of the project on 6th September last, the Government made clear that they were prepared to receive proposals for a viable, commercial gas industry. In response to that invitation, a joint working group from the industry announced that it would put forward a revised Kinsale gas scheme for consideration. Ministers permitted the accumulation for a further six months of subsidy, at approximately £1 million per month, while the group developed their proposals.
Once these became available they were subjected to a thorough appraisal, with the Department's advisers exploring points of difficulty with the group's own consultants. The Government were hopeful that the scheme might represent a way forward, but in the end we were forced to conclude that the proposals did not begin to offer the prospect of a commercially sound industry. In particular, the scheme did not overcome the fundamental problems of a purchase-price formula for gas which effectively made it uneconomic. At the same time the plan obliged us to assume that annual sales would increase tenfold over 20 years. This is more than 50 per cent. greater than the previous highest forecast and must be set against the background of an industry which in the great city of Belfast alone lost some 10,000 consumers, or one in seven of its total last year.
When we took into account the fact that, in the event of failure, financial guarantees from the Government amounting to some £70 million would be called, following which the Government would still be faced with the cost of closure, it became clear that rejection of the plan was the only responsible and honest course for the Government to take.
In the absence of continuing public subsidy all but one of the Province's gas undertakings have decided to close. There is no legal obligation on the Government to finance the closure process but, through this draft order, we propose to provide funds which will permit closure to be planned and orderly and which will minimise hardship to employees and consumers alike. The Government's terms for support will allow undertakings to pay enhanced redundancy terms up to British Gas Corporation levels; consumers will receive grants to permit conversion to alternative fuels.
The estimated cost of this package of support is £97 million. This figure has been calculated on the basis of our discussions with undertakings and takes into account detailed technical advice from the British Gas Corporation. The British Gas Corporation has been commissioned by the Department of Economic Development to advise and to assist on the rundown process and the corporation's normal practice on disconnection and purging of mains will be followed. I must assure your Lordships that safety 1500 considerations will be paramount, and our estimates of cost reflect this priority.
If I may now briefly turn to the order itself, your Lordships will see that the draft gas order has been brought as a whole before Parliament to permit the orderly rundown and closure of those undertakings which decide to cease operations. The most important features of the order are three in number.
First, Article 4 provides for the removal of the statutory obligation to supply which is, at the moment, laid on 10 of the 13 undertakings. For reasons both of economy and of public safety it is important that the gas distribution systems are closed down in a controlled and orderly manner. To accomplish this, the undertakings need legal power to terminate the supply of gas to individual consumers and, where necessary, to enter premises in order to ensure that this termination is accomplished in a technically competent and safe manner. Articles 4 and 7 between them provide the necessary powers. Direct financial support of the undertakings is necessary to enable them to continue operations while an orderly rundown takes place and to help the undertakings meet the direct cost of closure, including any outstanding liabilities. Payment will be made under Article 6 to cover these requirements.
Finally, the third point to which I wish to draw attention is that Article 8 provides for a scheme of assistance to gas consumers faced with the cost of converting or replacing their town gas appliances. Since publishing the order, the Government have announced their proposals for this scheme: domestic consumers will receive a grant which is deemed sufficient to cover the least-cost conversion or replacement of their existing gas equipment. Commercial and industrial consumers will receive 30 per cent. grant on the same basis but they may also be eligible for energy conservation grants. Consumers in this category may also be eligible for tax relief on essential expenditure.
Many of us are saddened at the prospect of the closure of the Northern Ireland gas industry. Nevertheless, your Lordships will agree that we must face the fact that, given the extent of its plight and the absence of any hope of viability, closure of most of the undertakings is inevitable. It is essential that we have this order on the statute book so that those undertakings which have opted for closure can do so in a planned, orderly and safe manner. I beg to move.
§ Moved, That the draft order laid before the House on llth July be approved.—(Lord Lyell.)
§ 1.45 p.m.
§ Lord Prys-Davies
My Lords, this is a very important order indeed because it assumes the removal of the gas industry, lock, stock and barrel (except possibly for the purged pipes in their grave), from Northern Ireland. Many people believe very strongly that this should not happen.
The procedure for considering orders of major significance to Northern Ireland (and this is in that category of orders), is wholly inadequate. Never was this more apparent than today. We are spending public money and public time on an order which we cannot amend, which we cannot alter or reject. This means that Parliament is having legislation foisted 1501 upon it by the Executive, and the Executive are in the greatest hurry. Because they are in the greatest hurry the legislation may sometimes be inferior. Not only in the interests of Northern Ireland but in the interests of Parliament, members of all parties want substantial alterations to the system of legislating for the Province so long as the Province is subject to direct rule.
I voice this conviction. My noble friend Lord Underhill has voiced it since I have been a Member of the House and it is a conviction that I am sure will be voiced by other Members this afternoon. We voice it today in the hope that our deep unease will be noted by those in authority. But meanwhile it behoves us to make every possible use of this round of debate, formal and ritualistic though it may be.
I thank the noble Lord, Lord Lyell, for the background to the order and for his very clear explanation of its provisions. As the noble Lord pointed out, from about 1977 there have been major uncertainties facing the gas industry in the Province. That point should be emphasised because this is a factor which should not be overlooked in seeking a proper explanation for the decreasing demand for gas in Northern Ireland, although there are other factors. It now appears that as long ago as 6th September 1984 the Government had taken this decision to kill the gas industry in the Province, but this was not then public knowledge. It was locked in secrecy within the department.
The then Minister of State advised the industry on 6th September 1984 to take stock of the position, but he also went on to declare that the Government would he glad to receive representations about the future. The industry assumed from that statement that there could he a future for the industry. Indeed, who is to blame them from coming to that conclusion? So in good faith the public construed the statement of 6th September 1984 to be an open invitation to provide options for the future of the industry, provided that those options did not involve continuing subsidy.
But since 18th April this year we have known that that statement was misleading. The present Minister of State, giving evidence to the Assembly on 18th April, said this:In any case the decision was not made now (in 1985). As I have said clearly, it was made on 6th September".So that is when, how and where the lid came off the truth. The Minister of State, at the Assembly Committee, spoke of the Government standing by that decision and described how the Government had never deviated from the September decision.
If the September 1984 statement was intended to be misleading, that would be the gravest stricture to level at the Government. I do not level that criticism at the Government. I believe that the then Minister of State was honourable and possibly trying to be kind to the Province. On the strength of the 1974 Statement the gas industry, as the Minister has explained, set up a working party representing the gas undertakings and the gas industry trade unionists and advised by experts of international standing; namely Coopers and Lybrand, no strangers to the Government and no strangers to Northern Ireland, and Congas Engineering of Canada. With commendable speed, the working group produced its own revised Kinsale gas scheme for the industry, and an advance copy of this scheme was rushed to the department in February.
1502 There then followed a series of meetings between the DED officials and the working group consultants, but not with the working group itself. Indeed, as almost an afterthought, the Minister of State told the Assembly that the officials had spent seven hours talking to the consultants who compiled the report. Seven hours was not long enough. Then, within five or six months, it was decided to extinguish the hope which the Government had offered the previous September. It had been arranged for the representatives of the working group to meet the Minister of State on 11th April 1985 to discuss this scheme. That meeting did not take place. The Government were in a hurry and on Good Friday, when Parliament was not sitting and probably the Assembly was not sitting, the Minister met the working party and pronounced that their rescue plan was unviable. Those are the facts.
However, the fact also remains that the working party had advanced a prima facie case for an alternative proposal to the Kinsale scheme. Compared with the original Kinsale project, it was a much scaled-down project, concentrating, in phase 1, on supplying Newry and the Greater Belfast area. Nevertheless, it had many things going for it. It would have given immediate access to 90 per cent. of the Northern Ireland gas market at a much reduced capital cost to the United Kingdom Government; it would have shown a surplus of £159 million over a period of 20 years; it would have saved about 400 jobs in a Province where unemployment is very high; and it could have been the base for further development.
The Minister of State, when he appeared before the Assembly on 18th April, may have given the impression that the rescue plan was based on hope, and no more, to sell more gas. The revised plan was of course based on hope to a certain extent; but it was also based on judgment and calculation. That was acknowledged by Professor Black, the department's trusted expert of many years' standing. The issues involved in the revised plan are complex and the consultants who advised the working group were cautious. The fact that the working group's revised scheme rested on at least four major but not unreasonable assumptions, each in turn involving a number of other assumptions, illustrates the complexity of the matter which was disposed of by the department in six or seven weeks.
Perhaps I may remind the House that the scheme was based on assumptions as to purchase price at the border; the capital costs; the level of consumer demand, in particular over the initial eight-year period; and the financing of the scheme and the source of finance. These four major assumptions have been attacked by the Minister of State. But they have not been demolished. Indeed, sometimes the Minister of State's attack was misconceived, and it demonstrated that on this occasion he had not fully mastered the details of the plan.
Considering the significance of this decision for the people in Northern Ireland, we on these Benches assert that the revised plan should have been presented to a body of experts outside the department for analysis, testing and report. With the greatest respect to the officials in the department and to Professor Black, the necessary testing could not in our view be undertaken by department officials in the course of seven hours' 1503 discussion with the working group's consultants, or in the course of seven weeks, or possibly at all. Fresh minds should have been brought to bear on the revised plan. I will explain why. This was necessary because we know that the department, since September last year, had adopted a line; and experience tells us that once a department adopts a line, it usually sticks to it. That is why it was necessary, in our submission, to bring in outside experts' fresh minds.
In any event, in our view the Government would be wrong to base their decision on the financial viability of the revised scheme alone, without having due regard to other economic and social considerations. They should take into account the considerable doubts, including the unease of the Northern Ireland Economic Council, about the reliability of the department's estimates of the substantial costs to be incurred in closing down the industry.
I say to the Minister, with the greatest respect, that his speech did not reflect at all the unease which has been expressed in the Province that the estimates of the department are far too low. Those who have inquired into the costing believe that the ultimate figure will be much nearer £147 million than the Government's estimate of £97 million. The Government should have taken into account the effect of the decision on the Northern Ireland economy generally and the extent to which it will imperil other businesses, maybe small businesses; and its effect on the desirability of maintaining a fuel choice for consumers, at a reasonable price.
They should have taken fully into account the painful consequences for the men and women who are employed in the industry and the consequences for groups of consumers, such as the elderly and the handicapped, who are very heavy users of gas. Indeed, Age Concern has been moved to circulate briefing material showing how this decision will adversely affect elderly people in the Province.
§ 2 p.m.
§ Looking to the future, full regard should be given to the possible discoveries of natural gas reserves elsewhere. We would wish to know whether British Gas is likely to find commercial reserves of natural gas under the waters of Morecambe Bay. If the reports we have heard turn out to be promising, would it be feasible to lay a pipeline from Morecambe Bay to Northern Ireland? When the Government are so concerned to seek a solution to the immense problems of the Province, they should have taken into account such political considerations as the effect of this decision on Irish confidence in Anglo-Irish joint ventures in the future, bearing in mind also that the Kinsale initiative originated in the Republic in 1982 or 1983.
§ All these factors should have been placed in the scales if the Government were to arrive at the right decision, but we feel—and it can be no more than a feeling—that inadequate attention has been paid to them. We therefore feel that the Government have arrived at a decision which may not stand the test of time.
§ This afternoon, however, we cannot reject the order or amend its provisions. Nevertheless, can we at this 1504 eleventh hour seek to influence events? Since this order was laid before Parliament there has been one new and relevant development. We know that Lloyds merchant bank have shown an interest in financing a pipeline project to import natural gas from Kinsale to the Province. That was reported in the Belfast Telegraph on 19th July, and it has been reported in Oilman, the weeky newsletter circulated among business interests in Britain.
§ A bank spokesman has indicated that it might take a few months to complete the evaluation: if the evaluation is successful and private funding becomes available, that will be a new factor of considerable significance. When the Minister of State gave evidence to the Assembly, he was very quick to point out that the rescue plan did not provide for private funding; but this is now a possibility, even if no more than that. Therefore, the question to the Minister is whether the Government will delay the execution of this order for a few months to give Lloyds merchant bank a reasonable opportunity to complete their evaluation.
§ According to the Minister, the cost of delaying execution will be £1 million per month. That is relatively small beer in the context of the costing of the run-down of the industry, which the Government put at £75 million and others put at some £140 million. If the Ministers tells the House that the Government cannot agree to maintain the status quo for a few months, will he also then explain to the House why there should be this extraordinary hurry? Has there been another secret decision that, cost what is may, whoever offers the money, the Province is to be deprived of a gas industry? If so, it is the only comparable Province in the whole of Europe which would be without a gas industry.
§ However, the order is here to stay, and this compels me to mention briefly three matters which are not dealt with in the regulations. First, there is no express reference to the need for a safety policy. Regulations 5 and 6 refer specifically to the efficient and orderly rundown of the industry. In fairness to the Minister, today he used the words "safe" or "safely" three times, but neither word appears anywhere in the regulations. If there is to be a run-down we want it to be safe, because we have been taught to be cautious with gas. We know how it can occasionally lead to explosions, causing dreadful damage. Should there be an explosion during the next three or four years in consequence of the run-down of the industry, people will ask: who is to be blamed for it? Is there a clear answer to that question? Has the department addressed its mind to the need for a safety policy which will apply to the innumerable points along the pipeline? Will there be a adviser on safety policy at each of the undertakings to be closed down? Perhaps the Minister can give us some reassurance.
§ Secondly, there is no reference in the order or the regulations, express or implied, to an appeals procedure in the event of a householder being dissatisfied with the financial assistance he or she has been offered; but we can readily appreciate that there will be many problems arising in assessing and determining the financial assistance payable in the circumstances of the case. On the 26th June in the other place the Minister of State said that the department was considering whether there should be a 1505 right of appeal. Four weeks later we still do not know the answer to the question. Why is this proving such a complex matter upon which to come to a decision? If the department can come to a speedy decision on the revised plan it should certainly be able to come to a decision upon whether or not there is to be an appeals mechanism. We want the Minister to know that we attach importance to the need for an appeals procedure, and a speedy one.
§ Thirdly—and this is my final point—if ultimately the critics are proved to be correct and the costs of running down the industry are in excess of £97 million, where will the additional funds come from? Will they come from the Treasury or will this be another burden to be imposed on the Northern Ireland budget?
§ Lord Hampton
My Lords, I, too, thank the Minister for his introduction of this order. Nonetheless, it must be made clear from the outset that we on these Benches, as well as the Labour Opposition as explained so well by the noble Lord, Lord PrysDavies, consider that the whole position with regard to the gas industry in Northern Ireland looks to us like being mishandled. The Explanatory Note to the order sums it all up when it says:The purpose of this order is to facilitate the rundown and closure by gas undertakers of their gas undertakings".The right honourable gentleman Mr. Peter Archer, speaking in committee in another place on 26th June put it well, I believe, when he said:The Opposition are not seeking a post-mortem. We want a consultation about treatment while the patient is still alive".We should like to be associated with that comment.
The order was in due course negatived in Committee by 18 votes to 10. But the Government have pressed on with it in the full House of the other place regardless. It would hardly be acceptable that your Lordships' House should reject outright an order passed by the elected Chamber. But I shall later come back to the question of whether some delay for further consideration might be possible.
"Profitability" is a fair word, but it is clear that the gas industry in Northern Ireland would need propping up for the foreseeable future if it were to continue. Our argument is that we think £12 million per annum—which the Government quote as the current subsidy required to continue to run the present gas industry—should be made available at least until some more happy solution to the present impasse can be found. The noble Lord has mentioned that some £97 million will be necessary for compensation anyway—and this figure might well have to be bigger—and added to this is the extra cost, as well as the human tragedy of numbers added to the unemployed.
I have had, as have other noble Lords, a personal appeal from the Gas Industry Joint Working Group to help if possible to persuade the Government, as they say:to re-examine vigorously the possibility of retaining a gas service for the people of Northern Ireland before irrevocable steps are taken to close it.I think significant are the words "irrevocable steps". I accept that there are many problems facing the gas industry in the Province. There are no easy answers. But we feel that there are two powerful reasons for 1506 suspending action at the present. First, great inconvenience will be caused in a part of the United Kingdom which is already disadvantaged. Secondly, the dangerously high level of unemployment can only be substantially increased by the proposed closures.
It seems probable, so far as can at present be estimated, that the compensation payable to houseowners who are forced to convert from their favoured use of gas to some other form of heating or cooking will be inadequate and that considerable hardship may well be caused. I shall come back to this.
In a telling reply to a Question for Written Answer on 18th June of this year the Minister of State, Dr. Rhodes Boyson, said:In disconnecting consumers from supply it is not the existing practice of the industry to remove pipes and fittings on private property once they have been purged and made safe".—[Official Report, Commons; col. 99.]They may have been, "purged and made safe"; but all the inconvenience of unwanted equipment will remain and conversion to the use of solid fuel would often need major adaptation to a building. The sum of £ 12 million is indeed a sizeable subsidy required to prop up an ailing industry, but we believe that the damage that would be caused by withdrawing this payment and running down the gas industry in Northern Ireland should be seen as unacceptable.
I suspect that the Government made up their mind on this issue some time ago and that further consultation has been only cosmetic—the case not really open to further consideration. As I mentioned earlier, the lack of confidence expressed by the Northern Ireland Committee in the other place was ignored and the Northern Ireland Assembly found that the order was duly announced only after it had risen for the Recess and it had no opportunity to debate it. In view of the great concern about this order and the serious opposition it has so widely aroused, I now ask the Minister whether it is possible to delay this order—the noble Lord, Lord Prys-Davies, also raised this point—to pause and consider further. Who knows what opportunities for the use of natural gas might yet arise if irrevocable steps are not taken prematurely.
Added to that, I have been approached by Age Concern, as have many other noble Lords, to see whether there is a possibility that the arrangements for compensation can be much more fully debated in Parliament than is at present proposed. It seems to me that unfair arrangements could lead to devastating dissatisfaction and even despair. If we were debating a Bill, the safeguards would have to be much more readily open to scrutiny. Can the noble Lord. Lord Lyell, when he comes to reply, reassure me on this point? We are not happy with this order but we shall not oppose it when the Motion is put. I should be grateful for answers to my two questions.
§ 2.15 p.m.
§ Lord Moyne
My Lords, I have a personal interest in this subject, though not of course a financial one, since a gas pipeline was laid some time ago through our small family farm near Dublin. We understood that it was to bring gas from Kinsale to Belfast. I have therefore been thinking for a year or more what a splendid instance this would be of North-South cooperation. But now the whole project is apparently to 1507 be scrapped. There is keen disappointment, I understand, in Irish Government circles. An agreement for the supply of the gas was apparently initialled by the British Government. There was, I understand, to be a fluctuating price tied to the price of oil, and I am told that the proposed price has never moved beyond the agreed range. That is not quite what the Minister said and I wonder whether there may be some misunderstanding there which can be cleared up.
Can my noble friend Lord Lyell tell us in due course whether in working out the agreed fluctuating price there was some miscalculation which has caused the British Government to go back on their word? Furthermore, can he tell us whether this question of abolishing gas supplies in the North has been debated by the Northern Ireland Assembly? There has been a tendency to regard the Assembly as something of a failure, through the non-co-operation of some of the Northern Irish parties. If its views are to be flouted on a matter of this kind, are we not making a farce of a body of which so many hopes were entertained? I understand that there is an agreement between all parties in the North, both Nationalist and Unionist, in favour of the proposed economic co-operation with the Republic in bringing the gas from Kinsale.
I am told by the joint working group of the Northern Irish gas industry that the supply of natural gas from Kinsale could be introduced at a cost of no more than £3.94 million by utilising available EC grants and loans and, at the same time of course, replacing the expensive methods used at present to produce gas from naphtha. On a present labour force of 1,000, I am told that the Kinsale gas would preserve 600 jobs, though 400 people would become redundant instead of the whole 1,000 jobs disappearing as proposed by this nefarious statutory instrument. Can my noble friend in due course confirm these figures?
Can he tell us whether an advance payment of £5 million has already been made to the Republic, which will be forfeited if the Kinsale project does not go ahead? Does he agree that the Department of Economic Development has estimated that the closure of the gas service in the North would cost as much as £97 million in compensation and that even this enormous figure has been challenged as much too low because of factors left out of account? Is there any reason why the North of Ireland should not have the benefit of natural gas enjoyed by this island of Britain, by the Republic and by other European countries? Bodies such as Co-operation North have received widespread support from all of us. Is not our praise of their work no more than insincere lip service if such a measure as the ending of the Kinsale scheme is to be accepted without question?
In spite of the sincere efforts made by Westminster and Whitehall to help with the problems of the Republic and the North and their relationship in living with the Border, is not this wretched order yet another example of the deaf ear so often turned in the past at Westminster and Whitehall to Irish pleas, whether Unionist or Nationalist? Is not this order a step backwards in the journey towards achieving harmony through economic co-operation?
We are apparently not at this stage allowed to vote against the order, but if my noble friend could at least 1508 give an assurance that the Government will look at the question again and take all these factors into account, before plant is irreversibly destroyed and pipes irreplaceably ripped out, he would make me a great deal happier. I should like to think that the North of Ireland might after all not be deprived of the use of a great natural resource which belongs to the island of Ireland as a whole.
§ Baroness Ewart-Biggs
My Lords, I think that the proof of the very great importance with which the House regards this order is the number of speakers present on a Friday afternoon who wish to take part in this debate. Before I make one or two points I should like to apologise to the Minister in case I am unable, because of the debate having started a little later than I thought, to be here when he replies. I look forward to reading his responses in Hansard.
My noble friend Lord Prys-Davies has already enumerated the very serious consequences that the passing of the order will have on the people of Northern Ireland. My noble friend has also traced the whole series of events which led to the Government's decision to close Northern Ireland's gas industry. Likewise, he has described the extraordinary episode whereby the report of the joint working group set up by the industry was rejected by the Minister of State in another place without his having fully discussed it with that group. Indeed, the noble Lord, Lord Hampton, has already mentioned this. My noble friend has made the seriousness of this measure very clear. If half the people of Wales were suddenly denied the use of gas, and if one thinks of what would follow in the way of a Bill, in the way of amendments, in the way of discussion, in the way of debate and in the way of argument, it brings home the implications of the order that is before us today. One cannot make too much of this point.
However, I should like to stress my own concern that the people of Northern Ireland should be denied the choice of the use of gas. Secondly, I should like to question whether the reasons for closing the industry were valid and deplore the manner in which the Government have carried out the whole exercise. Lastly, I should like to ask the Minister a few questions about compensation for present gas users, about the provision for appeals by dissatisfied households and about how the safety standards will be applied. I know that my noble friend Lord Prys-Davies has made these points too, but I should like to ask the Minister one or two specific questions.
First, there seems to be a considerable discrepancy between what the Government think will be the total cost of closing down the gas industry in Northern Ireland and what others, such as the Northern Ireland Economic Council and the joint working group, think. It would seem that against the Government's estimate of £97 million which has already been mentioned, independent sources put the figure as high as between £143 million and £155 million.
Those same sources believe that the Government have underestimated the cost on three different counts. First, in regard to the conversion of public housing to new fuels, the Northern Ireland Housing Executive puts the figure at £5.8 million higher than the Government estimate. Secondly, the Government are 1509 working on the assumption that the service will be closed by 1987–88, whereas the Northern Ireland Housing Executive's plans are to finish conversion by 1990–91, or in 1992. Each year of delay will cost the Department of Economic Development an additional £12 million.
Thirdly, the Government have admitted an advance payment of £5 million to the Republic of Ireland, to which the noble Lord, Lord Moyne, was referring. Under the Department of Economic Development's own previous plan, that sum of £5 million will be lost if the service closes. If the higher estimated costs prove to be correct, then, as my noble friend Lord PrysDavies asked, from what source will the Government find the additional money? That is a very important question and one which must be put to the Minister today.
Perhaps I may say a final word about the Northern Ireland consumers. In order to understand the implications to the Northern Ireland consumers, it is necessary to consider them as forming two separate groups, each of which will be affected very differently by the loss of the gas service. The first group is made up of 15,000 consumers who are tenants of the Northern Ireland Housing Executive. Although they will lose the use of gas, they will be fortunate in being offered a full fuel choice, including oil, electricity, bottled gas, etc. The cost of any redecoration resulting from conversion will be met by the executive. Finally, I understand that a system of dealing with complaints will be set up within the Northern Ireland Housing Executive. That is the first group affected.
The second group will be less well provided for. They are the 80,000 consumers who are either owner-occupiers or private tenants who will be compensated by the Department of Economic Development on the basis of the least cost conversion, which the Minister was good enough to explain to the House. This means that they will be denied a wide choice unless they bear the additional cost themselves of choosing a more expensive fuel. Moreover, they will receive nothing towards the cost of any necessary redecoration. Finally, it is not apparent from the draft order that householders who are justifiably discontent with the way in which their conversion has been carried out will have any right of appeal. Again, my noble friend made a point of asking the Minister about that aspect of the issue.
Further, it is not yet known whether voluntary housing associations, which normally work to the standards of the Northern Ireland Housing Executive, will be recompensed at the same level as the executive consumer or the private consumer. I shall be grateful if the Minister will say how the voluntary housing associations will be looked after.
There can be no doubt as to the difference between the various ways in which different groups of householders will be affected. It seems to me to be a great anomaly and injustice that they should be dealt with in such different ways. I hope that the Minister will say a few words also in order to quieten our fears about the safety aspect. I am not a great expert on the subject of gas installations but I will give the Minister one example, and perhaps he will respond to it.
1510 Suppose one has the situation where there were one or two owner-occupiers among a long line of terraced houses owned by the Northern Ireland Housing Executive. The houses would currently be piped for gas and the Northern Ireland Housing Association would make arrangements to convert them to, say, oil or electricity. However, the one or two owner-occupiers living in that line of houses might opt for solid fuel. Does the Minister not accept that there would be considerable danger where there is a different use of fuels in the same row of houses? As my noble friend said, specific qualifications on how the safety strictures will be imposed do not appear to be included in the order.
§ 2.30 p.m.
§ Finally, perhaps I may say one word about the people who will be affected most by the loss of the gas service: that is, the elderly. It goes without saying that it is mainly the old houses which have gas installations, and very often there are old people living in them. I understand that, taking the Province as a whole, as many as 48 per cent. of the gas consumers are over the age of 50 and that in Greater Belfast alone, in the households headed by people over 60, 55 per cent. are gas users. I too have been asked by Age Concern to present some of its worries about the elderly in Northern Ireland and I ask the Minister to comment on the following point made by Age Concern.
§ First, Age Concern is worried that elderly consumers will not be fully aware of all the implications—financial, mechanical and technical—involved in these conversions. It is felt that the only way of helping them in this regard is through advisers from the Department of Economic Development visiting them personally in their homes and explaining the implications to them.
§ Next, Age Concern urges that the choice of alternative fuel supply should be based on consideration of the long-term needs and wishes of elderly people and not on the basis of the least-cost option. Failing this, it urges that the right of appeal against the least-cost option be built into the compensation scheme for this very vulnerable group of elderly people. Age Concern also urges that provision be made for internal gas supply pipes, meters and other fittings to be removed and that the compensation scheme to provide for the cost of the necessary redecoration should be adequate, as old people are unlikely to be able to carry out their own redecoration and would not be able to pay for it themselves.
§ Age Concern also urges that elderly people with arrears exeeding six months should be regarded as special cases unless this can be demonstrated to be inappropriate. Finally, Age Concern considers that elderly people entitled to grant under the compensation scheme should receive priority when grant payments are made. It is vital that elderly people are not penalised, or put at risk, by delay in payment of a grant.
§ In conclusion, there is a very great worry that it will be the old people who will find it hardest to adapt and, therefore, every kind of consideration should be made. I am happy to say that the Minister of State in another place gave that assurance and I should be grateful if the Minister would confirm that.1511
§ I have nothing else to say except to add my plea to that of previous speakers that the Government should consider putting off for a few months the implementation of this order. It is an absolutely radical change in the lives of those who live in a part of the United Kingdom. I should be most grateful if the Minister would answer some of those questions.
§ Lord Dean of Beswick
My Lords, I rise briefly to support the plea that has been made from this side of the House asking for delay in the implementation of this order. If the order is acted upon now we shall be at a point of no return. I have read, as no doubt have the other noble Lords and the noble Baroness who have spoken in this debate, the proceedings in Committee in another place. Certainly the case for this action was not compellingly made by the Minister in that Committee. I shall not attempt for one moment to go into details, as my noble friend on the Front Bench did in a very technical review of what has happened. Certainly in this House today the Minister has not had any more of a convincing argument to put than was put in another place.
Anybody listening to the debate will realise that quite clearly the force of the argument is on the side of noble Lords on this side of the House, including my noble friend Lord Moyne, who have asked for some delay in implementing this order. Technically, I cannot answer this question, nor do I think can anybody else in this Chamber, but if, for instance, natural gas was found within reach of an economically viable area of Northern Ireland, I was wondering what would be the situation if this order had been fully implemented. We may be placing the people in that area of the United Kingdom in a situation in which they would then not be able to take advantage of a natural asset that had been found. I can think of nothing more disturbing and economically disastrous than for that to happen.
I have always had a concern for the events in Northern Ireland. It dates back to my days in another place when I was a Government Whip and then an Opposition Whip with, so to speak, a brief to liaise on the effects of policies on Northern Ireland and what was happening in the Province. Of course, we have always tried to approach the difficult problems of that place in an almost bipartisan manner. However, I am rather surprised that during his statement today the Minister did not take an opportunity to deal with something that was said in Committee in another place by a Member representing a constituency in Northern Ireland which to me cuts right across what I know from experience to be the true way in which we are governing Northern Ireland.
It is not usual for Members of your Lordships' House to make reference to Members in another place. However, I think that when assertions are made in another place which I certainly do not think are creditable, people are entitled to give their views on them. I speak of the honourable Member for the Strangford constituency in Northern Ireland, where he said during that debate (I shall quote very briefly):But we have direct rule, and the Ministers who come to Northern Ireland for review days every month and go away again"—
My Lords, I wonder whether the noble Lord will give way for a moment? I have been 1512 advised that in this House one is not allowed to quote from speeches in another place. I apologise to the noble Lord.
§ Lord Dean of Beswick
My Lords, I will paraphrase it by saying that the comment was made by that Member that there was a lack of attendance in Northern Ireland by Ministers over a recent period. That is not my phrase: that is the phrase that was used during the Committee stage. I know from my experiences, both under a Labour Government and under successive Conservative Governments since, that any Minister who has had to serve in Northern Ireland has had to do so very often at great personal risk both to himself and to his family. I know that irrespective of politics they have done that assiduously, and I think they have done it very well.
Of course, we must remind ourselves that Northern Ireland is in this situation because there seems to be an inability on the part of political leaders in Northern Ireland to come together to provide solutions that would be acceptable in normal political and governmental terms. However, I found the comment rather strange, coming from a Member who has the good fortune to serve not only in another place and in Europe as an MEP but also in the Northern Ireland Assembly. I question whether a person sitting on three such bodies would be able to compare their own attendance at those venues with that of some Ministers who serve the Government today and some Labour Ministers of the past. I believe that this merits some reference. That is why I make it. I believe that it was a rather callow remark that was made, and that it would have been better unsaid.
Having said that, I hope that the Minister will urge the Secretary of State to have regard to the points that have been made: I hope that he will give thought to them over some months to see whether the gas industry, or a basis of it, can be retained in Northern Ireland. To burn our boats now would be a rather tragic blunder from which we could not return.
§ Lord Fitt
My Lords, since the abolition of Stormont and the introduction of direct rule in Northern Ireland in 1972, there has not been a single issue on which the political parties in Northern Ireland could be united or could find any agreement—except this one. Every political party in Northern Ireland, every representational group, everyone who is concerned about the energy needs and the energy prospects for the future in Northern Ireland, speaks with a voice of total unanimity when they claim that the Government have taken a disastrous decision to close down, once and for all, the gas industry in Northern Ireland.
This is a decision of major importance. It affects the whole way of life of 100,000 consumers in Northern Ireland who hitherto have had the opportunity to use gas. It affects also the whole economic future of 1,000 employees in the gas industry in Northern Ireland. Many of the men who will be made redundant will never work again. Men who are 50 years of age and even those who are not yet 50, will never again have gainful employment in Northern Ireland. And people of all ages, particularly old people, who have become accustomed to using gas will have that opportunity withdrawn from them.
1513 Sitting here a few moments ago, I heard the Whip on the Front Bench telling my colleague that it was not procedurally right to quote from Hansard of another place. It offends the procedures of this House. And we must live by the procedures of this House. We must not do anything which may offend the susceptibilities of another place. I must tell all noble Lords present that this is not how I see this House. I believe that if the 100,000 consumers in Northern Ireland who will be affected, and the 1,000 men who will lose their livelihoods, were to be sitting in the Gallery of this House or were within the confines of the House at the moment and saw the atmosphere in which their future is being decided, they would be bitterly resentful.
I am delighted to see that we have enlisted another recruit. The noble Lord, Lord Moyne, has spoken this afternoon. A noble Baroness sat on the Government side on the last occasion that we debated Northern Ireland. I am delighted to see that, one by one, and step by step, there are people who are beginning to listen to Northern Ireland. However, it would be less than honest to say that there is a great deal of enthusiasm shown in this House or indeed in another place when the affairs of Northern Ireland are discussed.
§ 2.45 p.m.
§ We hear repeatedly—the papers including the Financial Times one day last week, are full of it and it has caused great comment among all political pundits—that the Government are trying to find some agreement with the Government of the Republic to see whether together they can grapple with the problems of Northern Ireland and find agreement on some cross-border co-operation which would help in bringing the warring communities together in Northern Ireland. Here was an absolutely obvious way in which they could have put their money where their mouth is. They did not have to have secret discussions, and they did not have to have leaks one way or the other. We hear these days a lot about the atmosphere of secrecy. I read an article in the Financial Times last week, and I read in the Guardian this morning an article saying that we should not believe what was written in the Financial Times.
§ The Government could have taken the decision which has already been referred to by the noble Lord opposite; they could have agreed with the Government of the Irish Republic to the installation of the pipeline. Such a decision would have economically helped the Government of the Republic and it would also have helped the people of Northern Ireland. It would not have been a unique decision, a one-off decision or something which had never happened previously. We only have to look to Europe to find that that is so. Take, for example, Western Germany, which is allegedly living on its nerves every day in case there may be a nuclear holocaust thrown at it from the Soviet Union. In spite of that, it is building a pipeline to the Soviet Union in order to use supplies of Soviet Union gas in Western Germany. That proves that it would not be a one-off decision. The situation, the atmosphere, the fears and suspicions which exist between Western Germany and the Soviet Union are far more acute than those which exist in Northern Ireland.
§ I speak as someone who was formerly chairman of the Belfast Corporation Gas Committee. We first 1514 began to suspect that decisions may be taken by the British Government to wind down the industry—and I have to say this because it would be less than honest to say otherwise—in 1977. There was a Labour Government in power; but within two years the Labour Government were out of office. However, I think I am correct in saying that had that Labour Government continued in office, they certainly would not be taking the decision which is being taken today by this Government.
§ Whatever disagreements I may have had—and I had many—with the former Secretary of State for Northern Ireland, Mr. Roy Mason, I know that he was so concerned with trying to create economic prosperity in Northern Ireland, outside of other political decisions, that I have no doubt in my mind that he would not have imposed the decision which has been taken by the Government.
§ Therefore, we find ourselves in a situation where there is great disagreement and great argument about how much it will cost. The Government say that it will cost £97 million. Those who are closely identified and associated with the industry say that it will cost £143 million, and I am prepared to accept their figures.
§ The Government on occasions have employed economic analysts. Indeed, they have employed a very reputable firm of economic analysts—Coopers and Lybrand. When the Government want to prove a case they employ that firm, and then, whenever it suits the Government, they will point out that firm's economic expertise—in other words, whenever its decision comes down in favour of what the Government are intending to do. However, when Coopers and Lybrand, after a very close assessment of every aspect of the gas industry, say, "We do not believe that it is right that this industry should be brought to an end", the Government, in the words of their Minister of State, say, "That is Alice in Wonderland talk" The Government cannot have it both ways. The Government should accept the expertise of Coopers and Lybrand whatever its decision may be, whether it be for or against whatever the Government's attitude happens to be at that time.
§ This is one decision which unites every aspect of political opinion in Northern Ireland. The Government took the decision one day last week when there were very few representatives in the House of Commons. Today there are very few Members of your Lordships' House here this afternoon. This is something with which we have had to live since direct rule. I think I said the last time we debated Northern Ireland in this House that we do not see a great influx of Members running through one or other of the doors into this Chamber to listen and to take account of the problems which daily affect Northern Ireland. The same thing happened in another place.
§ That attitude is a direct condemnation of direct rule. That is not the best way to govern the troublesome Province of Northern Ireland. But here is an issue where politics are set aside. There is no question of the border, or of flags. There is a question of the border in relation to the pipeline, but it is not a question of one's allegiance to the British connection or an aspiration to the Irish Republic. It is an issue of bread and butter which will affect people of whatever political persuasion or religious denomination in Northern 1515 Ireland. The Government have taken a disastrous decision.
§ Many of my noble friends who spoke before me pointed out that they had had communications from Age Concern in particular. I have read the document. They express a great deal of the fears which are at present felt by those people whose gas supplies will be affected. My noble friend Lord Blease is the only person who will be affected by the decision who is in this House at the moment. My mother will be affected by it because she lives in Northern Ireland. I shall not be affected by it because I live in Britain.
§ I could easily have absented myself today because I do not live in Northern Ireland. I left Northern Ireland in rather controversial circumstances. I consider myself to have been harshly treated by a certain section of the Northern Ireland electorate, and it would perhaps be understandable for me to absent myself from this debate, or even to agree with the Government. But I could not do that because I know how many people will be affected.
§ I have heard my noble friend—and, so far as I am concerned, I have no noble enemies in this House—Lord Hampton say that we cannot oppose this order. I have heard my noble friend on the Front Bench say that we cannot. I am not particularly concerned with the niceties and procedures of this House. This House is part of the British parliamentary system. That was why I accepted the honour of coming into this House. I did not think I was finished with politics, or was being sent out to grass, or that you do not say or do anything controversial in this House.
§ Since I became a Member of this House two years ago there have been other issues in regard to legislation of which I totally disapproved; for example, the Prevention of Terrorism Act and the Emergency Provisions Act. They were two issues to which I was totally opposed, and yet I did not think it necessary to divide the House. I say here and now, in the closing words of my remarks, that if there is an opportunity to divide this House today I hope that those noble Lords who have spoken against this order, and others who may be in this building, will realise the enormity of the decision which has been taken and will vote against the Government.
§ What would be the consequence of that? I am not naive enough to believe that there would be enough noble Lords in this House to defeat the Government. I do not think that is possible, but it is one way in which we could register our total disapproval. Those Members on this side of the House who because of their adherence to procedure feel that they cannot go into the Lobby do not have to go into the Lobby at all. They do not have to vote with me in the Lobby, but at least they could abstain from going into the Government Lobby in order to show their disapproval of the actions which have been taken.
§ I believe that this Government, had they been anxious to do so, could have had further consultations and agreements with the Government of the Irish Republic, with EC sources and with other people who might be anxious to retain the industry. I believe that, as has already been stated by my noble friends, persons associated with Lloyds Bank have said that they would 1516 be willing to have a further assessment made of the viability of the gas industry in Northern Ireland.
§ I remember many years ago when it was suggested that there should be an electricity link between the Republic and Northern Ireland. Some of the more bigoted Unionists objected forcefully to such an electricity link being established, on the grounds that they did not want republican hands on the levers of energy in Northern Ireland. Those days have gone. Unionist spokesmen have been prepared to accept flak from some of the more extreme factions of unionism in identifying with the Republic of Ireland in an attempt to have this gas line created.
§ I do not want to believe that the Government have taken an irrevocable decision. If they have, there is no way that I can sit in this House today and say that I agree with that decision. I shall do whatever I can, between now and the closing speeches, to mobilise whatever support I can to show my disapproval of the Government's attitude in the Lobbies of this House this afternoon.
§ Lord Pitt of Hampstead
My Lords, I rise to say that if the noble Lord, Lord Fitt, chooses to divide the House I shall be happy to be his Teller.
§ Lord Blease
My Lords, we have had a wide ranging debate and a good debate. I do not wish to detain the House by repeating what has already been said about this gas order except in one respect. As has already been mentioned by the Minister, and other noble Lords, over the past 10 years the future of the Northern Ireland gas industry has given rise to much argument, debate and much documentation. Today because of the present Government's policies—I should perhaps say lack of efficient policies—we are not debating the future of the Northern Ireland gas industry. Sadly and tragically we are discussing the closure, the demise, the death of the gas industry in Northern Ireland. This Gas (Northern Ireland) Order 1985 is not about the possible role of the gas industry in the economy of Northern Ireland, but about its funeral arrangements. The contents of the order are not precise or satisfactory arrangements for the industry or its consumers.
One thing is evident: the considerable distress that the order has given rise to in Northern Ireland as regards the future of the 1,000 skilled workers and members of management and as regards the future for 90,000 householders who represent 300,000 people in the Province who are users of gas supplies. There is also concern among the 3,000 commercial and 120 industrial firms who depend on gas as a primary source of heat and energy in the production of goods and services. They have considerable concern and anxiety about methods of replacement and how they can continue their production because of the possible changes.
Apart from these difficult questions that arise from this order, there is a further impediment to discussions and any meaningful, informed or reasoned debate. It has already been mentioned and I and others have spoken about it repeatedly in the House. The impediment is the procedural arrangements and the 1517 undemocratic way that some inappropriate parliamentary conventions are applied in this House to Northern Ireland orders. Instead of upholding the strong and valuable traditions of this House as a revising Chamber, we are here called upon today to be a mere rubber stamp.
§ 3 p.m.
§ If we could amend this order or even suggest changes that hopefully could give rise to some genuine positive consideration by the Minister and the Government, it would at least give some semblance of reality to the totally bemusing and ridiculous situation. Unless the noble Lord the Minister can today in his reply to this debate give us some satisfactory answers to the serious questions raised and unless the noble Lord the Minister can give some assurances on the points made in the debate that they will be earnestly and seriously considered by the Government, we—and let us be honest and let us face up to it—are taking part in an exercise of futility: futility so far as this order concerns the future and the present users and employees of the gas industry in Northern Ireland.
§ If there is anything useful that I can do at this stage in the debate it is perhaps with my few remaining remarks, to allow the noble Lord the opportunity to get his replies in order, which I am sure he will do. I am sure that the noble Lord will attempt to meet some of the requests that have already been made. He always responds favourably in respect of modest requests and we look forward to his replies on this occasion.
However, I would wish to add that while I do not accept the arguments made by the Minister in his opening remarks calling for the approval for the order, I find the tone and tenor of his approach more politically sensitive and perhaps more understanding than those of his honourable friend the Minister, Dr. Rhodes Boyson, when he has spoken in another place in debates on this order. I believe that no one should object to plain and forthright speech in the presentation of political objectives, and Dr. Rhodes Boyson has certain qualities in that regard. But, along with many others, I take strong exception to the arrogant manner in which Dr. Boyson has dealt with the many approaches to him about the gas industry and about this order. I would particularly draw attention to Dr. Boyson's statement during the debate on the order in another place on 19th July. The report is in Hansard, in Volume 83, No. 159, column 691. Dr. Boyson stated:
None of those who voted against the proposal before the Northern Ireland Committee and none of those who voted it down in the Northern Ireland Assembly carry any responsibility for Government policy. Obviously it was possible for them to vote against our proposal because they were not responsible for the budget. Their action was one of those freaks of freedom which occur from time to time and which people enjoy".
§ I consider it despicable to imply to honourable Members of another place who voted against this order and to Members of the Northern Ireland Assembly that they are irresponsible and that perhaps they take some form of inverted joy or thoughtless pleasure in voting against what I consider to be government by diktat, conflicting arguments, unqualified pronouncements and unanswered questions on important issues such as that represented in this order. I am sure that noble Lords will agree with 1518 me when I say that in no way are our approaches in this House today motivated by any sense or degree of joy in what we are considering. Nor do we consider that those who voted against the order were in any way acting irresponsibly.
§ I conclude by appealing to the Minister that, in the interests of the general democratic process, in the interests of the concern that has been expressed in Northern Ireland and in the interests of some realistic approach to Northern Ireland orders and the manner they are dealt with and debated, he will give attention to what has already been said by my noble friend on the Front Bench, Lord Prys-Davies. Perhaps my noble friend may be made a Minister at some future time. I understand that my noble friend Lord Prys-Davies has sent a letter to the Minister. He also put forward a plea that the date of operation of the order should be delayed. That is my own plea and it has also been put forward by others who have taken part in this debate.
§ I should like to place on the record that I welcome and support the views that were expressed by my noble friend Lord Prys-Davies, the Opposition Front-Bench spokesman. I know that I speak with the goodwill of the Northern Ireland Gas and Electricity Joint Working Group, whose secretary, Mr. Pimley, has been busy in the Westminster Lobbies concerning this order. I am grateful for the support and the earnest help that has been given by other noble Lords and by the noble Baroness, Lady Ewart-Biggs, who has left the Chamber. Their assistance has been warmly appreciated by the gas industry in Northern Ireland and the help given by the noble Baroness has been considerable in this regard.
§ In my view, the cogent arguments and reasoned points that have been put forward today should be considered and should have some influence on the Minister's reply to this important debate today.
§ Lord Lyell
My Lords, I think the noble Lord. Lord Fitt, and others of your Lordships make possibly the valid point that there are rather few noble Lords who make a habit of attending these sometimes technical and sometimes esoteric debates that we have on various orders concerning Northern Ireland. I would stress to the noble Lord, Lord Fitt, and to your Lordships that there is more than a grain of truth in the fact that we do have very high-quality speeches and a great degree of knowledge expressed here in our deliberations, as has been shown once again during our debate on the order this afternoon.
The Government know of the concern that is felt in the Province on this matter of gas and gas supplies. I would ask the noble Lord, Lord Fitt, to take it on board that his contributions, together with those of other noble Lords—the noble Lord, Lord Prys-Davies, and others—are very valuable. Incidentally, may I welcome the presence of the noble Lord, Lord Underhill, who, we hope, given a short holiday, will be in full voice and full strength soon, in the autumn. We look forward to that, and indeed all your Lordships who speak and debate on Northern Ireland affairs are looking forward to that. We are very grateful that he has been able to come today. We admire his fortitude in having attended right through this debate: and he will know that we are due to discuss another subject which is of interest to many of your Lordships— 1519 betting, gaming and the like—immediately after this order. I think that subject is very dear to the hearts of many people in Northern Ireland—probably almost as many as are concerned with gas. However, at the moment we are concerned with gas.
The noble Lord, Lord Prys-Davies, began traditionally by commenting on the procedures and, indeed, the inadequacies of direct rule. I have written down here the words "direct rule syndrome". He may have his opinion, but I would say to him what I have said to your Lordships collectively, which is that I believe we have had a very useful debate. I stress to the noble Lord, and indeed to all your Lordships—I shall be filling this out later on—that there is no question of killing the industry. This draft order gives permission to any or all of the 13 gas undertakings to close if they wish. It is in no way compelling.
The first point raised by the noble Lord, Lord Prys-Davies, concerned the Kinsale project. On 6th September last year, as I and many of your Lordships will be aware, the United Kingdom Government announced that the Kinsale project would not proceed, and that subsidy for the gas industry in Northern Ireland would cease. It was that decision to which my honourable friend the Minister of State in another place referred in his evidence to the Northern Ireland Assembly. I give the undertaking that the Government were sincere in their offer to consider any proposal which was seen to offer a viable way forward. I stress that this expression "viable way forward". I have to say that this viable way forward simply did not make itself known to us, and indeed was not apparent.
The noble Lord, Lord Prys-Davies, and I think my noble friend Lord Moyne also, referred to the Northern Ireland Assembly. As your Lordships and those who have read the report of the Northern Ireland Assembly will be aware, that Assembly accepted that the Government's decision to withdraw subsidy was irrevocable; and the inevitable outcome of that decision will be the closure of the industry. But, of course, the Assembly was of the opinion that the Government should make every effort to ensure that the rundown of the industry will be conducted as swiftly as possible, so that consumers are not left in a state of uncertainty. The Assembly also made specific proposals with regard to the rundown of undertakings and the conversion of their consumers' needs to other fuels. These are being considered, and a reply to the Assembly will be issued shortly.
The noble Lord, Lord Prys-Davies, also raised the question of gas from Morecambe Bay. I am advised that the Department of Economic Development in Northern Ireland has examined various options for the supply of all types of gas to the Province, and for that purpose I am including the supply of gas from Morecambe Bay. I am able to tell the noble Lord that there is no indication that natural gas could be provided on a viable basis from Morecambe Bay. When I say "viable basis", it would be on a lower cost than our calculations up to the present moment.
The noble Lord was also kind enough to give me advance notice of his suggestion as to a possible stay of execution of the draft order pending various projects 1520 or inquiries which are being carried out now by Lloyds merchant bank, to enable them to complete their evaluation of a pipeline project to import Kinsale gas to the Province. This question was raised also by the noble Lord, Lord Dean, the noble Lord, Lord Hampton, and the noble Baroness, Lady Ewart-Biggs. I hope that the noble Lord, Lord Prys-Davies, will accept that the Government maintained subsidy to the industry for a period of six months at a cost of £1 million per month while the Joint Working Group developed its rescue plan. But we believe that it is unfair to the industry, and indeed to the consumers, for the Government to prolong this uncertainty by continuing their subsidy on the basis of what can only be speculation about yet another possible scheme.
This gas order is purely an enabling measure—I stress that to the noble Lord, Lord Pitt, who rose to speak—which is intended to facilitate the closure of those gas undertakings which no longer wish to remain in operation. Those gas undertakings may choose to remain in business while investigations into private sector proposals continue. But from my point of view, and from the point of view of the Government, the Government cannot finance any further delay.
§ 3.15 p.m.
§ The noble Lord, Lord Prys-Davies, and others of your Lordships asked about possible assistance for a scheme for conversions. The Government have undertaken to consider the possibility of the need for some form of appeals mechanism in respect of this scheme. But it is still under careful consideration—I hope that that is an improvement on what may have been said in another place—and we must and will consider equity and fairness to consumers in relation to what is feasible in our own administration. Above all, it must be subject to accountability for public funds. The noble Lord may have heard that we may be proposing various schemes for conversions for consumers who are left without gas, but the final details have yet to be worked out. However, I hope that we have been able to give an outline.
§ The noble Lord quite rightly referred to the question of safety. The noble Lord may be aware—certainly I was not aware until, during the course of the debate, a note reached me—that what is called town gas can be made up of many different types of gas. I am sure he will accept, as I certainly do, that safety requirements might be different for these various types of gas, and if we insert the word "safety" and try to define it too tightly in the order we could find ourselves in trouble.
§ However, I give the noble Lord and your Lordships an undertaking that we shall be following precisely the advice of the British Gas Corporation on all safety procedures and on technical matters, as regards the operations which may be carried out. So far as the order is concerned, we shall be following all this advice from the British Gas Corporation. I am sure your Lordships will accept that it is pre-eminent in this field and that we could not have better advice on aspects of safety. I am able to say that our estimates reflect this major priority.
§ The noble Lord, Lord Prys-Davies, and, I am sure, your Lordships will accept that the Government have responsibility to make a decision on the gas industry. 1521 I am afraid that we cannnot farm out this responsibility. The Department of Economic Development has taken advice all through from expert sources before arriving at the decision.
§ The noble Lord, Lord Prys-Davies, also referred to the possibility of private enterprise rescue, and the speech which was made by my honourable friend the Minister of State in another place. I think my honourable friend went out of his way to applaud any role of private capital in the gas industry in the Province, and indeed in any industry in general. The Government would certainly not stand in the way of any private investment in any plan to revise this undertaking, or to set up a new gas industry, so long as there was no recourse to Government guarantees and protection. I am afraid that what the Government could not do is invest taxpayers' money when they do not believe this to be prudent. All your Lordships will know that I have had to stand in this very position and debate the results of Government expenditure on what were rather unsound commercial ventures.
§ The noble Lord, Lord Hampton, and others of your Lordships raised the question of consumers converting to other fuels. Domestic gas consumers will be entitled under the gas conversion assistance scheme to a grant which will be sufficient to cover the least-cost conversion or the replacement of their gas appliances. This may involve conversion to liquid petroleum gas or electricity, in the case of cookers, with the possibility of solid fuel or oil as further options in the case of heating, central heating, bath water heating, hot water heating and the like. Industrial and commercial consumers will be offered, as I stressed in my opening remarks, the 30 per cent. grant on the same basis; and they may also be eligible for energy conservation grants. I hope that that will be of some help to the noble Lord.
§ The noble Lord, Lord Hampton, was concerned—and I think that this was the general tenor of the debate—about the question of job losses arising from any decisions to close by the undertakings in Northern Ireland. Nobody has a monopoly of concern on this issue, but the wish to preserve jobs is not a feasible basis for the success of any industry. Indeed, in recent years the desire to maintain employment in the gas undertakings in the Province has persuaded the Government to provide ever-increasing subsidies only to see the industry's decline continue relentlessly. I referred to that aspect when I opened my remarks on the draft order. The jobs factor is not a simple issue. The growth or the decline of jobs in any one industry, especially in the fuel industry which we are discussing this afternoon, has a direct bearing on employment patterns among its competitiors—oil, electricity, solid fuels or the like. I hope that the noble Lord will accept that.
§ The noble Lord, Lord Hampton, and other noble Lords, were also concerned with continuing the subsidy. The Government's fundamental difference with the noble Lord, Lord Hampton, is that the Government have set their face against continuing subsidy in the absence of any prospect of viability. If I may continue with this concept of viability, we have taken advice and we have I hope consulted on the fullest possible basis. The noble Lord, Lord Hampton, 1522 asked one question which I think is of relevance and has been uppermost in virtually everybody's mind this afternoon. I stress to him that arrangements for the payment under the gas conversion assistance scheme will be comprehensive and flexible. We are going to discuss arrangements for this conversion scheme with Age Concern and with other bodies which have in mind consumers and particular groups such as the elderly and those who are dependent on gas. I was interested in the figures of the noble Lord, Lord Fitt. I give that undertaking and I hope that it will be of some assistance to the noble Lord, Lord Hampton.
§ My noble friend Lord Moyne was kind enought to give me some advance warning about his thoughts this afternoon. My noble friend startled me with the thought of the gas pipeline in the Republic proceeding through his farm. When the noble Lord and I rise in our places to discuss pipelines going through our farms it tends to cause mirth. Certainly, in another place one of my honourable friends said that compensation for the pipeline proceeding through one's farm outdid much of the crop proceeds. I hope that that is not the case with my noble friend Lord Moyne.
§ My noble friend referred to disappointment n the Republic of Ireland. In his announcement of 6th September last year, my right honourable friend Mr. Butler expressed his bitter disappointment. I know from personal experience that he was especially upset that, despite the intense effort which had been put by all sides into the negotiations and into the discussions by both Governments, the project to supply natural gas to Northern Ireland from Kinsale simply could not proceed as it was not viable for Northern Ireland. The Government have reiterated their sorrow that the project, which at one time appeared to offer the prospect of a mutually advantageous cross-border enterprise, should have foundered. We regret that. But we are firmly convinced that the scope for developing improved cross-border economic relations—this is only one aspect of it—would not have been served by proceeding with a project which clearly was not to the commercial benefit of Northern Ireland.
§ My noble friend failed to grasp one of the prime reasons for the decision of the United Kingdom Government not to support a natural gas project. One of the prime reasons for that decision was that the pricing arrangements over the period of supply would result in a gas price that was insufficiently competitive with other fuels. Also, the market available to gas is not adequate to provide for a viable project. I referred in my opening remarks to the drop in demand for gas over a period of some four years. I stress to my noble friend that those problems have not been resolved. I assure him that the public are not being misled. I wish to make it clear that the Government simply have no plans to make a re-examination of that particular project.
§ The noble Lord, Lord Dean, made mention of a possible delay. I hope that I covered that point in my earlier response to the noble Lord, Lord Prys-Davies. I should like to thank the noble Lord, Lord Dean. I hope that he is not too upset about the procedural gap that might have been created—certainly I have done it. I am sure we can resolve the matter. However, we are all particularly grateful for the noble Lord's words of praise for those of your Lordships who serve in 1523 Northern Ireland. Any possible risk or danger is totally outweighed by the welcome which all of us receive in Northern Ireland, even in matters such as we are discussing this afternoon. The sympathy and understanding that I find there is unbelievable. I wish to pay my own tribute to everyone in Northern Ireland who helps this Government and others to do their particular jobs.
§ I would stress to the noble Lord, Lord Fitt, and to all of your Lordships, that the draft order before the House today is an enabling and permissive measure. It does not compel any closure. I stress also that to vote against the draft order this afternoon would be to vote against any undertaking being permitted to close, even though that undertaking deemed it imperative to do so.
§ A vote against the order this afternoon would also indicate opposition to the provision of support. There may have been discussions as to the level of support, but your Lordships will surely agree that support of the order of £97 million is not ungenerous. From my own side of life in Northern Ireland, I can put every £1 million to extremely good use. I believe that the support we are providing for the planned and orderly rundown really is particularly generous. Your Lordships may think that I have said enough. I am sorry that I have not been able to be more helpful. I have tried to explain the Government's reason why we believe this order will be to the benefit of Northern Ireland. We hope to be flexible and generous. With that, I commend the order.
§ The Deputy Speaker (Lord Cullen of Ashbourne)
My Lords, the Question is, That the draft order laid before the House on llth July be approved? As many as are of that opinion will say, "Content"; to the contrary, "Not-Content". I think the "Contents" have it. Clear the Bar.
The Tellers for the "Not-Contents" have not been appointed pursuant to Standing Order No. 50, and the Division therefore cannot take place. I declare that the "Contents" have it.
§ Motion agreed to.