Appropriation (Northern Ireland) Order 1985 (Hansard, 11 March 1985)

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

My Lords, I beg to move that the draft Appropriation (Northern Ireland) Order 1985, which was laid before your 14 Lordships on 20th February of this year, be approved.

As your Lordships may be aware, this order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974.

The purpose of the draft order is twofold. The first is to appropriate the 1984–85 Spring Supplementary Estimates. This is dealt with in Part I of the schedule which covers the issue of a further £68 million out of the Consolidated Fund of Northern Ireland in respect of the Spring Supplementary Estimates of certain Northern Ireland departments. This sum is in addition to some £2,872 million which has already been approved by your Lordships for the current financial year. It brings the total estimate provision for this year, 1984–85, to just over £2,940 million.

The second purpose, which is covered in Part II of the schedule is to authorise the Vote on Account to all departments in the Northern Ireland Office of £ 1,323 million for next year-1985–86. This provision is necessary to enable all services to continue until the 1985–86 Main Estimates are considered by your Lordships later in the year.

Full details of all the provisions sought in this draft order can be found in two volumes, copies of which have been placed in the Printed Paper Office. These are entitled the Spring Supplementary Estimates and Statement of Sums Required on Account.

Recent economic indicators show that Northern Ireland, like the rest of the United Kingdom, is experiencing a revival of economic activity. The signs are that this trend will continue. In Northern Ireland the trend for both total industrial production and manufacturing output remains upward. Output for these sectors in the first three quarters of 1984 rose by 3 per cent. and 4 per cent., respectively, when compared with the same period in 1983. The recovery is broadly based; most sectors now display some improvement. The most recent employment figures provide supporting evidence. The rate of decline of employment has fallen significantly in recent years; employment declined by 660 in the 12 months to December 1984, compared with a decline of 3,110 in the 12 months to December 1983. Indeed, the number of persons employed actually rose by 4,170 in the third and fourth quarters of 1984. Despite these encouraging figures, unemployment remains the most pressing social problem in the Province. The trend is still upwards, even though there are signs of improvement.

Turning now to the Supplementary Estimates, we find that a common feature in six out of the 24 Votes are receipts from the European Community under the Urban Renewal Regulation. The order before your Lordships provides for the receipt of £14.2 million for the second of three tranches of aid which in total amounts to some £19.8 million and which was approved by the European Commission in November. The assistance has been earned by 91 publicly funded infrastructure projects in the greater Belfast area and has enabled the Government to increase their planned expenditure on urban renewal, including housing. I think your Lordships will agree that this positive and practical assistance indicates that, along with the Government, the European Community shares the concern to alleviate the Province's social and economic problems.

15 I now turn to the main provisions of these Spring Supplementary Estimates. Class 2 covers aid to industry, and in Vote 1 an additional £4.4 million is required, the majority of which—£3.5 million—is to fund an increased number of alterations and extensions to existing factories; and under Vote 3 expenditure on standard capital grants will rise from £37.5 million to £54 million. We believe that that indicates improved business confidence in manufacturing. However, we have to admit that part of the increase can also be attributed to investment being brought forward in the knowledge that the Standard Capital Grant Scheme is under review. The Northern Ireland scheme has in fact been reviewed in the light of the significant changes already made in its Great Britain equivalent. My honourable friend in another place hopes to be able to announce the outcome of that review in the very near future.

Perhaps we may move on to Vote 1 in Class 3 which covers energy. A new subhead, B3 is being introduced to enable the Northern Ireland Gas Company Limited to repay loans issued during the financial years 1983–84 and 1984–85. This flows from the Government's decision, which was announced in September 1984, that they would not be proceeding with the Kinsale natural gas project because the project no longer afforded the prospect of economic viability. Provision is being made to enable the orderly run-down and closure of those gas undertakings which decide that they are unable to continue without financial support.

Those of your Lordships who are familiar with the Province will be aware that the Northern Ireland electricity service is heavily dependent on oil for electricity generation. The movement in the sterling—dollar exchange rate has sharply increased the price of that fuel and there has been a consequent increase in electricity service costs. Under Class 3, Vote 2 an extra £5 million is therefore sought to increase the electricity tariff subsidy; now some £90 million. This is, of course, of increasing concern because it restricts the scope for expenditure on other fronts. For that reason the Government are looking urgently at the options for altering the primary fuel used for electricity generation at Kilroot, which would reduce costs and thus the demand for the subsidy. The Government and the electricity service are also actively following up the potential for reducing the cost of electricity generation through the use of indigenous lignite.

The extra net provision of £4.2 million in Class 4, Vote 1 is for capital, operational and maintenance costs on the roads programme. If we continue to look at the schedule, we find housing. This continues to be the top priority among Northern Ireland's social and environmental programmes. The net increase in Class 5, Vote 1 of some £9.5 million in the provision for housing services can be attributed mainly to an additional sum of £6 million to enable the Housing Executive to repay certain building society loans and to an increase in the level of expenditure on house renovation grants in response to rising demand.

In Class 6, Vote 4 a net increase of just over £1.3 million is required mainly for the purchase of 16 computer equipment for the Department of the Environment's rating and Ordnance Survey services.

Moving on to education, we find the supplementary provision sought for the education services in Class 8, Vote 1 of £5.2 million. This relates primarily to the increased salary costs arising from the teachers' April 1984 pay award of 5.1 per cent. However, it also includes provision of just under £1 million for capital grants to schools under voluntary management which will allow further progress on certain essential minor works, such as health and safety schemes; £0.75 million of this figure has been made possible by the new carry-over arrangements introduced last year which has permitted a proportion of unexpected capital funds in the Northern Ireland block as a whole to be brought forward from the 1983–84 financial year into 1984–85. Under the scheme under-spending of up to 5 per cent. of the total eligible capital provision may be carried forward from one year to the next. The carry-over facility has proved to be a most welcome addition to the flexibility of my right honourable friend the Secretary of State. As well as the Department of Education, three other Northern Ireland Departments have benefited this year: the Department of the Environment, by £1.6 million; the Department of Economic Development by £2 million, and the Department of Health and Social Services by £0.5 million. These amounts are included in the additional provision being sought now for these departments.

Returning to Class 8 and in particular Vote 4, the supplementary provision of £5.2 million is required for grants to the Education and Library Boards. The bulk of the increase will be spent on recurrent and capital expenditure on this year's youth training programme. This increase will bring the total expenditure on the educational element of the youth training programme to over £10 million and it will allow the further education colleges to offer 2,500 full-time places and 7,500 part-time places.

The supplementary estimate for Class 9, Vote 1, which covers health and personal social services, seeks net additional resources of £3.2 million, mainly to take account of pay settlements the additional costs of which have attracted, as in the rest of the United Kingdom, partial assistance from the contingency reserve.

Your Lordships may have noticed a number of Votes with a token provision of £1,000. Class 9, Vote 2, is one such example and, with your Lordships' permission, I shall use it to explain why they appear in the Supplementary Estimates. In this particular Vote there has been an increase of almost £3 million in the cost of medical and ophthalmic services. However, this £3 million increase is offset by savings brought about by reductions in the provision for pharmaceutical services, and also by higher receipts than expected from the contributions paid by employers and employees towards the cost of the health service. The overall effect of these pluses and minuses—if that is what they can be called—is that the original provision is adequate. However, in order to draw the attention of your Lordships to the significant changes in the costs of these elements within the Vote it is necessary to seek a token supplementary estimate of £1,000.

17 In the social security programme, an additional £2.7 million is being sought in Class 10, Vote 4 for administration and miscellaneous services. Additional provision is required for salaries and wages, charges for agency services and for additional costs with the inquiry into children's homes and hostels.

Finally, under Class 11 provision has been made in Vote 3 for some £2.4 million, the bulk of which is related to the information technology drive within the Northern Ireland Civil Service. The drive is aimed at improving the services offered to the community, and contributing towards more effective and efficient administration in line with the Financial Management Initiative.

In these remarks I have tried to outline, albeit I hope briefly, the main features of the draft order that is before us this afternoon, and, above all, to give your Lordships an appreciation of the reasons for the changes in the provision. I shall listen with great interest to whatever your Lordships have to say on this matter. In my reply I hope to deal with as many of the points as your Lordships will raise. I am very grateful for the kind reception of this order and to all your Lordships who have expressed an interest in raising various points. I hope that I shall be able to answer them as we go along. My Lords, I beg to move.

§ Lord Prys-Davies

My Lords, I very much regret that my noble friend Lord Underhill is not in his usual place this afternoon. He always uses the debate on the appropriation order to review those aspects of public expenditure programmes in the Province which are of the greatest concern to him. The House will be glad to know that he is making a slow, though steady recovery.

I thank the noble Lord the Minister for explaining clearly the main provisions of the order. I should like to make one or two comments about the provisions and ask some questions on matters which the Minister did not mention. We know that the Northern Ireland Assembly is being consulted by the Government on public expenditure programmes in Northern Ireland. It would be very helpful if we could be told how many of the Assembly's main recommendations or conclusions have been accepted by the Government. I am sure that if I had the services of a research assistant, I would be able to work out the answer to my own question. It would, however, be helpful if we could be given it.

I have read the Assembly's report on public expenditure priorities for 1985–86 published last July, and also its document on economic strategy published last December. Both are valuable reports based on the Assembly's perception of the needs of the Province. Does the Secretary of State go along with that perception? How successfully has he related those needs to what the Government are prepared to spend on public expenditure?

On the issue of Northern Ireland, we face a largely hostile world opinion. It is important for that reason that we should have an Assembly whose status and authority is constantly enhanced. It is also important 18 for the sake of the Province itself that we should have an Assembly that can speak with authority. It therefore matters that the Assembly should be seen to be a strong instrument capable of influencing public expenditure programmes in the Province.

My second question relates to a matter that the Minister mentioned in his speech. It concerns EEC expenditure in Northern Ireland. We on this side accept that European Commission resources should be available to help resolve some of the problems that are of a scale and intensity that can weaken the development of the Community itself. This is the Community dimension to the Northern Ireland problem. I believe that the Commission has responded generously to the needs of the Province. Northern Ireland has benefited substantially from the European Social Fund, from the European Regional Development Fund, from the Agricultural Guidance Fund, from the assistance for Belfast to which the Minister referred, and, to a much lesser extent, from the loans by the European Investment Fund.

I do not propose to ask any questions about the complex issue of additionality. Can the Minister tell the House, however, what were the total receipts in 1984–85 in the Province and how much will be received in 1985–86? Looking to the future, one is mindful of the enlargement of the Community, which will add substantial territories to those designated as Community problem areas. Are the Government satisfied that the Province will continue to be given the highest priority by Brussels for the foreseeable future? We were gratified to learn that there are indications of a revival of economic activity in the Province. But the Minister himself readily acknowledged that unemployment remains the major problem facing the Province. The Assembly has advised that reducing the level of unemployment should be the single, most important objective of Government policy, second only to the maintenance of security and law and order. This conclusion led the Assembly to another conclusion; namely, that the public sector must continue to furnish a high proportion of job opportunities in Northern Ireland.

Side by side with unemployment and redundancy in industry, the whole range of health and welfare services in the Province is still short of manpower. Nevertheless, the entire class of 41 nurses due to finish training at the Royal Victoria Hospital, Belfast, on 21st December last faced unemployment. This is surely absurd. One would have thought that there must be a saner solution. Should there not be more spending on the NHS in Northern Ireland so as to improve the quality of life for many of its people? In the Province there is above average reliance on sickness benefit and invalidity benefit, above average incidence of severe disablement, above average infant mortality and handicap, above average incidence of mental handicap, above average congenital abnormality and above average incidence of mental illness. Against this background, the paying of social security to nurses who cannot find work on completing their training has nothing to be said for it. They should be paid for giving their services in hospitals and surgeries, and to the sick who remain in their homes in the community.

19 This leads me to another matter; namely, the role of the Housing Executive. Housing, in the words of the Minister, is a top social priority in Northern Ireland. But it appears to me, on reading the newspapers and reading Hansard, that the Housing Executive is a subject of widespread criticism. There is a demand that its housing programme should be thoroughly reviewed. It is said that it is inefficient. It has been criticised for failing this year to spend all the funds allocated to it, although there is a long housing waiting list. Possibly more worrying, it is also said that it is not undertaking its tasks in a way that retains the confidence of those who have to deal with it. I offer no judgment on those comments. But it is right to draw the attention of the House to the criticism. Can the Minister tell the House whether or not the evidence justifies the criticism?

Finally, I shall dwell on an aspect of the Irish dimension. I have referred to the Community dimension; I shall now refer to the Irish dimension, although a small aspect of that dimension. I refer to the Irish language. I have searched through the appropriation accounts, but nowhere is it specifically referred to. There are over 500 items of expenditure specified in the index of the report of the Comptroller and Auditor General, but the Irish language does not merit even an afterthought. I understand, however, that there are Gaelic language or Irish language schools, Irish language periodicals and some Irish language radio programmes. A noble friend has passed me a newspaper cutting which shows that the Irish national teachers' organisation has called on the Government to produce a report on the development of the Irish language and the culture associated with it. Should not the Government give financial assistance to the welfare of the Irish language? If the Minister tells me that this is done and that it is incorporated within Class 8 of the order, that is fine, I hope, however, that he will identify how much money is being spent on supporting the Irish language.

I regret that I was unable to give the Minister advance notice of the questions I would be asking. I therefore do not expect instant replies to all my questions.