Appropriation (No. 3) (Northern Ireland) Order 1987

HL Deb 07 December 1987 vol 491 cc10-28

3.4 p.m.

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

My Lords, I beg to move that the Draft Appropriation (No. 3) (Northern Ireland) Order 1987 which was laid before your Lordships' House on 11th November of this year be now approved. I should stress to your Lordships that the order has been made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. On this occasion I am asking the House to approve extra funds for only one vote, namely, the Department of Economic Development's Vote 3. My opening remarks on this occasion—I am sure noble Lords will approve—will therefore be reasonably brief.

The particular vote with which we are concerned this afternoon covers expenditure on, first, local enterprise initiatives; secondly, assistance to the aircraft and shipbuilding industry; thirdly, mineral exploration; fourthly, energy efficiency measures; fifthly, capital investment grants for industrial development; and, lastly, scientific and technological assistance. Only some of these programmes require extra funds.

On 16th July this year your Lordships approved the Northern Ireland 1987–88 main Estimates, which included some £92.5 million for these services. This afternoon I am seeking a further £18.5 million, taking the total proposed expenditure on this vote to just under £111 million for the current financial year. The Estimates Booklet which is available in the Printed Paper Office—and I am sure that your Lordships will have copies this afternoon—gives full details of additional expenditure. At page 6 of the Estimates Booklet noble Lords will see that Section A of the vote covers local enterprise. Within that section the Local Enterprise Development Unit—which we call LEDU in Northern Ireland—requires an additional £1.5 million. The activities of LEDU are directed towards helping existing small businesses to expand and to encourage those seeking to establish new businesses. In a very difficult economic and social climate LEDU has a commendable record of promoting over 31,000 jobs since its inception in 1971, including 4,500 jobs in the last financial year. The agency hopes to promote 4,000 jobs in the current financial year.

One particular initiative which I wish to refer to your Lordships' attention this afternoon is the local enterprise programme of LEDU. This programme is targeted on local communities. It aims to promote the growth of new indigenous small businesses. It is being done through a network of enterprise centres right across the Province. Already 18 have been set up providing specialist advice to small businesses on the spot, and readily available premises, but most important of all, the necessary back-up services. Some 3,000 jobs have been created to date and this number is expected to increase substantially in the next few years.

In Section B of the vote we find that an additional £18.1 million of government support is required for Harland and Wolff this year. Many noble Lords will be aware of the severe and continuing crises which, since the mid-1970s have beset the international merchant shipbuilding industry. The facilities of Harland and Wolff are best suited to the large ship market but it is in this sector that competition from the Far East is at its fiercest. In consquence, the company has turned to more specialised ships such as the BP SWOPS vessel. However, in these specialist vessels many engineering techniques are being used for the first time. This has of necessity led to delays in the programme and losses on the contracts. The increased government support is required to cover these contract losses and to meet work-in-progress contracts where instalments payable to the company have slipped into the next financial year.

If we look at subhead B3, which covers the Shipbuilding Redundancy Payments Scheme, we find that there is a reduced requirement of £1.2 million, thus leaving a net figure of just under £16.9 million for the section as a whole. The redundancy payments scheme has now terminated leaving only support payments to be made to workers made redundant prior to 31st December 1986.

Finally on page 6 we find Section C of the Vote. This covers energy and, as it is put, "other support services". For a number of years Northern Ireland has had the highest electricity generating costs in the United Kingdom because of its heavy dependence on oil. We find that an additional £146,000 is required this financial year for consultancy studies. The consultants whom we have engaged will provide expert advice to the Government in evaluating the competing public and private sector proposals to provide the new generating capacity which will be required in the mid-1990s.

In conclusion, I shall listen with great interest to all points made by your Lordships and I shall do my best to reply to them today. If I am unable to do so, I shall write to any of your Lordships who are concerned with any difficult points. I commend the order to your Lordships.

Moved, That the draft order laid before the House on 11th November he approved. —(Lord Lyell.)

3.12 p.m.

Lord Prys-Davies

My Lords, I thank the noble Lord, Lord Lyell, for his explanation of the contents of this third appropriation order of 1987. Its scope is narrow, being limited to defraying expenditure between now and the end of next March on the three items which the noble Lord has explained.

The additional expenditure of £146,000 on consultancy studies on energy matters is, in money terms, the smallest item covered by the draft order, but its implications are of the greatest importance to the economy of Northern Ireland because they have a bearing on the future generation of electricity for the Province.

In the debate in your Lordships' House on 14th July last on the draft Electricity (Amendment) (Northern Ireland) Order, the Minister and every speaker in the debate emphasised the importance of developing a new and economic supply of electricity for Northern Ireland to replace the generating plant which is due for retirement in the mid-1990s and also to meet the growth in demand. It was then known that Northern Ireland is fortunate in having substantial reserves of high quality lignite—a kind of brown coal, as I understand it. One purpose of the electricity order was to facilitate private sector involvement in the construction of a lignite-fired station, if the department considered that to be the right decision in the best interests of the Province.

Last July the department was negotiating with two potential private generator companies about the possible terms of construction of a lignite-fired power station at the site of the Crumlin lignite deposits. The Northern Ireland Electricity Service, which is the statutory provider of electricity for Northern Ireland, was advocating an alternative way of creating the additional generating capacity, including the conversion of its own Kilroot power station from oil to dual coal-firing and also itself building the lignite station at the Crumlin deposit. There were therefore a number of options for generating the additional capacity.

I understand that the department has very recently received a detailed exploration report from the Australian exploration consultants, Meekatharra Ltd., on the extent and the quality of the lignite deposits at Ballymoney, which is another lignite site some distance away from the Crumlin deposits which were referred to in the debate last July. I understand that this latest exploration report may show that the exploitation of the Ballymoney site may be an additional option and its full implications must therefore be carefully evaluated.

Can the Minister confirm to the House that a contract for the new generating station will not be awarded until the Government have fully evaluated the detailed report which has now been received from the Ballymoney deposit? Will the Minister also confirm that a decision to award a contract for the new electricity generating station will not be taken until an opportunity has been given for competitive alternatives to be submitted, compared and evaluated for the exploitation of the lignite deposit at both Crumlin and the Ballymoney site?

Before I leave the energy Vote, I should like to ask the Minister a question which my noble friend Lord Blease would have addressed to him if he had been able to arrive at the House in time for this debate. It relates to the efficient use of energy. He would have asked the Minister whether the Government propose to introduce new measures or incentives to encourage consumers to make more efficient use of energy. My noble friend Lord Blease tells me that such an incentive would certainly be in the best interests of the Province and that such an initiative would be supported by many people. Perhaps the Minister can tell us something about that.

I now turn to the largest item in the draft order: the payment of £18 million to Harland and Wolff by way of grants and loans to secure new shipbuilding orders. Perhaps the Minister can correct me if I am wrong, but I believe that with this additional expenditure the total provision for Harland and Wolff during this financial year will be about £58 million. We on these Benches accept the importance of Harland and Wolff to the economy of Northern Ireland and to many companies in the rest of the United Kingdom which trade with it. I have not seen the company's annual accounts which were published last Friday but can the Minister tell the House whether it is anticipated that Harland and Wolff will be seeking further government assistance in 1988–89? We certainly accept that Harland and Wolff cannot be immune to world shipping conditions, but can the Minister also tell us whether it is exposed to adverse conditions which in many ways are specific to Northern Ireland?

We pay tribute to the efforts of management, trade unions and employees to make Harland and Wolff a more cost-effective and internationally competitive company. Its competitiveness has been enhanced at high cost in terms of unemployment and redundancy. I believe that during this year alone the company has shed about 22 per cent. of its labour force. I was therefore pleased, in a sense, to note that the sum which earlier had been set aside for the shipbuilding redundancy payments scheme has been revised downwards, albeit by a very modest sum. Are the Government satisfied that as the company's employees have been made redundant, they have been receiving training for other skills so that they do not drift into long-term unemployment?

Before leaving the shipbuilding yards of Harland and Wolff, I have to touch on one of the deep political problems of the Province. The company has traditionally employed very few Catholics. Is the department satisfied that Harland and Wolff is now vigorously promoting equality of opportunity in employment for both communities in the selection and promotion of all grades of its staff, or, is it dragging its feet?

Now I turn to the third item, the additional assistance for the Local Enterprise Development Unit (LEDU) which generates the growth of small and efficient businesses in the Province. It is generally agreed that this unit has a good record for creating real jobs and also for co-operating with the district authorities and voluntary groups. The Northern Ireland Economic Council recently reminded us that LEDU has reduced its job target for 1987–88. The Minister spoke earlier of the job targets which have been achieved by LEDU. If that is so, can he give the House a reassuring explanation for the reduction in the jobs programme?

We are also told by the Northern Ireland Economic Council that it has been unable to obtain adequate detailed information from LEDU and the Industrial Development Board to enable it to make a complete analysis of industrial development and job prospects for the Province. This is clearly worrying, because if the analysis is incomplete the prognosis and prescription can be faulty. If there is anything in this point we would urge the department to encourage both LEDU and the IDB to make available to the economic council all the detailed information which it considers essential to get its analysis right.

Finally, I should like to raise one matter which does not come within the strict ambit of the order. I trust that your Lordships will allow me to raise this one point. On Thursday night, 22nd October last, in the western region of the Province six major rivers burst their banks and their waters flooded at least 337 homes and shops and also agricultural land to an extent never recorded before. This caused substantial damage and loss which has been assessed to be of the order of £1.325 million. The Northern Ireland Association of Citizens' Advice Bureaux described the area affected around Strabane as being "a disaster area". Strabane district council described the consequence as a "catastrophe". A deputation of five councillors accompanied by their chief executive came to Westminster early in November to plead for more help for the flood victims.

We know that poverty and hardship are unequally distributed throughout the United Kingdom but Strabane and the district bear an exceptionally heavy share of that burden. In Strabane male unemployment is 42.3 per cent.—almost one in two of the male population. That is probably the highest level of unemployment in the United Kingdom. A large number of people in the area are dependent on social security and are not likely to find their way into employment for many years to come. In those circumstances, it is not surprising that many of the people of Strabane had given a very low priority to insuring their house contents against the risk of flood damage. In the result, they were found to be under-insured or not insured against the risk.

The Department of Health and Social Services has made payments in excess of £200,000 to flood victims to meet their urgent and immediate needs. British Coal has made available a free supply of coal and there has been a modest contribution from the EC. I understand that the payments made by the Department of Health and Social Services, or a high proportion of them, have been by way of loans which are repayable. It is far from clear how the unemployed of this area can possibly repay the loans out of unemployment benefit. Can the department find a way to waive its legal entitlement to recoupment of the money paid? I hope that the Government can respond generously. The waiver of their entitlement would be widely supported. I hope that the Minister's replies to these points will be helpful, and with those few questions and comments we support the order.

3.25 p.m.

Lord McNair

My Lords, after thanking the noble Lord, Lord Lyell, for explaining the order with his usual clarity and attention to detail, I ought perhaps to explain to your Lordships that my noble friend Lord Hampton, who has contributed so much and so well for many years—10 years I think—to these discussions has at last felt obliged to lay down his portfolio and to ask to be relieved of his spokesmanship. I know that this will be a matter of regret to the body of regular Ulster-watchers who have come to appreciate the essential reasonableness and moderation of his speeches, and with the exception of the Lebanon I can think of nowhere in the world where such qualities are more needed or in shorter supply.

Having explained the position of my noble friend, I must next regretfully inform your Lordships that the competition to succeed him as Alliance spokesman for Northern Ireland has been such that we have not yet been able to resolve it. I am no more than a very temporary stand-in. That being the case, perhaps the best amends I can make for this rather deplorable state of affairs is to be very brief.

In reading what was said in another place about the order I was struck mostly—and several honourable Members made this point—by the unfair burden borne by the inhabitants and industries of Northern Ireland as regards the exceedingly high cost of their energy. I gather that they pay one-third more for electricity than the rest of us. We recall the recent occasion when the noble Lord, Lord Young of Graffham, explained to us with his accustomed sang froid, aplomb and perhaps panache why it was such a good idea to increase the price of electricity by a good deal more than the rate of inflation. Is is really necessary, sensible and fair that this should extend to Northern Ireland, where the average rate of unemployment is about 19 per cent.?

It has been decided that neither a gas pipeline nor an inter-connector link with the national grid via Scotland can be provided. If these decisions were made on ineluctable technical grounds, because we simply do not know how to do it, then we have to accept them. But if they were made on short-term grounds of cost-effectiveness then I suspect that one or both of them is probably mistaken.

I should like to raise one final point that is provoked by "The Money Programme." last night on television. I understand that there has been a welcome, if modest, revival in the linen industry in Northern Ireland but that none of the flax is grown there. It would be interesting for me at any rate to hear from the noble Lord whether any steps are being taken to re-introduce this crop. When we think that agriculture is the major employer in Northern Ireland it would seem that a re-introduction of the crop would be a good idea. There must still be a good many people around who know how to grow it.

3.30 p.m.

Lord Dunleath

My Lords, in thanking the Minister once again for having presented the draft order in his usual clear and courteous way I should like to refer to energy efficiency, which is mentioned in the only Vote before your Lordships' House this afternoon. What I beg to say is peripheral to the more central points that the noble Lords, Lord Prys-Davies and Lord McNair, have raised, but perhaps there are certain general implications which would make them worth touching on.

First, I believe that in certain places—I have not ascertained where or to what extent—domestic waste is processed in some way, probably by incineration, so that it can generate energy. Obviously its contribution to the overall demand for energy would be fairly minimal, but still I would suggest that it is worth considering not only for the contribution that it would make but also as a solution to the problem of finding new places to dump rubbish.

The noble Lord, from his experience of the Department of Agriculture in Northern Ireland, will probably be aware of the contention and difficulty that is stirred up by local councils trying to find sites to dump rubbish. Inevitably the people living round about complain, and usually with justification too. One of the more recent examples to come to my notice was the disused quarry at Magheramorne. The noble Lord probably knows about that. The residents around there are complaining that the watercourses will be polluted, there will be foul odours and so on, that birds will carry the rubbish away and drop plastic cartons and things over the surrounding countryside. There are countless examples of that. Therefore, even if the contribution towards energy generation was minimal it would still he worth looking into in terms of conservation of the countryside.

Then there is the matter of an aerobic fermentation of sewage. When successfully done this produces methane, which is combustible, through microbial degradation of the carbon material therein. This leaves a harmless, odourless, disease-free matter which can he spread on land as an organic fertiliser. Similarly from the point of view of the environment even if the contribution to fertilisation of the land is not all that great, at least it would save polluting the sea and the loughs with raw sewage.

I think there is already a plant at Coleraine in the north of the Province which is processing sewage in this way. I am told also that in Birmingham, in the United States, and in Holland such processes are being successfully carried out. But not so in Newcastle, County Down, where a substantial amount of public money is being spent, as I understand it, to pump raw sewage a considerable distance out into the sea, but even if it is a mile or two miles into the sea it is still going to have a polluting effect. Any benefit that could be gained from that sewage by generating gas from it, by producing fertiliser from it, will be lost. I cannot understand that. If the noble Lord can throw any light on it this afternoon I shall be grateful.

Again, the digestion of farm slurry has already proved to be effective. I saw in the press a photograph of the noble Lord standing admiring the complex of buildings at Portglenone not very long ago, so he knows about this. Once more, combustible gas is produced and an end product produced which is useful as a fertiliser, both liquid and solid. The products can be separated.

For an outlay of only £65,000 (which is not all that much nowadays when you are going in for a major plant, whether agricultural or industrial) the monastery at Portglenone—and I am referring to the religious order; perhaps the Ministry of Agriculture had some part in it as well, I do not know; if they did, I salute them—managed to set up this plant. The result is that they are able to produce one and a half tonnes of fertiliser a day which they can sell at £1.35 a bag. They are generating revenue from this as well as generating gas which they can use for heating and other purposes. With this process the weed seeds are killed so that there is no propagation of foreign matter to any farmer who spreads this fertiliser on his land.

Another interesting aspect is that in Holland they have been having problems with slurry, and particularly pig slurry where they have a high concentration of pig units in certain parts of the country. This slurry in its raw state gives off ammonia, which apparently is a catalyst for acid rain. They have found that this problem is solved by digesting the slurry. Therefore from the atmospheric pollution point of view it is well worth digesting slurry, even if again the energy produced from the process is minimal by comparison with the total provincial or national requirement.

I would respectfully suggest that it is not only in the interests of the Department of Economic Development but also in the interests of the Departments of Agriculture and the Environment to look into this and see to what extent they can promote it. I should be interested to hear from the noble Lord how far there has been public education on these subjects and to what extent funds have been devoted to encouraging farmers and public authorities dealing with sewage to look into the possibilities that may exist there.

The next point—and I mentioned this to the noble Lord when he kindly asked whether there were any points we wanted to raise—is why is it that the surplus heat from electricity generating stations is deliberately dispersed either into the atmosphere through cooling towers or, as is mostly the case in Northern Ireland, into the sea because they are water-cooled? Could that energy not be harnessed and used for district heating or some other purpose? It seems an awful waste.

Insulation of buildings is something that has been much better understood in recent years, but I have been distressed to see how many modern houses and particularly a lot of the modern blocks of flats—I think of Divis Towers in Belfast, and those 1950s and 1960s developments—have suffered from condensation. if you get condensation inside a building, that surely means that it is badly insulated. It defeats me to know why buildings erected so recently, at a time when any architect or engineer ought to have known about insulation and heat conservation, should have suffered to the extent that Divis Flats, for instance, have: they are now virtually uninhabitable.

Another great waste of energy is in providing an excessive temperature in public buildings. Everyone knows that the differential between the temperatures outside and inside a building is critical to the amount of fuel that is consumed. If you increase the temperature inside, the law of diminishing returns weighs in with a logarithmic viciousness. The consumption of fuel increases out of all proportion to the increase in the temperature. Therefore I really do question whether it is necessary to keep some of our public buildings as hot as they are at present.

However, even if we made improvements in insulation and in energy conservation, we are still, to the greater extent, dependent on fossil fuels. They will not last for ever. I should therefore like to ask the noble Lord how much progress is being made with Biomass, which I remember several years ago was being hailed as being the quickest renewable source of energy; that a crop of Biomass could be produced in under 10 years and that this would he a source of fuel. I remember they were experimenting on it in Loughgall.

Similarly, how much progress have Her Majesty's Government made in making it attractive for farmers to transfer land from conventional agricultural production to forestry? I think that we still import about 90 per cent. of our timber requirements. This surely is a renewable source of energy, even though it does not have as quick a turnround as Biomass.

I apologise that I have had a few fresh ideas since I originally wrote to the noble Lord. I do not necessarily expect answers to all the points that I have raised this afternoon, but I shall look forward to hearing from him, if not this afternoon, in due course.

3.42 p.m.

Lord Fitt

My Lords, at the outset I should like to express my gratitude to the business managers of the House for arranging for this debate to take place in the afternoon, because it has ensured a greater attendance in your Lordships' House than we normally have. In the past Northern Ireland people have felt somewhat neglected when they heard or read that the debates on Northern Ireland issues, which they regarded as being of vital importance, were limited to a dinner hour here in the evenings. The same feeling persisted in relation to the debates which took place in the House of Commons.

I am not only grateful that we have this debate this afternoon, but I realise that for the first time, among new Members to your Lordships' House, we have five ex-Secretaries of State. When each one of those gentlemen held the office of Secretary of State they proclaimed to the House of Commons the great affection which they had for Northern Ireland and its people, and recognised its tremendous difficulties and problems. On leaving Northern Ireland they said that they would retain an abiding interest in the affairs of Northern Ireland.

The Earl of Longford

My Lords, did people believe them?

Lord Fitt

My Lords, I think that that has to be proved by future events. I see the noble Lord, Lord Atkins, in the House. I hope that in future debates affecting Northern Ireland those noble Lords who, as I say, have expressed great concern for Northern Ireland will be able to join in and show that concern to the people of Northern Ireland.

The scope of this particular debate may seem somewhat limited, but it has tremendous implications for the people of Northern Ireland. It takes into account employment, which is the ever-prevailing interest in everything relating to Northern Ireland, and the high cost of energy, electricity, etc.

In relation to LEDU, I do not think that there is anyone with any knowledge of Northern Ireland who would in any way take offence at the consideration which has been given by the Government to the Local Enterprise Development Unit. Since its promulgation by British Parliament after the institution of direct rule, I think that of all the organisations in Northern Ireland, LEDU has really proved its worth. It has brought about local enterprise; it has brought about community involvement. Each and every senior officer employed by LEDU treats LEDU as a job which gives him a salary; those officers are dedicated to the work that they are doing. I know the senior officers of LEDU. Each and every one of them is really involved in trying to create employment in Northern Ireland which, as we have already heard, has an unemployment rate of 19 per cent.

In that small Province 126,000 have seen unemployment. We do not talk about short-term or long-term unemployment in Northern Ireland; it is all long-term. People in Northern Ireland have been obtaining unemployment benefit for five, 10, 15 and 20 years, and some of them for up to 30 years. These were figures which I ascertained when I was elected in another capacity to another House. Unemployment is something that we live with every day in Northern Ireland.

I was in Belfast last week and the week before. In relation to what I regard as the most significant part of this order vis à vis the Belfast shipyard, I found in talking to many people that there is a great air of despondency about the future of Harland and Wolff. Whether or not it be justified is another matter. However, I can say I spoke to many people who are employed by Harland and Wolff, and to say the least, they are fearful of the future.

I am sure I have the overwhelming support of the five former Secretaries of State of Northern Ireland when I say that Harland and Wolff is an industry which is much more than an industry in Northern Ireland. It is the lynchpin of all the other industries and it is symbolic of industry in general in Northern Ireland. Between 50 and 60 per cent. of Harland and Wolff work is carried on outside the gates of the Belfast shipyard. Six hundred firms throughout Northern Ireland are actually involved in the process of building ships in Belfast. Every month 285 firms invoice Harland and Wolff. That indicates that Harland and Wolff problems are not restricted to the Queen's island; they pervade all over Northern Ireland. Whatever happens to the finances of Harland and Wolff will have an ongoing effect throughout the whole of Northern Ireland.

We have heard in recent years about the efficiency of Japanese and German shipyards and all the other foreign shipyards. We were told that their efficiency has led to the charge of inefficiency in British shipbuilders and in Northern Ireland. That really is not so. The facts of life are—and I went out of my way to ascertain them before taking part in this debate today—that there are five main shipyards in Japan. For the last trading year, 1986–87 the NKK shipyard lost 95 million dollars; the IHI shipyard lost 145 million dollars; Hitachi lost 106 million dollars; SHI lost 75 million dollars and Mitsui lost 22 million dollars. The same applies to German and Spanish shipyards. Every major shipbuilding country in the world has lost money because the world seems to be needing fewer ships than it did.

On those figures, British shipyards are not doing too badly. British Shipbuilders, with its workforce of 6,000, has had a trading loss of £148 million. Belfast, with a workforce of 4,000, has had a trading loss of £58 million. If one tries to correlate the figures, Harland and Wolff has done even better than British shipyards and certainly better than other shipyards.

I think it is worthwhile repeating that Harland and Wolff is not only a shipyard. It is symbolic of everything that is important in Northern Ireland. In view of the recent election results in the North-East of England, it may be that the Government will wish to take the view that the shipyards in North-East England are on the mainland but the Belfast shipyard is on another island far removed from the every-day world of events here. It may be that further orders will be approved in relation to other parts of the United Kingdom. I hope that the Government will not take that view.

As a result of the losses incurred last year by the Belfast shipyard 1,300 men were made redundant at a considerable cost, in millions of pounds. Those 1,300 men had skills; they were fitters, turners and electricians. They do not need training; they have already been trained and have given their lives to the Belfast shipyard. It is highly unlikely that those men could be trained for any other industrial occupation in Northern Ireland. They have already acquired skills and it is a sad story that those skills are no longer of use to them because of the cut-back in shipbuilding.

At the behest of the Government and on their advice, in recent years Harland and Wolff has departed from its normal activity. It was building large tankers and bulk carriers but at the behest of the Government it switched and is now engaged in building three of the most sophisticated ships in the world. They are three of the most sophisticated ships that will ever sail the seven seas and I say that with considerable pride.

As we look forward to the 1990s there is a feeling in shipbuilding circles that there will be an upturn in building. It has been estimated that 50 to 60 per cent. of the world's tanker fleet will then be between 15 to 20 years old and due for replacement. When the orders are placed it will create a new mood, an upswing and a feeling of competition among the different yards for the building of those tankers. It would be a tragedy if in the 1990s Harland and Wolff no longer existed and could not engage in the competition for those orders. I hope that I am not being unduly pessimistic.

The noble Lord, Lord Lyell, should be aware of some of the disquieting stories that have appeared in shipbuilding journals over the past few months. I do not know from where the information is obtained or whether it has been leaked. All noble Lords know of the leaking that takes place in politics with people trying to create an atmosphere. At the moment there is a feeling of despondency. It has not gone very far hut it must he transformed into a feeling which will improve the morale of the present workforce. They must know that they will have enough orders to keep them going for two years and that on entering the 1990s the yard will he in existence and able to compete for the upswing in orders which will take place.

I am not sure whether the Minister is aware of the rumours that I have heard from certain people whose optimism I hope is justified. The Belfast shipyard made its name in the early part of this century by building great passenger liners. It still has that capacity. Noble Lords will remember the "Canberra" and will know how vital it was to have a ship such as that in the Falklands war in 1982. I do not believe that the day will ever come when ships such as the "Canberra" and other cruise liners are unnecessary. I hope that not too far into the future Northern Ireland will again be in a position to design and build great passenger liners.

I have spoken specifically about the Belfast shipyard because I am a Belfast man. I know many of the shipyard workers and I agree with what has been said by my noble friend Lord Prys-Davies. There have not been too many Catholics, or Nationalists (for want of a better word) employed in the Belfast shipyard throughout the years. If there is a problem in that regard I hope that the directors of Harland and Wolff will go out of their way to ensure that there is no religious discrimination in the employment of its workforce.

No matter how many Catholics or Protestants may be employed, that issue should not, and I hope will not, be a reason to look with disfavour on the present workforce employed by Harland and Wolff. I hope that this afternoon the Minister will be able to indicate that the workforce and management of Harland and Wolff—a company which has had many financial problems but which has good industrial relations and a good workforce—are entitled to look into the future with optimism. Harland and Wolff is part of Belfast and Northern Ireland and it must remain so.

3.54 p.m.

Lord Lyell

My Lords, as always we have had a tremendous debate on what, on the face of it, was a short Appropriation Order. It gave rise to few questions but any noble Lord who has been present over the last hour will appreciate the tremendously detailed knowledge shown about Northern Ireland. Many detailed questions have been aimed in my direction and I hope that I shall be able to answer them satisfactorily. If not, I hope that I shall be able to give satisfactory answers in writing at a later stage.

I am pleased to welcome the noble Lord, Lord McNair, to our debates—perhaps I should say our "club". I should like to disabuse him of one matter: none of us is an Ulster-watcher and I am sure that he would not wish to be considered as such. All noble Lords here are doers and participants in the activities of Northern Ireland. I am sure that all noble Lords who regularly take part in debates on Northern Ireland will welcome the noble Lord. I should like to say that we have appreciated the tremendous help, advice and comments that have previously been given by his colleague, the noble Lord, Lord Hampton. We look forward to hearing from him when he is able to attend.

The noble Lord, Lord Prys-Davies, first asked about energy and raised the interesting point about lignite and the two main deposits at Crumlin and Ballymoney. I should like to make four points as regards lignite and mineral exploration. First, the Department of Economic Development is examining every option for future electricity generation in Northern Ireland. They include both coal and lignite stations. However, until the study is completed I do not think that the Government will wish to presume that the lignite deposits at either Crumlin or Ballymoney will be exploited in the immediate future.

My second point relates to the Australian company, Meekatharra, mentioned by the noble Lord when he made an approximation into Irish, although he may not have intended to do so. I first became aware of this company 15 or 16 years ago while working in Australian minerals as an apprentice stockbroker. I believe that the company recently submitted a report of its study into the Ballymoney deposit. However, the study of the Meekatharra company will certainly form part of the full appraisal of the study on lignite which I mentioned at the outset.

The third point about lignite with which I wish to deal is that before taking any final decisions on the next tranche of the capacity for electricity generation in Northern Ireland, the Department of Economic Development will take into account all the information that is available. That information will, of course, cover both the Crumlin and Ballymoney lignite deposits as well as alternative coal options.

Lastly, should lignite be the chosen option. certainly it would be for the power station operator, whether private or public, to decide which lignite source was most attractive to him on the basis of commercial negotiations and indeed of generating electricity.

The noble Lord, Lord Prys-Davies, raised a query on behalf of the noble Lord, Lord Blease, concerning energy efficiency. The noble Lord, Lord Blease, will certainly be aware, as indeed may be the noble Lord, Lord Prys-Davies, that the Government operate a scheme of assistance under the Industrial Development (Northern Ireland) Order 1982 which is meant to safeguard and maintain employment in Northern Ireland by the reduction of costs through the promotion of energy conservation and more efficient use of energy. Since its introduction on 1st June 1983, this scheme has resulted in nearly 460 firm applications for assistance. The applications to date indicate savings of nearly £4 million per year—I think it is between £3.9 million and £4 million—to the firms which have applied. The Department of Economic Development also funds an insulation scheme that provides grants towards the cost of loft insulation in private homes.

Both the noble Lords, Lord Prys-Davies and Lord Fitt, raised the question of Harland and Wolff and the shipyards. As was pointed out, the difficulties in the shipbuilding market have affected shipyards all over the world. Western European production of merchant ships has halved over the past 10 years. Certainly the difficulties in obtaining new ship orders are not unique to Northern Ireland. It is with that in mind that Harland and Wolff has gone out of its way to pursue other options. Indeed, the marketing strategy of the company has covered three sectors: first, merchant shipbuilding; secondly, offshore work; and thirdly, what are called quasi-naval vessels. Earlier this year a new and strengthened sales and marketing team was established in Harland and Wolff with the aim of ensuring that the company positions itself correctly for future developments in all three sectors.

As noble Lords have pointed out, the company last week published its accounts for the year to 31st March 1987. Those figures show that the company incurred a trading loss of £57.8 million and an overall loss of a little over £75 million. The noble Lord, Lord Fitt, will certainly know that the company is wholly owned and funded by the Government and that that loss will be met by the Government. My right honourable friend the Secretary of State announced last month that the continuing difficulties in Harland and Wolff's trading position indicate that the Government's support in the financial year 1988–89 will be greatly in excess of the previously planned level of £30 million. However, that level will he the subject of continuing negotiation between the company and the Government and we hope to have a reasonably accurate estimate of what it will be. The figures that I have produced to the House today, as your Lordships will have noticed, give some indication of the scale of the problem.

The noble Lord, Lord Prys-Davies, also asked about employment practices at Harland and Wolff. Of course, the company is subject to the same employment legislation and rules governing equality of employment as any other company in Northern Ireland. As your Lordships will be aware—it has been hinted at by the noble Lord, Lord Fitt—historically the workforce has been drawn predominantly from the Protestant community. However, it is difficult for the company to create a more balanced workforce since overall numbers are declining and new recruitment is at a much lower level then before. However, the company has signed a fair employment declaration and has implemented an affirmative action programme, as a result of which any recruitment which takes place is subject to fair employment practices.

The noble Lord, Lord Prys-Davies, asked about the recent redundancies at Harland and Wolff. The level of redundancies is a matter for the company and will depend on the future workload that the company can obtain. A subsidiary company called Harland and Wolff Enterprises has been set up along the lines of British Shipbuilders Enterprises to provide practical advice on retraining—a particularly important aspect raised by the noble Lord, Lord Fitt—as well as re-employment opportunities for workers at Harland and Wolff who can no longer take part in the company's continuing progress.

The noble Lord, Lord Fitt, asked about the particular programmes of Harland and Wolff. The company has three current orders. First, there is the single well oil production system, which, in the course of my opening remarks, I referred to as SWOPS. The vessel is highly technical and very complicated. It is certainly the first of its type to be built at Harland and Wolff and requires a great deal of new technology. It has been prepared for British Petroleum.

Secondly, there is the conversion of a container ship into an aviation training ship for the Ministry of Defence. Thirdly, there is the auxiliary oil and replenishment vessel—the AOR vessel—for the Ministry of Defence. All three vessels are particularly interesting as engineering projects. It will be appreciated that they require a vast amount of new technology not all of which was suitable for Harland and Wolff who have had to make changes. I should like to pay my tribute and that of the Government to Harland and Wolff for the speed with which it adapted to new skills and practices. I am sure that all your Lordships will wish the company well.

The noble Lord, Lord Prys-Davies, raised the question of LEDU. Of course, job promotion is but one of the activities of LEDU. The reduction in the LEDU job promotion target for 1987–88 reflects a widening of the range of activities of that organisation to support small businesses in Northern Ireland. However, there has been an increase in new activities, which include such things as local enterprise groups, management and marketing development schemes and the establishment of export companies which are much appreciated by small companies wanting someone to give them advice on how to break into markets, be they in Great Britain, the Community or elsewhere in the world.

LEDU is targeting its activities on developing a product quality initiative. In several institutions that I have visited I have seen little stickers stating "The customer comes first" or "Zero errors" and such slogans, all of which indicate that quality comes first and is taken into consideration by companies all over Northern Ireland.

The noble Lord, Lord Prys-Davies, mentioned the floods. Certainly the flooding on 20th and 21st October, which was most evident in Strabane early in the morning of 22nd October, was caused by what those noble Lords who know Northern Ireland would agree was very exceptional rainfall. I believe that up to three inches or 75mm. was heard of in several areas in the Province; not just in Strabane or Omagh but also in a small village called Maguiresbridge where the level of the river rose something like six feet. The village was flooded at three o'clock in the morning. I visited it at 10 o'clock that morning and I could see what level the water had reached. The rainfall in that catchment area certainly exceeded 75mm.; it was, I think, nearer 80mm.

I should like to pay tribute to the excellent response of all the statutory and voluntary bodies in Strabane, Omagh and elsewhere in their efforts to remove flood water from properties and give immediate help to families and businesses that were affected. The Government are not responsible for compensating what are insurable risks, but they have provided help in whatever practical ways are possible, especially for those in genuine need. I shall go on to say a few words about that.

The reaction of the government departments and the other public bodies involved has been two-fold. First, the aim was to provide as much help as possible to the individuals who suffered and, to that end, urgent payments from the social security office of over £250,000 have been made. I stress to the noble Lord. Lord Pry's-Davies, and to everybody in your Lordships' House, that all social security claims have now been dealt with. Under rules which apply throughout the United Kingdom some payments will he recoverable. However, certainly I give the assurance that recovery will be sought in a humane and considerate manner, with full regard being paid to the personal circumstances of each individual who has made a claim.

As the noble Lord also mentioned, the European Commission provided £57,000 which was very welcome. British Coal provided 70 tonnes of free coal and all of this has now been distributed. The Housing Executive provided what I am advised are dehumidifiers, but which I call giant portable heaters, to help dry out the properties, and the Housing Executive has rehoused a small number of families. Furthermore, the electricity service has surveyed the houses and replaced electricity meters free of charge where necessary. The Western Health and Social Services Board has provided material and other help and the Industrial Development Board and LEDU have both been in consultation with their client companies in these particular areas.

The other essential work which is now being undertaken is the repair and replacement of the infrastructure which has been damaged. A scheme for new flood walls in Strabane, costing £4½ million has been announced. Some of the seven local bridges which were washed away have been replaced on a temporary basis and they will be replaced permanently as soon as appropriate arrangements can be made. Other essential repair work to Housing Executives properties is now being undertaken.

I hope that these few measures that I have outlined will represent a very positive and helpful response to what has been a very distressing situation to many individuals and families, and indeed to many businesses, in Omagh and Strabane, as well as—I do not forget it—Maguiresbridge where two of the village shops had most of their stock washed away and, I think only three houses in the village were not struck by the flood.

The noble Lord, Lord McNair, raised the question of electricity generation and, if I may, I shall briefly try to give him some assistance in regard to the queries that came to his mind. The tariff rate of Northern Ireland electricity is indeed fairly high. The present tariff policy was introduced in 1981 in order to bring Northern Ireland electricity prices down to a level more closely in line with those in Great Britain. In deciding to align these tariffs to the highest rate prevailing in England and Wales, the Government considered that they would not be unjustified in providing a subsidy which resulted in Northern Ireland consumers paying less than some of their counterparts in Great Britain. I think your Lordships will agree that that is fair.

As regards the application of an increase of between 8 and 9 per cent. in electricity charges in Northern Ireland, I should point out that 8 per cent. is a preliminary estimate of the expected overall average percentage increase in English and Welsh tariffs, but the rate will vary between boards and that still has to be determined. As the Northern Ireland electricity rates are linked to the highest ones in England and Wales, we shall have to await the outcome of the area boards' deliberations before being aware of the scale of the tariff increase which will apply in Northern Ireland.

The noble Lord, Lord McNair, also asked about flax. I am afraid that I did not see the programme to which he referred. I shall certainly see it on my return to Northern Ireland where, I can assure your Lordships, we assiduously record any programmes on television or radio that are of interest to myself or my colleagues. Northern Ireland does indeed have an ideal climate for growing flax, but the conditions are not really favourable for the process of retting of flax. This will be familiar to the noble Lord, Lord Fitt. In his career he will have seen many of these retting dams. I understand that this is the process of breaking down the wood material to enable the fibre to be extracted. The process of water retting that used to be carried out before the war was used extensively, but it is not really possible any more because of environmental control and pollution of rivers. Therefore that would certainly not be possible in Northern Ireland.

Over the past few years we have carried out various experiments in chemical and other methods of retting, but I have to inform the noble Lord, Lord McNair, and your Lordships that as yet none of these has provided a viable alternative. We certainly are experimenting in something that is called tank retting, but I should not think we shall have any news for the noble Lord this year. Certainly I shall want to see what is contained in the programme. For all I know there was something dealing with tank retting in that programme. But if I have any news on flax and retting, I shall certainly let the noble Lord know.

The noble Lord, Lord Dunleath, raised the most interesting question of trying to convert waste products into heat. At the outset, the noble Lord referred to a disused quarry at Magheramorne. Perhaps I ought to be aware of it. Certainly I shall make urgent inquiries. I shall not weary your Lordships this afternoon with what might be picked out of that interesting place, but I shall endeavour to see what the noble Lord found or what was reported to him. The noble Lord, Lord Dunleath, will be aware that a number of companies in Northern Ireland are investigating the possibility of developing waste derived fuels. Perhaps he may be going to a seminar on the subject which is being held in Belfast later this week on, I think, 11th December. The Department of Energy has provided funding of £33.2 million towards research and development projects for the conversion of domestic and industrial waste in the United Kingdom, but in sewage plants in Northern Ireland waste animal matter has been treated to produce methane gas which is used in processing the sewage.

Recently the Government have given support to one organisation in Northern Ireland to install a treatment plant to convert animal waste to a source of energy. I think that the noble Lord also referred to raw sewage at a farm in Coleraine. I shall certainly look into that—I was not aware of it—and will also pass on the noble Lord's comments about the pumping of raw sewage well out to sea, I am glad to say, at Newcastle, County Down. I am sure that my honourable friends will be interested in that.

The noble Lord referred to the abbey at Portglenone and to the treatment plant there. I paid a visit there and the wife of my right honourable friend the Secretary of State has been there since. The noble Lord pointed out how interesting this plant is. I would go along with him on that, but I shall have to write to him with some of the figures that we have found from Portglenone, and with some of the arguments that we believe do not put quite such a favourable light on the conversion figures as first appeared when we were looking at the project.

The noble Lord mentioned two concepts. He said that there were some interesting odours. If the noble Lord would come with me, he might then slightly rephrase that. Certainly, the digesting of slurry may be interesting in your Lordships' House, but it is not exactly a term which I or many others would wish to use.

The noble Lord raised a question, which I hope is not aimed at me or my colleagues, about overheating of government buildings. The Energy Efficiency Service operates within the Department of Economic Development and it seeks to encourage everybody to use energy efficiently. Certainly it is concentrating its efforts on all kinds of energy efficiency in public buildings, in housing and in government departments. I find that the noble Lord's opinion on heat, certainly in my part of Dundonald House, is not always what he believes it to be. We need to have auxiliary heaters in some of the rooms when meetings are taking place, at least in my office. However, he is welcome to come and visit me and find out about that.

On the question of Meekatharra we are carrying out experiments at Loughgall, as the noble Lord knows, but we are not yet in a position to say how these will be able to transfer energy. Perhaps it is relevant in fairly small farms and one or two houses, but so far we have not been able to transfer these findings and figures to larger projects.

The noble Lord, Lord Fitt, was kind enough to mention my right honourable friend in a previous administration. I understand that his name is now the noble Lord, Lord Colnbrook. I probably should have known that but as this is my first visit to your Lordships' House for about a month, I am sure that my noble friend will accept my apologies.

The noble Lord, Lord Fitt, also drew my attention to many points on Harland and Wolff. I hope that I have covered them. I was interested to note that the noble Lord had researched into Japanese shipyards as well as European ones. I compliment him on the excellence of his study of the Japanese language. We shall be able to discuss this matter at a later stage.

I hope that I have covered all the points that have been raised in this afternoon's debate on the appropriation order. If I have missed any I shall certainly write to noble Lords about them. With that, I commend the order to your Lordships.

On Question, Motion agreed to.