§ 4.4 p.m.
§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Skelmersdale) rose to move, That the draft order laid before the House on 14th November be approved.
§ The noble Lord said: My Lords, I beg to move that the Draft Appropriation (No. 4) (Northern Ireland) Order 1989 laid before this House on 14th November be approved. The order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. This is one of a series of routine financial orders for Northern Ireland which come before the House each year. They are unique to the proceedings of this House. As we all know, under the Parliament Acts we are debarred from discussing the direct finances of the country except in very general terms.
§ On this occasion I am asking the House to approve extra funds for only two Votes; namely, the Department of Economic Development Vote 2 and the Department of Health and Social Services Vote 4. The Department of Economic Development 1413 Vote 2 includes expenditure on local enterprise and assistance to the aircraft and shipbuilding industries, while the Department of Health and Social Services Vote covers expenditure on those social security benefits which are not dependent on national insurance contributions. Contributory benefits such as unemployment benefits are not covered by this order.
§ The draft order authorises an additional £95.7 million over these two Votes. Your Lordships may wish to refer to the Northern Ireland Autumn Supplementary Estimates 1989–90 booklet, which is available from the Printed Paper Office. That gives full details of the additional expenditure sought.
§ I shall start with the Supplementary Estimate for the Department of Economic Development. It refers to only two areas; namely, local enterprise and assistance to the aircraft and shipbuilding industry. Fifty-eight million pounds is required to meet further costs associated with the privatisation of Short Brothers plc on 3rd October 1989. The Government agreed in the heads of agreement in June to fund the losses incurred by Shorts from 1st April 1989 until the completion of the sale at a date to be agreed. In other words we did not know how much money would be needed or when. That is why appropriation was not made earlier in the year. We now have a good idea but audited figures have still to be agreed. The Department of Economic Development has also retained the financial liabilities and obligations associated with aircraft sold in the past by Shorts, and funding is also required to cover certain of those costs within this financial year.
§ Your Lordships will also be aware that the privatisation of the shipbuilding business of Harland and Wolff was completed in September. Under the arrangements for the sale, the new company—Harland and Wolff Holdings plc—will receive from the Government repayable loan stock, rationalisation grants and intervention aid on new merchant orders. The old company—Harland and Wolff plc—will no longer trade but will continue to be responsible for certain pre-sale commitments, including redundancies and ship financing arrangements. Therein lies part of the reason for the appropriation of this money.
§ There is, in consequence, a reduction of £45.9 million in the amount of funding required for Harland and Wolff plc, the old company. Additional funding of £79.9 million is, however, needed for the new company, Harland and Wolff Holdings plc. In addition, an increase of £741,000 is needed to cover the fees of consultants appointed by the Department of Economic Development to provide specialist advice on aspects of the privatisation. The Estimate which is now before the House accordingly provides for an increase of £34 million, to just under £94 million, for assistance to shipbuilding during 1989–90. That will be offset by appropriations-in-aid of £28.5 million, representing the payment for the assets and business by Harland and Wolff Holdings and the repayment of grants to the department by the old company.
§ The other area of the Department of Economic Development's Vote 2 for which extra provision is 1414 required is the Local Enterprise Development Unit, Northern Ireland's small business agency. As many of your Lordships are no doubt aware, LEDU, as it is called, together with the Industrial Development Board has had considerable success in promoting new jobs in the Province. In the financial year 1988–89 LEDU promoted some 4,580 new jobs and renewed some 420 jobs. Over the same period, the IDB promoted some 5,650 new jobs, renewed 1,680 jobs and maintained 745 jobs. I am sure the House will agree that that is not a bad record. The number of new jobs promoted by the two organisations in 1988–89 represented increases of 13 per cent. and 7 per cent. respectively over the previous year. The draft order seeks an additional £365,000 partly offset by savings of £265,000 from economies elsewhere within LEDU's budget, to enable LEDU to continue its work of encouraging the development of small businesses in Northern Ireland.
§ Finally, the additional requirements in that Vote are further offset by a reduced requirement of £3 million on capital grants. That results from a continuing decline in the number of firms seeking assistance under the capital investment grants for industrial development scheme. That scheme has been abolished, but applications for grants for expenditure up to 3rd March 1988, when it stopped, can continue to be made up to 31st March 1990.
§ I now turn to the other Vote requiring extra funds in the Supplementary Estimate—the Department of Health and Social Services Vote 4. An increase of £34.4 million is sought for the social security programme. Your Lordships will appreciate that expenditure under that Vote is very largely demand-led and that it is not unusual for the estimates to be adjusted during the year.
§ The most significant increase sought—£33.1 million—is for income support due mainly to average payments to claimants being higher than originally provided for. Also higher average payments, partly due to increases in Northern Ireland Housing Executive rents and higher payments to certain pensioners, account for an increase of £1.4 million for housing benefit. Additional provision of £3.6 million for attendance allowances and £1.7 million for child benefit is sought because of increases in the numbers of claimants.
§ The extra requirements that I have outlined on that Vote are partly offset by estimating adjustments of £5.9 million elsewhere in the Vote. Of that £5.6 million relates to family credit, where the uptake is lower than originally anticipated despite an on-going publicity campaign to encourage applications. The remaining £300,000 is due to a revised estimate of requirements for rates rebates, reflecting lower than anticipated take-up.
§ I hope that the House has found this summary of the main components of the Autumn Supplementary Estimate helpful. I commend the order to your Lordships.
§ Moved, That the draft order laid before the House on 14th November be approved.—(Lord Skelmersdale.)