HL Deb 13 March 1989 vol 505 cc49-72

5.53 p.m.

Lord Lyell rose to move, That the draft order laid before the House on 28th February be approved.

The noble Lord said: My Lords, I beg to move. The order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. Perhaps I may briefly go through what I normally do at this stage when discussing the appropriation order. Your Lordships will be aware that financially, the order has two purposes. The first is to authorise the further expenditure of £473 million in this financial year. If noble Lords were to examine the 1988–1989 Northern Ireland Spring Supplementary Estimates volume, which is available in the Printed Paper Office, at page 4 it will be seen that the sum of £473 million is referred to. This amount, when added to the £3,618 million previously approved by your Lordships, brings the total Estimates provision for Northern Ireland departmental services to some £4,091 million for this financial year.

The second purpose of the draft order is to authorise the vote-on-account of some £1,669 million for 1989–90. That is the next financial year starting in about three-and-a-half weeks' time. The second amount is necessary to enable services to continue until the 1989–90 main estimates are approved, subject to your Lordships' agreement, later this year. The details of the second amount can be found in the Statement of Sums Required on Account leaflet which has also been placed in the Printed Paper Office. As your Lordships are no doubt aware, the estimates for law and order and other Northern Ireland Office services are not covered by this order.

This draft order covers the entire range of services provided by Northern Ireland departments. I should like to mention one or two key features of the Northern Ireland economy. The Northern Ireland economy continues to show clear signs of improvement and revival. We are particularly pleased by the reduction in the numbers out of work in the Province. By January 1989 total unemployment on a seasonally-adjusted basis had fallen by nearly 16,000 since the peak in October 1986 and by nearly 7,000 on the numbers of exactly 12 months ago.

In the Province employment is rising. The number of employees in the manufacturing sector rose by 2,000 in the year to last September. In the same period the number of jobs in the service sector has gone up by 3,000. Your Lordships will be aware of recent successes, to which I shall refer later, as regards the Industrial Development Board which show that Northern Ireland is an attractive location for new investment.

The Government will continue to pursue economic and public expenditure policies in Northern Ireland to strengthen the Province's economy. These policies will ensure that the economic recovery is as broadly-basedas possible for the benefit of all areas and sections of the community.

Perhaps I may now take your Lordships briefly through the draft order. I shall pause at various pages and draw attention to what I believe are one or two of the more interesting and illuminating points. I shall start with my own department, the Department of Agriculture. Page 6 of the Estimates volume, Vote 1, provides for the Northern Ireland expenditure on United Kingdom-wide support schemes. Your Lordships will see that under subhead A7 at the bottom of page 6 provision of £600,000 is sought to meet the costs in Northern Ireland of the measures introduced to assist the egg industry. These short-term measures were introduced to restore stability to the industry following the sharp fall in demand for eggs as a result of the problems in Great Britain associated with salmonella enteritidis in eggs and egg products. Although no such infection was detected in any eggs produced in Northern Ireland, the industry is co-operating with the Department of Agriculture on further measures. Final decisions in relation to Northern Ireland will be taken in the light of developments in Great Brtiain.

Following the reopening in Northern Ireland of the national element for the agriculture improvement scheme, the order provides for additional expenditure of £4 million under subhead B7. Your Lordships will find that in the right-hand column of page 7. The scheme is mainly concerned with the provision of grants for effluent storage and disposal facilities. An extra £1.3 million in subhead C1, also on page 7, is provided this year for payments of compensatory allowances to farmers in the less favoured areas.

The Department of Agriculture's Vote 2, on pages 9 and 10, contains a number of adjustments to the funding of agricultural services. For example, subhead B5 on page 10 provides an extra £450,000 for the intensive livestock sector. A further £500,000 is also provided in the drainage programme under subhead C5. This last sum is to meet additional expenditure on the restoration of the flood defences at Strabane following the severe flooding in October 1987.

I now turn to the Department of Economic Development which has supplementary estimates for all of its five votes. These are detailed on pages 12 to 27. The most significant item in Vote 1 is an extra £15.8 million in subhead D1to meet the current level of expenditure on industrial development grants and loans under selective financial assistance agreements. This reflects the continuing success of the Industrial Development Board in promoting employment in manufacturing industry and tradeable services. As I am sure noble Lords will be aware, we have had a number of major successes on the job creation front. The major investments by Daewoo and Montupet will, for example, provide almost 1,600 new jobs. I remind the House that this increased expenditure is largely offset by an extra £14.6 million of receipts, mainly from the sale of factories and land in line with the privatisation policy of the Industrial Development Board.

The increases sought on the Department of Economic Development's Votes 4 and 5 are all less than £3 million. However, Vote 2 contains by far and away the biggest single increase in these Supplementary Estimates. This is the provision of £390 million for the recapitalisation of Short Brothers plc. This will be found on page 16 under subhead B1. The process was announced by my honourable friend the Parliamentary Under-Secretary of State in another place on 27th February this year.

Noble Lords may recall my honourable friend's previous statement on 21st July 1988, that the Government were ready to consider suitable proposals that might lead to the acquisition of Short Brothers by private sector interests. Subsequently, Kleinwort Benson were appointed as merchant banking advisers, and we have been moving towards our objective of privatisation. The Government have been pleased with the interest shown in Short Brothers by other potential purchasers. This interest confirms our view that Short Brothers is a company with many fine products and is held in high regard by other companies in the aerospace industry. We remain convinced that Short Brothers' best interests will be served by an early return to the private sector with the disciplines and opportunities which are available there.

Noble Lords will be aware that an information memorandum was issued to companies interested in acquiring Short Brothers. That was issued on 10th January this year. Detailed discussions are taking place with prospective buyers. Our intention is to achieve a sale as early as possible. Since the early 1980s Short Brothers has been funded largely by commercial borrowings and, because of the high development costs related to new products together with trading losses, a high level of borrowings has been built up. This in turn has placed a considerable interest burden on the company. The Government have always recognised the need to restructure Short Brothers' balance sheet before the company can be returned to the private sector. We have been considering how and when this should best be done. We have reached the view that there would be merit in taking steps now to enable the company to extinguish the bulk of its loan indebtedness to commercial banks.

Clearly, the best way of achieving this would be to inject grant into the company now to enable it to repay its bank borrowings. However, we have decided not to follow this course as it would undoubtedly be opposed by the European Commission, which would not wish to sanction a definitive capital reconstruction until final details of the disposal are known. For that reason we propose to replace the company's commercial debt by a convertible loan from the Government. This would be at National Loans Fund rates. It would replace all of the company's commercial debt save for loans from the European Investment Bank which themselves carry an interest rate well below that charged by the National Loans Fund. Our loan would be convertible. Our expectation is that it would not be repaid but would be converted, either in toto or, for the most part, into equity at the point of disposal of the company. This proposal would be subject to the agreement of the European Commission, and formal notification of our plan has already been made to it. We hope that it can reach a positive decision before the end of this financial year.

The aim of replacing commercial with Government debt is, first, to reassure the market about our intentions on capital reconstruction; and secondly, to simplify the company's portfolio of borrowings so that final recapitalisation can be effected at the appropriate point with minimum delay. The Government's third aim in replacing commercial debt is to secure a reduction in the interest burden currently borne by the company and consequently a corresponding reduction in the liabilities of the Government. There may be other payments to conclude the sale, but such matters will arise from detailed discussion with prospective buyers.

For that reason I seek approval at this stage for a payment of up to £390 million. The public expenditure consequences of this payment cannot be accommodated within the Northern Ireland public expenditure block and the necessary resources will be available from the reserve. I am sure that noble Lords will support the substantial provision proposed to replace existing commercial borrowing by Short Brothers. This is a positive indication of the Government's determination to give the company the best prospects for an early and successful privatisation.

Vote 1of the Department of the Environment covers roads, transport and ports. These votes are to be found on pages 29 to 34. There is a net additional provision of £10.9 million. On page 30, under subhead A4, £5.9 million is sought towards an extended programme of maintenance works on carriageways and footways. In subhead A2, £3.1 million is sought for roads, construction and improvement schemes. Also within Vote 1, provision has been made for a contribution of £100,000 to the East Midlands Air Crash Disaster Fund. This is shown on page 32 under "Civil Aviation Services". This £100,000 is part of the £250,000 donation announced by my right honourable friend the Secretary of State for Transport. I am sure that noble Lords will join me in welcoming this contribution towards the relief of suffering caused by that tragic disaster.

On pages 53 to 65 the Department of Education seeks an extra £9.3 million in Vote 1. As can be seen at subhead A1 on page 53, an extra £5.2 million grant is sought for education and library boards. Of this, £3.4 million is for mandatory student awards, schools for mentally handicapped children and library book stocks. The education boards will also receive a further £1.8 million for the maintenance of school buildings. Under subhead A2, an extra £5 million is to be provided for capital expenditure.

On page 60 we find the Department of Education's Vote 2. An additional £4.3 million is sought mainly for capital expenditure on, for example, the Northern Ireland universities. I am delighted that Belfast's Grand Opera House and the Downpatrick Arts Centre will also benefit.

Pages 67 to 79 cover health and personal social services. An extra £46 million is being sought in Vote 1. The figure is £45.834 million. Of this total, about £29.5 million will be allocated to health and social services boards, under subheading A1, mainly to meet the cost of the nurses' regrading and other review body pay settlements. The extra cash will help to maintain the high standard of health and personal social services which we enjoy in Northern Ireland. It will also enable further progress to be made in the transition from institutional to community care for those in long-stay accommodation.

In subhead A2 on page 67, your Lordships will see an increase of over £10 million in the capital programme. That will ensure that building projects are carried forward as planned; that essential medical equipment is replaced and that some of the most pressing maintenance jobs can be tackled. Perhaps I may also draw your Lordships' attention to the figure of £10.7 million at the foot of page 69. That is required for family practitioner services to meet higher estimates of demand and higher costs, especially in pharmaceutical services.

In the social security programme a total additional provision of £7.6 million is sought. Six hundred thousand pounds of that figure is required in Vote 3—on pages 75 and 76—to meet the increased costs of completing the social security reforms. Finally, an additional £7 million is required in Vote 4 to meet increased demand on the social security budget for income support, supplementary benefits, attendance allowance and transitional payments.

I should like to express my gratitude for the close attention and patience which your Lordships have shown while I have described what I find to be some of the more interesting details contained in the order before the House this evening. I shall certainly listen to every point raised by your Lordships, and I hope I shall be able to give some constructive and helpful answers thereto. However, as your Lordships know, if any points are missed I shall of course be glad to write to the noble Lords concerned in detailed and, I hope, succinct form. My Lords, I beg to move.

Moved, That the draft order laid before the House on 28th February be approved.—(Lord Lyell.)

6.12 p.m.

Lord Prys-Davies

My Lords, the House is grateful to the noble Lord, Lord Lyell, for his comprehensive introduction to the appropriation order and for placing each of the main Votes within the context of the Government's overall policies and expenditure plans for Northern Ireland.

As the Minister implied, the order involves the expenditure of very substantial public resources in Northern Ireland. As we have heard, the topics which it covers touch upon the interests, and affect the activities, of practically everyone in the Province. For those reasons it is a document of considerable public importance. Plainly it is a document which can only be assessed by the directly elected representatives of Northern Ireland meeting in their own Assembly in the Province, being directly answerable to the general public and having to face the spectrum of pressure groups which provide an impetus for getting policies changed or new ones accepted.

I fear that the best we can do in your Lordships' House is to raise a number of issues. Some of them are of general significance, questioning possibly a trend here or there, and some are of detail on a variety of matters which often appear to be unrelated. I shall now deal with just a few such issues.

Agriculture is the first Vote covered by the order and, indeed, the noble Lord, Lord Lyell, is the Minister for Agriculture in Northern Ireland. Agriculture remains the single most important industry in the Province, employing as it does over 43,000 people with another 18,000 people employed in ancilliary industries. I do not know a great deal about agriculture, although I was born and bred in the countryside, but I have had the benefit of advice from my noble friend Lord Gallacher, who is the Opposition's chief agricultural spokesman in the House. In the light of discussions which I have had with him, I wish to raise but two issues with the Minister about his department.

Given the inevitable pressures from the European Community upon farmersto diversify their industry and raise more of their income from activities other than farming, how do the Government see the farming community of Northern Ireland responding to this major challenge, especially as there does not appear to be, under present conditions, the same potential for tourism, craft shops and riding schools as exists in Great Britain? Therefore, given the urgency and the importance of the challenge, perhaps the Minister can assure the House that the Government are introducing adequate measures to encourage the diversification that is required, or that they are at least preparing such measures.

Last week your Lordships' Select Committee on the European Communities published a damning indictment of Community government's failure to tackle the problem of fraud which involved the Community's agricultural policy. That fraud had already been identified by the EC Court of Auditors. I am wondering just how frank the Minister can be with the House on that issue. Can he tell us how active his department is in taking measures closely to supervise CAP subsidies in order to prevent fraud? Further, does his department have properly trained officials to check closely for fraud under the Community regulations which are, by any standard, complex? Indeed, that is why I asked whether the department has properly trained officials to undertake such work.

An important subject which straddles both the Department of Agriculture and the Department of Education is the provision of places for Northern Ireland students who wish to pursue veterinary studies. I should like to know just how concerned the two departments are about the implications for Northern Ireland of the UGC's report on the need for rationalisation of veterinary education. As your Lordships will recall, the report was discussed in this House on Thursday of last week.

So far as I can see, unless I missed the point, there is no specific reference to Northern Ireland in the UGC's report. Can the Minister tell the House whether his department is concerned about the impact of the report? Moreover, is his department worried about the position in Northern Ireland if the major recommendations of the report are accepted and implemented? I raise that issue because one or two people from Northern Ireland have written to me on the matter.

I now turn to the Vote of the Department of Economic Development. As the noble Lord, Lord Lyell, pointed out, the biggest supplementary item is the provision of £390 million for the recapitalisation of Short Brothers plc. That is a substantial sum of money and we are pleased to note that it is to be drawn from the reserves. Indeed, we support that item. However, it has been estimated that up to £1billion of public money will have to be put into Short's before a buyer will make an offer for the company. Can the Minister tell the House whether that estimate of £1 billion is somewhere near the mark?

We are concerned about Short Bothers. There are strong external forces bearing on the company which is—we must be clear about this—a very small company, compared with almost all of the European companies with which it is in competition. Nevertheless, Short's has strengths. If those strengths are to be used to greater effect in a privatised structure, an agreement with any buyer will have to be armed with strict conditions, carefully drawn up in a contract that can be monitored and enforced. In the light of experience, it will not be sufficient merely to rely upon assurances. I trust that the department will hear that message. I listened to the Minister but it is not clear to me what stage has been reached in the discussions involving another important Northern Ireland company. I refer to Harland and Wolff. The Minister was silent about that company which is also in financial straits. To the extent that its future, like the future of Short's, is dependent upon financial arrangements and state aid, which have to comply with EC regulations, have those arrangements been approved in outline by Brussels or is this a matter which still has to be negotiated?

We welcome the Minister's encouraging reports about the continuing success of the industrial development board. We fully support its increased allocation of resources which will enable it further to develop the economy of Northern Ireland and to promote employment in the face of turmoil and the consequent image problem.

I now turn to the education Vote. We welcome the increased expenditure on schools in Northern Ireland. There is a strong case for spending more money on the fabric of Northern Ireland schools. We are especially pleased to know that more money is to be spent on education for the mentally handicapped. I am sure that the House will be delighted with the allocation to Lagan College to enable it to complete the first phase of its new permanent accommodation. That school was started in 1981 with a roll of 28 pupils only. It has now risen to 550. I am sure that it is the wish of many of your Lordships, some of whom are not in the Chamber this evening, that I should thank the governors of Lagan College for the service which they have rendered and are rendering to Northern Ireland by promoting integrated education. Their task has not been easy. We know that there are powerful pressure groups standing in their way, but there is now evidence that their vision, commitment, courage and sense of purpose is beginning to bear fruit.

I regret that there is no separate Vote for expenditure on the Irish language. I have on a previous occasion pressed the case for such expenditure to be shown under a separate heading in the Estimates. Should not that expenditure be presented? I am sure that the Government can take credit for agreeing to set up a working party on the study and place of the Irish language in the curriculum of Northern Ireland schools. Can the Minister today, or by letter, tell us when that working party will be established?

Drawing upon my experience of education in Wales, I say that if the teaching of the Irish language is to be given an effective place in the Northern Ireland school curriculum it will be necessary for additional resources to be made available to the schools and possibly to the training colleges as well. It is important that expenditure on promoting the Irish language should henceforth be shown in a separate education sub-Vote. I hope that the department will hear that message.

I now move to the health Vote. Expenditure on health care in Northern Ireland is high. As the Minister said, there is continuous pressure for more spending on health care. It is not clear why the expenditure is so high compared with health expenditure in Wales, Scotland and parts of England. I wonder whether the department is undertaking any research into the morbidity pattern in Northern Ireland. I also wonder whether the department has its priorities and policies right or do we have to live with this high level of expenditure on the health Vote in the Province? We must also ask whether some policy areas—for example, health education in schools, housing and anti-poverty measures—warrant a special inter-departmental review to see whether policy changes are required. At another level, what steps is the department taking to ensure that the health boards are developing the necessary intelligence and management information systems to assist the hospitals to produce the best value for money? We shall be interested in receiving in due course—not necessarily tonight—the department's comments on those questions.

I have no other questions on the order for the Minister; but in any consideration of the order one cannot but deeply regret that, of the total expenditure within the Secretary of State's responsibility, 41.1 per cent. is spent on social security and law and order. I appreciate that we cannot comment on the latter point. I also note that under the latter Vote £64 million will be spent on improving and strengthening police accommodation in Northern Ireland. That again is a large sum of money. I regret that under current conditions we cannot argue a case against that expenditure. I accept that position. It is in the interests of Northern Ireland that a political solution should soon be found so that that type of defensive expenditure can be redirected towards building in Northern Ireland a far better society than the one we now have.

6.28 p.m.

Lord Hampton

I thank the Minister for introducing the order. I have listened to the noble Lord, Lord Prys-Davies, once again with interest. It seems to me almost incredible that it is nearly two years since I last spoke about Northern Ireland in your Lordships' House. I find this occasion partly happy and partly sad. I am happy to see friends and remember that business goes on as steadily as ever; it is sad to realise that no solution to many problems is close, and that the atrocities, the suffering and the terrorism go on. The noble Lord, Lord Prys-Davies, spoke about the vast expenditure that that involves.

Perhaps I may start with a few brief general comments. Dr. John Alderdice, leader of the Alliance Party of Northern Ireland, summed up the situation well in the recent education of Alliance News. The noble Lord, Lord Dunleath, knows all this better than I. Dr. Alderdice said: The terrifying series of sectarian murders which has claimed new victims over the past few days, emphasises again that the most important division in Northern Ireland is not between Unionists and Nationalists or Protestants or Catholics, but between the men of terror and violence who seek to destroy all human values, and those who want to build a democratic and stable society". I believe that that was also in the Home Secretary's mind last week when he said that we must "extirpate" the IRA. My party seeks to support the Alliance Party as it works across the sectarian divide.

Two events concerning Northern Ireland, apart from the continuing atrocities, have depressed me in recent times. The first was the Elected Authorities (Northern Ireland) Bill which has just finished its final stages in this House. I am saddened that the Government seem at times to ignore the advice of all those who live in the Province, but as I was unable to be present earlier this afternoon, I must not say more here. I am saddened far more by the fact that the Bill is necessary and that terrorism, the arousal of extreme fear, still has such a powerful influence there.

Secondly, I shall briefly comment on the shootings in Gibraltar. I set aside the recent debate in this House on the TV programme, "Death on the Rock", except to say that I thought that the noble Lord, Lord Windlesham, defended his report withdignity and integrity. Nonetheless I find what seems to have happened highly disturbing. It is virtually certain that three known terrorists were bent on carrying out an atrocity that would have made that at the Enniskillen war memorial look like a picnic. The terrorists were shot, which is to be regretted, but in due course they are given a martyr's burial by hundreds of people who apparently saw no evil in what those two men and a women had planned to do. How biased can one get?

However, while emphasising the difficulties, I do not wish to appear totally despondent. I sense signs of hope with discussions across the sectarian divide, improvements in the employment situation, the progress of Lagan College and so on. That is encouraging. Somehow all those who want to build a democratic and stable society and who truly condemn the horrifying series of sectarian murders have to be united in a common cause. One must hope that in a war-weary nation, as it has been described, sanity based on courage will prevail sooner rather than later.

I feel somewhat out of touch but perhaps I may ask the Minister two questions. Both concern page 11 of the Appropriation (Northern Ireland) Order 1989. First, the sum granted on account is £147,000, for expenditure of the Northern Ireland Assembly". What does that involve in the present circumstances? Secondly, when the sum of £160,000 is granted, for expenditure by the Northern Ireland Parliamentary Commissioner for Administration and the Northern Ireland Commissioner for Complaints", can the Minister explain briefly what is involved? In particular, what kinds of complaints are dealt with and about how many in a 12-month period?

6.33 p.m.

Lord Dunleath

My Lords, once again we are grateful to the Minister for having presented the draft appropriation order in the way that he has. It seems to have surfaced rather more quickly than usual on this occasion. I therefore regret that I was unable to give him advance notice of any of the points that I wished to raise. However, I have no qualms about raising them because I am sure that they will occasion him no difficulty.

Turning first to the Department of Agriculture, Votes 1 and 2, there is quite a lot of concern at the moment about unfit meat being marketed in Northern Ireland. I am not sure whether the noble Lord is aware of this but it seems that there are illegal knackeries which can process casualty animals and then put them onto the market. They can be sold as cheap meat, apparently, in back streets, or I think that they can be incorporated into products such as beefburgers or paté.

I must confess that to a certain extent I looked upon the reports about salmonella and listeria as being partly journalist mileage. But I took a different view when one of my closest colleagues went down with food poisoning about three weeks ago. He has been quite seriously ill in hospital ever since. I therefore think that the risk of unfit food products coming onto the market is something which Her Majesty's Government ought to think about very carefully. In my view the matter of illegal knackeries being able to distribute food is quite worrying.

Secondly, smuggling is a matter to which I have referred before. I am afraid that I return to the conclusion that if we could just get rid of monetary compensatory amounts, it would solve a great many problems. The last time I ventured to raise this, the noble Baroness, Lady Trumpington, said that we would achieve a common currency within the European Market as soon as the time was right. I should be quite interested to know when the time will be right. I should have thought that it could well be just about now. If the noble Lord can throw any light on that when he is winding up, I should be very grateful. It continues to be a problem. There is also a problem as regards animal health.

The third point under the section on the Department of Agriculture is that there is some anxiety in farming circles about the reduction in the special aid package for agriculture. That is the successor to the remoteness grant, as it was originally called. I am aware that it is common policy throughout the EC to reduce support for agriculture. But I am sure that the noble Lord will be aware that agriculture represents proportionately a much larger industry in Northern Ireland than in the rest of the United Kingdom and many other EC countries. That is something which cannot be brushed lightly aside.

The fourth point under agriculture is that I should be interested to learn from the noble Lord how much progress has been made over encouragement for forestry among private landowners who are farmers and how much has been made over the set aside system.

Turning now to the Department of Economic Development, I agree that the IDB is doing a good job. Some you win, some you lose; that is the way it is. But our area of concern is, as suggested by the noble Lord, Lord Prys-Davies, that Harland and Wolff seem to present a major problem. Unlike other industries, that company does not seem to have been groomed for privatisation with its balance sheet being improved and its order book sustained. I am not close to the situation but we have heard reports of contracts which have been denied to Harland and Wolff. That seems a funny way to go about matters when one is trying to make a company look attractive for sale to the market. It contrasts to a certain extent with the situation in Short's.

Turning briefly to the Department of the Environment, I venture to return to waste disposal which I raised some time ago. I suggested to the noble Lord then that perhaps alternative means other than landfill might be considered; otherwise the entire country will become a thinly disguised rubbish dump.

Since I mentioned that matter, a committee from the other place consisting of honourable Members from all parties produced a report which indicated that Great Britain is sitting on a time bomb with regard to disposal of toxic waste. I readily acknowledge that in Northern Ireland, fortunately, we do not have the same problem of disposing of acute toxic waste. However, at the same time, pollution of water courses, of the atmosphere and of land is something that will increase if we continue with land-fill disposal of waste. I ask the noble Lord to look at this once again to see whether such waste could not be disposed of in a manner that would be less detrimental to the environment.

Turning to the Department of Education, we greatly welcome the support that has been given to the integrated colleges and particularly to Lagan College, which was the flagship of integrated education. I was proud to have been associated with that college in its early years. There is a question mark over Brownlow High School in Lurgan. I do not know whether the noble Lord has any information about this school, but there is a group of parents in North Armagh who are keen to see Brownlow being integrated. However, there is another point of view which does not favour integration. I hope that the help that Her Majesty's Government have already given to integrated education will be extended to Brownlow High School. We are certainly grateful for the assistance that has recently been approved.

Finally, I hesitate to say this, but there seem to be many inconsistencies in planning matters in Northern Ireland. Planning permission seems to be given for buildings that are quite inappropriate for their environment; and yet the planning office is unusually severe on anyone who wishes to use an existing building for an alternative purpose—for example, someone who may have a farm shed or a garage and then goes into the plumbing business and wishes to store pipes, valves and other equipment of that kind.

I say this with even more hesitancy because the person in question is a longstanding friend of mine: in the office of the ombudsman there seems to be something of a "Yes, Prime Minister", situation. I greatly admire the gentleman in question, but I wonder whether the complaints and problems that are being put to him are being over-filtered before they reach his desk. In saying that, I am not inferring any personal criticism of the gentleman in question. I wonder, however, whether the procedure is correct.

I am grateful for the consideration which Her Majesty's Government continue to give to matters of importance in the various Northern Ireland departments. I should like to thank the noble Lord for his presentation of the draft appropriation order.

6.43 p.m.

Lord Fitt

My Lords, at the outset I should like to congratulate my noble friend Lord Prys-Davies on the painstaking manner in which he has gone through this appropriation order. I notice that the noble Lord who will be replying to the debate is adequately supplied with civil servants to advise him on the issues which are liable to be raised. My noble friend does not have such assistance either in this House or outside it. For someone who does not represent a Northern Ireland constituency, he deserves credit for the effort that he has put into this matter. Indeed, he could not act with any greater diligence if he were to represent a marginal constituency somewhere in Northern Ireland—although I would not wish to inflict that upon him.

One cannot but be made aware of the gross futility that exists in Northern Ireland. It has already been referred to by the noble Lord who has spoken from the Liberal Benches. A terrible campaign of violence has been waged for 20 years. We are all aware of the increase in this violence over the past weeks. This time last week, two more young British soldiers were brutally murdered on the streets of Derry. Many other deaths and maimings have taken place. What have they been for? It is allegedly to bring about a United Ireland, to unite the Irish people, to bring about reconciliation between the unionists in the north and the nationalists in the south.

When one looks at this appropriation order for 1988–89, colossal sums are to be expended in Northern Ireland to carry out the appropriation for the various departments. It amounts to £5,000 million. That is quite a lot of money to be spent on 2.5 per cent. of the people of the United Kingdom. Without wishing to be blasphemous, I ask this question: where, in the name of God, would that money come from if there were a United Ireland and if the IRA were to be successful in coercing the north to join the Republic against its will—excluding all the bloodshed and pain that would be caused? How, in the name of God, could that country exist? Where would it get such sums as £5,000 million?

I do not suppose that there is ever an occasion when the Opposition will say to the Government, "You have done extremely well and we have no criticism to make". That is not the duty of the Opposition. The Opposition will always find some means by which to criticise the Government. We have not resorted to such tactics because there is no political gain from unwarranted criticisms. My noble friend Lord Prys-Davies and other noble Lords have quite rightly drawn attention to the amount of money that needs to be spent on so-called security—in protecting RUC stations, and other expenditure—which could very well be used to create a better life for everyone in Northern Ireland.

Should anyone in Northern Ireland read or listen to what I have to say, I should like to ask them a direct question. Do they realise the vast amount of money that has been paid by the British taxpayer to cater for the everyday needs of people living in Northern Ireland, whether in Republican or Loyalist areas? If that link were to be broken by the activities of the IRA, I believe that it would prove to be an economic disaster not only for Northern Ireland but for the Republic. There would be an overspill of the calamity into this part of the United Kingdom. I say that as one who wishes to see the border abolished, if possible by consent, and certainly not by coercion.

I should like to see everyone in the island of Ireland living under an Irish government in peace, amity and concord. No matter that the IRA may consider itself to be acting in the interests of the people of Ireland, however many people it may have on its hit list which we have heard so much about over the past 48 hours, if it continues to pursue the policy it has been following for the past 20 years, I have no hesitation in saying that it will never win. It cannot win. All it can do is to continue to inflict grievous pain on the body politic of Northern Ireland.

There are only a few issues which I should like to draw to the attention of the Minister this evening. No longer being a Member of Parliament I am not as fully involved in the needs and concerns of the population in Northern Ireland as I was for many years. Therefore I have to depend on people writing to me and telephoning me to tell me of their concerns.

One of those concerns relates to the Mater Hospital. I believe that it is envisaged that the Mater Hospital is to lose its casualty department. That has caused great concern in the northern part of Belfast. I lived in the north of Belfast and I support Mr. CecilWalker, the present Member of Parliament for that area, when he says that there is great concern about the projected closure of that hospital. North Belfast has seen a great deal of violence throughout the past 20 years. On many occasions the existence of the casualty department at the Mater Hospital has undoubtedly saved lives. I wonder, therefore, whether there could not be a reallocation of the money given under that heading to ensure that the hospital is kept open.

I understand that there is a very long waiting list for treatment in the ophthalmic department at the Royal Victoria Hospital. Incidentally, that is one of the best ophthalmic departments anywhere in the world. It is short of funds and there is a very long waiting list for cataract operations. Cataract complaints very often affect elderly people. I have seen them in my own family. They can be very distressing complaints as people begin to feel that they are losing their sight. I think that further financial assistance should be given to the Royal Victoria Hospital, or there should be a reallocation of existing funds, to enable that long queue for cataract operations to be diminished.

The Minister mentioned that Northern Ireland is not so very different from other parts of the United Kingdom when it comes to complaints about major issues. In that very same Royal Victoria Hospital, and indeed in the Mater Hospital, there are serious complaints about the nurses' regrading system. I know that that complaint affects every other region in the United Kingdom; it certainly affects Northern Ireland.

The question of education and Lagan College has already been referred to by the noble Lord, Lord Dunleath. I think that he and others deserve great credit for taking part in that pilot scheme to bring about integrated education in Northern Ireland. That does not mean that every other school, be they state schools or schools under the control of the Catholic Church, will be closed down, but it does mean that at least some tentative steps are being taken to bring about schools which will cater for integrated education.

The person who deserves credit most of all in that connection is Basil McIvor. He is now a judge in Northern Ireland, he was a member of the Executive in 1974, and is now doing everything he can to enhance integrated education in Northern Ireland. He deserves great credit.

The other issue which has been referred to by every speaker except the Minister is the Belfast shipyard. The Government's actions in an attempt to write off £360 million and the discussions which are taking place with the intention of finding a buyer to privatise Short and Harland will certainly not meet with the overwhelming enthusiasm of the workforce. However, when it comes to choosing between closure of Short and Harland and privatisation, I think that they will reluctantly settle for privatisation.

Harland and Wolff is different. It has been funded differently. It was funded with government money rather than with money from commercial banks, as in the case of Short and Harland. The Government have kept Harland and Wolff afloat. They could quite easily write off the debt appertaining to Harland and Wolff. I understand that final discussions—and I emphasise the word "final"—in relation to the possible privatisation of Harland and Wolff have taken place this afternoon. I hope that on the 9 o'clock news tonight we shall hear that a successful conclusion has been reached.

Engaged in those discussions are representatives of the Government, the DED in Northern Ireland, and Mr. Fred Olsen. Mr. Fred Olsen is a shipowner recognised world-wide with excellent credentials. Everyone who is engaged in the shipping industry throughout the world has nothing but the greatest respect for Mr. Olsen.

A project has been put forward by Mr. John Parker, the present managing director of Harland and Wolff. Mr. Fred Olsen is willing to undertake to put £12 million into the Belfast shipyard. He would also place an order for three ships, which would guarantee employment in the immediate future. He would be prepared to have those three ships built at 10 per cent. less than he could have them built in a shipyard in Korea. I believe that that is an indication of the bona fides of Mr. Olsen.

Mr. Olsen would have a minority shareholding—47.5 per cent. Mr John Parker and the other executives in Harland and Wolff are prepared to mortgage their homes and any other property they have. The workforce at Harland and Wolff are prepared to put their redundancy payments resulting from privatisation with the management funds. Together, they would hold the other 47.5 per cent. That represents 95 per cent. of the shares. The other 5 per cent. would be taken by Northern Ireland investors, people who live in Northern Ireland and have the capability to invest in Northern Ireland, and by banks and building societies who have already indicated that they would be prepared to take part.

I say to the Minister that I believe that to be a great indication of the involvement of the whole of the people in Northern Ireland and of a very reputable shipowner, Mr. Fred Olsen. As I say, he is one of the most reputable shipowners in the shipping industry.

That is the proposal that has been discussed today. In effect, it would mean that the Government would have to write off about £60 million, although the commercial banks would not be involved. The Government must be aware of the situation. I understand from some members of the delegation who met the Prime Minister recently to discuss Harland and Wolff that she showed some interest in allowing the company to continue as an industrial concern. As has been said on many occasions, Harland and Wolff is not only an east Belfast project; there is a spin-off from work in Belfast to all other areas of the six counties and to the mainland, because many of the parts involved in shipbuilding have to be imported from other areas of the United Kingdom into Northern Ireland. The project therefore keeps people in employment not only in east Belfast but in other parts of the United Kingdom. I believe that there is such sincerity and enthusiasm behind the offer that I have described that it should be given every support by the Government.

7 p.m.

Lord Lyell

My Lords, once again, the House owes a huge debt of gratitude to the noble Lord, Lord Prys-Davies, who has led the nice inquiry—I must not call it an inquisition—that he always leads when I present the appropriation order to the House. This evening he has maintained his high standard of inquiry and his keen desire to discover what lies behind many of the figures in the order—not simply the figures presented to the House that I find of interest. The tour of the appropriation order on which I conduct noble Lords on each occasion is something of a personal selection, but the selection of the noble Lord and of all noble Lords who have spoken in the debate indicates the tremendous interest not only in the economy of Northern Ireland but in the well-being of everyone who lives in the Province.

The noble Lord referred to agriculture and the support and good counsel of his noble friend Lord Gallacher to whom we always extend a welcome whenever he wishes to come to Northern Ireland to examine agricultural matters. I am sure that he will pass on our good wishes to his noble friend who is always a welcome visitor to Northern Ireland.

The noble Lord, Lord Prys-Davies, referred to a devolved assembly and the directly elected representatives of the people of Northern Ireland. I agree entirely with him that the matters that we have discussed this evening could best be considered by the elected representatives of the people of Northern Ireland in a devolved assembly. I hope that the recent encouraging signs will utimately develop in that direction. As the noble Lord will be aware, my right honourable friend the Secretary of State, with the assistance of my honourable friend the Under-Secretary of State, Dr. Mawhinney, is exploring the common ground that exists between the constitutional parties in the Province. I cannot say more about that matter this evening. We hope that those discussions will bear fruit either in the short-term or medium-term future.

On the question of agriculture, the noble Lord also inquired about farm diversification. It will be no surprise to the House to learn that my department—the Department of Agriculture—is anxious to encourage diversification, but noble Lords, especially the noble Lords, Lord Dunleath, Lord Fitt and Lord Blease, will be aware that the climate, topography and soil conditions combine to work against significant diversification away from what we in Northern Ireland call traditional enterprises. In addition—something that is unique to Northern Ireland—the small farm structure does not exactly encourage farmers to give up land for new and what are today largely experimental purposes. However, notwithstanding those points of difficulty, some diversification is already taking place. The farm diversification scheme, on behalf of the international fund, has been useful in promoting a number of interests, particularly in horse breeding exercises and, to a lesser extent, in small animal production—I refer to goats, rabbits and other similar small creatures.

We have also been encouraged by the interest shown in the farm woodland scheme and the woodland grant scheme which, as noble Lords will be aware, are United Kingdom schemes. However, we believe that they reflect some interest by Northern Ireland. Although the United Kingdom farm diversification scheme, which provides aid for on-farm, non-agricultural activities, has had only a limited impact in Northern Ireland, it has stimulated some development in tourist accommodation and recreation as well as education facilities.

Lord Dunleath

My Lords, I was interested in the Minister's comments and wondered whether there was a chink of light regarding the possibility of relaxing VAT on alternative enterprises, particularly horse breeding. Horses could be regarded as farm animals in the same way as cattle or sheep, thereby relieving the accommodation of taxation.

Lord Lyell

My Lords, my noble friend reminds me that this is a traditional week at a place which is only 120 or 130 kilometres west of where we are now seated and where there are notable arrivals from Northern Ireland as well as from the Republic. One of the more successful trainers, whom I salute, has had notable successes at that particular "festival", as I believe it is called.

The noble Lord raises a particularly interesting point about VAT and fiscal structure. I am almost sure—surer than most of the bookmakers—he will not win his bet this evening, but if I find any chink of light, as he puts it, I shall certainly write to him. He will know that so far none of our inquiries in that regard has met with success. But I shall not give up; I shall certainly write to the noble Lord on that point.

The noble Lord, Lord Prys-Davies, rightly raised the question of combating fraud, which seems very much to be the flavour of the week, the month and possibly the year in the media. Some of the criticism is well informed, although some is considerably ill-informed. I assure the House and especially the noble Lord that my department, as well as the Customs authority in the United Kingdom, work particularly closely with the Ministry of Agriculture and the Customs authority in the Irish Republic in operating systems of what we call end-use controls. We believe that those systems are effective, but they need to be ceaselessly updated.

Those systems are designed to combat illegal trading in various agricultural commodities. Noble Lords will have heard about those quadrupeds that cross the Border, but they constitute only a small part of the traffic that crosses the Border quite legally. The House will be aware that Northern Ireland is the only part of the United Kingdom with a land border adjoining another member state. We therefore have one or two problems in that area, but I assure the House that my officials are well trained in what is required to combat illegal trading. We work in close consultation with the Customs authorities and with our colleagues in the Republic.

The noble Lord, Lord Prys-Davies, asked about the Irish language. There is no intention on our part to make a specific Estimate provision in relation to the Irish language, just as there is no specific provision shown for any other subject in the school curriculum. However, we recognise the importance which many people in Northern Ireland attach to Irish language tuition and, above all, to the language itself. The proposals reflect this and mean that Irish will still be available in all schools which presently teach it or wish to do so in future. I hope that that brief outline will be of help to the noble Lord. If there is anything further that we can glean, I shall write to him.

Integrated education was mentioned by the noble Lord, Lord Prys-Davies, and other noble Lords. Certainly it is a major element in the package of education reforms for Northern Ireland which were announced by my honourable friend the Minister responsible for education in October 1988. Our general approach on integrated education has been to encourage it where there is a local wish for it. I shall certainly take on board the point raised by the noble Lord, Lord Dunleath. I cannot answer him this evening; I shall have to scour the local newspapers. However, I shall write to him on that point.

We have proposed a significant range of new measures to support integrated education. We announced them as part of the reform package. We call them the five-star package: first, the provision for existing schools to opt for grant-maintained integrated status should they wish; secondly, the strengthening of legislation for controlled integrated schools; thirdly, financial assistance for newly-established integrated schools; and fourthly, priority for integrated school capital building projects. The fifth element of this star process is the introduction of a statutory responsibility on the Department of Education to encourage integrated education.

The noble Lord, Lord Prys-Davies, mentioned Short Brothers, as indeed did the noble Lord, Lord Fitt. This matter of course exercises your Lordships' minds and the minds of everyone in Northern Ireland as well as many others in the United Kingdom. The noble Lord, Lord Prys-Davies, referred to the cost of privatising Shorts. He mentioned a figure of approximately £1 billion. I am sorry that we cannot yet provide an estimate of the total cost of privatising the company to the Government. The figure that I gave earlier was what we think will be needed as we speak today. However, the Government are determined to do everything they can to ensure the successful transfer of the company to the private sector. We recognise that there are considerable financial implications in this. But of course the final sum will reflect on the discussions with the ultimate buyer. All these different discussions will reflect different aspects of the company. The figures will fluctuate. However, the final sum will reflect on what are very complicated and confidential commercial discussions.

The noble Lord spoke of the conditions attached to any putative sale. I appreciate his concern on this point. Of course we shall attach particular importance to the commitments that prospective purchasers are prepared to make in regard to the long-term future of the whole company and its employees.

The noble Lord, Lord Prys-Davies, referred to the provision of veterinary education. I am the Minister in charge of vets, and as we use more vets in Northern Ireland than any other area, we have particular regard for this. The report of the working group on veterinary education has reached my office. My officials are considering with me its implications. They relate to the future needs of Northern Ireland, for manpower in the veterinary area as well as training of future vets. If necessary we shall make our representations to the University Grants Committee or its successor in due course. I hope that I may have some news in the future for the noble Lord. However, I have none this evening and I doubt, even if I wrote to him, whether I could be of much more help. However, I assure him that this is a matter that exercises us greatly.

The noble Lords, Lord Prys-Davies and Lord Fitt, raised the question of Harland and Wolff. Dealing first with the shipyard, my honourable friend the Parliamentary Under-Secretary of State indicated that the Government are anxious to achieve an early and successful privatisation of the company. I do not have knowledge of the matter that the noble Lord, Lord Fitt, mentioned. Perhaps he has watched the media more recently than I have done. However, I assure him that we have been working very hard to find a structure for privatisation which will be right for the company as well as obtaining the approval of the European Commission. We have not yet obtained this approval since we have not necessarily had a proposal to put to the Commission. But we shall study these proposals in detail, and the matters mentioned by the noble Lord, Lord Fitt, to find purchasers for the company. We detect encouraging signs of progress. We hope that there will be an early conclusion to the discussions.

The noble Lord, Lord Prys-Davies, raised the matter of the high level of health expenditure in the Province. He used the "in" words of health with morbidity. Indeed, expenditure on health in the Province is 20 per cent. higher per head of population than in England and Wales. This reflects higher levels of morbidity in Northern Ireland. A broadly similar pattern prevails in Scotland where morbidity levels are also relatively high. However, I take the point of the noble Lord, that we have to obtain the maximum value for the money from the resources that are allocated to the health programme. He will know—and I reiterate it once again—that the Department of Health and Social Services, as well as the health boards, are making very great efforts to ensure that they obtain the maximum value for the money. Let us take one example: improving patient throughput in the acute hospital sector.

We were very grateful to see the noble Lord, Lord Hampton, back in the Chamber. He would not expect me to say a great deal about elected authorities after we had had a quite lengthy debate on it earlier today, let alone on the second question that he raised, on Gibraltar. However, perhaps I may write to the noble Lord, Lord Hampton, with the provision for the Estimates for the Northern Ireland Assembly as well as the Northern Ireland Parliamentary Commissioner for Administration and Complaints. The various items of expenditure under the Northern Ireland Assembly Vote would appear to be covering basically the costs of the small Assembly staff and residual payments to former members of the Assembly. However, I shall amplify this. The Parliamentary Commissioner, or the ombudsman as he is more generally known, publishes an annual report which will provide information on the number of complaints. We shall certainly ensure that the noble Lord, Lord Hampton, receives a copy as soon as possible.

The noble Lord, Lord Dunleath, raised a fascinating question on unfit meat. This seems always to be raised before, or after, we have had a nice meal. He gave an example of a noble, honourable or right honourable friend who was struck down by food poisoning. Perhaps I may take details of that later. I hope that it was not caused in any way by unfitmeat. Quite rightly, the noble Lord referred to the dangers of unfit meat. Perhaps I may stress to him that the chief medical officer of the Department of Health in Great Britain recently issued general advice to the public about unfit meat and in particular some of the more unattractive aspects of listeria. The chief medical officer went on to give specific advice to pregnant women and to some patients who were vulnerable because of illness or treatment. Some of the advice given by the chief medical officer was to eat food piping hot. However, he referred to eating certain cheeses. I do not know whether these were the cause of the noble Lord's ailment, let alone that of his friend.

The noble Lord, Lord Dunleath, compared Shorts and Harland and Wolff. A different approach has been necessary in approaching the privatisation of these companies. They operate in completely different markets and have different financial requirements. I assure the noble Lords, Lord Dunleath and Lord Fitt, that the Government are prepared to consider the provision of substantial assistance to a prospective buyer provided that some structure for privatisation which is right for the company can be found. That is not necessarily a matter for us to discuss in your Lordships' House this evening. At the outset it is a matter for confidential and commercial discussion.

The noble Lord, Lord Dunleath, took us back briefly to the ombudsman and spoke about handling some of the case-load of the ombudsman. He paid a generous and fully justified tribute to him. I hope the noble Lord will accept that the Parliamentary Commissioner is totally independent of the Government. It would be inappropriate for me to comment on this matter, but the noble Lord's remarks will be drawn to the Parliamentary Commissioner's attention. The noble Lord also referred to the combined efforts of my department and the Department of Health and Social Services.

I have covered some of the more attractive aspects of cheese and piping hot food, but, as your Lordships will be aware, there is a continuing review in the United Kingdom. Any action taken in Northern Ireland will follow any remedial action that needs to be taken in Great Britain, but that will not prevent us from taking action as we are required to take it in the Northern Ireland context.

On MCAs and currency adjustments, the green pound and so on, I am afraid I cannot help the noble Lord this evening. The Government and the European Commission are committed to the abolition of MCAs by 1992, but the noble Lord will be aware of the varying interests of member states in achieving all this, and it may be difficult. I appreciate his concern about special aid for agriculture. It is voiced to me continually by virtually everybody in the agricultural community in Northern Ireland. There is to be a reduction in special aid for the coming year, but it is a matter of determining priorities, given the overall pressures on public expenditure in Northern Ireland, particularly in agriculture. It is frustrating for me to realise that we cannot do everything that we want to. However, £5 million for Northern Ireland's unique scheme represents additional resources at a time when farm incomes elsewhere in the United Kingdom, especially in my own area in Scotland, have been improving, albeit slowly.

The noble Lord raised the issue of set-aside. As he will know probably better than anyone in your Lordships' House, this has been of only limited interest to farmers in the Province. The farm woodlands scheme has been quite successful, and nearly 50 applications have been received for the planting of about 200 hectares, which for Northern Ireland is respectable.

The noble Lord, Lord Fitt, made one of his traditional questioning speeches. It was very touching that he referred to the fairly large sum of money that we are discussing. I am sure he will accept that, over all the years that he has been in another place and the noble Lord, Lord Dunleath, and I have been sitting in your Lordships' House, we have been discussing Northern Ireland affairs. This has gone on for some 15 or 16 years. The funds mentioned this evening are bipartisan. However. I note his comments on public expenditure.

The noble Lord was concerned about the Royal Victoria Hospital, especially the ophthalmic unit. We recognise the difficulties and the eastern health board, which is the responsible body trying to deal with these difficulties, established a task force to look at deficiencies as well as to make recommendations. The board has identified in its operational plan for 1989–90—that is, the coming financial year—a proposal for additional theatre sessions on the RVH site. This proposal will be considered in the context of the development of regional medical services for 1989–90, and £1.5 million has been set aside for this. My honourable friend Mr. Needham recently announced a sum of £1.35 million for the eastern board in this financial year, 1988–89, for the purchase of high-cost equipment associated with regional medical services, including ophthalmology. If any part of that is of major interest to the service, then I shall write to the noble Lord with such figures as I can identify from that.

The noble Lord also asked about the Mater Hospital. The complementary study of the royal group of hospitals, the Belfast City Hospital, and the Mater Hospital, resulted in a number of recommendations. One of these was that the Mater accident and emergency unit should close in the evenings. The time of the closure was to be decided locally. The noble Lord's local knowledge might have a considerable input into that. But I assure him that that recommendation is one of a number included in the eastern health and social health and service draft operational plan. This was issued for consultation in December last year. Together with the comments, the plan will be considered by the whole board on 27th April this year and after that the board will be discussing its conclusion with my honourable friend, as well as the Department of Health and Social Services, so perhaps there may be some news then.

The noble Lord rightly drew attention to the level of public expenditure in Northern Ireland. The £5.2 billion total for Northern Ireland excludes the special addition of £390 million that I referred to earlier when dealing with Short's. The whole of this overall figure is the deliberate consequence of matching resources and needs, with more resources being allocated to the Province and to other relatively disadvantaged areas than to the prosperous regions of the United Kingdom. The Government are continuing to target public expenditure resources in ways which will assist the Province to strengthen its economy through self-sustaining growth. We had two marvellous examples earlier this year of Daewoo and Montupet, with an additional 1,600 jobs, which shows that this continuing investment in the structure of the Province is beginning to pay off.

The points mentioned on this aspect by the noble Lord are understood by all who take a genuine interest in the economic and social well-being of the Province and are much appreciated. That just about covers everything that was raised in this debate by your Lordships on the order. If I have missed anything, I shall write to noble Lords. I thank your Lordships for your traditional patience and courtesy. I went through the order on points that I felt were important. But we are grateful, and I believe everyone in Northern Ireland will be grateful, for the attention that has been focused on these figures and the Estimates this evening.

On Question, Motion agreed to.

House adjourned at twenty-nine minutes past seven o'clock.