Appropriation (Northern Ireland) Order 1998

HL Deb 05 March 1998 vol 586 cc1409-35

10.46 p.m.

Lord Dubs rose to move, That the draft order laid before the House on 12th February be approved.

The noble Lord said: My Lords, the draft order before us today authorises expenditure of £148 million for Northern Ireland departments for the current financial year. That is in addition to the £6,573 million voted by the House last July. The order also authorises the Vote on Account of £3,026 million for 1998–99 to enable the services of Northern Ireland departments to continue until the 1998–99 main estimates are brought before your Lordships later this year.

I would remind your Lordships that the order does not cover the estimates for the Northern Ireland Office on law and order services. As a Whitehall department, the estimates for the Northern Ireland Office are dealt with separately. However, the public expenditure decisions underlying the estimates for the Northern Ireland departments and the Northern Ireland Office form part of the Northern Ireland block allocation. The Secretary of State has flexibility to reallocate resources within the block.

I know that your Lordships continue to take a close interest in the prospects for economic development in Northern Ireland, and I should like to say a few words about the local economic situation before turning to the contents of the estimates. The latest available official statistics and survey data show that the Northern Ireland economy remains in good health in almost every area. The main economic indicators have, once again, shown very positive results for the Province.

The output of manufacturing and production industries continues to rise at a rate well above that achieved nationally. Over the past five years Northern Ireland's manufacturing sector has increased its output by almost 21 per cent., twice the rate of growth achieved nationally. There has also been a significant improvement in the Province's gross domestic product relative to the United Kingdom, with GDP per head in Northern Ireland increasing from 78.2 per cent. of the UK average in 1990 to 81.2 per cent. by 1996.

Record employment levels have also been achieved. At September 1997 the number of employees in employment in Northern Ireland stood at 585,020: the highest September figure on record. That is coupled with a seasonally adjusted unemployment rate of 7.9 per cent. That represents a fall of 63,500 on the peak October 1986 figure, when 17.2 per cent. of the workforce was unemployed. In addition, significant falls in the numbers of both long-term and youth unemployment are particularly encouraging.

The financial year 1996–97 has also been a record year for investment in the Province, with a total of £630 million invested by IDB client companies over the course of the year. Inward investment has also been forthcoming, with 35 inward investment projects contributing an anticipated investment of some £490 million, and creating 4,641 new jobs, while safeguarding a further 3,345 jobs.

Allied to that are the recent survey results from the local business community. Indeed, many of the forecasts for the coming year predict further employment growth, reductions in unemployment and strong rises in output.

All of this clearly demonstrates the impressive achievements of the Northern Ireland economy, and I am confident that this performance will continue to be sustained. However, continued violence could compromise the Province's bright economic future.

Your Lordships will be aware of the strain placed on the public purse by way of compensation payments resulting from, for example, the recent bombings in Moira and Portadown. Incidents such as those mean that millions of pounds which should otherwise have been available to spend on important areas such as hospitals, schools, roads and jobs have to be diverted to pay for the mindless destruction inflicted on our town centres. It is certainly the wish of the vast majority of the people of Northern Ireland that there will be no recurrence of the destruction which we have witnessed in the past few weeks and that the Province can enjoy the peace and prosperity for which we are working.

I now turn to the main items in the Estimates, starting with the Department of Agriculture. In Vote 2, covering local agriculture support measures, a net increase of £17.6 million is sought. This includes some £5.4 million in respect of controlling outbreaks of animal diseases, including brucellosis, salmonella, Newcastle disease and BSE, £1.5 million for processing and marketing grants, £1.4 million for rural development and £2.4 million for the EU Peace and Reconciliation Programme. Within this vote £5 million has also been made available to bring forward to the 1997–98 financial year the payment of some 1,250 capital grant claims relating to the sub-programme for agriculture and rural development which would otherwise have been held over for payment in the 1998–99 financial year. Increases within this Vote are partially offset by increased receipts.

I now turn to the Department of Economic Development, where token increases of £1,000 are sought in Votes 2 and 3. In Vote 2, an addition of some £0.5 million is for the Northern Ireland Tourist Board, to assist the development of tourism in Northern Ireland. Tourism plays an important role in economic development in Northern Ireland, where it is estimated that spending by holiday visitors and domestic holiday makers accounts for approximately 2 per cent. of Northern Ireland's GDP, sustaining in the region of 12,500 jobs. This and other increases are offset by reduced requirements and increased receipts elsewhere within the Vote.

In Vote 3, a token increase of £1,000 is also sought by the Training and Employment Agency. An increase of £3.6 million is sought for the Jobskills programme, to meet increased demand and for the training centre network for payment of training allowances. Also in this vote an additional £1.5 million is sought for the Government's new welfare to work initiative. This is to fund preliminary work, including demonstration models, prior to the Province-wide introduction of the New Deal in April. At present there are approximately 3,000 18 to 24 year-olds currently participating in agency employment and training programmes. From 6th April the agency will provide for approximately 10,000 young people in total, on a New Deal option financed through either the New Deal allocation of £140 million or transfers from existing provision.

Unemployment is a huge waste of our economic potential and a major cause of poverty. A priority of the Government is to tackle the root causes of unemployment and provide new opportunities for work. Welfare to work is a major and innovative initiative targeted directly at tackling unemployment.

The New Deal for the unemployed is aimed at getting the young and long-term unemployed into jobs and helping them to stay in employment. This will be achieved through increasing the long-term employability of the unemployed by improving their self respect, skills, experience and motivation.

I turn now to the Department of the Environment. A net increase of £5.5 million is sought in Vote 1. The main increases include £4.1 million for roads maintenance, £1.6 million for the operation of ferry services, £2 million for compensation payments to Northern Ireland Railways and £1.8 million to meet the cost of concessionary bus and rail fares for the elderly, disabled people and children of school age. These increases are partially offset by increased receipts and reduced requirements elsewhere within the Vote.

In Vote 2, covering housing, a net increase of £17.2 million is sought. Some £7.5 million is for assistance to the voluntary housing movement and includes a transfer of funds from the Northern Ireland Housing Executive to housing associations to enable an additional 400 new dwellings to be started in 1997–98. It is important to recognise that the housing success story is continuing. Preliminary results of the 1996 house conditions survey show a significant reduction in unfitness levels. An additional £10 million, including £3.7 million from the capital receipts initiative, is being provided to the Northern Ireland Housing Executive. Gross housing expenditure in Northern Ireland this year is now expected to be £615 million, an increase of some £7 million over 1996–97.

In Vote 4, which covers environmental and other services, a net increase of some £6.2 million is sought. Some £7 million is for regeneration-related matters and £8.4 million represents the carry forward of running cost and capital underspends from previous years. Other increases within this vote include £2.4 million for planning compensation, some £0.8 million representing a transfer from the Department of Economic Development to cover grants to district councils for energy efficiency measures and £3 million to meet a variety of increased costs in the Environment and Heritage Service, the Construction Service and other agencies. These increases are offset by increased receipts and reduced requirements elsewhere within the Vote.

I now turn to the Department of Education, where a net increase of £29.1 million is sought in Vote 1. That includes some £12.5 million for grants to education and library boards. This is mainly for schools maintenance, home to school transport, energy efficiency measures, special educational needs, library stock, the harmonisation of pay and conditions of manual and white collar staff and redundancy costs. In addition £0.8 million is for universities, mainly for research projects, while £16 million is for student loans due to a reduction in expected receipts from the national sale of the student loans debt book as a result of a re-phasing of the sale. An increase of some £2.8 million under the Government's New Deal initiative is also sought in this Vote for schools and institutions of further education. Increases within the Vote are partially offset by savings elsewhere.

In Vote 2, an increase of some £4.8 million is required for the teachers' superannuation scheme.

I move on to the Department of Health and Social Services, a net increase of some £48 million is required in Vote 1. This is for expenditure on hospital, community health and personal social services, health and social services trusts, family health services and certain other services.

In Vote 4, a net increase of £11 million is required. In addition to capital and administration pressures within the department, this includes some £0.7 million in respect of administering the welfare-to-work initiatives.

Finally, in Vote 6, which covers social security centrally administered by the Department of Health and Social Services, a net increase of some £2.4 million is sought. This increase is required to reimburse the Social Fund for expenditure on cold weather payments in 1996–97, winter fuel payments to pensioners in 1997–98 and increased payments into the Northern Ireland National Insurance Fund in respect of statutory sick and statutory maternity payments. These increased requirements are offset by savings elsewhere within the Vote.

I hope that this short summary of the main components of the Estimates is helpful. I beg to move.

Moved, That the draft order laid before the House on 12th February be approved.—(Lord Dubs.)

10.58 p.m.

Lord Alderdice

My Lords, even at this late hour we are all grateful for the Minister's careful and conscientious description of the purposes for which these moneys are to be voted. He has certainly added considerably to the material contained in the schedule. In passing, I should simply like to make the comment that, by this time next year, I hope that your Lordships' House will be addressing a greater expenditure in respect of the Northern Ireland Assembly; and that thus, rather than the scrutiny of these matters solely being the prerogative of the small club which gathers at these late and quite extraordinary hours in this House, it will be a matter for the elected representatives of Northern Ireland in another place on the other side of the water to scrutinise and deal with these matters.

Perhaps I may very briefly make one or two comments on the schedule and on the material referred to. In respect of agriculture, it is certainly welcome that in the past couple of days there have been some indications that there may be respite at least for our farmers in Northern Ireland over the BSE crisis. Even if that is followed through—and we earnestly hope that it will be—it will be a difficult matter for our farmers to regain their markets. Can the Minister give any indication whether the Government intend to set aside moneys and facilities to enable our farmers, if and when they gain access to the international marketplace, to regain their markets? They will need assistance and encouragement of all kinds. I should be grateful if the Minister could indicate whether there will be a positive response from government to that requirement and also whether there will be some assistance for the much smaller number of beleaguered owners of flagged herds or at least some recognition of their plight.

I turn to economic development. The Minister indicated the encouraging news—at least in some areas—of inward investment and the growth of the Northern Ireland economy. Inward investment is important. While in the past there has been a quite understandable and appropriate tendency to look to the larger international companies to invest in Northern Ireland, there may now be a case for trying to explore with some of the smaller companies—I am thinking of companies in the United States with perhaps 50 or 100 workers—whether they might find it worth while to set up business in Northern Ireland as an English-speaking foothold in the European Union.

At present, the financial risks and investments that would be necessary for them to explore that possibility may be too great for such small companies to cope with. The larger companies to which we give assistance are perhaps much less in need than some of the smaller companies, which, without some assistance, may not be able to make that step. Perhaps the Minister and his colleagues might consider whether concessionary rates could be provided for two or three months or perhaps a little longer to enable companies to put in some of their best people and just dip a toe in the water. If he does not feel able to reply tonight, as I am sure he will not, perhaps he will reply in writing.

Whatever we do about inward investment, whether from the bigger companies or from the smaller ones, surely it is our own indigenous companies. particularly the small and medium-sized enterprises, that are the key to the Northern Ireland economy. I do not say that in any adverse way against our large companies, on which we depend so much. However, it seems to me that there is still a degree of entanglement with red tape and bureaucracy. It is not as bad as it might be, or indeed at times has been, but I wonder how much consideration the Government are giving to whether there are other steps which might be taken on deregulation. It is not long since we considered some such measures in your Lordships' House. I wonder whether any other measures are being considered by the Government to give encouragement and assistance to our smaller businesses.

On the question of transport and the Department of the Environment, it seems to me that, despite recent comments by Ministers about the importance of public transport—indeed, there was recently a debate in your Lordships' House on the railways in which the question of rail transport and an integrated public transport system was discussed—there seems to be a hold-up in respect of finance of a number of rail projects. There have been recent indications and a helpful response from the Government in regard to the Antrim to Bleach Green railway line. Money is the key issue and I believe that some exploratory projects are being held up because of finance. If we are to address public transport in a serious way and if we are to have an integrated system, some resources need to be put into research, and there needs to be some encouragement in terms of funding projects.

On education and health there is a great deal that could be said. I ask the Minister to write to me on my next point because I am sure he will not have this information to hand. As we look—as I hope we do—towards a Northern Ireland assembly and the democratising of our governmental structures in Northern Ireland, some of those structures which were established specifically to deal with the democratic deficit (I refer to education and library boards and health and social services boards) will surely no longer be necessary. I would be grateful if the Minister could obtain for me some indication of the costs of running and administering the education and library boards and the health and social services boards at present. For those of us who would hope to be involved in these matters it would be encouraging to know whether from that rationalisation of the management structure some resources could be obtained to put into the front line care of patients with more nurses on the wards and into the education of our children with more books in their libraries.

I welcome some of the developments that are outlined here, not least the indication that more resources will be available for concessionary fares for the elderly and for the disabled. I welcome the fact that there have recently been announcements from the Government of significant funding—it is never enough of course—to be injected into health and education. I should be grateful for some response on those issues, possibly not this evening but in writing.

11.6 p.m.

Lord Rathcavan

My Lords, I thank the Minister for presenting this order with his usual clarity. I particularly welcome the increased support for tourism to which he referred.

We all hope and pray that within the next few months there will he an agreed political package to put to a referendum and a return to a real and lasting peace. If I may speculate on that event, I hope that we can expect from the Government economic measures which will reinforce and underpin any peace deal. The Secretary of State said in a press release only this week, we have to start thinking about these issues". She was referring to economic issues after a peace deal. Is the Minister considering what proposals could be introduced? I hope I may hazard some suggestions.

First, the subsidised loan scheme operated through the Northern Ireland banks for the European Investment Bank was a huge success but the available funds were exhausted a year ago. Will the Government have in place agreement with the European Investment Bank to have this scheme restored and replenished in the event of an agreed political package?

Secondly, can something be done to bring the vastly different corporate tax regimes in the north and south of Ireland into line? Previous administrations have always maintained that there can never be direct tax variations in the UK. But this principle has now been conceded in the proposals for devolution in Scotland. A reduction in corporation tax in Northern Ireland must now be in the gift of the Government. Corporation tax of 31 per cent. in the United Kingdom compares with a rate of 10 per cent. for manufacturing industry, and some other areas, in the Republic of Ireland. That huge difference is sometimes the straw which swings a decision on inward investment from north to south.

A reduction in corporation tax would do much to stimulate industrial development and inward investment in Northern Ireland. It does not involve a north/south structure or body, which is politically controversial, and it will be seen as a practical measure of co-operation. There will never be a better time for this than on the back of, and on the occasion of, new political opportunities that might occur. It could be flagged up as a future option, incentive and intention.

Thirdly, I had intended to speak in some detail—but I shall not do so at this late hour—about electricity prices which were examined by the Monopolies and Mergers Commission. It identified that generating costs in Northern Ireland are 30 per cent. higher than in comparable areas of Great Britain and that therefore costs of electricity to industry in Northern Ireland are up to 25 per cent. higher than in comparable regions of Great Britain.

Some two years ago—no doubt the noble Baroness, Lady Denton, will remember this—the Government made available £60 million to offset the higher generation costs in Northern Ireland. I am told that only £15 million of that has been spent, with another £5 million spent on energy efficiency. There is £40 million left. Will the Minister assure us that the Government will not lose that money and the opportunity and commitment to offset the higher generation costs in Northern Ireland? It appears that it will be at least two and a half to three years before we see the Scottish connector and the competition that that will bring.

Perhaps I may say a brief word about the cross-border rail and road links, a subject which is being discussed by a committee of the British Irish Interparliamentary Body of which I am a member. There cannot be two cities in Europe of comparable size to Dublin and Belfast which still have such bad rail and road links, despite recent investment which was badly and incompetently underestimated. The problem is on both sides of the border. But can the Minister assure us that funds will be in place from whatever source to complete the dual carriageway and the full upgrading of the rail track north of the border and to provide a direct service to Dublin from Londonderry and all the towns on that route which represent a population base as large as Belfast? They are much needed.

The road system in Northern Ireland is also falling badly behind. I understand some private finance initiatives (PFIs) have been put forward for new road schemes. Will the Minister consider those favourably?

If we achieve a political settlement and a peace deal, there are enormous economic prizes to be won. Two major hotels, representing an investment of over £30 million from the private sector by Hilton International and Stakis, conceived during the last ceasefire, will open this year. I hope that the Government will be prepared to continue to back the Northern Ireland Tourist Board to help it seize a unique opportunity to bring more holiday visitors and tourism investment to Northern Ireland. I hope, too, that they are ready to back the Industrial Development Board to enable it to promote and advertise itself on the same level as is done by the equivalent authorities in Scotland and the Republic of Ireland.

Finally, from all the millions of pounds we are talking about this evening, can I refer to just one aspect? I congratulate the noble Lord, Lord Dubs, on his role as Minister of the Environment in Northern Ireland in which he has backed support for the Seniors British Golf Championship, I believe to the tune of £1 million. I am no golfer, I hasten to say. The event will be held at Royal Portrush for the next four years and will be televised live in the United States, Japan and many other countries. Let us hope that this will also open a window on a new dawn for tourism and industry in Northern Ireland.

11.13 p.m.

Baroness Denton of Wakefield

My Lords, it would be inappropriate to begin any speech in this House tonight without expressing regret and sadness to the families of the victims of the terrible tragedy. One feels so inadequate on such an occasion, which unfortunately has happened so many times. Each time we hope that we are talking about the last deaths so that those people's families can at least say, "From here we go forward", but then we go backwards again. But stupidity among those people who inflict those tragedies causes them to think that violence is the answer. It never has been; it never will be. One has to make assumptions that such action is based on pure evil, not on political issues. If the news is as good as we hear, we hope that the Government's efforts will bring progress. We can only wish the Secretary of State and her team every good fortune in moving the process forward, and acknowledge that it will not be easy.

I should also like to thank the Minister, since this is the first opportunity I have had, for his kind words after I left the Chamber last week. As the Minister knows, I still desperately envy him his job, so it was kind of him to say what he did. I hope he will appreciate that my comments are made in a spirit of concern for the Province. I am glad to say that the noble Lord, Lord Alderdice, and I are back on common ground on this occasion. I agree with him on every issue that he raised.

One of the major issues is: why are we doing this? Not, why are we doing it at this hour? But, why are we doing this? This is not an order that Scotland brings forward, or Wales brings forward. It is an order which must be an overhang from some Stormont legislation. How we, here, can sit and talk about moneys in hundreds of thousands of pounds and know anything about the matter, I find incredibly difficult to understand.

The noble Lord may say that I did that for three years. Indeed, I did. But the view from the Back Benches is rather clearer than sometimes it is when the paperwork keeps coming at you. I hope that that idea will not be put forward. I hope that this is an area that will be taken out of the process in future. But if not—and I hope that it is not an "if not"—perhaps I may suggest that the time spent between now and next year may be well spent on a miscellaneous order that says: "Let's look at it once. These figures of transfer should be for the people who know what they are doing." If the matter is not devolved next year, could we examine the cost of what is involved and examine how it can be done?

I tried to give the Minister notice of the questions I intended to raise, although I appreciate that on some matters he will still need to write to me. I should like to know what are the costs of doing all this, and whether there has been an opportunity to talk about all these figures—not in this House, but among the people it affects, those who live and work in Northern Ireland, those who understand this matter and will take it on.

The Minister will understand that I am slightly nervous of the figures he quoted in his opening remarks. He gave the unemployment figures for September 1997—and it is now March 1998. I know that the beginning of the year was not as happy as we should all have liked. I shall read Hansard carefully tomorrow and may write to him.

Examining the figures in the appropriation order—wide as they are—where are the benchmarks of achievement? How will the Government measure whether these transfers are the right use of money? The Prime Minister said yesterday that he will pass to industry what the local authorities do not carry out effectively. I hope that in Northern Ireland he might look at the reverse, and pass from central to local authorities what the central authorities may not be carrying out effectively. But benchmarks will be needed in order to do that. I also suggest that it is very difficult to ask people to be responsible without giving them responsibility.

Turning to individual areas—and I have the advantage over my colleagues in being relatively up to date—more support is added for the Department of Agriculture, but there is no indication as to where the help will be given. I share the concern of the noble Lord, Lord Alderdice, about farmers. Those with flagged herds have serious problems. We talk about farmers having a "cycle"; but these people have experienced only a downward spiral, and that will continue. I hope that the European news is as good as we are told, but that area of farming will still present difficulty.

An Answer given in this House on 3rd March indicated that the beef and sheep sectors in Scotland are due to receive a further £24 million. I hope that there will be a comparable figure somewhere in the accounts for the farmers of Northern Ireland. I should be interested to know what the figure is likely to be.

One of the areas where we have a wonderful example of the edge in Northern Ireland is in the clean and green product. What are the plans for expenditure on organic farming compared with the position in the rest of the United Kingdom? That is one area where the marketing of products would give wide opportunities.

In the supplementaries we are looking for money to be transferred for central administration. Any private company would be taking out 10 per cent. of their overheads. Are we saying that in government that is added on?

During my period in office we promised to keep open the Omagh veterinary centre on the basis that the farmers contributed to the costs. That was not the year to ask farmers to contribute to the costs, but we had no money to do anything else. Ministers have changed, but the same officials gave the advice. I wonder where the money suddenly came from? Perhaps that is a matter on which the Minister can write to me.

Administrative costs grew in the DED headquarters. I hope that those costs are explainable. I know that there were the costs of obtaining fire certificates and fire certification for every government building. I hope that that is now done. There can be no greater crime than not ensuring that your employees are safe.

I share the concern of the noble Lord, Lord Rathcaven, that for over two years the department has been sitting on something like £40 million of energy efficiency money, which does not even earn interest. That money should be out with the people who are suffering from the high cost of energy in Northern Ireland. I wonder how long it will be before a decision is made to bring that money forward?

The noble Lord's colleague in another place gave a written Answer on 3rd March about inward investment from Japan, South Korea and Hong Kong, giving the number of new jobs promoted and jobs safeguarded. I think the figures cover three years. There are two sets of figures shown for 1996–97. I am not sure that even on any Asian calendar there are two of those years. If we assume that the figures cover three years, I should be interested to know what is happening now rather than what is projected to happen. One of the things that concerns me is that there are no jobs protected or brought in from Taiwan or Singapore, where the IDB has had offices for many years. Is the money being benchmarked and used efficiently? How do we make decisions about where it is invested? My instinct, like that of the noble Lord, Lord Alderdice, is that the United States wishes to come to Ireland—we hope to Northern Ireland. The corporation tax issue is of concern. I hope that the noble Lord's optimism about the Government's view is greater than mine.

There is a problem. We have brought investment into Northern Ireland as the gateway to Europe. If we are not part of the common currency, that investment will go south. That will affect Northern Ireland more than any other area. The attractions and relationships are strong. We have always fought against the moneys which the Irish Government have been able to put forward. That is a matter of great concern.

I wish to refer to two other issues with regard to inward investment. We have outstanding something like 1,800 jobs from Hualon. They were there; they went to the European Court; if they come back, they will need money cover. I see no indication in any of the papers on financial matters that the money is there. That is a lot of jobs for Northern Ireland, and it would be very good to have them.

I understand that last year the chairman of the IDB and the permanent secretary of the DED visited New Zealand. There is no indication of inward investment from that country or exports to it. I wonder what was the purpose of that visit?

One of the points that concerns me in relation to the IDB is that there is no clawback of moneys. If we give moneys to companies and they make a great success, the money goes into people's private pockets; it goes on to the stock exchange. I believe that government money should be recirculated for the benefit of the economy; for the benefit of creating jobs. I wonder whether the Minister is prepared to look at that.

If we go to his other department, the Department of the Environment, the water infrastructure in Northern Ireland is in a desperate condition. The findings here in the rest of the UK when privatisation came through indicated that they were extremely desperate. There is a serious need for widespread infrastructure spend and I wonder where it is planned to come from.

Again, in the health figures, there is no mention of the rationalisation of the Belfast hospitals. Was the whole of the work on that wasted? Is it coming forward? Much time and money was spent and there is obviously a need.

Earlier this year, or at the end of last year, an asset register was published for Northern Ireland. It was published for the rest of the UK and I understand that the Government are trying to ensure that some of the money comes back and can be retained by departments, which makes it attractive to do it now. I wonder what plans are made to do that in Northern Ireland.

It was welcome news for everybody, I am sure, to hear this week that there would be new funds from Europe. I share the delight of the noble Lord, Lord Rathcaven, in what happens in the European Bank and the subsidised loan scheme. I would raise only one matter of concern. A lot of the money went to larger companies than had been intended. It was meant for small and medium enterprises. I hope that that money will not be frittered away; that it will make a big difference in Northern Ireland; that the problem of matching funds which stopped many people being able to touch it is addressed; and that it will not take as long as it did previously to reach the people concerned.

Northern Ireland does have money. We have been very fortunate. The support of Europe has been outstanding. No Northern Ireland Minister can be anti-European, because Europe has stayed with us through thick and thin. It has watched ceasefires come and go and not taken out its money. The question must be: how does Northern Ireland use it and how does it use it well?

11.27 p.m.

Lord Lyell

My Lords, I too thank the Minister for presenting the estimates so concisely. My noble friend Lady Denton had a particularly distinguished career in the department in which I served; on the other hand I had the opportunity to present these appropriation orders on six occasions. I did not make as good a fist of it as the Minister made tonight, let alone my noble friend.

I appreciated the comments of the noble Lord, Lord Alderdice, and his joy at the thought that next year the estimates might be presented in a Northern Ireland assembly. I hope that his comments will be read with joy and happiness by whichever politician or candidate takes over the Department of Agriculture.

I must say to the noble Lord, Lord Alderdice, and your Lordships, that one of the first things that I had to do in April 1984 on going to the Department of Agriculture was to announce to the annual general meeting of the Ulster Farmers' Union that milk quotas would be imposed with fairly draconian severity. It is still imprinted upon my mind and that of the department—the Minister can check on this; presumably he can look back at what happened nearly 14 years ago—"Minister nil, Lions 2, still munching in extra time". I hope that those thoughts may go some way to assuage the happy politician who takes over the Department of Agriculture. It is certainly not a bed of roses. It is a fascinating place, but I believe it is known technically as having "downside" potential.

I was interested to see in Part I, Vote 1, of the Department of Agriculture, reference to "market support" and then lower down the paragraph, "market development". I think of two particular commodities. First of all, beef. Of course there has been wonderful news so far as BSE is concerned, although in the headquarters of the Department of Agriculture there was not unconfined happiness as to the ramifications. I understand there have been some complications, even with the good news. I hope, however, that the good news continues. The computerised database which got under way in 1988, is the basis of a model and we hope it will be a success throughout the rest of the United Kingdom.

Secondly, in market support and development, I think of chickens, referred to technically in Northern Ireland as "the fowl sector". I was particularly impressed, as were consumers throughout the world at large food fairs, with the standards of production in the chicken industry. I remember one brand which was marketed under the name "Poulet Noir". That was a clever and effective marketing device. I hope that the brand is still in evidence but I doubt that the company who marketed those chickens will be able to use the brand or similar marketing devices in future.

My noble friend who preceded me mentioned the importance as well as the success and pre-eminence of the department in its scientific and veterinary services. My noble friend mentioned the veterinary office in the veterinary centre in Omagh. I hope that the technical and commercial confidentiality of all the research that is done in these sectors will be closely protected. May I ask the Minister when he last visited the veterinary research laboratory. During my time at the Department of Agriculture, to go and speak to all the experts at the laboratory was a real reward. I hope that he can visit in the near future. I am sure that the time he spends there will be more than adequately rewarded.

I see further mention of market support. One particular event in my time at the department was an exhibition in Paris which went under the acronym of SIAL. If the exhibition or something like it takes place this year I hope that the noble Lord will attend. I shall certainly question him, both on the Floor of your Lordships' House and in writing, to make sure that he does. The exhibition provided a wonderful opportunity to present, first, the agricultural industry of Northern Ireland; secondly, the expertise in his own department; and thirdly, the general face of Northern Ireland abroad. It was an opportunity to show consumers and important businessmen around the world that Northern Ireland has an enormous future as an agricultural producer. as my noble friend pointed out. The industry is what the Americans love to call a "can do" industry. I give as an example the Anuga exhibition, which took place in Cologne in 1985. A small firm called Eagle Sea Foods, embarking somewhat wide-eyed upon the project, did Northern Ireland and the industry an enormous service. It was amazed at its achievements. The firm, located in Belfast, was importing and processing fish from Norway and Aberdeen. It was highly successful, gaining custom in Germany and—guess where—in Norway. The firm had not thought of that. It had fewer than 50 employees, which the noble Lord, Lord Alderdice, and the Minister will be able to check and confirm.

I thank the Minister for his comments. I wish him well in all he is doing. He has good fortune in not being on television in the political process. I and other noble Lords who have been in the department were able to prove that one could go anywhere in Northern Ireland. Like those in the old, traditional Olympics, we left our prejudices outside. I was reprimanded several times by my officials for repeating slogans such as. "Act fast while grants last." That brought every four-wheeled and two-wheeled vehicle to Dundonald House.

Nevertheless, it was a wonderful example of the political process. An example of what the Minister and the department are able to do in Northern Ireland is SIAL in Paris. I hope that the Minister manages to go there and that when the order comes before the House next year he will be able to give us better news and tell us of further successes—I will not say triumphs—of his excellent department.

11.37 p.m.

Viscount Brookeborough

My Lords, I thank the Minister for his presentation of the order and for the amount of effort and work he is putting into his two departments in Northern Ireland. Perhaps I may inform the House that he is becoming well respected and most popular. That may not be a good thing, but I congratulate him on it.

I wish to concentrate on the rural aspects of the administration of the funds. The agri-food industry is the most important single industry in Northern Ireland. Fifty-three per cent. of its £2.8 billion sales are exported. However, there was a dramatic 38 per cent. drop in farm income in 1997 and that has had serious consequences on the thousands of small rural businesses which rely on agricultural prosperity. That extends further into the towns because even in the middle of Belfast one is only 15 minutes from a farm. Therefore, farmers encroach into the urban areas for their purchases to a greater extent than might be the case in the heart of England.

As regards the beef sector, we all welcome the possibility of good news from Europe. From the point of view of Northern Ireland, we must be particularly grateful not only to the present Minister but to previous Ministers and civil servants who originally instigated computerised tracing. Undoubtedly, it has been fundamental to whatever success we may gain.

In Fermanagh, where I live, the problems are very extreme. Surprisingly, due to the weather, there is no grain industry. Farmers rely predominantly on beef, dairy and sheep. Your Lordships are fully aware of the problems of the beef industry, but I wish to mention the dairy and sheep industries. The price of milk is now at its lowest for some time and with the reduction in the price of cull cows and calves due to the BSE crisis, profit margins are seriously reduced, if they exist at all. On the sheep side, fat lamb prices have plummeted to just over £30 and during last autumn farmers were buying store lambs for £40 to £42, and that is without the feed, overheads and everything else. So one can see that it is verging on disaster for them.

On top of all that the strength of the pound and the revaluation of the green pound, has meant a large reduction in the sheep annual premium paid on ewes. So many people relied on that. Can the Minister tell us what alternative strategies there may be to help hill farmers and those in less favoured areas? About 90 per cent. of the land west of the Bann consists of that. The department should be thinking of some form of rescue package for them.

The popular cry is for, and has been for a long time, farm diversification. Under the previous government there was a farm diversification scheme, which led to leader schemes for rural development. However, when this Government came to power they froze the new applications while a review was carried out. They even froze projects which had been approved through an expensive feasibility study process and where letters of offer had been issued, but were not yet signed up by the applicants. I understand that the review was to be published in May, but I now understand that it may be the autumn before it is published. Can the Minister give a more accurate timetable? Can he also reassure those who have already received letters of offer that they will be re-issued when the projects open up again? It is quite hard for farmers that by the autumn this Government will have been in power for a quarter of their term and projects are being frozen. If we change government at every election—perhaps we shall not at the next one—and projects are frozen for 25 per cent. of the time, we shall be in a sorry state.

Can the Minister also explain why, when much of this money is being targeted on community groups and is therefore EU-funded, projects with letters of offer have been frozen? It seems unreasonable and a waste of private enterprise, effort and money. One must remember that a lot of the feasibility studies are also grant-aided. So that is money either being locked up or wasted.

I turn to a slightly different but rural topic. The Minister is aware of the organisation FEAR, representing those people, mainly farmers, who, as a direct result of the violence and the current troubles, have to sell out or move away, and rent out their lands in Border areas. FEAR is putting a case to the Secretary of State—it met with her recently—for compensation for these victims of violence. For those who sold out there is a case for compensation, perhaps from a central fund.

However, there is another group. For those who moved out and are now returning, there is a totally different problem. They rented out their land and were therefore ineligible for the grants available at that time for such things as drainage, fencing, etc. In many cases their houses also became derelict. Land is rented out on that basis in a Border area and it is a dangerous area. It is dangerous even to go to check on what the farmer is doing. To be truthful, they do not take a great deal of care of the land. Therefore, this is severely run down land.

Does the Minister agree that it would be reasonable, especially as there are not many cases, for the Department of Agriculture to reinstate grants for this small number of people to enable them to get back into productive business quickly? The facts are there and they need very little verification. One has only to go and see. I ask the Minister to put this request on a fast track—definitely a faster track than the review on rural development. It should be put on a fast track to avoid a lengthy compensation claim procedure.

Connected with that but not directly with funds, is rural planning, which has a bearing on rural development. Planning applications in the Province are in the Minister's remit and in that of the Department of the Environment. Encouraging young farmers to continue to live in the countryside is a well-publicised aim of the European Union. To do that they must have homes for their young families, almost certainly while their parents are still alive and living on the farm. That is a particular problem. However, planning officers are all too often turning down applications for second dwellings on the same farms to enable this policy to come into effect. Can the Minister give an assurance that he is aware of the problem - now that I have told him - and that he will give it his attention? It will probably require his personal intervention as the response to applications seems to vary so much from one planning officer to another.

The last subject to which I should like quickly to refer is rural education. I believe that a government announcement last week stated that no rural school in Great Britain would be closed without the matter being referred right back up the line to the Minister, and that it is the Government's policy that, wherever possible, they will refrain from closing such schools. Can the Minister state that that policy will be extended to Northern Ireland? I should like to know whether the buck will stop with the Northern Ireland Minister or with the education department at Westminster. I conclude by thanking the Minister for his efforts. I wish him well in the new year.

11.45 p.m.

Lord Molyneaux of Killead

My Lords, I apologise genuinely for my failure to add my name to the list of speakers, although I have given the Minister advance notice of what I intend to say. I shall be very brief and adhere to the two-minute rule.

Under Vote 1, on expenditure on roads, while every community and council in Northern Ireland, like their opposite numbers in Great Britain, demands money for their local by-pass et cetera, there is one scheme which is vital to all who have an interest in the economy of Northern Ireland and recognise that the economy impacts in turn on every aspect of the lives of us all. That one scheme is the upgrading of the Euro Link, the A.8 road from Belfast to Larne, the major route for container traffic from the whole of Ireland. In past years, moneys have been spent on local road improvements in an unrelated fashion, but most of them have the effect of speeding traffic to the north east of the Province only to reduce the time that it takes to arrive at the bottleneck—or "choke" as the Royal Navy would say—on the approaches to Lame itself. It is true that some improvement has been made to the A.8, but there again the dual carriageway portion simply feeds traffic at higher speeds into the congested sections of that road.

With no element of vested interest whatsoever, I urge the Minister to take a fresh look at that all-important link between Ireland and Great Britain and thence to Europe. It follows on from the matter to which the noble Lord, Lord Rathcavan, drew attention with regard to communications southwards to Dublin. I can assure the Minister that he will have the full support of the entire population, who recognise the vital importance of that external linkage to the wider world.

Until last week, the Government—and the Treasury in particular—could have reiterated their dedication to the control of spending and keeping taxation low, but last week the President of the European Commission arrived in Belfast with an unexpected bonus, an injection of some £88 million. I suggest that that money should not this time be frittered away in penny packets, as on other occasions, but that the bulk of it should be devoted to the upgrading—the dual carriageway completion—of that vital Larne link, and then the penny packets and the confetti can go to worthy causes.

I have written to the Minister about the other matter that I wanted to raise, but as time is pressing, if he agrees. I shall send him some fuller notes on the subject which I and others have termed the "Belfast hills local plan 2001". It is a very important matter.

11.48 p.m.

Lord Cope of Berkeley

My Lords, it was good to have an encouraging report on the economy of Northern Ireland from the Minister, even if the unemployment figures seemed a bit out of date from what we have heard.

Perhaps I may say to my noble friend Lady Denton that we are right to consider this order. The control of expenditure is an important part of the work of Parliament, and the approval of the appropriation accounts is done for all parts of the United Kingdom—although this order is distinct because of the existence of a separate Northern Ireland Consolidated Fund which does not apply elsewhere.

There are two reasons why in 12 months' time we may not be considering another order quite like this. The first is the hope of an assembly, to which reference has already been made by the noble Lord. Lord Alderdice. On page 15 of the order £173,000 for the coming year is requested to get it started. I hope that that is built upon. The second reason is that resource accounting is coming. This is a huge change in the way that the Government manage their money. It has been in the course of preparation for some years. Ultimately, it will make government accounts like companies' accounts and hence much more understandable to the outside world and better for the management of the public finances. I understand that resource accounting is due to be in place by next month, although legally or officially it will not be in full use for another 12 months. Some departments in Northern Ireland have been practising with it over the past 12 months. I would be interested to hear from the Minister how that experiment has proceeded. I believe that it is of great importance for the way in which public money is looked after.

Before we vote more money for these worthy purposes in Northern Ireland I should like to ask about some matters that have gone wrong in the past. There was a report last year from the Comptroller and Auditor General for Northern Ireland that the Department of Social Security had overpaid quite large sums on income support and disability living allowance and that that amount had increased compared with previous years, about which he also had criticisms. He hoped that in the year to which this order mostly applies, which ends at the end of this month, improvements would be forthcoming. The amount of the overpayment was estimated to be between 1 per cent. and 5 per cent. of the DSS's expenditure, or between £20 and £60 million. That is a not insignificant amount and is something about which we should be concerned.

The other matter, although smaller, has been hanging about for longer. It is a report of a fraud in the Department of Finance and Personnel of some £315,000. We heard some months ago that the police had submitted a case to the DPP. It would be helpful to know before voting more money for the DFP that that fraud had been successfully brought to court or at least that progress had been made upon it.

All in all, it is important that we provide the supplementary sums for 1997–98 and the sums under Part II on account for the financial year starting next month. I am grateful to the Minister for the way in which he introduced the order.

11.52 p.m.

Lord Dubs

My Lords, in this debate questions come fast and furious and it is difficult to answer all of them succinctly. If I miss any of the points I shall do my best to write to noble Lords, but it is fairly late in the evening and I have a mass of papers before me. To do justice to all of them will take some time. I shall rush straight into it and see how it goes.

The noble Lord, Lord Alderdice, and other noble Lords referred to the encouraging news from Brussels about a possible lifting of the beef ban. The Government's view is that the news is encouraging, but until a firm decision is made by the Agriculture Council in a couple of weeks' time we cannot be certain. I advise all the farmers and others in Northern Ireland to keep their champagne ready but not to put it on ice just yet. We have had many disappointments and false dawns in the past in trying to get the ban lifted, but it appears to be more encouraging than ever before. If all the countries who voted to lift the ban two days ago in the Standing Veterinary Committee stick to their votes in the Agriculture Council we should be there.

That is only one of the two methods we are using to try and get the ban lifted, a point made by the noble Lord, Lord Lyell. The success of the certified herd scheme is based on computerised traceability. This scheme was introduced many years ago, not for BSE but for brucellosis and TB: it is now standing us in good stead as regards getting the ban lifted. In addition to the certified herd scheme the Government have also put to Brussels a date based scheme which the Commission is presently considering. Although it looks as if the certified herd scheme as regards Northern Ireland will win the day shortly—at least I hope it will—we may have to wait a hit longer for the date base scheme to come forward.

The noble Lord, Lord Alderdice, talked about the recovery of lost markets when the ban is lifted. My discussions with the meat exporters led me to believe that it may take about a year to get back 50 per cent. of their previous export markets, but it will take perhaps four or five years to recover the bulk of the remainder. Indeed, the original 100 per cent. is no longer there because in many of the export markets the total consumption of beef has fallen. It may be difficult for us to recover all our previous sales. It will be quite a long haul to win back the bulk of the previous export markets.

The Government will do their best to help and encourage the industry. I cannot offer any cash here and now, but I am aware that the industry will have to do a lot of very hard marketing to recover its previous sales, not only in Europe but in many other parts of the world. It will be tough and the Government will want to help.

The noble Lord, Lord Alderdice, also mentioned the problem facing flagged herds, as did the noble Baroness, Lady Denton of Wakefield, and one or two other noble Lords. I am aware of the particular difficulties facing farmers who have flagged herds. I have had meetings with them and I have been on one flagged farm. The Government are looking at ways to help them. They are in a particularly difficult situation and it will take them longer to get out of these difficulties than it will other farmers. It is very tough indeed for them.

The noble Lord, Lord Alderdice, talked about the need to encourage internal as well as external investment. I agree with him. I can assure him that the indigenous companies are not neglected by the industrial development agencies. The IDB has made substantial assistance available for local companies and the local enterprise development unit has a very good record in promoting and nurturing the small business sector. In 1996–97 LEDU recorded its best year to date, with client companies achieving a net increase in employment of 3,525 jobs, an increase of 15 per cent. over the previous year. The Government have recently launched a wide-ranging review of economic development strategy in Northern Ireland and this will include the balance between support for inward and home industry.

The noble Lord asked about the costs of education and health boards. I will write to him with information about the costs of these boards. It is the Government's policy to keep administrative costs to a minimum so that resources are directed to front-line services. My colleague, Tony Worthington, the Minister with responsibility for these issues, has been looking very hard at ways of saving on administrative costs in these particular areas.

The noble Lord also asked about funding for integrated education. The level of funding for integrated education is consistent with the Department of Education's statutory duty to encourage and support its development. The Government wish to maintain the momentum and, to this end, have established a working group which will explore ways of achieving this. Some of these points arose in a question I was asked about integrated education in the House not very long ago.

Regarding free fares for pensioners, to which the noble Lord referred, I recently visited Castlereagh council and announced that we would join with that council to set up an experimental scheme to see how much further we can support free fares for old-age pensioners. That council is keen to take part in such an experiment. That is an example of our willingness to explore the issue. There is a problem of affordability. There are significant cost implications for the Government or district councils. We move forward cautiously, but I am keen that we should examine all ways of taking that forward.

The noble Lord is worried about small companies. He made interesting points, and I shall bring them to the attention of my honourable friend Adam Ingram, who is the Minister responsible for the Department of Economic Development. The noble Lord mentioned the need for a fully integrated transport system. The Government are working towards the development of that. The creation of Translink, covering buses and trains, is an important step towards that goal. We have had a consultation process on transport. For the UK as a whole, and Northern Ireland in particular, we shall be publishing further proposals before too long. Alas, money is always a serious constraint. I sometimes say that we already have the makings of an integrated public transport system but that there is not all that much of it to integrate. That is one of the real difficulties.

I turn to the questions asked by the noble Lord, Lord Rathcavan. He talked about inward investment in Northern Ireland, and possible tax concessions by the Government to encourage it. He talked about a level playing field between Northern Ireland and the republic. The industrial development board can provide a competitive package for inward investors who are interested also in other attractions, such as the quality of the potential workforce. The issue of financial incentives will be studied in the review of economic development strategy which was announced last month.

The noble Lord talked also about money to offset electricity costs. The remaining £40 million for energy costs is pledged to actions which will help offset electricity costs in Northern Ireland. He commented on the interest rate subsidy scheme in the EU peace and reconciliation programme. The extension of the interest rate subsidy scheme to the next tranche of the EU peace and reconciliation programme is currently under consideration. He referred also to the transport infrastructure and the need to improve transport, particularly cross-border links. With respect to rail links, over £120 million in total has been spent in recent years on the Belfast to Dublin link, with generous support from Europe.

The trains are modern. The upgrade will be completed later this year when the total improvement of the track between Belfast and Lisburn is finished. That is the last stage remaining. The non-stop journey between the two capitals will then take just 100 minutes. It is an excellent train service. In Dundalk I opened the new service some months ago with my opposite number the Irish Minister. It is an excellent service. The usage is increasing. It is a pleasure to travel on that service. Bus services across the border are operated jointly by Ulster Bus and Bus Eireann. That is a good example of cross-border co-operation mirroring that of the railways. I am sure that the companies will react positively in terms of improved services to any evidence of an upturn in demand. There has in the recent past been a small fall off in bus passengers in Northern Ireland. That is something that worries me, because we want to encourage the use of public transport as much as possible.

With respect to cross-border roads, recent studies carried out on behalf of both Governments have identified the need to upgrade the Belfast to Dublin and the Londonderry to Dublin routes. Implementation of those proposed improvements will be dependent on the availability of funding.

It is a pleasure to see the noble Baroness, Lady Denton, back here with us on such good form. She made the very important point, with which I am sure the whole House will agree, about the recent tragedies in Northern Ireland and the need to express sympathy for those who were murdered in those tragedies and also for those who were injured.

I enjoyed her comment that having been a Minister for some years—in some senses, she was my predecessor—now she sees things differently from the Back-Benches. That is a good discipline. I hope that I have not lost that sense of seeing things from the Back-Benches in the sense of looking at matters critically. I understand what she says and I am sympathetic to some, if not all, of the points she made; and they were indeed many.

I often wonder about this particular process. I do not know whether the noble Baroness was referring to the way in which the accounts are printed or whether she was referring to the process by which we discuss them at present, at this fairly late hour. From my much more limited experience of these matters than that of the noble Baroness, I am conscious that it is not a very satisfactory method of scrutiny. Frankly, I would wish to be sitting with my officials so that we could answer all the questions far more fully and immediately than is possible in the way it is being done here. But it may well be that if things work out well in Northern Ireland, by next year the process will have been taken over by a locally devolved assembly, and therefore the matter will be out of the Government's hands as regards Westminster. If it is not, I should wish to see if there is any way in which we can simplify the process and be more helpful to Members of this House. Indeed, that point would apply also to the other place.

In fact, the Estimates are presented in the same simplified format as those for other Whitehall and territorial departments. In March 1995, the Government, in the form of the then Treasury and Civil Service Committee and the Public Accounts Committee, approved the introduction of simplified estimates. It may be that the noble Baroness thinks that they have not been simplified enough.

Baroness Denton of Wakefield

My Lords, I checked this matter before I raised it in the House. I am told by the offices of this House that there are no equivalents to these orders from any other parts of the United Kingdom. It is suggested that this may be a hangover from the days of the Stormont parliament. That is why I said we cannot possibly know the detail. That is why I raised the matter.

Lord Dubs

My Lords, I thank the noble Baroness for that comment. If I was not quite accurate in what I said, I shall look into the matter and write to the noble Baroness with the more accurate position.

I have referred already to the difficulties facing the flagged herds. The noble Baroness asked a very specific question about the particular support that was available last year and not this year. The position is that the payments made to flagged herd owners in 1996–97 were made under a European Community regulation which allowed for a one-off exceptional payment to address the difficult market circumstances brought about by the BSE crisis. All the aid allowed under that regulation has been paid. The aid package announced by my right honourable friend the Minister of Agriculture on 22nd December will he funded under a different scheme; that is, under the EU agrimonetary compensation schemes. The rules for that are very clear and aid is available only to offset the effects of sterling green rate revaluations. It will not allow for aid to be skewed to particular groups within an eligible sector. That is the difficulty with which we have been faced. I had originally wanted to provide more help for the farmers with flagged herds, as was possible when the noble Baroness was the Minister responsible. However, I have been told that it is not possible under the system and it is the Brussels arrangements which prevent that.

The noble Baroness asked also about central administration costs and why there is money included for them in the supplementary estimates. The money included for administration reflects the take-up of the end-year flexibility scheme, a number of transfers from GB departments, including administration costs for the Welfare to Work programme and reallocations within Northern Ireland departments.

The noble Baroness asked about the Omagh Veterinary Centre's costs. My department, DANI, is planning to introduce charges for its veterinary diagnostic services later this year. The department will monitor income against the cost of providing that service at the Stormont and Omagh laboratories.

The noble Baroness referred to overseas companies and asked about the position of Hualon. The company remains committed to investing in Northern Ireland but the exact timing and level of such investment are not clear. IDB remains in close contact with the company. On 6th October 1997 the European Court dismissed a final appeal mounted by the Trade Industry Association. The IDB has continued to maintain close contact with the company since that decision was taken. However, since the Asian crisis, the general situation in the world textile market has changed. Asia has become much more competitive for labour-intensive industries, such as garment manufacturing, and this has had a knock-on effect on textile companies such as Hualon. The current level of provision for selective financial assistance takes account of all known projects. There is no specific provision set aside for individual projects.

The noble Baroness asked about claw-back from successful IDB companies. This proposal would be seen by companies as penalising success and would adversely affect the competitive position of IDB. Such an IDB policy change would be seized upon and exploited by IDB's international competitors. The proposal would restrict industrial development activity in Northern Ireland at a time when we are seeking to maximise such activity.

Companies consider that the Government secure their return through taxes paid by both the company and its employees. The introduction of claw-back of grant where companies achieve profits above the agreed equity costs of capital would be regarded as government doubly penalising their success—taking a share of the profits as well as receiving more tax revenues. By seeking to clawback funds and profits, the amount of funding available to reinvest in business would be reduced. This would be particularly difficult to defend if employment in the company was also above target. Projects being considered by IDB for support have varying degrees of risk and uncertainty as to the eventual outcome. This proposal would, I fear, introduce further uncertainties into these projects.

The noble Baroness raised the issue of the provision and funding of water and sewage services. When I had the fortune to be appointed to my present responsibilities, I was given a number of presentations in the DoE about the various services and activities of the department. I was more shocked by the situation as regards the water and sewage services in Northern Ireland than by anything else. I have to tell the noble Baroness that my understanding is that there were years of neglect by her government of the water and sewage services. The money was simply not made available and the sewage services in particular are in a very unsatisfactory state.

I am looking at the options for the future organisational and charging arrangements for the provision of water and sewage services in Northern Ireland. That is to say, I am reviewing them at present. In the near future, I hope to publish a consultation paper seeking views about the provision of such services, including methods of raising money to pay for them, leading to decisions about the way ahead by the summer of 1998. This is a very difficult area and it is urgent for us to take decisions to ensure that we maintain high standards in the water and sewage services.

I believe that the noble Baroness also asked about the Assets Register and the arrangements that have been made in that respect. The comprehensive spending review requires departments to examine whether they are making the best use of their assets and to identify surplus assets which could be sold. The Assets Register is a vital tool in the process and departments are examining all their assets as part of the review. That is very much underway at the moment.

As regards the rationalisation of hospital services in Belfast, my honourable friend who is responsible for the Department of Health and Social Services is currently considering these proposals. They give rise to difficult issues which it is important for us to take time to get right. I am sure that the noble Baroness will be in agreement with that.

The noble Baroness also asked about the inward investment effort and questioned why we had poor results from Singaporean and Taiwanese companies. We attempt to make a balanced effort to attract inward investment from around the world and we remain flexible in targeting effort and resources to areas where the prospects are best. Clearly we will have to look at all the countries from which we can attract more inward investment.

The noble Baroness also asked about public consultation on expenditures. The Government believe in consultation, and a very extensive consultation on the comprehensive spending review was undertaken last year. This is being considered in the review.

I thank the noble Lord, Lord Lyell, for the good wishes he expressed and I note his eagerness to have me go to the exhibition in Paris. My officials will take note of that and I shall have to see what advice they give me. I have to be careful about how many trips I go on because I do not want to be absent from Northern Ireland more than I need. Otherwise, people might start talking.

The noble Lord talked about the take-up of agricultural grants. I recognise the importance of grants to the farming industry. The main capital grants being paid to farmers at the moment under SPARD, FACES and the Farm and Conservation Grant Scheme are oversubscribed, and DANI is therefore unable to improve on the take-up rate.

The noble Lord referred to LEADER. I am not sure whether I have misunderstood him. I had the feeling that some of the things he said referred to the SPARD scheme, which is the one that was immediately oversubscribed when it was opened, before I took office. It was oversubscribed within two days and had to be closed simply because there was not the money to pay. We are now paying it off year by year. The difficulty with the scheme is that it was open-ended and had very few criteria which could limit the demand. That has been a real difficulty. However, as I said in my introduction, I have managed to take £5 million from next year into this year so as to pay off more of the farmers who have been waiting very patiently.

The noble Viscount, Lord Brookeborough, made the point that farm incomes have dropped rapidly. I am aware of that and have had many discussions with the UFU, NIAPA and individual farmers about the difficulties they are facing. The problem is that they are facing these difficulties across the whole sector of agriculture and not just in any one part of it. I was at a meeting not long ago when the Prime Minister met farming unions from all over the UK, including from Northern Ireland, and we had a discussion about this. Some money has been made available by my right honourable friend the Minister of Agriculture. He made an announcement before Christmas and some further announcements have been made. We are doing the best we can to help, but it is difficult because some of the problem stems from the value of the pound sterling against other currencies. That affects all sectors of the economy and not just agriculture.

The noble Viscount, Lord Brookeborough, referred to farm diversification and the LEADER programme. I wonder whether he was talking about SPARD rather than the LEADER programme. If I have misunderstood him, I shall write and let him know. The review of SPARD has to take account of the fact that all financial provisions under the scheme have been committed by applications received up to 24th March 1995. The review includes in its remit the question of additional funding. Everyone whose application has been acknowledged will be entitled to grant aid if they do the work and submit a claim as per the SPARD scheme.

The noble Viscount also referred to LEADER and rural development applications being frozen. I am not aware of any grants that have been frozen where letters of offer have been issued.

The noble Viscount also talked about the FEAR—Fear Encouraged Abandoning Roots—scheme. The Government are aware of the difficulties faced by those who were displaced. Indeed, the Secretary of State has recently met with the FEAR group to hear their concerns. As matters stand at present, there is no provision for retrospectively claiming grants or subsidies in these circumstances. But I know the Government are aware of the difficulties facing these people and I shall certainly reconsider the position in the light of what the noble Viscount said.

As regards alternative strategies for hill farmers, the agri-monetary package announced by Ministers in December includes supplementary payments to suckler cow premium and sheep annual premium claimants. A significant number of these are hill farmers. In particular, the additional sheep payment includes an increase in the rural world supplement paid to less favoured area producers. We have tried to target the help where it is most needed. I hope the noble Lord will accept that that is an effective way of doing it.

The noble Lord asked about additional houses on farms and planning permission. Planning permission may be granted for a house on a farm where it is essential to the needs of the farm, but what we cannot do is simply say that all planning controls in the countryside will no longer apply. We have to be careful that we retain the beauties of the countryside. However, planning permissions certainly are granted from time to time where they meet the criteria. I have just indicated an example of that.

The noble Lord asked why planning implementation is different in different areas. The planning service aims to treat all applications fairly. If the noble Lord can provide me with details of specific cases where that appears not to be the case, I shall be happy to have them investigated. As regards the closure of rural schools, proposals for the closure of any school in Northern Ireland are subject to ministerial approval, as they are in Britain. I think that is the assurance that the noble Lord seeks.

The noble Lord, Lord Molyneaux, asked about the Belfast to Larne road and whether it would be upgraded. While the existing Belfast to Larne road is considered capable of carrying current and projected traffic volumes, the long-term benefits of further dualling the route are recognised. Schemes to achieve this are included in the six to 15 year major roadworks programme, where they will be implemented at a pace dictated by the level of finance available and the competition from other schemes across the whole of Northern Ireland. In case the noble Lord thinks that is utterly pessimistic, in the context of the comprehensive spending review we have been looking at all these matters and, although I cannot give him any particular hope, I am aware through my visits to councils all over Northern Ireland that there is much pressure for improvements, upgrading and dualling of roads. I have had several discussions with councillors about that road and I am well aware of local concerns, but at this stage I cannot offer the noble Lord any more immediate comfort.

As regards the announcement made by the president of the European Union, Jacques Santer, on the additional £88 million under the peace and reconciliation scheme, that has to be spent in terms of the criteria for peace and reconciliation. I very much doubt whether they would extend to the road scheme that has been suggested. I do not think that will work but it was a good effort on the noble Lord's part!

The noble Lord, Lord Cope, said there may be an assembly next year and some of these debates will no longer take place here. We hope that will be the case. He asked about resource accounting. The resource accounting and budgeting process continues in line with the timetable set out in the July 1995 White Paper, Better Accounting for the Taxpayers' Money. Generally all departments are on target to have the necessary accounting systems in place by April 1998 so as to produce resource accounts for the year ending 31st March 1999. He asked about unemployment figures. The employment figures that I mentioned refer to September 1997, but the unemployment figure of 7.9 per cent. refers to January 1998, which I think is as up to date as we can get.

The noble Lord also referred to criticisms of over payments by the Department of Social Security, which does not, of course, operate in Northern Ireland. In Northern Ireland responsibility for the administration of Disability Living Allowance and Income Support rests with the Social Security Agency. We are, of course, careful to ensure that such payments are made properly. The agency has in place a strategy to tackle the problem of incorrect payments and to detect and prevent fraud. This also involves action to improve adjudication standards to ensure that people receive the benefits to which they are entitled. He also asked about fraud in the Department of Finance and Personnel. This is an intricate fraud involving collusion between a civil servant and outside suppliers. The collusion consisted primarily of falsifying invoices, some in the names of fictitious companies. Investigation of the fraud has been conducted by the Royal Ulster Constabulary, and the Director of Public Prosecutions' review of the evidence is at an advanced stage.

I think that I have dealt with all the points. In so far as I have not, I shall ensure that I write to noble Lords. I regret that I have taken rather long on this but noble Lords asked the questions and I felt that I had to give the answers.

On Question, Motion agreed to.