§ 7.36 p.m.
§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs) rose to move, That the draft order laid before the House on 9th June be approved.
§ The noble Lord said: My Lords, the draft order before us today authorises expenditure of £4,282 million for Northern Ireland departments in the current financial year. That is in addition to the sum of £3,120 million voted on account in March and brings total estimates provision for Northern Ireland departments to £7,402 million.
§ We are providing for substantially increased spending in key priority areas in line with our manifesto pledges. The two major beneficiaries are health and education with additions of £616 million and £588 million respectively over the three-year period beginning this year. Other key areas with spending increases include the New Deal for the unemployed, water and sewerage and transport infrastructure.
§ As noble Lords may recall, Parliament voted to approve sums on account for 1999–2000 to meet the expenditure needs of Northern Ireland departments as part of the normal Northern Ireland appropriation procedures which took place in February and March 1999. The appropriation order itself was then made at the March Privy Council. We had hoped that devolution would have taken place in March or April of this year and the Assembly would therefore complete the appropriation of the 1999–2000 main estimates. However, with the delay in devolution it now seems unlikely that the Assembly will be able to pass an appropriation Bill before the Summer Recess, even if agreement on the timing of full devolution is reached quickly. We have therefore decided that it would be appropriate to seek approval for the main estimates for 1999–2000 from Parliament. This will safeguard the continuity of key public services including the health service, social security, education, economic development, agriculture, environment and so forth. If appropriation was left until after the Assembly's summer recess, there is a risk that some of these services could begin to run out of money. After devolution, the Assembly will of course be responsible for approving all further appropriations for devolved services, including any supplementary estimates for 1999–2000 based on the recommendations of the Executive Committee.
§ This order covers the services of the Northern Ireland departments which, despite the ongoing political difficulties, we hope will shortly become the responsibility of the Northern Ireland Executive and 200 Assembly. I 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, until powers are devolved to the Northern Ireland Executive and Assembly, the public expenditure decisions underlying the estimates for both the Northern Ireland departments and the Northern Ireland Office will continue to form part of the Northern Ireland block allocation. As such the Secretary of State has flexibility to reallocate resources within the block in light of emerging pressures and easements. After devolution the Secretary of State's flexibility will only cover the expenditure of the Northern Ireland Office. The Northern Ireland Executive and Assembly will then have flexibility to reallocate resources among the devolved services.
§ I am sure your Lordships will join with me in recognising the possibilities for truly momentous change flowing from the establishment of the Assembly and will share with me in the desire to do everything possible to ensure its success. Indeed, given the present difficult circumstances in the Province, I am sure your Lordships will agree that all those who can bring influence to bear in resolving the present situation, should be encouraged to do so.
§ Following the Government's Comprehensive Spending Review, an estimate of some £14 million was set for the Assembly for 1999–2000. However, it is accepted that following devolution additional provision will need to be made for the costs of the Assembly. My right honourable friend, the Minister of State, Paul Murphy, is discussing this matter with the Assembly Commission. He will be in a position to provide more information when he is introducing the draft appropriation order in another place.
§ I know that your Lordships continue to take a close interest in the prospects for economic development in Northern Ireland and I should therefore like to say a few words about the local economic situation before turning to the contents of the estimates. The latest available official statistics 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 four years, Northern Ireland's manufacturing sector has increased its output by almost 12 per cent compared with growth of just 0.5 per cent 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 rising from 76.9 per cent of the national average in 1990 to 80.4 per cent by 1997.
§ At December 1998 the number of employee jobs stood at 609,480—the highest figure on record. This is reflected in the International Labour Organisation's unemployment rate of 7.2 per cent for the period January to March 1999. This means that unemployment in Northern Ireland is now lower than five other UK 201 Government regions (Scotland, Wales, Merseyside, London and the North-East) and a significant 2.4 per cent below the EU average of 9.6 per cent, with major economies such as France, Germany and Italy recording unemployment rates of 11.4 per cent, 9 per cent and 12 per cent respectively. In addition, falls in the numbers of both long-term and youth unemployment are particularly encouraging.
§ Also 1998–99 has been a good year for investment in the Province. During 1998–99, 49 IDB-supported projects have been announced by companies already established in Northern Ireland, promoting 2,777 new jobs while safeguarding a further 2,817 existing jobs. Over the same period, 21 IDB-backed inward investment projects have been announced, promoting 2,657 new jobs.
§ Of course, the difficulties surrounding Drumcree last July and the July before have not helped because they possibly deter inward investors and everybody must hope that an accommodation will be reached there before the beginning of the marching season next month.
§ All of this clearly demonstrates the impressive achievements of the Northern Ireland economy which, coupled with the potential for achieving political stability, provides Northern Ireland with an opportunity for a brighter economic future.
§ If, as we all hope, devolution of power to local representatives takes place in the very near future, the six main Northern Ireland departments will undergo significant restructuring to form a new 10 department structure, along with the office of the First Minister and Deputy First Minister. As this will involve the transfer of many services between departments, as an aid to presentation the 1999–2000 main estimates votes have been numbered from one to 26, with the existing department names removed from the vote. I now turn to the main items of expenditure covered by the order as detailed in the estimates booklet. I will refer to votes in line with the revised vote numbering. Figures are generally rounded to the nearest million pounds and I shall be as brief as possible to allow maximum time for debate or questions. I shall start with the Department of Agriculture. In Vote 1, net provision of £17 million is to fund EU and national agricultural support measures.
§ In Vote 2, £153 million is for ongoing regional services and support measures. This includes £70 million for the development of the agriculture and agricultural products industries and for scientific and veterinary services. Some £20 million is for farm support, enhancement of the countryside, and fisheries and forestry services. Some £18 million is for central administration, including information technology and specialist accommodation services, and £8 million is for the rural development programme. Then £18 million is for the Rivers Agency and £10 million is in respect of processing and marketing, fishing projects and structural funds which are wholly funded by the European Union. This vote also contains provision of £9 million in respect of the European Union Peace and Reconciliation Programme, which incorporates agriculture, rural and water-based projects.202
§ I now turn to the three votes for the Department of Economic Development, where in Vote 3 £153 million is for the Industrial Development Board. The Belfast Agreement, with the prospect of greater political stability, provides a unique opportunity for attracting new investment to Northern Ireland. This major commitment of resources will enable IDB to offer very competitive packages of assistance to both new and existing firms and will build on the IDB's excellent performance in 1988–99.
§ In Vote 4, £145 million is required. This includes £15 million for the Northern Ireland Tourist Board to assist the development of tourism in Northern Ireland. Again the prospect of peace opens up opportunities for promoting Northern Ireland as a tourist destination. In 1998, 1.47 million visitors came to Northern Ireland, an increase of 4 per cent on the previous year. It is anticipated that in 1999, visitor numbers will increase again by 4 per cent to 1.53 million. This aptly demonstrates the potential that exists for attracting tourists and increasing the contribution the tourist industry can make to the economy. At present spending by holiday visitors and domestic holidaymakers accounts for 2 per cent of Northern Ireland's GDP, sustaining in the region of 14,750 jobs. If this could be increased to the levels attained in the Republic of Ireland, currently around 5 per cent., there is the potential to create a further 20,000 jobs.
§ In Vote 5, £265 million is sought for the Training and Employment Agency and £72 million under the Government's welfare to work initiative will provide 25,000 places in a range of employment and training measures mainly within the New Deals for 18 to 24 year-olds and long-term unemployed. This is a significant increase from some 15,000 places in 1998–99. Employers in Northern Ireland have reacted enthusiastically to the New Deal and to date almost 3,000 have signed agreements to deliver the employment option. Some £61 million is to fund 11,500 training places under the Jobskills Training Programme. A total of £22 million is for other training programmes which will provide some 3,300 places for long-term unemployed adults in projects of community benefit. A further £17 million is to assist companies to improve their competitiveness by developing the skills of their workforce.
§ Turning to the Department of the Environment which has five votes numbered 7 to 11, Vote 7 seeks £204 million for roads, transports and ports. This includes £147 million for the development and operation, as well as the maintenance of Northern Ireland's public roads system. Some £20 million is for road passenger services and almost £13 million for continued support of railway services.
§ Vote 8 relates to housing, where some £266 million will be provided, mainly to the Northern Ireland Housing Executive and the voluntary housing movement. When net borrowing and the Housing Executive's rental income and capital receipts from house sales are taken into account, the total resources available for housing will be approximately 203 £605 million. Gross resources for the voluntary housing sector, taking into account some £40 million of private funding, will be around £110 million.
§ In Vote 9, gross expenditure of £209 million is estimated on the provision of water and sewerage services, of which £90 million is for capital expenditure and £115 million for operational and maintenance purposes, including administration costs. That vote reflects also a recent technical change in presentation. Previously that vote was shown net of a contribution from the regional rate. Now, however, those receipts are not being included and the net overall amount is therefore that much higher.
§ That technical change will have no effect on the level of activity in water services. We are providing an additional £84 million for water and sewerage over the next three years. That substantial additional provision is needed to put right many years of under-funding in that vital area. We are fully committed to addressing the requirements arising from EU directives and to provide the highest standards in public health.
§ In Vote 10, £222 million is being sought for environmental and other services provided by a number of agencies, including the Environment and Heritage Service, the Planning Service, the Construction Service and the Rate Collection Agency. Moreover, £30 million will be targeted at areas of social, economic and environmental need through various urban regeneration measures and £31 million will be made available under the EU Peace and Reconciliation Programme, of which £23 million will be funded from EU receipts.
§ The estimates for the Department of Education seek a net total £1,536 million in Vote 12, an increase of 6 per cent on last year's provision. That includes £882 million for recurrent expenditure by education and library boards, of which £1 million is provided under the Government's New Deal. That comprises £818 million for schools and £64 million for libraries, youth administration and other services.
§ Vote 12 also provides £48 million for boards' capital projects; £65 million for capital projects in voluntary and grant-maintained integrated schools; and £163 million for recurrent expenditure in voluntary and grant-maintained integrated schools. That amount includes £28 million recurrent expenditure for grant-maintained integrated schools, an increase of £5 million over 1998–99. The provision for boards' and other schools' capital includes some £6 million under the Government's New Deal.
§ Also in Vote 12, £110 million has been provided for colleges of further education, £125 million for local universities and £128 million for student support, including grants and student loans. The vote also covers expenditure on a range of youth, sport, community and cultural activities, including £17 million for arts and museums, £5 million for the Odyssey Millennium Landmark Project and £4 million for community relations. Some £13 million has also been made available under the EU Peace and Reconciliation Programme.204
§ The next set of six votes relates to the Department of Health and Social Services where £1,666 million is sought in Vote 14 for expenditure on hospitals, community health and personal social services, health and social services trusts, family health services and certain other services.
§ In Vote 16, £33 million is sought for expenditure on grants to voluntary bodies, training, bursaries and further education and certain other services.
§ In Vote 17, £146 million is sought to meet the department's administration and other miscellaneous costs. That includes £96 million for the Social Security Agency which also takes into account £3 million in respect of administering the Welfare to Work initiatives. Some £8 million is for the Northern Ireland Child Support Agency; £4 million for the Health Estates Agency and £37 million for the core department.
§ In Vote 18, £1,811 million is sought for social security benefit expenditure administered by the Social Security Agency. That represents an increase of 7.3 per cent compared with forecast outturn for last year. It covers not only the general uprating of benefits from April 1999 but also an increasing number of beneficiaries.
§ In Vote 19, £373 million is sought to cover expenditure on the independent living funds, motability, housing benefits and the Social Fund, including substantially increased provision for winter fuel payments and payments into the Northern Ireland National Insurance Fund.
§ Finally, I turn to the new Northern Ireland Assembly vote where, as I have already advised, £14 million is sought to cover the initial costs of the Assembly in this financial year.
§ I hope that that short summary of the main components of the estimates is helpful. I commend the order to your Lordships.
§ Moved, That the draft order laid before the House on 9th June be approved.—(Lord Dubs.)
§ Lord Luke
My Lords, I am grateful to the Minister for his explanation of the order and accept the need for it. I also welcome in particular his announcement of the discussions taking place concerning the funding of the Assembly. The Minister will no doubt be taking action in due course and we look forward to responding more fully at that time.
§ Lord Redesdale
My Lords, I apologise for being a couple of minutes late for the Minister's opening remarks. I was taken by surprise because the amendment which seemed to be debated for such a long time did not end in a vote. I have not contributed to the debate on Lords reform and that is probably why I made such a mistake.
The Minister will not be surprised that we welcome the extremely positive note which was struck in relation to the extra money provided in the order for education; namely, a further 6 per cent. I welcome too the positive news as regards the employment statistics which will go a long way towards increasing the future prosperity of Northern Ireland. 205 I have only one question on the order. It relates to the cost of the Assembly. The Minister stated that his honourable friend in another place will be dealing with that issue. However, we raised that matter on the last Appropriation Order because there seemed to be some difference between the Assembly's figure of £ million for its running costs and the £14 million which was put aside by the Government. The monthly expenditure of the shadow Assembly is running at £1.2 million. Therefore, it seems unlikely that the full Assembly could survive on a mere £14 million because that is what is roughly being spent at present. That has been highlighted also because the Scottish Parliament has produced very different figures for its running costs.
The Minister said that an accommodation is to be reached. It was envisaged, but unfortunately has not come to pass, that the Assembly would be up and running by June. Had that been so, there would have been some difficulty in relation to working within those figures. However, the Minister assured us that the situation is under control and is in hand. Therefore, I support the order.
§ Lord Molyneaux of Killead
My Lords, I suppose that the drafting of the order in its present form is a sign of the times. Although the votes are numbered, they do not appear at first sight to relate to the Northern Ireland departments as we know them. Judging from the Minister's introduction, perhaps we may assume that that is because of the restructuring of the departments to provide justification for the appointment of up to a dozen Ministers. That implies that they will not work as hard as the noble Lord and his colleagues have done. They have had a much heavier load.
One disadvantage of the present layout is that although the votes cover a multitude of matters, apart from the welcome tally which the Minister gave of the amounts expended on each of the items, all we have in printed form is a collection of sentences. However, I do not complain because I expect that this is a one-off.
However, in this short debate, I wish to concentrate on only one department; namely, the Department of Finance and Personnel. Like other noble Lords, I am grateful to the Minister for his explanatory letter of 3rd June. It is understandable that there is a problem caused by the fact that devolution has been delayed, and I accept entirely what the Minister said in that regard. Although the allocations to the Northern Ireland departments appear to follow the normal course, based, as they are, on the Northern Ireland main estimates, the uncertainty exists in relation to the new Northern Ireland Assembly. That has led to difficulty with regard to the provision of expenses of the Assembly for 1999–2000.
Hitherto, the estimates included a very modest vote to, for example, the Clerk of the Assembly. That has gone on for a quarter of a century, irrespective of the fact that no assembly existed, so at least someone is going to be made an honest man from now on as a result of the changes. But now there is a possibility of an assembly in that it may come into being—and I put it no higher than that—and the Department of Finance and 206 Personnel has budgeted for a sum of £14.3 million for the year 1999–2000—based, I suppose, on the outcome of the Comprehensive Spending Review.
The first difficulty is that the £14.3 million was extrapolated from 1998–99 shadow Budget with an uplift of round about 1.53 per cent, again, probably in line with Treasury figures for the UK. I do not complain about that modest percentage increase, but it brings me to a second problem which has nothing to do with the increased expenditure but everything to do with taking no account of the increases which were implicit in, and made inevitable by, the legislation in your Lordships' House which established the Assembly. That inevitable expenditure falls under what might be termed "under-estimated expenditure".
Under-estimates in the DFP figures account for most of the discrepancies between its estimates and those of the Assembly Commission and amount to around £17 million, of which the following are the most significant: secretarial staff salaries for 400 staff, £5.4 million; printing, publishing, and the rest of it, £3.9 million; committee costs, including travelling, which has not yet been estimated; subsistence, specialist advisers and Parliamentary Association duties, £2.4 million; Members' allowances, including office costs allowance, party allowance, temporary secretarial allowance, £1.2 million; Members' travel and subsistence, including staff and family concessionary travel, £1.4 million; IT costs—I am not quite sure what that is—£1.1 million; Members' salaries, of which -we would have some knowledge, come to £700,00 million; Library acquisitions and purchases of publications amount to £300,000, and stationery costs amount to £200,000. That makes a total of £16.6 million.
I turn now to the third discrepancy and cause for concern, which is the entire absence of provision under different headings. While the under-estimation to which I have just referred amounts to some £17 million—that is, the discrepancy between the DFP and the Assembly projections—the remaining £5.5 million is mainly attributable to the following expenditure areas, which, for some extraordinary reason, have been unforeseen by the DFP. They include Members' pensions at £1,350,000 and Parliament building running costs, including heat, light, rates, rental and outbuildings. I should have thought that someone would have had the foresight to come to the conclusion that such bills had to be paid. In total, they come to £780,000.
Then there is another curious area; namely, works to Parliament buildings (including maintenance, grounds maintenance, repairs, improvements, architects, and so on) which amount to £750,000. There is also catering (together with cleaning) which comes to over half a million pounds; furniture which amounts to half a million pounds and then another curious one—miscellaneous Westminster-style provision for Members (including insurance, winding-up allowance, resettlement grants, ill-health, and retirement grants)—which amounts to a quarter of a million pounds. That is followed by some relatively more modest publicity and educational material, specifying who is going to be 207 educated, which amounts to £100,000. There is also the cost of legal counsel at £100,000 and childcare at £25,000. All that makes a total of £4.4 million.
As I said, these are expenditure areas which are apparently unforeseen by the Department of Finance and Personnel. Taken together, the discrepancies between the DFP and the Assembly estimates for the year 1999–2000 of some £22.6 million can be accounted for as follows, under three brief headings. The department's estimate is £14.3 million. Under-estimates stand at £17 million and lack of provision for any allocation stands at £4.4 million, making a total of £35.7 million—nearly £36 million.
I have not included the considerable amounts which will surface as a result of decisions already taken in principle by the Northern Ireland Office and by the Assembly itself: additional recommendations in regard to Members and office holders; additional salaries of office holders who are designated; sound and vision contracts—greatly inflated by decision of the Assembly, not of the Government, to use English and Irish languages thereby doubling Hansard costs compared to those in Westminster—and proposed charges by the Department of Finance and Personnel; for example, charging a fee to the Assembly for recruitment, which is not as yet specified. There we have a whole range of expenditure actually approved, or committed, in addition to the £36 million that I have already mentioned.
The Minister was very frank and honest when he explained that the order before us is something of a holding operation—we can quite understand that—which does not breach the Comprehensive Spending Review but is in line with all the other main estimates. I do not intend to press the noble Lord for a definitive response this evening to these complicated matters. But I wonder whether it might be possible for the Minister to consult with his ministerial colleague Mr Murphy, who is in charge of the Department of Finance and who will be submitting this order to the other place next week. Perhaps the two Ministers could seek to reduce the gap between £14 million and £36 million before the other place debates this unsatisfactory situation next week.
In his opening speech the Minister gave a hint that the Government might be giving some thought to that very wide financial gap. I am not demanding that the gap be closed in the short period of one week in view of the fact that some items cannot easily be quantified. But is it unreasonable to suggest that the noble Lord, Lord Dubs, and his ministerial colleague Mr Murphy might compare the estimates of the department—which is Treasury linked—with the estimates of the Northern Ireland Assembly commissioners and, it is to be hoped, reach an agreement, albeit a modest one, on a more realistic presentation before next Monday?
§ Lord Hylton
My Lords, I rise reluctantly to explain some of the deplorable consequences of the current change from ACE (Action for Community Employment) to "New Deal", being the somewhat Rooseveltian term borrowed by this Government for their latest proposals. As some of your Lordships may 208 know, I have the honour to be president of NIACRO. This voluntary organisation, together with Exturn, has for many years been providing training workshops for ex-offenders and others at risk of falling into crime. These workshops have often produced wooden play equipment, which is used by play groups and infant classes throughout Northern Ireland.
Over the years, most of our clients have been referred by the Probation Board. The work and instruction in the workshops have been specially designed for people who have not done well at school and who do not have high level manual skills. Dedicated teams of managers and instructors have been built up, willing to work with difficult people, some of whom need a period of sheltered employment if they are to lead crime free lives.
There has already been a year's notice of the change from one system to another. Both the organisations that I mentioned, with strong support from the Probation Board, have been moving heaven and earth to adapt the new system to the needs of our clients. The matter has been discussed with the Training and Education Authority and taken to the highest levels of the Civil Service.
I regret to say that all this negotiation has been to no avail. Sixty or so training workshop places have already been lost, staff have been made redundant and the remaining few places are likely to close by the end of July. A community asset is being lost which will be extremely hard to replace. We understand that in this respect Northern Ireland is being treated worse than England where better transitional finance is available.
It is therefore with regret that I have to ask why was no special provision made for criminal justice trainees in Northern Ireland? How will the rehabilitation through work of ex-offenders be protected in future? Are Her Majesty's Government still committed—as has been claimed in the past—to crime prevention? If so, what is their approach to people who are often virtually unemployable? If Ministers are not concerned about adults, will they at least devote resources to young people, particularly those suspended, or excluded or dropping out from school? Will the Minister try to convince his colleagues of the urgency of these issues? It goes without saying that such issues involve a considerable number of different departments. I trust that they will therefore be considered in the round.
§ 8.15 p.m.
§ Lord Blease
My Lords, I join with other noble Lords in thanking my noble friend the Minister for the thoughtful and detailed way in which he has introduced this appropriation order. We can well understand some of his feelings as, had circumstances been different, this discussion might have been more eventful. Along with others I regret that the order has been enacted in this way.
For some 18 years I sat on the Opposition Benches. I see some noble Lords on the other side of the House who were Ministers at that time. During that time we looked forward to these appropriation orders and the debates on them which gave us an opportunity to discuss 209 the affairs of Northern Ireland in some detail. That gave us the opportunity to have an input in those discussions. I feel sure that the new Northern Ireland Assembly will constitute a welcome change in that it will make the elected representatives accountable to the Assembly and to the people of Northern Ireland. God speed that day and may it bring peace and tranquillity with it!
I have received two letters from the Minister on the matters of the draft appropriation order and the main estimates for Northern Ireland departments. Those matters are closely interlinked in many ways. The Northern Ireland estimates 1999/2000 are relevant to our discussion tonight. I have some three points to put to the. Minister. The estimates are much more detailed than the order itself. As I say, the estimates apply to the years 1999/2000. The estimates comprise a well produced document which is worthy of close study by all who are interested in the development of the Northern Ireland economy and in the social well-being of the people of the Province.
Section 5 on page 19 of the estimates explains the details of parliamentary accountability and the order of estimates. These estimates apply to this House, the other place and any of the other new devolved parliamentary bodies in the United Kingdom. The document states,The accounting and audit arrangements for grants in aid for certain subscriptions and international organisations are indicated by a common set of symbols which are illustrated on page 24. The normal accounting and audit arrangements will not apply in certain other cases".I think that is a strange statement. If certain areas do not meet the standard requirements of accounting and audit arrangements, they should still be subject to parliamentary democratic procedures. The Minister has already mentioned the sums that are allocated to various departments. Section 2 on page 83 of the document refers to the Northern Ireland Assembly. It states,The provision sought for 1999/2000 is 5.8 per cent lower than the final net provision for 1998/99 of £328,000 and 23.6 per cent higher than the forecast outturn for that year of £250,000".I believe this matter should be discussed tonight. An overspend has been mentioned in the document. As is the case with other parliamentary bodies throughout the United Kingdom, the Northern Ireland Assembly must be accountable to Parliament and must not overspend its budget. That applies to present and to future circumstances.
Paragraph 2 on page 85 of the estimates states, with regard to the new Northern Ireland Assembly,The provision sought for 1999/2000 is £14,278,000 and reflects the initial cost of the new Ireland Assembly operating in the shadow form".Apparently the new Northern Ireland Assembly has incurred an overspend of £6,628,000.
With those Northern Ireland citizens who believe in parliamentary democracy and parliamentary accountability I look forward to welcoming elected representatives who listen to the needs of the people who have elected them.
Like others, I feel sure that the Minister looks forward. He has spent a long time in Northern Ireland; I am sure he has learned many lessons and seen many challenging matters arising. We long for the day when 210 Northern Ireland Ministers will be accountable to the people of Northern Ireland themselves. At the same time we thank those who have filled the breach over the past number of years.
§ Lord Rathcavan
My Lords, in the short time available I should like to make a few points. First, can the Minister confirm that the Government have begun to implement the recommendations of the Economic Development Strategy Review, known as Strategy 2010, which was issued by his colleague, the Minister for the economy, Mr Adam Ingram? Many of the recommendations are exhortations to industry to broaden horizons, play to strengths and tackle weaknesses. An Economic Development Forum has already been established but there are some particular aspects where the Government can act and act now to help Northern Ireland to mirror the great success already being achieved by our neighbours in the Republic of Ireland.
I have raised before the serious problem of different rates of corporation tax across the land border—around 10 per cent in the Republic of Ireland against 30 per cent in Northern Ireland. I know the Minister will say, as usual, that that is the sacred turf of the Treasury, but the Chancellor made tax concessions for Northern Ireland a year ago on capital allowances. This has proved a valuable concession. The Minister referred to the successes of the Industrial Development Board. It has been valuable to those considering, inward investment.
But more needs to be done. Strategy 2010 emphasises that we must have a level or equivalent tax regime to our land neighbours. Will the Minister acknowledge this situation and flag it up as an issue which makes Northern Ireland uncompetitive; and, I might add, from which the Treasury is losing tax revenue from Northern Ireland companies which acquire manufacturing facilities across the border in the Republic of Ireland in order to maximise their tax liabilities in a more favourable regime?
Another cross-border tax leakage, estimated as a loss to the Treasury of well over £100 million, is currently being caused by the difference in excise duty on petrol and diesel—more than 17 pence a litre on unleaded petrol and 15 pence on diesel—which has led to widespread smuggling of road fuel. In border areas it is estimated that 48 filling stations have closed, with the loss of 250 jobs. Similar though smaller excise duty differences exist in the European Union. For example, the Dutch Government have introduced a subsidy scheme for road fuel retailers in border areas. Perhaps the Minister can tell us what the Government, who are committed to further increases in these excise duties, will do about this real problem.
Another fiscal problem faces Northern Ireland with the proposal—or the "Marshall Plan" as it may be called—in the report by the noble Lord, Lord Marshall, on the business use of energy. He called for an energy consumption tax—to be introduced in next year's Finance Bill. The implications for energy-intensive companies such as Du Pont and Michelin and for textile processors, already suffering from Northern Ireland's 211 high electricity prices, are significant. It is important that the Government urgently address this further erosion of Northern Ireland's competitiveness by these proposals.
Perhaps I may comment on the funding situation for environmental programmes in the agricultural sector. I know that the Minister referred to some increases in this area, but it is rumoured that there is insufficient funding available to support the existing environmentally sensitive area schemes. Now we have the countryside management scheme which was announced in recent weeks. Will the Minister confirm that there will be adequate funding to support this and that it will not be rationed?
Finally, the Northern Ireland Office has, it is said, done a good deal with the Treasury to keep funds from the privatisation of Belfast Harbour for reinvestment in Northern Ireland. Can the Minister assure us that the harbour commissioners will get more commercial freedom ahead of privatisation to develop their business and its value? Can he assure us that the huge and valuable city centre properties owned by the harbour commissioners will go to the public good and not into private pockets, as happened with the privatisation of Belfast international airport?
I apologise for raising so many points. As we are running short of time, I would be happy for the Minister to write to me and place a copy of his reply in the Library.
§ Lord Lyell
My Lords, perhaps I may add my voice briefly to the debate and thank the Minister for presenting in such detail these appropriation orders. I can certainly confirm what was said by the noble Lord, Lord Blease. Perhaps he was referring to at least one of the former occupants of the position so ably occupied by the noble Lord, Lord Dubs, but I, too, recall fairly lengthy and detailed appropriation order debates.
Perhaps I may raise one or two points. One certainly may be in the line of an oration that I seem to remember giving when the noble Lord, Lord Molyneaux, was present in the Moses Room in Committee. A certain musical item was classified as "It's fate was pathetic and tied to the stake and burned as heretic" I may inject a slightly heretical note into the debate. I see that the noble Lord has his thinking cap on.
We have had great support—I would add mine—for all the efforts of the Minister's right honourable friend across the water, which has been reflected in what we read in the newspapers and the electronic media throughout the world.
In the very first line of Vote 1 appear the words "Market support". At the end of that paragraph, on page 3, there appears "Market development". Perhaps I could once again ask the Minister to look at that as a matter of particular importance. This year is an odd year. I am sure that the Minister will know that one of the world's great food fairs takes place in Cologne in Germany; Its traditional acronym is ANUGA. I hope that the Minister, if still in post—or, one might say, to be announced or to be confirmed—or, if there is any 212 problem, the First Minister or someone of similar stature, will attend this clearly important world gathering in Cologne.
Certainly whatever the Prime Minister may be discussing and whatever one sees in the political development of Northern Ireland, it is just as important to present the very professional face of Northern Ireland—certainly of the farming industry, the market support industry and the food industry, let alone other aspects of Northern Ireland—to members of the public from all round the world. This is equally important and equally welcome. I hope that the Minister will pass on my hope that somebody—I hope that it will be the Minister, if his tenure can be extended—will be, I hesitate to say banging the drum but making a suitable fuss with ANUGA in October this year.
I am delighted to see in the vote that there is stress laid on the scientific and veterinary services in the Department of Agriculture, together with other "spin off' or complementary aspects of the marvellous scientific traditions in Northern Ireland. I was not sure which sub-total were referred to in the vote, but I hope that any sums expended in this area will not diminish. I hope that the Minister will use his influence to see that the proportion of the sums expended in this area will be maintained.
I am delighted to see in Vote 2 that the reference is still to "water course management". In my career in the Department of Agriculture it used to be called "drainage". It may be in tribute to me that it was expanded to "water course management". Never use one word where two will do. But that is particularly relevant.
I am delighted to observe sea defences. I do not remember too much flooding in my time in the north. I recall that there was some fresh water flooding when a river bank gave way because of an enormous colony of rabbits. We sent in local sportsmen and that disposed of that problem. I hope that the Minister will take care of water course management; I hope that he will add all his influence to scientific and veterinary services; above all, I hope that he or perhaps his right honourable friend the Secretary of State—someone of stature—will go to ANUGA and push for Northern Ireland's excellent food industry and everyone involved in it.
§ 8.30 p.m.
§ Lord Fitt
My Lords, I want to reinforce what the Minister said when he wished the new assembly success and hope that this will be the last time that we will have to debate a Northern Ireland appropriation order.
I have had the experience of debating appropriate orders in the old Stormont parliament, in the old Stormont assembly, in another place and in your Lordships' House. When an appropriation order was debated in the old Stormont assembly there were times when the debate lasted for two days. All the elected representatives from the various constituencies who were aware of the needs of those constituencies would have their say. I believe that Northern Ireland is the place where the vast amount of money allocated in the order should be debated. I have just had verified by one of the civil servants that the order covers expenditure of 213 £4.5 billion. That is a good deal of money by anyone's standards. I believe that the only place that that amount of money should be debated-where the money should be spent and from where it should be withheld-is Northern Ireland.
When, 20 or 30 years ago, Northern Ireland Members first raised matters at Westminster concerning their constituencies, the Hansard staff were nearly driven berserk. They were sending notes up and down to Members. They could not understand Members' pronunciation and they had particular difficulty with the Member for Antrim North. The number of place names that he mentioned in his appropriation speeches kept the Hansard staff going for two or three hours.
It is a long time since the elected representatives of Northern Ireland last had the opportunity to discuss an appropriation order and the expenditure of this money. They have not had responsibility for saying where that money should be spent—where a hospital should be built or where assistance should be given to some industries. An awful danger has arisen. A dependency culture has grown up in Northern Ireland. If you do not have responsibility for saying where the money is to be spent, it is all too easy to point the finger at British Ministers. We have seen that happen over the past 25 years. We have seen the various competing agencies in Northern Ireland demanding more assistance from the British Treasury, and sending people far offshore to demand money from the European Community. A dependency culture in any society is a very dangerous thing.
Northern Ireland has had to live without its own government. On the question of the £ million for the new assembly, it may not have been said in Parliament or in your Lordships' House, but on the streets of Northern Ireland, and in the bars and the pubs and the clubs, people are laughing about it. Who decided on this £ million? The figure was arrived at with gay abandon. They say, "Ah well, the British Government will have to pay for it". I believe that the increase in expenditure will prove to be totally unjustified.
I am saying to the Minister today, as I said to him when he first took on the responsibility for Northern Ireland, after congratulating him on what he had been able to do, that I hope that he will no longer be saddled with responsibility for governing Northern Ireland, and that Northern Ireland elected representatives, on the soil of Northern Ireland and in the constituencies of Northern Ireland, will take responsibility for an appropriation order such as this.
§ Lord Dubs
My Lords, I am grateful to the many Members of the House who have contributed to this debate. First, perhaps I may say a few words about the noble Earl, Lord Attlee. I know that lie wanted to be here but I understand that he had a prior commitment with the TA, with which he is very involved. It is only for that reason that he was unable to be present. In saying that, I mean no disrespect to the noble Lord, Lord Luke, on the Opposition Front Bench.
Perhaps I may take up the point just made by the noble Lord, Lord Fitt. Yes, the Government clearly want devolution to happen. It is desirable for many reasons, 214 not the least of which is that it is right and proper that local Ministers and local members of the assembly should determine expenditure and should determine how money is spent in Northern Ireland. That is a politically desirable thing to happen. It is one the Government want to happen. It will be one of the many benefits of a handover of power to the assembly and to local Ministers. The sooner it happens, the better.
I turn to the many questions raised by noble Lords. If I happen to omit any point that has been raised, I shall write to the noble Lord concerned. I shall do my best to answer the questions of which I have made a note.
The concern raised most often by Members of the House was funding for the assembly and the Northern Ireland departments. There is no question that the assembly will be funded to the level that it requires. My honourable friend the Minister of State, Paul Murphy, is at present discussing this matter and will be able to say something more when the order is debated in the other place. But we will not leave the assembly without the necessary money. The money in the appropriation order is the pre-devolution amount, based on some £40 million. When the assembly takes over responsibility it will need have to have a larger sum of money to deal with the extra responsibilities that it will have to exercise as a full assembly. That also goes for the need to change from the present departmental of six to the new structure of 10 departments, plus the department at the centre. We have to find that money because the assembly must be able to function.
My noble friend Lord Fitt suggested that there was concern among people in Northern Ireland about the amount of money involved. The assembly indicated how much money it would need. On devolution, it will have to accept responsibility and be answerable to the people of Northern Ireland for the money that it thinks it necessary to spend on its operations. We want to facilitate that process, but responsibility for expenditure in the full devolved assembly will rest with the assembly, However, in the meantime, we want to facilitate the process so that when the assembly takes over there is a smooth transition and the money can be made available. The 14 million for 1999–2000 is an interim figure. It has to be. The additional requirements of the assembly will be addressed through the normal monitoring arrangements where provision can be reallocated to the assembly from easements elsewhere within the Northern Ireland block. But I repeat: there is no question of our failing to ensure that the assembly will have enough money for its requirements.
The fact is that the assembly did not give the Department of Finance and Personnel time to examine its estimates of what was needed—hence the lack of an agreed figure at this stage. The matter will be resolved, so I do not think it would be useful for me to go into the detailed points at this stage.
The noble Lord, Lord Molyneaux, made three points: about the assembly, the 10 departments and the absence of other provision. However, I think that those points have all been dealt with in what I have said. That is how those different headings of expenditure will be dealt with.
215 The noble Lord, Lord Blease, asked a number of questions. He referred to paragraph 5.4 on page 19 of the Estimates relating to the use of accounting symbols. The last sentence of the paragraph refers to the detail of the audit being carried out. A normal audit of a department may involve audit down to the transaction level. However, if it is grant-in-aid, the detail in the course of the audit in the appropriation account may not be at transaction level. In such cases the recipient body of that grant-in-aid will be subject to its own external audit arrangements and will therefore be accountable for the detailed way in which it deals with money that has been granted to it.
The noble Lord also asked questions about the figures for Northern Ireland Assembly expenditure at pages 83 and 85 of the Estimates. The figures relate to the residual expenditure of the old Northern Ireland assembly. If the noble Lord feels that it would be helpful, I am happy to write to him and give rather more detail.
The noble Lord, Lord Hylton, asked about provision for integrating ex-offenders into society. He referred to a transition between ACE and the new deal. It may be necessary for me to write to the noble Lord. Ease of transition is a matter of concern to us; we want to make sure that nothing slips through from one system to another. We have tried to ensure an easy transition from ACE to the new deal. In relation to the noble Lord's specific point, if it is acceptable to him, I should like to write to him with more information.
The noble Lord, Lord Rathcavan, asked a number of questions. The first dealt with the implementation of Economic Development Strategy 2010. The review of economic development strategy announced by my honourable friend Adam Ingram, the Minister for Economic Development, on 29th January 1998 was designed to produce a new economic development strategy for Northern Ireland up to the year 2010. The review was carried out as a collaborative exercise involving both the private and public sectors. It is for the Northern Ireland Assembly to consider and implement.
The report makes over 60 recommendations for developing the Northern Ireland economy over the coming decade. While it remains a matter for the devolved government to take much of the strategy forward, the day-to-day business of government must go on. Some issues raised in the economy development strategy review must be addressed now and cannot be delayed. The Minister for Economic Development has announced that he will begin to implement a number of these key issues, including the establishment of the proposed economic development forum, which will give social partners a strong, effective voice and a meaningful role in influencing and monitoring Strategy 2010.
The noble Lord also asked about the difficulties concerning excise duty and the differential with the Republic of Ireland. I fully appreciate the noble Lord's concerns on the price differential in fuel prices between the Republic and Northern Ireland. These reflect national policies. While I realise that that is of little 216 comfort to those petrol retailers facing business difficulties, the wider benefits of the levels of public expenditure announced by the Chancellor are in no small way made possible because of the UK-wide national revenue generation policy.
I am aware that various groups have been pressing for a subsidy scheme for petrol retailers in the Border areas of Northern Ireland similar to that in the Netherlands. However, the European Commission has questioned the legality of that state aid, and any similar schemes will most likely have difficulty in meeting the European state aid rules.
As regards smuggling, HM Customs will continue to deploy resources against illegal trade, as they have done with good success in the past.
The noble Lord, Lord Rathcavan, also asked about the port of Belfast. He asked whether commercial freedom could be given to the port of Belfast prior to privatisation. I do not think that that is possible, because it would require legislation to ease its transition from trust board status to the kind of status referred to by the noble Lord. We are moving with all possible haste to implement the privatisation proposals. The position at present is that the committee established by the Assembly to consider the matter is still examining the proposals of the Belfast Harbour Commissioners. The commissioners have put forward revised proposals dealing particularly with the issue of the landbank. The Harbour Commissioners will meet later this week to discuss that development. I am scheduled to meet the Assembly committee later this week. So the matter is under active consideration. Clearly, the Government are anxious that there should be no delay and progress should be made as rapidly as possible.
The noble Lord, Lord Rathcavan, also referred to the effect of the energy tax in Northern Ireland. I recognise his concern. The matter has been raised with Treasury colleagues so that Northern Ireland interests can be taken into account when the levy is set.
As regards the funding of an environmental programme, the natural environment is one of the foundations on which we shall build the vibrant mixed-use rural economy to which the Government are committed. The new countryside management scheme which complements the existing ESA scheme means that we can now support farmers throughout Northern Ireland in adopting environmentally sensitive farming practices. We have been able to make £1.2 million available out of existing resources to enable the countryside management scheme to be introduced. That will allow up to 1,000 applications to be accepted. The case for additional funding for agri-environmental schemes will be considered against other priorities as part of the Government's implementation of the Agenda 2000 settlement.
The noble Lord, Lord Lyell, stressed the importance of international food fairs as a showcase for Northern Ireland agricultural products. I know of the noble Lord's direct experience over a number of years as the Minister in Northern Ireland responsible for agriculture. The noble Lord referred to the ANUGA fair in Cologne. I have managed to attend a number of food fairs. I went 217 to SIAL in Paris and I have been a couple of times to the seafood fair in Brussels, as well as attending a number of events located in Northern Ireland itself. I am happy, if time allows and if my responsibilities continue, to support Northern Ireland agriculture in whatever way is possible. Having got the beef ban lifted for Northern Ireland, we want to ensure that Northern Ireland products are successful on world markets. That is the way to encourage and help Northern Ireland agriculture.
believe that I have dealt with all the main points. I commend the order to the House.
§ On Question, Motion agreed to.