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Appropriation (No2)(Northern Ireland) Order 1998

Volume 591: debated on Thursday 9 July 1998

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7.35 p.m.

rose to move, That the draft order laid before the House on 16th June be approved.

The noble Lord said: My Lords, the draft order before us today authorises expenditure of £3,754 million for Northern Ireland departments in the current financial year. This is in addition to the sum of £3,026 million voted on account in March, and brings total estimates provision for Northern Ireland departments to £6,780 million, an increase of 6 per cent. on 1997–98. The order also authorises the use of additional receipts to meet an excess vote in 1996–97.

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. As such, the Secretary of State has flexibility to reallocate resources within the block in the light of emerging pressures and easements.

Before turning to the contents of the estimates I hope your Lordships will allow me to make a number of more general comments. I am sure that many of your Lordships would share with me the view that the present process of approving this order is not the most effective means of exploring and examining the Northern Ireland Estimates. However, since in the future it will fall to the new Northern Ireland assembly to deal with the estimates and expenditure currently falling to the six Northern Ireland departments—and this may, therefore, be the last occasion on which the order is brought before this House in this way—this would clearly not be the appropriate time to propose change.

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. Furthermore, I am sure that your Lordships will agree that the initial cost of the assembly at some £9 million is not a high price to pay compared to the cost and consequences of an absence of democracy. Surely we will all accept that locally elected representatives accessible to, and ultimately accountable to, the people of the Province, provide the best possible chance of a lasting solution to the tensions which remain so evident.

The effects of the present, but, hopefully, temporary disruption in the Province, undoubtedly impact on the prospects for economic development, including tourism. Many observers might see these as self-inflicted wounds. However, past achievements have shown that Northern Ireland can and will recover lost ground. For example, 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 five years, Northern Ireland's manufacturing sector has increased its output by almost 24 per cent.—more than 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 rising from 78.2 per cent. of the national average in 1990 to 81.2 per cent. by 1996. Furthermore, record employment levels have also been achieved.

The year 1997–98 has also been a record year for investment in the Province, with planned investment by IDB client companies totalling £713 million, an increase of 12 per cent. on last year's figure. This investment represents the promotion of 7,137 new jobs while safeguarding a further 4,254 existing jobs. Forty-one inward investment projects contributed anticipated investment of over £520 million. This should create a record high 5,064 new jobs, while safeguarding a further 2,483 jobs.

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.

In Northern Ireland, as in the rest of the UK, education and health are government priorities. So far as concerns Northern Ireland, additional funding in these and other comparable national programmes is calculated by reference to the Barnett formula which in essence reflects the broad population balance between Northern Ireland and the rest of the UK. Budget additions to Northern Ireland public expenditure in 1998–1999 include £34 million for education, £44 million for health and £46 million for welfare-to-work. In addition, the Chancellor's package amounting to £315 million, announced on 12th May, provided funding for roads, education, housing and agriculture, including funding through the proposal to transfer the Port of Belfast to the private sector.

I now turn to the main items of expenditure covered by the order as detailed in the estimates booklet. The figures are generally rounded to the nearest million pounds and I shall be as brief as possible to allow maximum time for debate. I shall start with the Department of Agriculture. In Vote 1, net provision of £17 million is to fund EU and national agriculture support measures.

In Vote 2, £130 million is for on-going regional services and support measures. This includes £63 million for the development of the agriculture and agricultural products industries and for scientific and veterinary services. Some £23 million is for farm support, enhancement of the countryside, and fisheries and forestry services; £22 million is for central administration, including information technology and specialist accommodation services, and £7 million is for the rural development programme. Some £17 million is for the Rivers Agency and some £5 million is in respect of processing and marketing and fishing projects which are wholly funded by the European Union.

In the Department of Economic Development's Vote 1, £160 million is for the Industrial Development Board. As the shadow assembly begins to work towards implementing the Belfast Agreement supported by over 70 per cent. of the people of Northern Ireland in the referendum on 22nd May and re-affirmed in the assembly election at the end of June, the prospect of greater political stability provides a unique opportunity for attracting new investment to Northern Ireland. The IDB already offers a very competitive package of assistance to both new and existing firms and together with a more stable environment will further increase the attractiveness of the Province as a good place to do business. This major commitment of resources will enable the IDB to maintain a high level of support towards improving the Northern Ireland economy.

In Vote 2, £117 million is required. This includes £14 million for the Northern Ireland Tourist Board, to assist the development of tourism in Northern Ireland. In 1995, during the previous ceasefires, almost 1.6 million visitors came to Northern Ireland, an increase of 20 per cent. on the previous year. 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 holiday makers accounts for 2 per cent. of Northern Ireland's GDP, sustaining in the region of 12,500 jobs. I hope that at the present time, when Northern Ireland is going through what I believe is a short-term but difficult situation, people will reflect on the consequences of their present conduct on the potential for tourism and attracting inward investment.

In Vote 3, £210 million is sought for the Training and Employment Agency; £62 million is to fund 14,700 training places under the jobskills training programme. A total of £32 million is for the Action for Community Employment Scheme, Community Work Programme and Enterprise Ulster which will provide some 5,780 places for long-term unemployed adults in projects of community benefit. A further £23 million is to assist companies improve their competitiveness by developing the skills of their workforce. Almost £40 million under the Government's welfare-to-work initiative will provide a range of employment and training measures within the new deals for 18–24 year-olds and long-term unemployed.

The Chancellor's recently announced initiative will also provide an additional £42 million from November 1998 to assist the long-term unemployed, providing up to 30,000 places. Taken together with the welfare-to-work allocation, this is a substantial commitment by this Government to tackle the root causes of unemployment and provide new opportunities for work.

I now turn to the Department of the Environment, which in Vote 1, seeks £174 million for roads, transport and ports. This includes £138 million for the development and operation of Northern Ireland's public roads system as well as maintenance which continues to remain a priority.

Vote 2 relates to housing, where £267 million will be provided, mainly to the Northern Ireland Housing Executive and the voluntary housing movement. When net borrowing and the Housing Executive's rents and capital receipts from house sales are taken into account, the total resources available for housing will be approximately £603 million.

In Vote 3, gross expenditure of £194 million is estimated on the provision of water and sewerage services, of which £87 million is for capital expenditure and £104 million for operational and maintenance purposes, including administration costs.

In Vote 4, £190 million is being sought for environmental and other services provided by a number of agencies including the Environment and Heritage Service, Planning Service, Ordnance Survey of Northern Ireland and the Rate Collection Agency; £38 million is for the important task of urban regeneration measures targeted at areas of social, economic and environmental need. This represents a net increase approaching £5 million more than last year and it is anticipated that these resources, through various partnerships with the private sector, will continue to produce higher overall investment levels; £30 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 of £1,403 million in Vote 1, an increase of 0.5 per cent. on last year's provision. When account is taken of Northern Ireland's share of receipts in each year from the national sale of the student loan debt, expenditure will increase by 3.2 per cent. Vote 1 includes £833 million for recurrent expenditure by education and library boards, of which £1 million is provided under the Government's new deal. This includes £792 million for schools, and £41 million for libraries, youth, administration and other services.

Vote 1 also provides £37 million for boards' capital projects; £50 million for capital projects in voluntary and grant-maintained integrated schools; and £151 million for recurrent expenditure in voluntary and grant-maintained integrated schools. These amounts include £41 million for grant-maintained integrated schools, an increase of £9 million over 1997–98. The provision for boards' and other schools' capital includes some £6 million under the Government's new deal.

Also in Vote 1, £95 million has been provided for colleges of further education, £112 million for local universities and £133 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 £16 million for arts and museums, and £4 million for community relations. Some £12 million has also been made available under the EU Peace and Reconciliation Programme, of which £9 million is being funded from EU receipts.

The next set of votes relate to the Department of Health and Social Services where £1,601 million is sought in Vote 1 for expenditure on hospital, community health and personal social services, health and social services trusts, family health services and certain other services. This amount represents an increase of 2.3 per cent. on last year's final net provision.

In Vote 3, £25 million is sought for expenditure on grants to voluntary bodies, research, training, bursaries and further education and certain other services.

In Vote 4, £142 million is sought to meet the department's administration and other miscellaneous costs. This includes £93 million for the Social Security Agency, which also takes into account £2 million in respect of administering the welfare-to-work initiatives; £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 5, £1,766 million is sought for social security benefit expenditure administered by the Social Security Agency. This represents an increase of 8.6 per cent. compared to forecast outturn for last year. It covers not only the general uprating of benefits from April 1998, but also an increasing number of beneficiaries.

In Vote 6 £348 million is sought to cover expenditure on the independent living funds, motability, housing benefits, the social fund and payments into the Northern Ireland National Insurance Fund.

Finally, I turn to the new Northern Ireland Assembly vote where £9 million is sought for set-up and operational costs. Pending parliamentary approval of the 1998–99 main estimates, arrangements have been made for resources to be advanced from the Northern Ireland Consolidated Fund.

I hope that this short summary of the main components of the estimates is helpful. I commend the order to your Lordships. I beg to move.

Moved, That the draft order laid before the House on 16th June be approved.—( Lord Dubs.)

7.51 p.m.

My Lords, it goes without saying that in the light of the Northern Ireland Assembly and the rather exotic base thereon there may be a considerable change to our debates on appropriation orders, if indeed they exist in their present form in future. Local representatives will in many ways, not yet clearly defined even by themselves, become responsible for the administration of the departments listed in the present order. But the Parliament of the United Kingdom will remain in control of the block grant, as will be the case in Wales. There is a certain parallel. In both cases the Treasury will remain the paymaster. It follows that financial accountability to Parliament must remain. It may not be in such detail but in principle there will have to be accountability.

Presumably, the estimates of the Northern Ireland Office will continue more or less in the same categories but under a form of direct control, if not direct rule. Therefore, the position will not resemble the arrangements that existed under the Government and Parliament of Northern Ireland up until 1972. It follows, I hope, that there will remain a Secretary of State for Northern Ireland with Cabinet rank, as in the case of Wales, as I understand it. Scotland may be in a different position even in advance of achieving independence. That is not my ideal but it may prove to be unstoppable.

I turn to Part II, Vote 1: Department of Agriculture. I should like to raise the plight of the pig industry in Northern Ireland. I am aware that the Minister yesterday met representatives of the Ulster Farmers Union. He will have been made aware of the serious difficulties. As I understand it, the first difficulty is the burden of cost arising from the disposal of offal and dead pigs. That cost is now attributed to the producer. It may appear to be a minor matter, but in an industry that is already in serious trouble and in a depressed state it becomes a large minus factor for the average pig farmer.

An additional burden is imposed by the 1991 legislation that requires the conversion of sow stall and tether systems. I understand that the phasing-in period ends on 1st January 1999. It has been put to me that, although the legislation was and is a requirement of the European Union, other member states, including our nearest neighbour the Irish Republic, do not share the intention to enforce the conversion in their respective territories. My facts may not be entirely accurate and I should welcome any clarification that the Minister may be able to provide. In similar fashion, there appears to be no ban in the Irish Republic, and as I understand it in other European states, on the use of meat and bonemeal in pig feed. Northern Ireland pig producers do not advocate the use of such dangerous ingredients, but find it difficult to understand why competitors south of the frontier should be permitted to retain a feedstuff cost advantage. I trust that the noble Lord, having reflected upon the proposals put to him yesterday by the Ulster Farmers Union, can give the House some encouraging news this evening.

I turn to the Department of the Environment's Vote 3 dealing with water and related matters (as it is politely called). For several years I have pleaded with successive Ministers in various departments for co-operation and co-ordination between the key elements of the Department of the Environment in regard to housing development in general. The roads and planning sectors, which are now subject to agencies within the department, appear to take no account of the non-availability of water and sewerage facilities, which I understand are also under an agency. I offer as a typical example the village of Glenavy in my former constituency, which is about five miles from my home. The planning and roads agencies gave the go-ahead for new housing estates. The builders moved in and the houses were built and occupied before it was discovered that basic services were almost non-existent and certainly totally inadequate. For two or three years residents had the unedifying experience of mobile slurry tankers shuttling from house to house, all made worse by inevitable spillage. The point that I have raised about co-ordination is made more urgent by the creation of three agencies that cover the fields that I have outlined. For the same reason, I caution against rumoured plans to split up the Department of the Environment. That would tend to make for even less communication and certainly less co-operation.

With Glenavy still in mind, perhaps I may mention that just before the fourfold expansion of that village the primary school and Roman Catholic secondary school were closed and demolished on the grounds the respective authorities decided that the roll in one case was seven short of the 200 required to enable the school to remain in operation. That decision was taken because no one had informed the education authority—I do not refer specifically to the department—that school numbers would mushroom within two years. Now the children have to be bussed long distances to inadequate schools.

That leads me to my final point, which is also related to the Department of Education: Vote 1. One of the primary schools to which children are bussed is Ballycarrickmaddy. (In my notes I have spelt the name of the school in block letters. I shall furnish that information to whoever requires it later.) That primary school is well known to my noble friend Lord McConnell. It is a tiny Victorian building, surrounded by a sea of mud in wet weather. Around the building dotted in a sea of mud like satellites are numerous mobile classrooms. Noble Lords will recall that the Department for Education in Whitehall made a Statement to the House some months ago that funds were to be made available to remove and replace outside toilets in the whole of England and Wales. In that Statement a time limit was set for the achievement of the target. Has that scheme been extended to Northern Ireland? If so, how has it been put into effect in schools like Ballycarrickmaddy, which passed out of my care at the general election but for which I still have a great affection? That school has no covered connections between the satellite portakabins. If that has proved to be impossible given the architectural layout of the complex, I am afraid that the only alternative is a new school.

8 p.m.

My Lords, the Minister suggested that this is not a satisfactory way of handling the order in this House. I agree with him most heartily, because it is a subject upon which there should be detailed questions and answers for each department. We have only an hour in which to complete the debate on this order. There is no time to go though each section of it. For that reason I shall concentrate on the economy, which influences almost everything in the Province.

The Minister gave pertinent figures for the growth in GDP and employment. He has saved me trouble in that respect. The achievement and the steady growth of the Northern Ireland economy and its manufacturing industry in recent years have been outstanding. For much of that, the noble Baroness, Lady Denton, deserves credit. As Minister responsible for the economy in the previous administration, she worked hard, and, what is more important, effectively for the development of the economy.

Looking ahead, I cannot agree with the rosy outlook described by the Minister because for a variety of reasons the immediate prospects are not all good. For instance, the textile and clothing industry is under severe pressure, due partly to the strength of sterling but also because modern machinery and methods are now being employed in the Far East where labour costs are but a fraction of those in Europe. Long-established textile firms are in real difficulty. I trust the IDB is doing all that it can to assist those firms which provide employment for a large number of people and have been stable, in some cases, over several generations.

The most serious threat to the economy of Northern Ireland relates to agriculture. The EU embargo on beef exports by the UK has affected Northern Ireland more than Great Britain because 55 per cent. of beef in Northern Ireland was exported, in contrast to about 10 per cent. or less in Great Britain. At last the embargo has been lifted in Northern Ireland due to the combined efforts of government and the industry, but unfortunately it will take time before exports can be developed to anything like the former level.

The agri-food industry in Northern Ireland is very important. It accounts for 10 per cent. of total civil employment and 8 per cent. of GDP and has sales of £2.28 billion, of which 53 per cent. is directed outside the Province. In 1997 total income from farming in Northern Ireland decreased by 38 per cent., due largely to the beef crisis, and it is estimated that agriculture output will decrease by a further £50 million in 1998. Already large numbers of small rural businesses are having to cut their workforce numbers. This is very serious because rural areas in Northern Ireland depend almost entirely on agriculture, and the stable social structure depends on it.

My noble friend Lord Molyneaux spoke about the pig industry where there is a crisis. He gave reasons for it. For example, for more than a year the net margin per pig on a birth-to-bacon basis is negative. It varies from a loss of about £2 to as high as £10 per pig. As a result, pig farmers are in serious debt, and there is no sign of how they can get out of it. I know that the Minister is well aware of the situation. I hope that he can give us some suggestions tonight as to how the industry might find its way back to profitability.

In agriculture generally there is money which should be made available to the farmers, many of whom are seriously in debt to banks and to suppliers. For instance, the revaluation of the UK's green pound rate should be paid out. It has already been paid out in all other EU countries. There are other compensation packages approved by the EU and paid out elsewhere. Will the Minister tell the House what action is proposed to make payment of the various grants and compensations which have put Northern Ireland farmers at a disadvantage, particularly compared with their neighbours in the Republic of Ireland? The general belief is that the Republic of Ireland is much more adept at obtaining EU grants and assistance than is the case in the UK. That does not seem to make good sense.

The recent package of financial assistance announced by the Chancellor of the Exchequer as a peace package has been widely welcomed. The roads scheme which will help the infrastructure is most urgently needed and I hope can be put in hand without delay because of the time taken—a long time in some cases—to obtain planning permissions. Traffic delays in the Westlink in Belfast have a very high cost attached to them and the improvement is long overdue. For instance, freight traffic to and from Belfast Harbour has been restricted for some years.

Industry in Northern Ireland generally has been handicapped and promises to be handicapped for many years to come by something quite unconnected with the value of sterling or lower labour costs elsewhere. The cost of electrical power to Northern Ireland industry is approximately 30 per cent. higher than in GB and domestic customers are similarly disadvantaged and to an even greater extent than our cross-Border neighbours. That disadvantage is expected to widen in the coming years and promises to continue until the year 2010 when the contracts with the generators can start to be renegotiated. The Director General of OFREG is well aware of the seriousness of those differences and has been working hard to reduce the differential. His responsibilities include transmission and distribution where his action has reduced charges to consumers, but the real problem lies in the high cost of generation, over which he has no control.

The cost of generation in Northern Ireland is 43 per cent. higher than Great Britain. That is a remarkable difference. A recent report by consultants retained by the regulator shows that generating costs in Northern Ireland do not need to be out of line with those elsewhere. The reason for it is the nature of the generating contracts offered by government in 1993. Those power procurement agreements offer a premium for making the power available, and at the time of signing it was not appreciated by government that prices would fall in Great Britain. A premium is offered for increased availability. By improved efficiency, the generating companies have increased availability and reduced the cost. The present Government were not responsible for those contracts, but they must surely appreciate the disadvantage suffered by industry in Northern Ireland which makes it even more difficult to attract new manufacturing industry to the Province.

At the present time the problem has been complicated by the need to plan for the EC directive on electricity trading which will become effective in February 1999. That requires 25 per cent. of the output in Northern Ireland to be opened to competition.

Consultants have been engaged to work out a system which will nominally comply with the EC Directive, and by complexity of arithmetic it may be possible to devise a system but administration costs will be high both to the generators and to consumers. Due to high fixed costs payable under the long-term power purchase agreements I do not see how any system can be devised which will produce overall savings. In fact the costs of administration may lead to some increase in prices, rather than a decrease.

It is generally believed that OFREG is now in discussion with the generators to see whether some reduction in availability payments can be negotiated, but this can only go a small way to reduce the present large differential of 43 per cent. Surely this is the time, when Government are working on the peace package, to become involved in discussions with OFREG and the generator and to work out ways in which all or part of the present contracts can be bought out. There is, after all, £40 million available which was ear-marked by the last administration which could be regarded as an appetizer. A genuine reduction in power costs would send out a very good signal to industry if included as part of the peace package and of course for domestic consumers it would be very, very welcome.

I wish to ask the Minister whether there is provision in the order for civilian victims of violence and for police who have suffered violence. The issue was highlighted by Sir Kenneth Bloomfield in his recent report. The provision is urgently needed.

My Lords, I wonder whether it assists the noble Lord, Lord Cooke of Islandreagh, if I correct a minor point? The debate is not time limited. I am not inviting noble Lords who have yet to speak to do so at great length; but it is not a time-limited debate.

My Lords, I thank the Minister for pointing that out. However, 12 minutes was probably reasonable enough given the short time available.

8.12 p.m.

My Lords, I shall not be affected either in length or brevity by the instructions given by the noble Baroness. I thank the Minister for the clear terms in which he presented the order. Perhaps I may say what a pleasure it is in this rather select group of us who deal with Northern Ireland business to follow the noble Lords, Lord Molyneaux and Lord Cooke, who have intimate knowledge and experience of events in Northern Ireland. In particular, the questions on agriculture, which both noble Lords asked, and on power costs, which the noble Lord, Lord Cooke, has pursued tenaciously for some years, deserve serious answers. I hope that they will receive them. Both issues are fundamental to the economy of Northern Ireland.

As the Minister said, this should be, and we all hope is, the last time we deal in this detail with the budget of Northern Ireland. However, it is a particularly important occasion. The order sets the baseline for the first budget of the new dispensation in Northern Ireland, both in the quantum of expenditure and the departmental divisions. If I heard aright, I believe that the noble Lord, Lord Molyneaux, called the executive "exotic". It is dangerous for Members of the House of Lords to call any other institution exotic, but let us accept his description. The new executive in Northern Ireland, wrestling with these problems for themselves as Ministers for the first time—albeit within the constraints of the Treasury—will, I am sure, take our discussions tonight as a baseline from which to make their changes. In that sense, the order is important.

When the new assembly discusses the budget next year, I hope that the occasion will be better attended; I have no doubt that it will be. That is the great justification for moving to devolved powers in Northern Ireland: the issues we are discussing tonight are best discussed closer to the people affected by them. They can make the important political decisions relating to those issues.

I have some specific points about which I wish to ask the Minister. My calculation suggested that the education budget had been increased by 2 per cent. I accept that the mathematics of the Minister and his officials may be better than mine. I believe that he gave a figure of 3 per cent. after certain factors had been taken into account. However, I do not find encouraging an increase of 3 per cent. in the education budget as the baseline for future years. We are all agreed that Northern Ireland has one of the best education systems in the United Kingdom. We have to keep it that way. It needs to be improved upon.

We know that the comprehensive spending review is under way. I sincerely hope that we shall see a more generous increase in the education budget in Northern Ireland. I hope that that will come before too long. It is crucial that as Northern Ireland, we all trust, reverts to the characteristics of a normal civil society the skills conferred by education are the Government's first priority.

I welcome also the fact that more provision has been made for integrated education. As the Minister knows—I have persecuted him and his predecessors on the subject—it is important that in the process of arriving at an accommodation between the two main traditions in Northern Ireland (I trust that we are in the process of doing so) the demands of integrated education which cut across those two traditions are not squeezed out. All the evidence indicates that integrated education makes a significant contribution to people's perceptions of the other community with whom they share Northern Ireland, and is not merely a good way of being educated but makes a contribution which is much needed. The demand by parents and pupils in Northern Ireland still exceeds the supply. I hope that the Government will continue to increase in real terms the budget for integrated education, as they have done this year within an education budget which in real terms has stood still.

The noble Lord, Lord Cooke, spoke interestingly about the economy. There is a danger in taking the current improvement as a permanent condition. We know that the Northern Ireland economy is still disproportionately dependent on government expenditure of one kind or another. We all wish for the Province to have a more robust and less dependent economy. The key is inward investment. I was glad of the tribute made to the noble Baroness, Lady Denton. I am glad to see the Government continuing their efforts to attract inward investment. But inward investment is affected very much by the political atmosphere.

I do not wish to hijack this evening's proceedings by talking at any length about what is happening this week at Drumcree—we should be careful in measuring our words, as the Prime Minister and leaders of the Orange Order were after their meeting today—but I hope that I may be allowed to say this. Every day of bloody-minded intransigence, every burning tyre in Northern Ireland, will quite literally cost us the loss of thousands of visitors. That will cost the Province millions of pounds in investment. It is a matter of the lifeblood of Northern Ireland. The more those people think it is a "Saturday night special", a chance to show off, a chance to indulge themselves, the more I hope they reflect on what it means for the well being and the prosperity of themselves and their families, and the more I hope that it will restrain them at this sensitive time.

Finally, as other noble Lords have done, I refer to the curiously precise figure of £9,277,000 for the new Northern Ireland assembly. I wonder what the last £7,000 is for. Could it be for simultaneous translation from Irish into English in the new Northern Ireland assembly? I am told that that is very much needed because not all the Irish speakers speak Irish that well and therefore, it is extremely important that there should be some measure of translation.

However, let us take that figure of just over £9¼ million. If that is the expenditure on the assembly, where will the other elements of expenditure to enact strands 2 and 3 of the settlement be shown? In which budgetary account shall we see those? No doubt the costs will be smaller than those of the functioning assembly, but I should like to know how they will be budgeted for. Nevertheless, if we can turn the corner of the next week or two and see the assembly working effectively in the autumn, £9 million will be cheap at the price.

8.20 p.m.

My Lords, although the words a few moments ago from the noble Baroness have loosened my inhibitions as regards making a long speech, I do not intend to delay your Lordships long.

As the Minister said, this order is part of a procedure which we may not need to carry through again in this form. That is extremely welcome on two counts. First, it is welcome because we all hope that the new assembly and the agreement generally can overcome its present troubles. I support in general the remarks which the Minister made about the present situation in the Province, and certainly the effects on the economy are deep and profound, as the noble Lord, Lord Holme, has just said.

The second reason for welcoming the end of this procedure lies behind what the Minister said. Another procedure might work better for probing these figures and expenditure. In such an order, the figures are difficult to follow, even for those, like myself, who have done their best to follow them for quite a number of years in different formats. The figures which the Minister gave in his speech are extremely difficult to relate to the figures which appear in the order. That is in no way the fault of the Minister and I do not suggest that for a moment. It is in the nature of the process. However, it caused me to wonder whether the Minister can tell us anything about how in future those figures may be presented for the part which will remain our responsibility in this Westminster Parliament, even if everything goes smoothly as regards evolution.

I was encouraged that in the recent report by the Chancellor of the Exchequer he was carrying forward the work on resource accounting which was being undertaken in the Treasury while I was there, and to which I made my contribution, in order to reach a situation in which the Government can publish and Parliament can consider in a more meaningful manner the way in which expenditures are divided up, set up between different departments and also between capital and current expenditure. Is it the Government's intention, and in particular the intention of the Northern Ireland Office, to publish figures which will help us and in due course the new assembly as well to fit the figures which we are voting through with the total government expenditure under the different headings?

It would be extremely helpful. It would make the sort of decision which we are taking this evening and all the decisions on finance and expenditure much more like the decisions taken by the members of an ordinary board of directors, for example, in being able to see what it is that the company proposes to spend in the different areas and decide whether or not they agree with them.

In his opening remarks, although it does not arise precisely out of the appropriation order, the Minister referred to the transfer of the Port of Belfast to the private sector. It will not surprise anybody to know that I support the principle of privatisation. I know that in England certainly port privatisation has proved extremely effective. The Port of Bristol, near where I live, has proved an outstanding example of the effect of privatisation, although in that case the port was owned previously by the city council.

However, I am aware also of some of the special factors in the particular privatisation of the Port of Belfast, which I visited on previous occasions and learned a bit about during my time in the Northern Ireland Office. The Minister may be able to tell me this evening to which part of the public purse it is expected that the proceeds which will accrue from the sale of the port should be credited. It makes a difference because in future there will be two blocks of expenditure—the block including all the matters which we are discussing this evening being controlled by the new Northern Ireland assembly and the new executive, and Her Majesty's Treasury will be leaning over all as usual. It is important to know which part of the public purse will benefit from the sale of the Port of Belfast.

It was claimed, not unfairly and not necessarily prejudging the questions I have asked, in the recent Command Paper 3978 on economic and fiscal strategy that it was included as part of the benefits to the government as a whole. But it due course it will be important to know whether it is assisting Northern Ireland itself where investment is, as other noble Lords have said, so important. Having said that, and with that one particular example, I support the order.

8.26 p.m.

My Lords, I am grateful for the positive and supportive comments and contributions which have been made throughout the debate. I turn first to the question asked by the noble Lords, Lord Molyneaux and Lord Cope, about the new arrangements which will be put in place for these matters when the Northern Ireland assembly is functioning fully. The Northern Ireland Bill, which is to be brought before the other place before too long, will make provision for the financial arrangements under which the new Northern Ireland assembly will operate. It would be inappropriate for me to go into more detail at this stage but your Lordships will have ample opportunity, when that Bill comes before this House, to consider the details of how that new assembly will operate as regards financial control.

The noble Lords, Lord Molyneaux, Lord Holme and Lord Cooke, asked about the crisis facing the pig industry. I have had more than one meeting with representatives of the industry to discuss the difficulties facing pig producers not only because of the depressed state of sterling, which affects other parts of the United Kingdom and therefore is not just a Northern Irelands issue, but also the particular difficulty after the destruction by fire of a pig meat processing plant in Ballymoney and the effect that that might have on the ability of pig producers to bring forward their animals for processing. That is an immediate difficulty with which my department has been grappling, as has my honourable friend the Minister of State in his responsibilities for the DED and therefore for the future of a possible plant to be constructed, given that the present one has been totally destroyed by fire. That is a short-term difficulty.

The other issues which arose as regards pig production are difficult because the European Union does not make it easy for us, even if we have the money available, to provide the sort of support which we are permitted to provide in other sectors of the agriculture industry.

I should like to write to noble Lords on the point about stalls and tethers because there is a very specific issue involved. The Government's position on animal welfare is a sound one and we do not particularly want to abdicate that position. I appreciate that some of the pig producers may find it difficult to adhere to the new arrangements; but, on the other hand, they have had eight years' notice that the Government intended to introduce them at this time. Therefore, I do not want to give the impression that we will somehow change the policy. But certainly there are some specific points about compliance by other EU countries which I should like to consider.

As regards the point about meat and bonemeal, there is a real difficulty here because, after all, we have been down this path before on the question of the BSE crisis in relation to beef. I do not think that we can go back to a policy—indeed, the noble Lord did not suggest it—where we allow meat and bonemeal to be used as animal feed. However, I appreciate that it makes the playing field less level than it would be in an ideal world. I shall address the matter in letters, if I have not dealt with any other points that have been raised in that respect.

The noble Lord, Lord Molyneaux, also made a number of comments about various DoE matters. I have to tell him that this Government have no plans to split up the DoE. If that is the wish of the Assembly, then that will be a matter for it to decide. However, we have no plans to split up that department. Clearly the Assembly will need to consider the structure of Northern Ireland departments. As I said, that is a matter for the Assembly and not one for this Government.

I should also tell the noble Lord that the difficulties he said had occasionally arisen as regards an imbalance between housing developments and lack of adequate water or sewerage services is something which I hope will not arise again. Certainly, in the broader context, the regional strategic framework will be looking at these issues, although I appreciate that this may be a matter to be resolved in more detail than that approach is susceptible to. Nevertheless, I hope that that is not a difficulty that will arise again and that housing developments will move in line with additional water and sewerage services where these are necessary in any particular area.

As regards the particular situation at Glenavy—an area which the noble Lord knows well—the water service has planned a new treatment works which will have double the design capacity of the current works from a population equivalent loading of 500 persons to a thousand. Site acquisition has held back the scheme, but it is now scheduled for commencement at the end of this year with completion in 1999.

The noble Lord, Lord Molyneaux, also referred to the difficulties as regards toilet facilities at Ballycarrickmaddy Primary School near Lisburn. That is a controlled school and, as such, responsibility for toilet and other provisions for the school is a matter for the South Eastern Education and Library Board in the first instance. However, the need to replace the existing premises is acknowledged. The board has recently commenced the planning of a new school. When planning is sufficiently advanced, the school will be considered for a place in the capital programme in the light of the resources available to the education service at the time. The board provided a mobile toilet block, including a toilet for the disabled, at the school three years ago.

The noble Lord, Lord Cooke, and, I believe, the noble Lord, Lord Holme, were concerned about the general difficulties facing farmers in Northern Ireland and the fall in farming incomes which has taken place over the past year or so. I concede that there has been a fall in farm income. Part of the difficulty has arisen from the strength of sterling over the past two years. However, I have to say that all exporting industries have suffered from the strength of sterling. The difficulty is not unique to agriculture, although I accept the point made by the noble Lord, Lord Cooke; namely, that, given the large amount of beef previously exported from Northern Ireland—a market which we are hoping to regain in the coming period—there has clearly been a particularly adverse impact on Northern Ireland producers who are exporting or who seek to gain or recover export markets in the future.

However, my right honourable friend Dr. Cunningham announced two packages of compensation for agriculture on 22nd December and on 3rd February, which I hope have gone some way towards helping farmers, or some farmers, to cope with the very difficult situation that they are in. As regards the question of the Republic of Ireland and its ability to gain money from the European Union, I should point out that the real difficulty is that we are a net contributor to the Union, while the Republic of Ireland is a net beneficiary. Some of the difficulties stem from our being a net contributor. Therefore, as regards some of the money which might be available through Brussels, a large proportion of money from the Treasury is also required in order to match the European money. That has been a difficulty that we have had to face for some time.

The noble Lord, Lord Cooke, talked about difficulties facing the textile industry. It remains a very important sector in the Northern Ireland economy providing some 25 per cent. of manufacturing employment. Of course, there are intense competitive pressures from the low-cost economies and the recent devaluation of some Asian currencies has added to those pressures. However, investment in industry in Northern Ireland continues. In 1997–98 companies created 900 new jobs. Since March, there has been an investment of £8 million in four projects attracting £1.5 million of IDB support. The latter anticipates further job-creating projects in the sector.

The noble Lord asked about the West Link. Yes, the roads programme provides for the commencement of a first-class and overall scheme in the 1999–2000 financial year, with the main element of the work commencing in the following year. That is the earliest start date following the completion of the statutory processes. I agree with the noble Lord that this particular project would very much help in dealing with the cause of enormous delays for motorists, especially for freight traffic going to Belfast harbour. Indeed, that is an important element as regards the competitive position of the harbour.

The noble Lord, Lord Cooke, also talked at some length about the higher electricity costs facing industry in Northern Ireland and the fact that generator costs are 43 per cent. higher than they are in Great Britain. Government policy is to reduce the cost of electricity in Northern Ireland, both to industry and to the domestic consumer. That will be achieved through the introduction of greater competition as regards the energy market. The regulator is already in discussions with Northern Ireland Electricity and the generators on possible ways of reducing generation costs. A progress report by the regulator in February 1998 confirmed that voluntary agreements had been reached on revisions of the power station west and Coolkeeragh contracts and held out the prospect that proposals being developed by the generators in respect of the Ballylumford and Kilroot contracts could also deliver the required benefits. A further progress report is expected in the autumn. If satisfactory voluntary agreements on changes to the contract cannot be reached, the regulator may decide to refer the matter to the MMC.

The noble Lord, Lord Cooke, also asked about payments to victims. There is provision for payments to victims as announced by the Government, but that is not to be contained in these estimates. That will be contained in estimates, which will be brought forward next spring in the supplementary estimates. Therefore, those figures as regards provision for victims will be seen at that time.

The noble Lord, Lord Holme, asked about the increase in education expenditure. The advice I have received shows that, on the basis of like for like, public expenditure on education will be £52 million higher in 1998–99 than in 1997–98, excluding the EU peace-package provision. That represents a 4.2 per cent. increase over the provision for 1997–98 inherited from the previous administration. Therefore, it is better than the figure that I quoted; in other words, if one compares like with like, the figure comes out better. I give way to the noble Lord.

My Lords, I am much obliged. I must say that that is a most gratifying rate of progress. I should like to congratulate the Minister on having gone from 3 per cent. to 4 per cent. in the space of one short debate. Indeed, at this rate, we will soon have proper funding for education in Northern Ireland.

My Lords, I take the noble Lord's point. However, we do listen to what he says and act accordingly.

The noble Lord also asked about integrated education. He will know that the Government are committed to extending integrated education in Northern Ireland, wherever local circumstances and local demand justify it. The figure of £41 million on maintained integrated schools represents an increase of £9 million on the previous year. I believe that to be a fairly hefty increase. I appreciate that the total sector is still small, but we are certainly committed to integrated education wherever local support justifies it.

The noble Lord, Lord Holme, asked about other costs, apart from Assembly costs, as regards giving effect to the agreement. These expenditures will be brought forward in the spring supplementary estimates against the other departments. I believe we shall have a further chance to debate that matter.

The noble Lord, Lord Cope, asked a question which, as I understand it, concerns resource accounting. I hope that I am right about that. The position is the following. The introduction of resource accounting essentially will bring the Civil Service cash-based finance systems into line with practice in the commercial world. I think the noble Lord was keen on that. It will introduce concepts such as capital depreciation and capital charging into the public sector financial area and as such provide more meaningful information on which to base judgments and take decisions. Challenging targets and clear objectives will be set against which resources will be allocated and utilisation monitored. These should in turn provide better information on which to consider and approve expenditure when debating and considering appropriation matters. I hope from those brief comments the noble Lord will feel that we are moving down the path that he is keen on—I know he has mentioned it in previous debates—and we shall have a system which will be more in line with practice in the commercial world. It may be easier to follow for those people used to the practices in the commercial world.

The noble Lord also asked about the future of Belfast Harbour. The Belfast Harbour commissioners made a suggestion to me about the future of Belfast Harbour. I have asked them to work out the proposals in some detail. These would involve a private/public partnership. When the proposals come back from the Belfast Harbour commissioners they will be subject to consultation before they come to the Government for approval. There is some way to go yet, but I am glad that the noble Lord thinks this is a useful way forward.

The noble Lord also asked about the Chancellor of the Exchequer 's package. As I understand it, that will represent expenditure in areas which in future will come under the assembly. It will concern expenditure in various of the six departments which will come under the new assembly and under the new ministers to be appointed in due course. I think I have dealt with all of the points that have been raised. I am grateful for the helpful and supportive comments that have been made during the debate.

On Question, Motion agreed to.