Northern Ireland (Loans) Bill

– in the House of Commons at 12:00 am on 28th November 1975.

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Order for Second Reading read.

11.55 a.m.

Photo of Mr Roland Moyle Mr Roland Moyle , Lewisham East

I beg to move, That the Bill be now read a Second time.

I shall first outline the technical need for the Bill, but I recognise that right hon. and hon. Members may wish to raise questions on it, in which event I shall be glad to have the opportunity to speak again in reply.

The Bill is essentially technical and provides merely a piece of financial machinery. It does not itself authorise any expenditure; nor does it affect the policies behind the programmes which it will help to finance. It merely ensures that, when certain programmes of capital expenditure have been approved by the normal procedures, the money for them can be made available.

There are a Northern Ireland Consolidated Fund and Northern Ireland borrowing powers constitutionally separate from their counterparts in Great Britain, although at present, of course, both those pieces of financial machinery are under the control of my right hon. Friend the Secretary of State for Northern Ireland.

All expenditure on transferred matters in Northern Ireland is financed out of the Northern Ireland Consolidated Fund. This obtains most of its funds from revenues. The Northern Ireland Consolidated Fund also obtains smaller sums by borrowing from various sources, of which the National Loans Fund is by far the most important. The Bill is concerned solely with loans to the Northern Ireland Consolidated Fund from the National Loans Fund.

Since 1970 such loans have been made under the Finance Act 1970, as amended by the Northern Ireland (Financial Provisions) Act 1972. The maximum gross total which can be lent to Northern Ireland under this legislation is £450 million, and it is essential to make provision for further loans before this limit is reached, which will probably happen at about the end of the current financial year.

Loans from the National Loans Fund are by far the most important source of long-term borrowing by the Department of Finance for Northern Ireland. But the Department raises money also in other ways—for instance, by the issue of Ulster savings certificates and development bonds and from the Trustee Savings Bank—and the more local savings that can be attracted the less will be the call upon the National Loans Fund. Hon. Members should note also that Northern Ireland people invest in United Kingdom national savings, such as the National Savings Bank and premium bonds, and in British Government stock. Northern Ireland therefore feeds the National Loans Fund as well as drawing from it to some extent.

The House will wish to be informed of the use made of the money provided under the Bill. Capital expenditure for Northern Ireland, like that of Westminster Departments, is financed out of current revenue, not by borrowing. But the Department of Finance borrows for the purpose of lending to public sector bodies outside central Government for approved capital expenditure. A small proportion of this lending is to the Northern Ireland Finance Corporation, which the House will be able to discuss when the forthcoming Order on the NIFC is debated, and a little goes to district councils. The lion's share, however, goes to the Northern Ireland Housing Executive and the Northern Ireland electricity service.

The Housing Executive is the public sector housing agency for the Province and currently provides about 165,000 dwellings. Its annual borrowing needs currently total some £80 million at today's prices. Hon. Members will, I hope, shortly have an opportunity to discuss Northern Ireland's housing problems in some depth in the Northern Ireland Committee. The capital needs of the electricity service are also substantial. Within the provision for Northern Ireland in the White Paper on Public Expenditure to 1978–79 there was provision for about £200 million to be spent on the electricity service over the five-year period at 1974 survey prices. Most of the sums borrowed under the Bill will be loaned on these two bodies.

The Bill has three clauses, not including the Short Title. Clause 1 sets a new limit of £800 million on the total sums outstanding on loans from the National Loans Fund to the Northern Ireland Consolidated Fund, including those made under all previous enactments. These sums already total £525 million, and it is estimated that the limit of £800 million would be reached in about two years.

I stress that we are not actually spending money by this Bill but are merely providing the financial machinery for the total to be reached, if necessary. The Bill provides that the limit can be raised once by Order, subject to an affirmative resolution of this House, to not more than £1,000 million. If that happened, there would be another debate. This should prove sufficient for a further 18 months, so that the loans provided for in the Bill should meet Northern Ireland's requirements for about three and a half years from now, after which new legislation will be required.

The Secretary of State for Northern Ireland will make the loans with the approval of the Treasury. This is a departure from previous legislation, which was enacted before there was a Secretary of State for Northern Ireland. It is general practice for Ministers to act as lenders to nationalised industries and other public bodies operating in the areas of government for which they are responsible. It is in line with the responsibilities of the Secretary of State that he should in future act as lender to the Northern Ireland Consolidated Fund.

The loans will be made for the purposes of expenditure "of a capital nature". The Secretary of State will define what this phrase is to mean. In practice, it will no doubt continue to be restricted to lending to the various bodies I have already mentioned.

Clause 2 provides for loans made to the Northern Ireland Consolidated Fund under previous legislation to be repaid to the Secretary of State, who will in turn pay what he receives into the National Loans Fund. This will ensure that payments of interest and principal on loans made under the old and the new legislation are all paid to the same account, making for administrative simplicity.

Clause 3 requires accounts of the sums received and disposed of under the Bill to be kept by the Secretary of State, examined by the Comptroller and Auditor General and laid before Parliament. This is the usual procedure in respect of lending by Ministers out of money issued to them by the Treasury from the National Loads Fund.

This is a non-controversial Bill, but it is part of the machinery through which capital works of real importance to Northern Ireland will be financed. I commend it to the House.

12.3 p.m.

Photo of Mr David Howell Mr David Howell , Guildford

We are grateful to the Minister for setting out the position with regard to the Bill. Immense sums of money are involved and it is right that, at a time when extreme stringency is needed in public expenditure and when the national kitty is virtually empty, we should look very carefully at what is involved.

The Explanatory and Financial Memorandum tells us that the loans to be provided under the Bill are transfers within the public sector and do not constitute public expenditure. That is literally true, but it is a misleading statement. The decisions which give rise to the need for public expenditure to be carried out are made in another context on another occasion, but we have here a very important part of the process by which resources are pumped through and dispensed in accordance with the policy. We have to scrutinise this process very carefully. As with all money figures in the public sector, this has been zooming up over the years.

We are superimposing this legislation on the provisions included in Clause 1 of the Northern Ireland (Financial Provisions) Act, which raised the total amount which could be outstanding from the National Loans Fund to the Consolidated Fund from £200 million to £350 million. Further Orders raised it to £450 million and £500 million, and this Bill raises it to £800 million with provision for an increase to £1,000 million by Order. These figures tell the same miserable story that is told in every other area of public expenditure and finance.

May I ask the Minister to expand a little more on the ways in which the loans dispensed from the Consolidated Fund are being used? He mentioned the Housing Executive and said that these matters would be debated in Committee, but can he tell us what progress is being made in the Housing Executive? In the past it has produced some disappointing results in relation to its targets for the replacement of the appallingly inadequate housing stock in Northern Ireland. It has been falling well short of the ambitious target of 17,000 new houses a year set in the 1970–75 development plan. Has there been any improvement now that it can borrow all this money?

The Bill also involves the Northern Ireland Finance Corporation. For reasons which seem to me quite irrelevant, it is to have its name and form changed to fit in with the Government's plans in the rest of the United Kingdom. Will there be any change in its practical functions, or will it be merely a question of printing a lot of new letterheads? Loans of public money on a substantial scale are involved in this corporation.

Are there any loans outstanding to Harland and Wolff through this mechanism? If so, can the Minister give us more information? The outlook for this shipyard is not encouraging and it would be absurd to pretend otherwise. It has been a continual drain on public funds by both subsidies and loans for a long time, and with world shipbuilding orders well down it is in an immensely difficult position.

I have no doubt that hon. Members from Northern Ireland will wish to raise more specific points arising out of the Bill, but I should like reassurance that the immense sums being channelled through the Bill are bringing as many benefits as we could realistically expect in the present difficult situation in Northern Ireland.

In the past it was our proud claim that, despite all the horror in Northern Ireland, its economy had been immensely resilient. I had some connection with these things a few years ago and we were very proud then both of the relatively small impact which terrorism had made on the loss of jobs and of the development of industrial training. Some of the new techniques being used in Northern Ireland caused interest and much admiration in other parts of the world. We were proud in the time I was in Northern Ireland that the employment position improved and that the Government were able to help in a number of ways.

In the present situation unemployment in Northern Ireland has greatly increased, as it has done in the rest of the United Kingdom. Will the Minister tell us whether the growth of unemployment in Northern Ireland has been greater or less than in the rest of the United Kingdom? Is the regional disparity greater or smaller than it was last year? I always hoped that we could reduce the disparity, and I should be interested to know whether that reduction has been maintained.

The total Northern Ireland expenditure for the current year is estimated as £369 million under the Class XV Estimates. Perhaps the Minister will correct me or give any further information he has on that sum. This is the amount which is handed over in the form of a block grant plus a number of additional grants-in-aid for specific purposes.

I hardly dare mention devolution, so frequently is it on everyone's lips at the moment, but it is interesting that we are dealing here with an administration which still remains devolved. The devolved political government is in abeyance for reasons which we all know, but these loans and expenditures are being administered by the structure which is still devolved. Having worked with that structure, I have no hesitation in saying that it has many excellent qualities and I have the highest admiration for the Northern Ireland civil servants. The devolved administration had many virtues in terms of flexibility and co-ordination of effort. I realise that by saying this I am turning a blind eye to the more decisive and important point of devolution of political control. The Belfast administration and the Northern Ireland Civil Service have worked well. I hope that the Minister will tell us that they are still working well and efficiently in the present appallingly difficult circumstances.

12.14 p.m.

Photo of Mr Enoch Powell Mr Enoch Powell , South Down

The Minister of State is right to remind the House that this is an enabling, not to say a limiting, Bill. In passing it the House is making no decisions on actual lending or borrowing, or on expenditure. There may be in other respects policy decisions which it implies and to which the hon. Member for Guild-ford (Mr. Howell) alluded; but I hope to deal with that aspect later.

The successive predecessors of this Bill present a curious story. If I have the story at all correct and complete, it is, taking it from 1950, roughly this: after 15 years the limit was raised by £55 million; after another two years by £60 million; after another two years by £50 million; after another year, in 1970, by £150 million; after another two years by £350 million; and now it has been raised by £450 million. I am of course including in these calculations the amount which can be added to the limit by order of the Secretary of State under the successive Bills. That is a melancholy and grisly reminder, though somewhat irregular, of the progress of the apparently irresistible onward march of the giant Inflation, and the accelerated march of that giant during these years.

If any hon. Member should be so injudicious as to suggest that the large increase in the limit made by this Bill represents an undue weight of capital expenditure in Northern Ireland—I am hopeful from the emptiness of the Benches opposite that there may be no such injudicious observation—the Member who made it would be quite mistaken. I note that the last increase of £350 million, exhausted or nearly exhausted in two years, is not higher than the rate of capital expenditure for the previous year or two. I also note from the Minister of State's remarks that the increase of £450 million by this Bill will take about three years to catch up with, so that an average rate of about £150 million a year, in money terms, flowing out of the Fund has been the experience in the last few years and is expected to be the experience in the next few. Let no one therefore assert that Northern Ireland is absorbing an undue, still less an unduly increasing, proportion of the borrowing and the public capital expenditure of the United Kingdom.

As the Minister of State pointed out, we have opportunities—they may be more or less adequate—to debate with more propriety than we can on this Bill the areas of policy which correspond to the major capital outlays that will be eventually made possible as a result of this Bill. My hon. Friends from Northern Ireland and I mean to make full use of those opportunities, either in Committee or on the Floor of the House. On this occasion, therefore, I do not need to deal with areas such as housing. Instead, I come to the Bill itself and to the real policy decision which, in a sense, it implies.

I want to put first a detailed question to the Minister which may save time and avoid putting down an amendment in Committee. I refer to Clause 2(2)(b), which gives the Secretary of State, with Treasury approval, the power to alter the terms on which existing loans are to be repaid and interest on them is to be paid. On the face of it, this would appear to be a very far-reaching and arbitrary power. I realise that in the case of almost all these loans they are already in terms where repayment and interest are dependent on Treasury direction—are already variable, indirectly or directly, by the Treasury. Nevertheless, I should like the Minister to make clear whether any other terms than those already so variable are rendered variable by Clause 2, and, if there are any, what is the justification for so surprising a provision and what limits are to be placed on it.

Turning back to Clause 1, it is a rather strange experience—almost an amusing one—to follow the nomenclature through the successive Bills which have preceded this one. In subsection (1) it is quite clear that the advances are being made to the Consolidated Fund of Northern Ireland. But when we look at subsection (3) we find traces of considerable variation. For example, in the 1950 Act the advance in the terms of the Act was to be made to the Exchequer of Northern Ireland, but the rubric in the margin referred to Loans to the Government of Northern Ireland. and that rubric has been followed by the explanatory words in brackets. Similarly, in paragraph (b), the 1970 Finance Act referred to loans to the Exchequer, but that is explanatorily described in the words within brackets as being loans to the Consolidated Fund of Northern Ireland". The Minister well knows that there is a real, not merely a technical, difference between Government, Exchequer and Consolidated Fund. Indeed quite a bit of the constitutional history, not to say the financial history, of Parliament is embalmed in the difference between the meaning of those separate expressions. I should be grateful if the Minister could shed a little more light than he did in his introductory remarks on these differences and the consequential variations in nomenclature.

The Minister, in opening the debate, did make one clarifying observation, when he said that the Consolidated Fund of Northern Ireland is the fund from which is met expenditure "on transferred matters." I take it that that means matters transferred under the old Stormont Constitution; but I should be glad if it could be explained whether it now means matters which would be transferred under the 1973 Act if the 1973 Act were still in operation—which, mercifully, that Heath-Robinson Act is not, and never will be again. So the Consolidated Fund of Northern Ireland has a certain historical existence. As the hon. Member for Guildford (Mr. Howell) pointed out, that historical existence is for the time being maintained administratively, and in a sense the one policy decision that the House is taking by the Bill is to maintain that existence, albeit limiting it to administration by the terms of Clause 1(1).

I now come to the one political observation, if I may be so bold, that I wish to offer on the occasion of the Bill. If there is one financial matter on which, so far as I know, all sections of political opinion in Northern Ireland are united, it is that they are not prepared to have public finance in Northern Ireland separated from the public finance of the United Kingdom generally. Putting the matter more precisely, they are not prepared to be told that because this House and the United Kingdom decide, for instance, to advance a sum of money to Harland and Wolff, the financial consequences of that decision are specifically to be borne by other forms of expenditure in Northern Ireland.

On the contrary, we say that the industry of Northern Ireland is an integral part of the industry of the United Kingdom, as Northern Ireland itself, in the terms of the Government's first Position Paper supplied to the Constitutional Convention last year, is an integral part of the United Kingdom. We maintain that there is no more reason for a variation in expenditure on one head in Northern Ireland to have repercussions upon expenditure under the other heads in Northern Ireland than for expenditure in the North-East or in the South-West of England to have such local and specific repercussion.

We are wholly determined—whatever may be the general policy of the Government, and whether we agree with it or not—that the policy governing the industry of Northern Ireland shall be an integral part of the policy governing the industry of the United Kingdom. Putting that in financial terms, it is not merely a party determination but a general one that, so far as I am aware, all political sections in Northern Ireland are not prepared to be turned off with a block grant and told that that is what we are getting and that if this House, in its wisdom, or any other devolved administration, thinks fit to increase or emphasise expenditure on one head or another, room for that has to be found from somewhere else in Northern Ireland expenditure, as such. "Integral" means what it says, in financial and in all other respects.

Let me sum up the situation in this way: one accepts that the Consolidated Fund of Northern Ireland is a historical survival, but let it be no more than a historical survival. Let it not be the means or the symbol of a financial separation between Northern Ireland and the rest of the United Kingdom. In particular, let it not be the means of treating Northern Ireland differently from any other part of the United Kingdom by making Northern Ireland absorb increases of expenditure under one head which are required as a result of its circumstances or of the policy of Her Majesty's Government at the expense of other forms of public outgoings in Northern Ireland.

This Bill is no occasion, nor, perhaps, is such a packed House on a Friday the fit audience, for any lengthy constitutional reflections. Still, as the hon. Member for Guildford remarked, devolution is in the air: I suspect that it is a word that we shall find difficult to keep off our lips in many a surprising context. I found it somewhat ironical, in the light of the Bill, to read paragraph 111—which I shall not exhaustively quote—of the devolution White Paper issued yesterday, which proposes to set up a Consolidated Fund Bill, or the equivalent of it, in Scotland, with a devolved administration and Assembly. That same paragraph includes, however, some important words, that are germane to this Bill. They are as follows: However, the Government must control both the total amount of long-term borrowing and within this the total of borrowing from official sources by local authorities and public corporations. These controls are essential for the management of the United Kingdom economy. In that sentence lies the unsolved, and, maybe we shall find, insoluble incompatibility between a unitary State—the United Kingdom—and a devolved administration responsible, beyond the limits of what we know as local government, to a locally-elected assembly.

Of course, it is an unreal distinction. The distinction between controlling the total of borrowing and controlling the items of borrowing is one the unreality of which was being explored by our predecessors in the House in the 14th century. It is an unreality which made the needs of the Crown and the borrowings of the Crown the foundations of the powers of the House and of our constitutional liberties in this country.

Immediately the theory is put into practice one finds that in controlling the total—in controlling "the total of borrowing from official sources by local authorities and public corporations"—one inevitably takes policy decisions about the size of this or that, about more or less in one quarter and more or less in another. If the decision upon the more or less, the this or that, is to be transferred elsewhere, it will be discovered that the control over the total will become either intolerably irksome or hopelessly impracticable.

We in Northern Ireland know very well that although part of the borrowing of Her Majesty's Government is for public purposes in Northern Ireland—that is what the Bill provides the machinery for—we, together with our fellow citizens in the rest of the kingdom, take the consequences of the administration of the public finances of the United Kingdom. There is no Northern Ireland inflation: there is only a United Kingdom inflation. There is no Northern Ireland recession: there is only a United Kingdom recession. And so one could go on.

To be an integral part of the United Kingdom is to be affected equally with all other parts by the financial decisions which are taken. The sums which will be borrowed in order to make possible the advances eventually occurring under the Bill are part of the celebrated "net borrowing requirement" of the United Kingdom. We make no complaint of that; for, although inadequate in number, the parliamentary representatives of Northern Ireland share the responsibility for, and take part in the criticism of, the decisions which have led to that result. So I refer for the last time to my text, the Consolidated Fund of Northern Ireland. Let no one suppose that any part of the United Kingdom can be insulated from the consequences of the total management of the finance of the United Kingdom, and let no one be in any doubt as to the determination of Northern Ireland to share to the full, for ill or good, the fortunes of the United Kingdom.

12.33 p.m.

Photo of Mr Roland Moyle Mr Roland Moyle , Lewisham East

I thank the House for giving me permission to speak a second time in the debate, which, although the House is sparsely attended, has given rise to a number of interesting points on which I can comment.

I should perhaps say first that the borrowing provisions of the Bill are related to a time factor. As time extends, so also does the necessity for borrowing money to meet public expenditure purposes in Northern Ireland.

Although the right hon. Member for Down, South (Mr. Powell) set out a dismal history of the fall in the value of money, and although he was to some extent supported by the hon. Member for Guildford (Mr. Howell), I assure the House that there is stringent scrutiny of all matters relating to public expenditure in Northern Ireland. That may have escaped the population there to date, because much of the present expenditure is expenditure for which approval was granted in the earlier years of his decade. Many of the public expenditure reductions, certainly reductions in the rate of growth, will not become apparent on the ground for some years. In the meantime, it may well be that people in Northern Ireland are not aware of the rigorous control of public expenditure that is taking place.

I regret that we are not in a position to give the hon. Member for Guildford some of the statistics for which he asked concerning the Housing Executive. However, if it will help the debate on housing that I hope we shall have in the not-too-distant future, I shall write to him giving those statistics. We agree with the hon. Gentleman that housing is the prime social problem in Northern Ireland. In spite of public expenditure restrictions, we are determined to make the maximum possible contribution to solving the problem in the shortest period, but that means building up an industry capable of dealing with it. It is not simply a matter of providing money and saying "Go ahead". There is a great deal of other planning to be done as well.

The Northern Ireland Finance Corporation will have its name changed to the Northern Ireland Development Agency and its functions will change, bringing it into line with similar Agencies in Scotland and Wales. My right hon. Friend the Member for Salford, West (Mr. Orme) will shortly introduce the necessary Order. We believe that the Agency will be valuable in developing industry in Northern Ireland, which is another problem that we must try to solve.

Historically, the economy of Northern Ireland has been a little weaker than that of the United Kingdom, in spite of its close links with industry in Great Britain, both financially and organisationally, and unemployment has traditionally been higher in Northern Ireland. The hon. Member for Guildford asked what the current position was. Unemployment is still noticeably higher in Northern Ireland than in the rest of the United Kingdom.

I do not expect the inhabitants of Northern Ireland to be wildly excited about what I say next, but the fact is that unemployment there has been rising a little more slowly over the recent period of recession than in the rest of the United Kingdom. I presume that most people in Northern Ireland are more conscious of the fact that unemployment has risen than of anything else, but we have been taking Government action to improve the position and the Northern Ireland economy is showing slight signs of being a little more resilient compared with the rest of the United Kingdom than it has been in the past. Although by now the unemployment level in Northern Ireland has risen by the same percentage as unemployment in Great Britain, it has taken longer to do so.

The hon. Gentleman also asked about Harland and Wolff. None of the money which it is proposed should be borrowed under the Bill is destined for Harland and Wolff. The Northern Ireland Finance Corporation has not provided money for Harland and Wolff. The £60 million provided for the firm has come from a Vote under the heading of the Department of Commerce. To this extent Harland and Wolff is outside the scope of the Bill.

Photo of Mr Enoch Powell Mr Enoch Powell , South Down

In other words, that means that this is not treated for accounting purposes as a capital outlay?

Photo of Mr Roland Moyle Mr Roland Moyle , Lewisham East

I would need notice of that question because it strikes me as being rather technical. It is not part of the borrowing machinery set out in the Bill. The source is totally different. It is a Vote of the Department of Commerce. The hon. Member for Guildford is right to say—it is no secret—that Harland and Wolff is in the same sort of difficulty as other shipyards throughout the world following the huge increases in the price of crude oil which took place from 1973 onwards.

The right hon. Member for Down, South—

Photo of Mr David Howell Mr David Howell , Guildford

Since the Minister appears to be leaving my questions may I add one more, of a slightly technical nature? It may be that the reply will wing its way to him by some means before he sits down. In Clause 1(3)(b) of the Bill the various authorities are set out by which loans up to a limit of £450 million on the total amount advanced have been approved by this House. In the Explanatory and Financial Memorandum we learn that £525 million of these loans was outstanding as at 11th November 1975. Can the hon. Gentleman explain what authority covers the gap between £450 million and £525 million?

Photo of Mr Roland Moyle Mr Roland Moyle , Lewisham East

We will do our best to answer that point.

Before leaving the subject of Harland and Wolff I should say that, although we increased the amount of money available, some of the increased money was not extra to Northern Ireland expenditure. It was found by reducing expenditure on other aspects of Northern Ireland affairs. A great number of the Votes have to make some contribution to increased expenditure in Harland and Wolff.

I turn now to the points raised by the right hon. Member for Down, South. I would dearly love to follow him into his interesting and philosophical considerations of the problems of devolution. It would be unwise for me to do so. I have no doubt that the passages in his speech which alluded to this subject will be carefully considered by my right hon. Friend and others with responsibility in this area. The right hon. Gentleman's words will be carefully weighed in the eventual outcome of the discussions we are to have on this subject over the ensuing months. However, I had better restrict myself to the Bill.

There was one point which we might try to clear up. It concerns the impression we are under that the financing of Northern Ireland under any possible devolved Government would be on the basis of a block grant. That was what the report from the Convention proposed. It seemed to me, trying to follow the right hon. Gentleman—maybe I have got him wrong—that there was a slightly different gloss on this approach by the right hon. Gentleman. If that is so, he must reconcile his views with those of his right hon. and hon. Friends. If that is not the case, this is an interesting aspect of the problem that has not been noticed before.

On the assumption that a block grant is the favourite way of financing a devolved Government in Northern Ireland—I appreciate that this is not entirely relevant—there are one or two points I should make. First, the Government do not believe that any formula can be devised for calculating the size of a block grant without the need for some sort of political judgment. It is not possible to delegate to a nominated Exchequer Board, for example, responsibility for the distribution of resources among parts of the United Kingdom. Any Government at Westminster must remain responsible for resources allocation. I do not believe that the House of Commons would abdicate its responsibilities for voting money.

Second, the block grant is certainly intended to provide room for its recipients to decide their priorities without the need for constant Treasury supervision. It does, however, impose a constraint upon the recipients. A Northern Ireland administration financed by a block grant would have to live within that grant. This would not be a soft option. It could not look to the United Kingdom Government or to this House for further funds for new and additional items of expenditure in the course of the period for which the block grant was allocated, although it might be possible for inescapable cost increases to be offset. A block grant might be right. It might be a healthy discipline for Northern Ireland. It certainly would not be a soft option. If a Northern Ireland administration wanted an assurance that money would be provided for all its projects, whether or not they could be covered by a predetermined sum, the corollary would be detailed Treasury scrutiny of the expenditure.

I would not want to give the House the impression that the Government have taken a firm view on that or any other aspect of devolution at this stage. We will certainly study what has been said and hope that in turn the right hon. Gentleman will study what I have said.

On the subject of the control of Northern Ireland finances, we note what the right hon. Member says about separation from the United Kingdom. All I can say at this stage is that we are following the general tradition of Northern Ireland financing machinery as it has existed—with some variations, I concede—since the Government of Northern Ireland Act 1922 as subsequently modified.

The right hon. Gentleman was worried about some of the confused state of the nomenclature employed in the Bill. The relevant sources are Section 13(1) of the Northern Ireland Constitution Act 1973, since when there has not been a Northern Ireland Exchequer separate from the Consolidated Fund, just as there has not been such a separation in Westminster since the National Loans Act 1968. Even in the past, what the real difference was between the Northern Ireland Exchequer and the Northern Ireland Consolidated Loans Fund was a matter for some speculation. In any case, that has now gone.

The right hon. Gentleman drew attention to the side headings of previous legislation in which the provision was described as Loans to the Government of Northern Ireland. That was a shorthand and commonsense way of referring to the body of the section involved. Even the wording of the section referred not to the Government but to the funds under the Government's control. There is no need now to refer to the Northern Ireland Government or to the Northern Ireland Executive, but simply the need to refer to the Consolidated Fund out of which, by Northern Ireland statutes, loans can be made. I hope that that explanation combined with my opening speech will at least clear up the question of nomenclature and make life easier for some people.

I was asked about giving an assurance concerning Clause 2(2)(b). I can give that assurance in the terms in which the right hon. Gentleman sought it. The Treasury, and now the Secretary of State, has always had power to vary the terms of loans to be repaid to what will now be the Northern Ireland Consolidated Fund, but only by agreement with the person repaying the loan. Within those terms there can be a variation. There is no increase in variation over what has existed previously. It will be a matter for agreement between the Secretary of State and the person repaying the loan.

I have covered all the points that have been raised in the debate to the extent that I am in a position to cover them, and I commend the Bill to the House for a Second Reading.

Photo of Mr Roland Moyle Mr Roland Moyle , Lewisham East

I apologise to the hon. Gentleman. The piece of paper arrived while I was speaking. It says that the figure of £525 million refers to the total outstanding and that the sum of £450 million refers to the gross sum advanced under the 1970 Finance Act. That does not advance the matter a great deal. I think that I had better write to the hon. Gentleman and see whether I can clarify the matter in that way.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Miss Margaret Jackson.]

Committee upon Monday next.