Northern Ireland (Appropriation)

Part of the debate – in the House of Commons at 12:00 am on 23rd July 1979.

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Photo of Mr Brynmor John Mr Brynmor John , Pontypridd 12:00 am, 23rd July 1979

I understand what the hon. Gentleman says. It is the justification in the Budget for the removal of the selective employment premium. I believe that SEP has been a significant help at the margins, especially for small and medium-sized industry. The job loss, therefore, may be significant. I am merely asking the Government, if they have made the calculation, what job loss will occur and what is their calculation of the employment effect of removing this assistance.

I was dealing with the question of the blacker than black areas, such as the constituency of my hon. Friend the Member for Belfast, West (Mr. Fitt), in which the rate of unemployment is over 20 per cent. I plead with the Government, in future dealings, to show more patience, when talking about the viability of firms, than was shown towards Antrim Crystal recently.

I was in Northern Ireland when the chairman of Antrim Crystal made his broadcast. He said that because of the time needed to train glass blowers—which I understand is seven years, and this assistance was being chopped off after three years—the time for viability had not even been reached, so there was no sensible prospect of its coming towards viability. If that is so, the Government have been hasty. What is even worse, they have ignored the social and economic costs and the costs on public expenditure of creating unemployment in an area with an already very high level.

The Secretary of State for Industry said that his chief aim in the amendments to regional aid that he was making was to target the available aid upon the worst of the areas. If he is right and he can do that—I do not believe that he can—I plead with Northern Ireland Ministers to target their assistance upon the blackest spots, which have unemployment levels of 20 per cent. and 25 per cent., so that we can tackle the problems where they arise. Northern Ireland Ministers will know, as I do, the relative immobility of labour in Northern Ireland. People do not travel very far to work, for many understandable reasons.

It is in this context that the cut of more than 600 in the number to be industrially retrained is to be viewed. If Northern Ireland is to widen its economic base, it must have a wider capacity to offer new skills and opportunities. The public expenditure cuts that have been announced, together with the cash limits, at whose extent we can only guess, will lessen the chances of Northern Ireland being able to provide for the future a range of skills amongst its work force which are attractive to employers.

I deal next with the existing problem, which is intensifying, has intensified and will intensify daily. I refer, of course, to the oil crisis. This has had a very serious effect on Northern Ireland, because the price of oil dictates the cost of electricity generation. That is to be seen in the appropriations and the reference to the short-term aid given to the electricity industry. For all that I know, the Government may be contemplating further short-term aid of that kind.

The high and increasing cost of oil increases the cost of industrial manufacture, and that is why short-term aid is being given by the Government to try to redress the manufacturing disadvantage to Northern Ireland industry resulting from the high cost of power. Nevertheless, I believe that Northern Ireland industry must be decreasingly competitive compared with other parts of the country.

What is often overlooked, and ought not to be, is that in addition to the cost of manufacture of products the high cost of power makes the cost of living greater in Northern Ireland than in other parts of the country. It makes it an expensive place in which to live. Although family incomes are well below the United Kingdom average, in Northern Ireland family expenditure is more than 2 per cent. higher.

Since everyone agrees that the oil crisis is neither a short-term nor a minor one, we have to take a long-term view. Two major solutions have been put forward. The first is the connection of Northern Ireland to the gas grid. In my discussions with employers and trade union representatives in Northern Ireland, however, I was not convinced that that would be of very great benefit to manufacturing capacity, because manufacturing industry in Northern Ireland is geared heavily to the use of electricity.

Nor do I believe that the introduction of another form of energy would help to make electricity any cheaper. I notice from a long answer, together with an explanatory document, which is in the Library, that the Government have rejected the solution, not only because it would involve those disadvantages, or lack of advantages, but because it would cost £100 million. Although the Government have a better opportunity than I to judge, I would not dissent from their judgment.

Both unions and industrialists have urged the connection of Northern Ireland to the British electricity grid, where they see the possibility of cheaper and more efficient use of electricity, but no one should be in any doubt that that would have employment implications for Northern Ireland. The electricity service currently employs 6,500 men in Northern Ireland, many of them on the generating side.

When the grid has surplus power, the habit of the CEGB is to knock out first those stations with the highest cost of generation. My conversations lead me to believe that Northern Ireland has the highest costs of generation, so Northern Ireland would be knocked out first, and perhaps closed down if there were a permanent surplus.

There is not a shortage of generating capacity in Northern Ireland. When Kilroot comes on stream in the late summer of 1980 there will be a surplus of energy generated within Northern Ireland, which in happier times could be transferred to the South—which would be very helpful.

But the vital thing, and what we must identify, is not the method of generating but the fuel that has been used to fire the power stations that generate the electricity. The choice of oil, which, after Kilroot, will form 90 per cent. of the firing for electricity generation, has left Northern Ireland extremely exposed and dependent not only upon an expensive and increasingly expensive method but on a fuel in which we shall continue to have to economise.

Coal was regarded for a long time as old-fashioned and uncompetitive. In its conventional wisdom, the CEGB has for long waged what can only be called a vendetta against coal, but the conventional wisdom of the electricity industry and its preference for coal and coal alone has been shown to be mistaken. The rising price of oil and the need to conserve supplies dictate to the electricity industry in Northern Ireland and to the Northern Ireland Office—I know that Ministers are considering this—the conversion of some oil-fired stations to dual-firing capacity with oil and coal, so that we may enjoy the advantages of coal. Certainly in future it will have the advantages of greater viability and will not leave Northern Ireland a hostage to the oil crises of the future.

I am sure that the coal industry can and will assist in this work. We should aim for dual-fired stations accounting for about 50 per cent. of total capacity instead of the present 10 per cent. That may be costly, but it is no more costly than the price that we would have to pay by leaving Northern Ireland exposed to one fuel, the world price of which is increasing.

By spending cuts—both those which have been announced and those which are lurking for the autumn—the Government have thrown a shadow over the Northern Ireland economy. The cuts have weakened economic life and jeopardised employment. The Government hope that reductions in employment caused by public expenditure will be countered by the stimulus to the private sector.

The job loss created by public expenditure cuts is here and now. What is the Government's calculation of the take-up by private industry of the stimulus in the Budget? I do not believe that that will ever completely make up for the cuts in public expenditure. If that is so, not only will Northern Ireland workers be on the dole for a long time but the jobs may disappear, never to return.

If private industry is not enthused by the Budget, and the rush to buy shares and invest in Northern Ireland does not materialise, I hope that the Government will be brave enough to jettison the dogma that has resulted in public expenditure cuts and increase public expenditure for Northern Ireland.