Appropriation (Northern Ireland) Order 2000

Part of the debate – in the House of Lords at 8:15 pm on 6th March 2000.

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Photo of Baroness Farrington of Ribbleton Baroness Farrington of Ribbleton Government Whip 8:15 pm, 6th March 2000

My Lords, I begin by thanking all noble Lords who have taken part in this debate. The noble Lord, Lord Molyneaux, identified a crucial issue with regard to funding for Northern Ireland in that the Barnett formula largely removes the need for detailed negotiation with Her Majesty's Treasury on spending needs. It is a transparent mechanism that enables allocations to be scrutinised. Expenditure per head in Northern Ireland remains significantly above that in England, reflecting relative need.

The noble Lords, Lord Molyneaux, Lord Patten and Lord Glentoran, raised the issue of agrimoney compensation. We are aware of the tremendous pressure to do something for the agricultural sector in Northern Ireland. Incomes have fallen by a further 22 per cent in the past year whereas they appear to have stabilised in the rest of the UK. We recognise the funding difficulties, but payment of compensation cannot proceed on a regional basis. The UK agriculture Ministers discussed agrimoney compen- sation on a number of occasions, including most recently at their meeting on 10th February this year. In 1999 a total of £16.8 million agrimoney compensation was provided to farmers in Northern Ireland. Further assistance will also be available over the next two years. Future assistance to the farming industry in the UK will need to be looked at in the context of the next spending review.

The noble Lords, Lord Molyneaux, my noble friend Lord Dubs and the noble Lord, Lord Glentoran, also raised the issue of the crisis in the pig industry. We recognise that that industry is facing difficulties across the UK. I can assure the noble Lord, Lord Patten, that the whole Government, including my right honourable friend the Prime Minister, recognise the problems facing agriculture. The Government are doing what they can within the rules on state aids. Special assistance has been given to Northern Ireland pig farmers to compensate them for the immediate effect of loss through fire of a major processing plant. A sum of £400,000 has been made available to promote pigmeat sales. In this, I concur with the recommendations of the noble Lord, Lord Patten. A cross-border study of the pig industry has been set up and will report before the summer. The Government will study that report extremely carefully.

The noble Lord, Lord Glentoran, raised the matter of Harland and Wolff and the negotiations with Carnival and with Cunard. We appreciate the concerns expressed by the noble Lord. Negotiations are continuing between Harland and Wolff and the Carnival Corporation of the USA. Officials at the Industrial Development Board are in close contact with senior management at Harland and Wolff and with the DTI in relation to the company's bid for the contract to build the new liner. I can assure the noble Lord that the Government will do everything in their power to be of assistance.

The noble Lord, Lord Glentoran, also raised the issue of the Irish Sea cod recovery plan. We sympathise with whitefish fishermen who have to forgo their traditional spring cod fishing. However, the cod must be allowed to spawn during this period. Prawn fishing will continue without serious restrictions, affording continuity of supplies to the important processing industry in Northern Ireland.

My noble friend Lord Blease spoke of justification for the costs of the Northern Ireland Assembly. The Assembly commission has estimated that the required expenditure of the new Assembly is necessary if the Assembly can resume its business. I believe that we would regard that as money well spent.

I thank my noble friend Lord Dubs for giving me advance notice of several points that he wished to raise. Both he and my noble friend Lord Blease asked about progress on the sale of Belfast Port and the financial implications for improvements to Northern Ireland's roads network. The position on the sale of the port is that the Belfast Harbour Commissioners have now published their revised PPP proposal, but have not yet submitted their transfer scheme to the department. The Assembly Minister for the Department of Regional Development recently submitted an options paper on the future of the port to the Regional Development Committee. If the sale of the port does not proceed, it is possible that there will be an impact on the roads programme. I would expect the consequent implications to be a matter for consideration by the Executive Committee and the Assembly. If the sale does not proceed, the allocation of receipts to spending programmes would also be a matter for those bodies. My noble friend Lord Dubs also raised the issue of what would happen were there to be in excess of £70 million from the sale of the port. We are aware of general concern on this point. Discussions are proceeding with the Treasury. However, it is important not to hold up the sale.

My noble friend also raised the question of the cost of the Assembly and possible savings arising as a result of the suspension. If devolution is not restored during this financial year, it is estimated that expenditure on the Northern Ireland Assembly will reduce by some £2 million in 1999-2000. Savings next year will, of course, depend on the date of the restoration. However, along with my noble friend Lord Blease, I can reassure my noble friend that we all seek restoration of the Assembly.

My noble friend Lord Dubs mentioned the issue of investment through the use of PPPs and PFIs to support investment in the railways and buses. I am pleased to be able to advise him that present investment in public transport services includes the purchase of 130 new low-floor buses at a cost of £15 million, reinstatement of the Antrim to Bleach Green railway line, costing £17 million, and the provision of the Bangor integrated transport centre, costing £4 million. Pending the development of PPP options for public transport, £5 million is being made available subject to a satisfactory investment appraisal to begin to address the rolling stock needs of the railway. We are also conscious of the potential contribution which PPPs could make to public transport and a review of possible PPP opportunities in public transport services has recently been completed. The conclusion and recommendations of the review are currently under consideration. It is expected that a decision on the way forward can be taken soon.

My noble friend made the point that public expenditure plans for Northern Ireland announced in the Comprehensive Spending Review included an assumed increase in revenue from the regional rate. One of the beneficiaries of the additional spending is, as he said, water and sewerage services, where significant increases in expenditure amounting to £85 million over three years are planned to help to meet European Union drinking water and waste water quality standards. Future spending on water and sewerage needs to be considered alongside other priorities in the next spending review.

My noble friend Lord Blease raised the question of a decrease of £68 million in the Department of Education estimate. The bulk of the £68 million decrease is the reduction of £70 million in receipts as a result of the third UK sale of student loan debt not proceeding. I can assure my noble friend that the resultant shortfall has been made good by the Treasury.

My noble friend Lord Dubs raised the issue of the City of Derry airport runway improvements. A final decision on whether to provide the city council with additional grant assistance to cover the cost overrun on the runway project has not yet been taken. I can assure the noble Lord, Lord Glentoran, that the Government will, at all times, act sensitively and quickly in reaction to crises in Northern Ireland. The noble Lord, Lord Smith of Clifton, expressed very well the view that peace is the best means of ensuring inward investment and economic redevelopment. Political success is vital, as my noble friend Lord Blease said.

The noble Lord, Lord Glentoran, is right to say that, should the Assembly be resumed shortly, it will resume responsibility with the appropriate level of funding within the budget left for it to determine. Several noble Lords have referred to the short period of time to consider the detail of this order. In commending it to your Lordships, I undertake to reply to any further questions submitted in writing. I join all noble Lords in hoping that the situation in Northern Ireland will improve and that this order will not need to be repeated in your Lordships' House. I commend the order to the House.